Pasritamig

Zymeworks announced Tuesday a strategic transformation into a royalty-focused biopharma, whilst maintaining in-house R&D capabilities — subsequent to positive top-line results from the Phase III HERIZON-GEA-01 trial of Ziihera (zanidatamab), partnered with Jazz Pharmaceuticals and BeOne Medicines, in first-line gastroesophageal adenocarcinoma (GEA) reported a day earlier.The company said the strategy — spearheaded by newly appointed acting Chief Investment Officer Scott Platshon — centres on reinvesting proceeds from licensed products into lower-risk assets while continuing early-stage innovation through partnerships.“We aim for continued growth in value of our royalty portfolio while continuing to invest in R&D focused on internal and acquired product candidates,” said Kenneth Galbraith, chair and chief executive of Zymeworks.The Canadian biotech stands to receive up to $440 million in near-term milestone payments upon successful global regulatory approvals of Ziihera across the US, Europe, Japan and China. Jazz on Monday said it will seek expanded US approval of the HER2-directed bispecific antibody — previously cleared for biliary tract cancer — in GEA first half of next year.Beyond Ziihera milestones, Zymeworks also remains eligible for up to $434 million in additional payments for pasritamig, which commercialisation-partner Johnson & Johnson is advancing to Phase III registration studies, plus mid-single digit sales royalties.The firm further noted it has streamlined operations by pausing clinical development of NaPi2b-targeted antibody drug conjugate ZW220 and bispecific antibody ZW171, alongside implementing other cost reduction measures. Moreover, it has also authorised a new $125-million share repurchase programme.As of September 30, Zymeworks held $299.4 million in cash and investments, combined with anticipated approval milestones, extends its cash runway beyond 2028.

Ziihera won its first approval last November in adults with previously treated HER2-positive biliary tract cancer. Ahead of the drug's first approval, Zymeworks forged licensing pacts with Jazz Pharmaceuticals and BeOne Medicines. Having found swift success with its Jazz Pharmaceuticals and BeOne Medicines-licensed cancer med Ziihera, Zymeworks has laid out a plan to make the most of its "significant future cash flows" and to double down on its strengths.The company's new licensing-focused model, which will play out alongside Zymeworks’ continued internal R&D operations, forms part of a bid to transform the company from a traditional biotech into what its CEO has branded a “royalty-driven organization.”In essence, the company aims to leverage cash flows from its partnerships with the likes of Johnson & Johnson, GSK, Bristol Myers Squibb and others to enable internal R&D and potential acquisitions. The company plans to focus its future efforts on preclinical and early-stage development programs, licensing out its promising later-stage assets, the company said in an investor presentation Tuesday.The rationale is that by letting partners do the legwork on late-stage studies, Zymeworks aims to avoid "costly and binary" pivotal-stage development.“With Ziihera as our foundational licensed product, we have made the strategic decision to evolve from a traditional biotechnology company into a royalty-driven organization differentiated by in-house R&D capabilities,” Zymeworks chief Kenneth Galbraith said of the decision in a Nov. 18 press release.“By having the capability to reinvest expected proceeds from the development and commercialization of Ziihera, and potentially further products,” Galbraith continued, “we aim for continued growth in value of our royalty portfolio while continuing to invest in R&D focused on internal and acquired product candidate as a source of future innovation and partnerships.”Ziihera won its first approval last November in adults with previously treated HER2-positive biliary tract cancer. Ahead of the drug's first approval, Zymeworks forged licensing pacts with Jazz and BeOne.Now, on the heels of a late-stage data drop that positions Ziihera for a potential approval in HER2-positive locally advanced or metastatic gastroesophageal adenocarcinoma (GEA), Zymeworks says it’s in the running to receive milestone payments from Jazz and BeOne in GEA worth up to $440 million, plus additional royalties from sales in the potential new indication.Meanwhile, Zymeworks figures the other key candidate it has tied up in a licensing deal—the bispecific antibody pasritamig—also has the potential to help fill the company’s coffers.Under an arrangement with J&J, Zymeworks says it is eligible for up to $434 million in milestone payments tied to the cancer candidate’s continued development, potential approval and subsequent commercialization. Zymeworks noted that it’s also slated to receive mid-single-digit royalty payments on pasritamig should the drug reach the market.In addition to those potential payment streams, Zymeworks also has prospective milestone payouts lined up through agreements with GSK, BMS, Daiichi Sankyo and Merck & Co., according to the investor presentation. Collectively, that assortment of platform partnerships could net Zymeworks billions of dollars tied to potential development and regulatory achievements, the presentation notes.The company’s board of directors and management came together on the new strategy after recognizing the “significant future cash flows anticipated from Ziihera, pasritamig, and other licensed products,” Zymeworks explained in its press release. The company believes the approach will help it deploy cash more thoughtfully while benefiting shareholders in kind.Those returns for shareholders will take one of two forms, according to Zymeworks. First, the company says it will work to compound existing royalty streams by reinvesting its licensing cash into candidates “that do not have a traditional biotechnology risk profile.”Further, Zymeworks said it plans to return excess capital directly through share repurchase programs or special dividends, according to the presentation. Aside from its existing licensing tie-ups with Jazz, J&J, BeOne and others, Zymeworks will be eyeing additional alliances under its new operating model, Galbraith noted. He suggested that his company will consider forging fresh collaborations “whether originating from our wholly-owned product candidates and technology platforms, or accessed externally."As of Sept. 30, Zymeworks had a little less than $300 million in cash on hand. The company pointed to cost-savings measures conducted since late 2024, including development pauses and layoffs, that should better secure its position moving forward. With the money available now and expected future payouts from its assortment of licensing pacts, Zymeworks figures it has a cash runway extending “beyond 2028.”Zymeworks is no doubt emboldened by the impressive top-line performance of Ziihera in Jazz and BeOne’s HERIZON-GEA-01 study.In that trial of HER2-positive locally advanced or metastatic GEA patients—which read out Monday—Ziihera plus chemotherapy and BeOne’s Tevimbra charted “clinically meaningful and statistically significant" improvements in progression-free survival and overall survival compared with the standard-of-care control cohort. The results support Ziihera’s role as a potential “agent-of-choice” in the subset of GEA patients tested, said Jazz, which is now eyeing U.S. regulatory filings in the indication in the first half of 2026.