Awesome. Well, good morning everyone, and welcome to the second day of the Citizen's Life Sciences Conference here in Miami. It's my pleasure to welcome Zymeworks, and chatting with us to talk about the company is Sabeen Mekan, Chief Medical Officer.
Sabeen, thank you very much for coming and joining us. I never know exactly who's in the audience, whether they know the Zymeworks story or not, or when they're listening to a webcast, whether they know the Zymeworks story or not. I always like to start with maybe a 2-4 minute intro about the company as an overview before we dive into details.
First of all, thank you for having me here. We're excited to be in Miami this week. I'll start with a little bit of a history of Zymeworks. Zymeworks has been around for the last several years. What we're known for is our first drug, zanidatamab, which is a bispecific, a HER2 antibody. It was built upon our own Azymetric platform, which is something we're very proud of.
It gives us very good antibody engineering and computational biology abilities, and it targets a distinct epitope or two different epitopes for HER2. That's an agent that we developed internally all the way up to registrational studies and licensed out to Jazz Pharmaceuticals. We're still retaining the financial cut through that drug, and that is giving us royalties.
With those royalties, we have been developing another suite of capabilities for both antibody-drug conjugates and T-cell engagers. That's a whole pipeline that is wholly owned by us, and we are developing it in phase 1 currently for some of these antibodies.
Some of the other ones are preclinical. Within that Azymetric platform, we also have developed a T-cell engager pasritamig, which we licensed out to J&J. With that, they were excited that they're taking it into registrational studies at the moment.
With all of that happening, it is a pretty exciting time to be at Zymeworks. We're in a very fortunate position to have stable income from the royalties from these assets that we've out-licensed and a pretty exciting internal pipeline.
We've been thinking a bit about what to do next. In terms of our strategy, we want to be a biotech company, continue to develop great assets and bring value through value creation through development of assets. However, we've made the decision not to move towards commercialization ourselves.
What we would like to do is develop these assets to a certain point, to inflection points, and then partner them out with the idea of an upfront payment, but also the major important thing is maintaining the long-term royalties.
That would bring in. It's a circular model which brings in more cash, over time aggregates royalties upon the zanidatamab and pasritamig that we already have, and also create value creation because since we already have a royalty aggregation model.
We can also buy in companies and assets that have royalties and further aggregate and compound on this. As you noticed, we recently got a $250 million note, which builds further confidence on the zanidatamab royalties that are coming to us and gives us the flexibility to execute on this model, right away.
Before we jump into the pipeline, and I know you're the Chief Medical Officer.
Yes.
I'd be remiss if I didn't, you know, ask you about the financial situation of the company, right? You mentioned royalties, and that's for Zani. Several milestones I think it's about, you've mentioned in the past, like $400 million in milestones through regulatory approvals that are still expected.
Then the $250 million dollar royalty note that you just got right now, it's a significant cash position. You know, if you could just give us, you know, a quick kind of overview. Did I miss anything there? Do I have everything there?
It seems like the cash position we calculated was going to be, you know, kinda north of $300 million, right, kind of right now. By the end of the year, some of these regulatory approvals are going to hit and those milestones should hit so.
Absolutely. I think you're pretty correct in that. I can elaborate on it a little bit further. Given our current cash position, we have $271 million in cash at the moment. In addition to that, we've recently gotten the $250 million royalty note.
If you add that together, it's upwards of $500 million that we have at the moment, which we can deploy to multiple uses for buying companies that have royalties to bring in assets that create value for us. In addition to that, we have future milestones, like you mentioned, the $440 million of royalties for zanidatamab that is expected from regulatory milestones. We also have commercial for GEA. That's for GEA alone.
Okay.
We also have a $90 million royalty for a third indication for regulatory milestones and commercial royalties that are tiered. In terms of the value of the asset, what I can say is if the value is over $2 billion, which we expect that it will go over, that goes up to 20%.
Oh, that's wonderful. Let's jump into the asset. The Zani is the poster child, right, of what I think is going to be coming from your pipeline, right, that you have, and it's an amazing poster child. We were able to produce some amazing data in BTC.
The GEA data just came out and you're seeing a significant benefit. Can you just tell us what's unique about the molecule? The GEA is the most recent or the near term drivers, right? Beause BTC is already on the market. Just tell us what the milestones will be going forward in terms of filing and commercialization.
Absolutely. We're very proud to generate zanidatamab on our own as Azymetric platform. It targets two distinct epitopes of HER2, which are different. What's exciting about it is that these epitopes work together to create multiple mechanisms of actions, which work in addition to what typically trastuzumab and pertuzumab would do alone.
Some of these include ADCC and complement activation, which results in immune activation similar to, akin to turning cold tumors hot. That is why we see more activity in a wider set of patients with this model. In terms of GEA, we're excited to have seen the data from first line GEA that was reported out at ASCO GI.
Some of the key highlights of the data was that this study, this phase 1 study is, for zanidatamab, in combination with chemotherapy versus trastuzumab chemo. We have an additional arm combining with checkpoint inhibitor tislelizumab. Both arms were positive against the control arm in progression-free survival, with a pretty exciting hazard ratio. We were also at this first analysis of PFS.
We had the first interim analysis of OS as well, and which was expected to be relatively immature, but we were excited to have a positive OS in the arm with tislelizumab, which just adds to the fact that tislelizumab is adding benefit in addition to zanidatamab. First thing is the data for zanidatamab is transformative.
When we've talked to KOLs and across the industry, people have told us this is just a much better HER2-targeted agent, and that's what's really the most important driver in this patient population. Having said that, as we've seen from prior data and the data from our study, the addition of checkpoint inhibitor is important and it does add value on top of zanidatamab.
That is something that we've seen in our trial, and the regulators are going to continue to evaluate. Jazz is very excited, and BeiGene's very excited in filing for zanidatamab. They've already shared that they've had very good conversations with regulatory authorities and have filed under a Real-Time Oncology Review.
Which is granted only to very few molecules which have really good data. That application has been completed, so we should be expecting to get approval in the second half of this year in the US and Jazz is committed to filings outside of the US as well.
Yeah, that's wonderful. You had mentioned the $2 billion opportunity for Zani. I think it includes more than just BTC and GEA. If I remember the Jazz kind of era, I think breast cancer is, I don't know, I would consider it almost like the holy grail if you can penetrate that. Can you just give us a quick sense? Beause this does seem to be the better Herceptin, the better kind of in HER2, right?
You can't think of a HER2-targeted agent without thinking of breast cancer. Jazz has already given the guidance of $2 billion. I think that was from about 18 months ago.
Okay.
I think they've still continued on that guidance for now. I'm sure they, at some point, they will be updating that. The breast cancer trials got underway recently. The EMpowher-HER tri-HER3 trial is the most advanced at the moment. This is a trial that is targeting patients who are HER2-positive. Second- and third-line setting going against trastuzumab chemotherapy.
I mean, if you've seen the data for zanidatamab in phase 2 studies in breast cancer and looking at the data from GEA, I think this is going to be very exciting for patients with breast cancer and would help improve their survival, and it will help us bring more value to our shareholders as well. There's a lot of interest from what we've heard in this trial.
The recruitment is expected to be completed by the end of this year and readout expected from the guidance from Jazz is end of 2027 or beginning of 2028. With that, I think breast cancer is a big indication that can add huge value. They're also thinking about early phase breast cancer trials. Those are an earlier phase setting in the adjuvant setting as well and potentially looking at HER2-targeted tumor other tumors.
Got it. Terrific. Well, like I said, it's a great poster child, you know, molecule to have. Really highlights, I think, a fantastic platform. Let's jump into some of the new molecules that are coming out of the platform. ZW191 folate receptor alpha, I typically think like, oh, it's a crowded space, but so is breast cancer.
If you have a best-in-class molecule, doesn't matter how crowded the space is you kind of go for it. You've seen some clinical data to date. Can you just tell us a little bit about the molecule, kind of what's the clinical data? What has you excited? When will we get our next update?
Folate receptor alpha is the first asset from that has clinical data from our wholly owned pipeline. It is an antibody drug conjugate, so different from zanidatamab, which is a bispecific antibody. It targets a distinct epitope of folate receptor given from mirvetuximab, which is a AbbVie molecule . At Zymeworks, we've been very, very careful with ADC design.
We believe in the right antibody pairing with the right magnitude of linker and payload effects. What we mean by that is for an ADC to be effective, the antibody needs to internalize extremely well. We are very careful in choosing antibodies that are very high internalizing and choosing the right targets for the tumors that we're going after.
Beyond that, from a linker and payload perspective, we believe that once you have an antibody that internalizes very well, you don't need to have a very toxic payload like some of the exatecan payloads, which are very toxic.
We believe in a moderately toxic payload to reduce the toxicity and also having a linker which is tight, moderately tight, not too much because we want to have some bystander effect, but we want to make sure that there's not too much of it, free antibody floating in the circulation to cause too much toxicity. Given that, we really believe in the design for our first ADC folate receptor, and we believe it to be a potential best in class, given the folate receptor ADCs. The early data that we showed pointed to some of that.
First thing is we showed that we had a very wide therapeutic index, and started seeing activity at 3.2 mg/kg dose starting at 1.6, which is standard for ADCs. Our payload toxicity is similar to deruxtecan, so we can directly compare where we are in terms of doses there. We were able to dose escalate to 11.2 mg/kg, which is certainly much higher than the ADCs in that category.
Despite that, our safety profile held up. We're hoping that with the higher doses, safety profile holding up, it should be able to derive better efficacy over time. What we've seen in our early data is our response rate is in the early 60s%, which is potential best in class while retaining the safety.
I mean, from a safety perspective, we are better than some of the molecules like Genmab's molecule. The fact is that we don't think we are going to need to select in gynecological tumors. We're effective at all levels of folate receptor alpha expression.
That's terrific.
Yes, with that, we're actively enrolling patients in dose optimization and are hoping to be sharing additional data this year at peer-reviewed medical congresses.
Just, you know, to think about the timing for a partnership you had mentioned when Zani had been partnered, is there a particular time in which you start looking for partners to move this forward? Or do you kind of wait, or are you kind of in discussions right now?
For each asset, we are always thinking about where and how we can create the best value and reduce the risk for ourselves. For folate receptor alpha ADC, this is the first drug ADC on our platform. We wanted to generate some data ourselves so that we can showcase how well our platform performs. We're already in dose optimization.
We are talking to potential partners. What we need here is to find the right partner which can provide us the best value to take this asset as fast as it needs, as well as it needs into registrational studies to derive the best value, because we usually are more interested in longer term royalties, and those are usually only derived based upon the success of our assets.
With that, I mean, we're not really in need of cash. That is something we can work on our own. However, we are interested in taking some of the financial liability off of us so we can focus on other assets within our portfolio as well.
Yep. Switching gears, you mentioned J&J and their drug. Well, the drug they've partnered with you on, pasritamig. It was yesterday, I think I was listening to another company. They said that J&J licensed, you know, the other company's drug to combine with pasritamig.
I think for the first time, might be the first time, we saw some clinical data earlier this year. Can you just take us through the data that's been presented? H ow excited you are, how excited J&J is to move it? Because I think you mentioned they're going into pivotal studies already.
Absolutely. We're very excited about the data, and so are they. You can see it through that because they've already announced three pivotal studies in various combinations with that asset. That really shows their strong commitment to this asset and taking it forward. For us, what's exciting is that this is developed on our own Azymetric platform as a first T-cell engager from our portfolio.
That shows us confidence in our ability to develop T-cell engagers. From a data perspective, some of the key things that I would highlight is that the safety profile of this drug, it's very, very manageable, and that's something that has been very unexpected of a T-cell engager. The dosing schedule, quite prolonged, every six weeks, which is also very combinable, very manageable for patients.
Compared to some of the other assets, it's showing some of the data that was showcased at ASCO GU showing exciting efficacy in combination, so in terms of rPFS. We're excited to take that forward further with the help of J&J.
Just to set the stage, I'd forgotten. It's a T-cell engager. Can you remind me the targets and what are the three indications that they're evaluating in pivotal studies?
The target is KLK2, which is a very clean target, mainly expressed in prostate cancer, and they're evaluating in combination with docetaxel, and they're evaluating in phase two studies in multiple other combinations, which they have declared that they're going to take forward as well.
Wow, that's wonderful. Switching gears again to another molecule. It's a multi-specific ZW209 DLL3, CD3, and CD28, so a tri-specific. This is the first time I think you guys are bringing this. This is going to be filed. An IND is going to be filed, and I assume we'll see clinical data. Can you tell us more about this molecule, how it's different than other DLL3 molecules that are out there?
What makes this different is the CD3 and the CD28, which makes DLL3 activation conditional upon the activation of both CD3 and CD28. What it does is it makes the molecule much more targeted towards DLL3. Activation only occurs with CD28. One is CD28 enhances the tumor T cell activation, so it results in a higher immune response, but that is much more targeted.
What we don't want is peripheral T cell activation, but we want more T cell activation in the tumor. With that, we're expecting that this would drive better efficacy as well as better safety for our patients, and we're expecting to take this into the clinic in 2026.
Okay. How does this conditional activation compare to like masking technologies or platforms that are out there? Is it the same? I mean, is it pretty much a mask or is it more a conditional kind of on/off?
It is slightly different. In some ways it is similar to masking because it is conditional activation.
Yeah. There was another molecule that you have, and I'm really curious about this because we've now heard from multiple companies, they're going after this unique target, right? This is PTK7. The PTK7 ADC, and it's a bi-paratopic.
Yes.
You're taking like the best of every world. Talk to us a little bit about what is PTK? How is it? I think by virtue of this being a bi-paratopic ADC, it's already differentiated from a lot of the molecules out there. Just take us through the unique, uniqueness of this molecule and the target.
PTK7 builds on our ability to develop bi-paratopic molecules. Here instead of doing a bispecific bi-paratopic antibody, we developed it in the form of an antibody-drug conjugate. PTK7 is a very important target. It's expressed in a wide range of tumors, particularly GI tumors, where we haven't had antibody-drug conjugates being approved in many of the indications yet. That is why we were trying to focus on those indications. What's unique about ZW418 is the payload. Instead of a topoisomerase payload, we have a pan-RAS payload there.
That is, as you see, the topoisomerase payloads have been very exciting, have delivered absolutely great data, but I think the field is moving on at the moment, moving to other targets for payloads that are exciting. One of the key reasons we chose the RAS payload is because of the tumor selection.
That we're going after, the GI-based tumors, where we think RAS is going to be a very active, it's very important. We thought that an ADC format would be much better in terms of internalizing and giving RAS to the tumor in itself as opposed to giving it as a small molecule.
I think there's been some experience with PTK7 ADCs, and the experience, at least to date, hasn't been all that good. You know, what have you learned from these others who have already tried to go down this path, and how do you plan on mitigating some of the issues that they've run into?
One of the things that we've focused on is the whole ADC construct, and that is something we really take a lot of good care about. That's why we really believe in our ADC design philosophy. What we're doing is looking in terms of validation.
Which is why we're starting with folate receptor alpha, which is a very well-validated target, to make sure that in the clinical setting, our ADC design philosophy works. That's what we've seen, and what we've tried to do in ZW418 is build upon that and learn from mistakes of others. Our medicinal chemistries and protein engineers are very, very careful.
They're very well respected in the field in trying to understand what works and what doesn't work within the ADC world and try to build molecules that are likely going to be successful.
Got it. You know, I know that we've kind of talked about this in you know, throughout our conversation. What are the next kind of milestones coming through? Clearly, some of these are in IND you know, enabling studies and getting ready to file an IND. As we think about kind of the next milestones for investors to just have it kinda lined up, what do we have between now and the end of the year from the company?
Oh boy, we have a lot going on. I think the most important thing people are looking for from an investor perspective is filing for approval for zanidatamab in first-line GEA in US and other territories, getting it into NCCN and other guidelines. Also following up on the breast cancer studies and its enrollment.
Pasritamig entering into phase 3 studies. From our wholly owned pipeline, we're expecting to share data from our folate receptor alpha ADC. We have our GPC3 targeted ADC in phase 1 as well, so that should have an inflection point later towards the end of this year, and we would be showcasing some data either end of year or next year.
We are planning to take our T-cell engagers 209 and also our autoimmune molecule 1528, which is an IL-4/IL-33, into the clinic in 2026. Most importantly, we are looking forward to execute on our strategy, which is basically getting new companies with royalties and assets that we are interested to develop and partner. I think this is a very critical year to execute on the strategy and make the right deals.
Sabeen, it was great talking with you. I already ran out of time, and I missed several molecules that we could have chatted more about. Next time I'll have to make it like a 45-minute fireside chat with you. Thank you very much for coming.
You're very welcome.
Appreciate it.
Thank you.