Zymeworks Inc (ZYME) 2022 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Zymeworks First Quarter 2022 Results Conference Call. (Operator Instructions)

And now it is my pleasure to hand the conference over to your speaker today, Jack Spinks, Head of Investor Relations. Thank you. Please go ahead.

Good afternoon, and welcome, everyone. My name is Jack Spinks, Associate Director of Investor Relations here at Zymeworks. Today, we will discuss our first quarter 2022 financial results as well as provide an update to our ongoing business.

Before we begin, I would like to remind you that we will be making a number of forward-looking statements during this call, including statements that relate to the implementation of our strategic priorities, clinical development of our product candidates, related clinical trials, anticipated clinical data presentations, potential therapeutic effects of zanidatamab and our other product candidates; expected financial performance and future financial position, the commercial potential of technology platforms and product candidates, anticipated continued receipt of revenue from existing and future partners, our preclinical pipeline, anticipated sufficiency of cash resources and other potential sources of cash to fund our planned operations into the second half of 2023 and potentially beyond, our ability to execute new collaborations and partnerships, and other information that is not historical information.

Forward-looking statements are based upon our current expectations and various assumptions and are subject to the usual risks and uncertainties associated with companies in our industry and at our stage of development. For a discussion of these risks and uncertainties, we refer you to our latest SEC filings that's found on our website and is filed with the SEC.

Later in this call, Neil Klompas, our Chief Operating Officer, will be discussing our financial results, including certain non-GAAP measures, a description of our non-GAAP measures and a reconciliation to the most directly comparable financial results as determined in accordance with GAAP, are described in detail in our press release, which is available on our website at www.zymeworks.com under the Investor Relations tab. As a reminder, the audio and slides from this call will be available on the Zymeworks' website later today.

With that, I will turn the call over to Neil. Neil?

Thanks, Jack, and hello, everyone. Thank you for joining us today for our first quarter earnings call. I would like to start today's call, with a note on our recently received unsolicited nonbinding proposal from All Blue Falcons. As we mentioned in our press release issued on April 28, 2022, the Zymeworks Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the company and all Zymeworks shareholders. I would also like to remind everyone listening, that this was an unsolicited and non-binding proposal and as such, no formal offer has been made by ABF. If a formal offer is made, it will be reviewed by the Board and its advisers, and a formal recommendation by the Board will be made to shareholders in due course.

While we recognize there may be further questions on this matter, we will not be able to comment beyond what we have publicly disclosed in our previously issued press release. For the remainder of the call today, we very much look forward to discussing our business and operations, as we continue to work towards our corporate goal of building shareholder value, by enabling patients to return home to their loved ones, disease-free.

With that, I will continue with a discussion of our financial results, followed by an update on our clinical and preclinical activities, and general corporate updates. As a reminder, I'd like to note that while I'll be presenting the prepared remarks today, our entire executive team will be available for Q&A following this portion of the call.

With that, I'd like to jump right into an overview of our financial results, followed by an update on our clinical and R&D programs, followed by a few closing remarks before we open up the lines for Q&A.

This afternoon, Zymeworks reported financial results for the quarter ended March 31, 2022. As reported, our revenue for the first quarter of 2022 was $1.9 million compared to $0.6 million in revenue for the same period of 2021. Revenues for the 3-month periods were primarily related to research support and other payments from our partners, which often include cost-sharing arrangements. Research and development expense for the quarter ended March 31, 2022, was $62.5 million compared to $44.3 million for the quarter ended March 31, 2021. These increases from the prior year, related primarily to higher clinical trial expenses for zanidatamab due to the initiation of the HERIZON-GEA-01 and a corresponding increase in the associated drug manufacturing expenses. Additionally, the company incurred severance and other expenses due to its restructuring program. These increases over the prior year were partly offset by lower clinical trial expense for ZW49.

General and administrative expense for the quarter ended March 31, 2022, was $12.1 million compared to $1.3 million for the quarter ended March 31, 2021. General and administrative expense for the quarter ended March 31, 2022, included non-cash stock-based compensation recovery of $5.1 million, comprised of $2.2 million expense from the equity classified awards and a $2.9 million recovery related to the non-cash mark-to-market revaluation of certain historical liability classified awards, and $3.9 million from restructuring expenses.

Excluding stock-based compensation and restructuring expenses, general and administrative expense increased by $3.2 million for the quarter ended March 31, 2022, compared to the same period in 2021 on an adjusted non-GAAP basis. The increase year-over-year was primarily related to severance and other expenses incurred due to the company's restructuring program in 2022, as well as a non-recurring sales tax refund recognized in 2021, which offset expenses in the prior year.

Zymeworks' net loss for the quarter ended March 31, 2022, was $72.7 million compared to $44.6 million for the same period in 2021. The increase in net loss was primarily due to increases in research and development expenses and general and administrative expense in 2022, as compared to 2021, as we previously noted. However, it is worth highlighting that the increased operating expenses in this quarter, driving net loss are expected to trend lower in upcoming quarters, relative to current levels.

Based on our forecasted operating expenses and largely driven by the ramp down of clinical expenses due to the completion of enrollment in our HERIZON-BTC-01 study and exiting the start-up phase of our HERIZON-GEA-01 in combination with a reduction in manufacturing expenses, driven by the completion of a significant portion of our process performance qualification runs, we believe there will be a reduction in operating expenses throughout the remainder of 2022 and into 2023, based on the spending prioritization, restructuring and non-recurring spending related to future BLA filings I spoke to above.

Our cash resources consisting of cash, cash equivalents and short-term investments were $300.5 million as of March 31, 2022. Based on our current operating plan and in combination with proceeds from certain existing collaboration payments we anticipate receiving, we believe our cash resources will fund our planned operations into the second half of 2023 and potentially beyond. In addition, we continue to make good progress towards our previously announced goal of executing on new partnerships and collaborations, in order to potentially increase this runway beyond 2023 via non-dilutive capital. For additional details on our quarterly results and for a description of our non-GAAP financial measures, and a reconciliation of GAAP to non-GAAP financials, I encourage you to review our earnings release and other SEC filings as available on our website at www.zymeworks.com.

I also want to provide a brief update on the restructuring efforts we announced in January. As described on our last earnings call, by March 1, we had exceeded our previously announced workforce reduction of at least 25%, which we had guided as being completed by the end of this year. The reduction and realignment of our workforce included 50% of the senior management team. And in January, we noted that we would be initiating a search for a new Head of Global Research and development. To that end, I wanted to note that the search for our new Chief Scientific Officer or CSO, is progressing well, and I look forward to providing more information over the course of the year.

Additionally, on behalf of the entire leadership team and our Board of Directors, I want to thank our outgoing Senior Vice President of Regulatory Affairs, Dr. Bruce Hart, as he leaves the company to pursue new opportunities. I know I speak for everyone on the regulatory affairs team and across the organization, as we wish him well in his future endeavors.

In parallel with the ongoing progress made in the selection of a new CSO, we are actively advancing targeted hires across the organization, aligned with the transformation of our workforce, we will continue to update the market with further details, as they arise.

With that, I would like to move on to a clinical update for our 2 lead programs. As announced last week, I'm very excited to highlight that, ahead of our published guidance of midyear 2022, we, together with our partner, BeiGene, have recently completed enrollment in the HERIZON-BTC-01 study, our pivotal trial evaluating zanidatamab as monotherapy, in patients with previously treated HER2 amplified biliary tract cancer or BTC. BTC is a hard-to-treat cancer, and advanced or metastatic cases are associated with a poor prognosis. Globally, approximately 210,000 patients are diagnosed with BTC each year.

With HER2 being expressed in between 5% to 20% of BTC cases, and there being currently no approved HER2-targeted therapies for this indication, zanidatamab stands to potentially help many patients around the globe. Zymeworks is committed to developing new therapies for hard-to-treat cancers, like advanced or metastatic HER2 amplified BTC, and completing our enrollment in our first pivotal study, is a major milestone and a testament to the hard work and dedication of our outstanding team, and the clinical sites and investigators that we are privileged to work with on this study.

With the last patient enrolled and a primary endpoint of objective response rate, we are updating our guidance with regard to the HERIZON-BTC-01 study timeline. We expect to lock the study database by the end of the year and share results by early 2023. Additionally, we expect the full details of this study to be presented at a major medical meeting in 2023. It is worth reiterating, that the FDA has granted zanidatamab breakthrough therapy designation for patients with previously treated HER2 gene-amplified biliary tract cancer. As such, zanidatamab is eligible for Accelerated Approval, Priority Review and Rolling Review by the FDA at such time that a BLA is submitted.

In addition, our partner, BeiGene, recently received Breakthrough Therapy designation for zamdatimab for the Center for Drug Evaluation of China's National Medical Products Administration, for treating patients with BTC, who have failed prior systemic therapies. As soon as the pivotal data is available, we and our partner, BeiGene, expect to have discussions with various regulatory agencies to inform our next steps.

At the upcoming meeting of the American Society of Oncology or ASCO, our Asia Pacific partner, BeiGene, will present 2 studies with zanidatamab used in the first-line settings. The first presentation scheduled for June 4, highlights Phase 1b/2 data of zanidatamab in combination with the CAPOX regimen of chemotherapy and the PD-1 inhibitor, tislelizumab for first-line treatment of HER2-positive advanced or metastatic gastric and gastroesophageal junction adenocarcinoma, or GEA. This is the first clinical data presentation of zanidatamab, in combination with chemotherapy and a PD-1 inhibitor. And this regimen is currently being studied in one of the treatment arms of the ongoing Phase 3 HERIZON-GEA-01 study.

The data in first-line HER2-positive GEA complements the interim Phase 2 results with zanidatamab and the standard of care chemotherapy in the same indication that was presented at the European Society for Medical Oncology Annual Congress in September of last year. The data presented at ESMO showed a confirmed objective response rate of 75%, a median duration of response of 16.4 months, and a median progression-free survival of 12 months, and exhibited a manageable safety profile in 28 response evaluable patients.

The second presentation at ASCO is scheduled for June 6, where our partner, BeiGene, will present preliminary Phase 1b/2 data for zanidatamab in combination with docetaxel, for the first-line treatment of patients with HER2-positive metastatic breast cancer. It is important to note, that this will be the first data presented for zanidatamab in a first-line setting for advanced or metastatic HER2-positive breast cancer.

As a reminder, in December, we presented data on zanidatamab in a late-line breast cancer setting, where zanidatamab plus chemotherapy demonstrated encouraging antitumor activity in heavily pretreated patients with HER2-positive breast cancer. The data presented for 22 efficacy-evaluable patients, resulted in a confirmed overall objective response rate of 36.4%, and a median progression-free survival of 7.3 months. And the combination of zanidatamab and chemotherapy, was well tolerated, with a manageable safety profile. We look forward to building upon these results in a setting, where we believe zanidatamab exhibits characteristics that are well suited for these early lines of therapy.

The third abstract submitted to ASCO contained interim data on late-line hormone receptor-positive HER2-positive breast cancer patients, treated with zanidatamab, in combination with fulvestrant and Pfizer's Ibrance. The abstract was selected for publication only. However, we subsequently withdrew the abstract from the meeting. To ensure this promising regimen is appropriately recognized and presented to clinicians and the public, we will continue to let this data mature in the patient population evaluated. As such, we plan to submit an abstract containing a larger data cut to a major medical conference in the fourth quarter of this year.

Currently, more than 50% of late-line HER2-positive breast cancer patients are also hormone receptor positive, which represents a substantial addressable patient population, and we look forward to presenting a more mature data cut, pending abstract acceptance at a conference later this year.

In addition to the milestones on zanidatamab, we continue to make progress in the development of ZW49, our second clinical candidate and first antibody drug candidate utilizing our ZymeLink platform technology with an auristatin-based payload. During the first quarter, we completed enrollment of 30 patients in the Q3 weekly expansion cohorts at 2.5 milligrams per kilogram. We continue to evaluate dosing on an alternate schedule of weekly dosing for 3 weeks on, followed by 1 week off drug to better understand the impact of more frequent dosing.

We are currently studying an expansion cohort for weekly dosing at 1.5 milligrams per kilogram, while in parallel, continuing dose escalation for a weekly regimen of 1.75 milligrams per kilogram. We continue to be encouraged by the progression of the study, and we look forward to sharing the complete Phase 1 data findings at a medical conference later this year, together with next steps in the clinical development plan for ZW49.

This quarter, we also highlighted a topic that is worth repeating here. In March, at World ADC London, our team presented information detailing our next-generation TOPO based ADC platform. We are excited about this new technology, as it expands the scope of our existing ZymeLink ADC platform beyond traditional auristatins and provide Zymeworks and potential partners the ability to select indication-specific payloads. Again, this enables development of clinically and commercially relevant TOPO antibody drug conjugates, that are shown preclinically to be potent, selective and importantly, bystander active.

The approach to generate these potential TOPO-based therapeutic candidates centered around an initial panel have (inaudible) in derived payloads with multiple lead chemistries, identified exhibiting favorable biophysical properties and a range of potency and bystander activities. We were able to benchmark and we believe, improve upon current ADCs in development by our competitors. With preclinical PK characteristics similar to a parental antibody, strong efficacy across multiple different tumor-associated antigens and diverse preclinical xenograft models and an excellent tolerability profile in preclinical models, suggesting a favorable therapeutic index.

We believe that our TOPO-based payloads will complement our existing auristatin-based payload technology, which is currently used in ZW49 and allow further fit-for-purpose and indication-specific creation of ADCs. We look forward to sharing more details on the next-generation TOPO-based therapeutic candidates, as well as potential multi-specific therapeutic candidates in our preclinical pipeline with progress throughout the year and at our early-stage R&D Day scheduled for later this year.

I would like to restate that our corporate goal, as outlined in January, is to advance 2 new product candidates that utilize our proprietary platform technologies and to submit 2 IND applications by the end of 2024. We are encouraged and excited by the preclinical results we've seen to date and look forward to sharing more about these programs and the supporting data at our R&D Day in the fourth quarter. In addition, I'd like to remind everyone that our data presentations are available on our website at www.zhymeworks.com/publications.

Since we detailed our key priorities in January, we have already made significant progress on many of these objectives. To highlight a few, we said we would improve our balance sheet, and we successfully closed a public offering against a very challenging macroeconomic backdrop and in parallel, executed on a reduction in workforce, in parallel with a focus on priority R&D programs, ahead of our target schedule. We said that we would fully recruit our pivotal study, HERIZON-BTC-01 by the middle of this year. And as I noted earlier, we have completed enrollment ahead of expectations and our previous guidance.

We said we would present updated zanidatamab data at a major medical meeting, and again, as I noted earlier on this call, data from zanidatamab, in combination with tislelizumab and chemo in the first-line gastric setting, as well as zanidatamab in combination with chemo in the first-line breast cancer setting, will be presented at ASCO by our partner, BeiGene. We said we would continue to work towards improving our balance sheet, and we continue to make good progress on completing other non-dilutive funding initiatives that will extend our cash runway as well as being very active in discussions on new partnerships and collaborations, that should secure funding for our planned operations beyond 2023.

And finally, we said we will continue to advance our core technology platforms and more importantly, communicate the value creation catalyzed by our investment in R&D, and we presented our new TOPO based payload at World ADC London, and we remain committed to building on this R&D momentum over the course of this year, and remain on track for 2 new IND filings by the end of 2024.

In closing, our Board and management team are acutely focused on building shareholder value through delivering on all of the 2022 and 2023 priorities we outlined in January, and hopefully exceeding expectations for our operating performance. With more to come in the coming months, with respect to data updates for zanidatamab at ASCO and other medical conferences, a comprehensive update on ZW49 and various presentations pertaining to our preclinical portfolio and R&D activities, I know I speak on behalf of our entire company, when I say we are very excited about the future of this company and we are committed to delivering upon our goals in a manner that benefits, both our patients and our shareholders.

With that, I will turn the call over to the operator to begin the Question-and-Answer Session. With me today are Kenneth Galbraith; our Chief Medical Officer, Dr. Neil Josephson; and our Chief Financial Officer, Chris Astle.

Your first question is from Stephen Willey with Stifel.

Understood that there's probably not much to say regarding the Blue Falcon update here. But just with respect to the ASCO updates, is there anything that you can say just with respect to expectations around patient numbers, and then maybe just anything that you may be able to say around the expected duration of follow-up that we should be looking for in the GEA and the frontline metastatic breast presentations?

Yes. Thanks for the question, Stephen. Just first on your first point, I'll let Dr. Josephson answer to the ASCO point. But I said the -- we made a written statement last week, both about what we received, and we really can't say more than that at this point as we indicated in that statement. And also on the start of this call, I think -- I can just assure you that, as with everything we do here at Zymeworks, we act with serious uncertainty, professionalism with the interest of all shareholders in mind, as we act in our business, I think when we have something further to say publicly, beyond the statement of last week, we will make it as appropriate and necessary. I think until that, I think any private discussions we choose to have with the group who sent in the letter or other third parties that we might engage with -- discussions with, will remain private until it's appropriate and necessary to have a further public statement. I think that's really all we can say right now. And I'll just pass it over to Neil Josephson to answer the ASCO question.

Sure. So as was discussed, this is Phase 1b/Phase 2 data, and I think it's -- from a high-level point of view, it's going to be similar in terms of the patient numbers, to what you've seen us present previously, when Phase 2 data has been presented. This is BeiGene's presentation, but the numbers are going to be similar to what you've seen in the past. And in terms of the duration of follow-up, these are both interim data cuts, specifically for GEA. Again, I think that, if you look at our previous presentations, you can get an idea of how much follow-up in general we're going to have. So we'll have some duration of response, but it's still an interim data cut.

And then in breast cancer, the maturity of data really needs to be such, that it is out for a while if you're looking at a duration of response, just because the standard of care in that setting has such a longer progression-free survival. So this is an interim data cut for both of those, I would say that it's going to be from the standpoint of duration, less mature from the breast cancer standpoint.

Okay. That's helpful. And I know that there's a lot of discussion around trying to procure non-dilutive funding through various collaborative structures. And I guess -- can you speak to the preference for doing more earlier-stage platform-oriented deals versus, I guess transactions that are focused around specific assets? I mean, it kind of seems like the former maybe won't necessarily inflect the balance sheet. I know that you're probably somewhat limited on the latter, but if you can just maybe speak a little bit to where you're spending most of your time on the collaborative front right now?

Yes, Sure, I can do that. And I guess there's 2 things. One, there are some financial options we can pursue that are non-dilutive, which could strengthen our financial position further. I think we talked about some of those earlier this year, when we talked about the strategy of strengthening our financial position, and a series of steps over a period of time, which is what we have been doing. So as soon as we have more of those complete, then you'll see us talk about them. I think if you go back to January, one of the things I talked about -- earlier on about any changes in strategy for Zymeworks when I took over, was to try and have a strategy of more fulsomely integrating partnerships and collaborations throughout the product portfolio.

And the strategy was simple, we could find ways by doing that, to accelerate the timing of development, what we firmly have to broaden our program scope beyond the current study which we have ongoing, improve our commercial competitiveness, leverage our shareholder investment capital with partners' capital, and all of those were structured to improve the long-term value of our R&D programs beyond what we could have done on our own, without those partnerships in place. I think we've been very active and busy, since then in discussing interest from quality companies throughout the product portfolio, because I think our goal is to find ways to integrate partnerships and collaboration successfully throughout everything we do, both preclinically and clinically. And I think as we have something to announce in completed arrangements throughout the portfolio, then we will obviously talk about it.

(Operator Instructions) Your next question is from Yigal Nochomovitz with Citi.

This is Ashiq Mubarack on for Yigal. How should we interpret ASCO choosing not to grant an oral or -- post your presentation for your CDK4/6 combo in late-line breast cancer, I mean, was there just not enough data, and maybe how much data were you intending to present, and maybe how much more will you present later this year in the fourth quarter?

No, good question. Neil J., do you want to talk about that?

Yes. I mean it's hard for me to speculate as to why ASCO made decision -- why ASCO makes decisions. I can say that, again, this is an interim data cut, so the presentation later on will be a more mature version of an interim data cut. We're still enrolling into the study. We're very excited about the results and interested in sharing those results, but we wanted to share the results in a way in which people could evaluate them more fully, than just in an abstract. So for that reason, we made a decision to submit to a subsequent meeting.

Okay. Maybe I'll sneak in one on ZW49. I guess, when can we expect some strategic updates regarding which tumor types you'll be advancing? That seems likely to be after the data in the second half, but is there any chance you might provide some strategic clarity before that?

Yes. I just that -- Please go ahead.

No, I could take that one, Neil. I think we've been, in addition to continuing to dose the study, and we gave you an update on progress today. I think we've been working very hard to determine what the next study for zani looks like and what the next clinical study looks like for ZW49 on the base that we find an acceptable dosing regimens to move forward with. And I think as soon as we're comfortable talking about the structure and timing of that, which could be in advance of presenting all the data, then we'll do so. So I think as soon as we have enough certainty of what we want to do, we'll obviously talk about that. It's not dependent upon doing at the same time, as having the full Phase 1 data set available on a peer review meeting.

Your next question is from the line of Charles Zhu with Guggenheim Securities.

I do have a few, if you don't mind. But just to start off really quickly, what are the benchmarks that you potentially need to shift for HERIZON-BTC in second-line disease? And how should we also think about those benchmarks, not only across the entire study, but also potentially on a cohort-by-cohort basis stratified by IHC score?

Good question. Neil J., do you want to take that one?

Sure. So I think if you look at patients who don't have -- most patients, I should say, with biliary tract cancer. Once they get out of the first line of treatment, unless they're eligible for something like an FGFR inhibitor, there really is no standard-of-care, so if you look back at the ABC-06 study, really combination chemotherapy, which would be available to most patients, gives you single-digit response rates and not a meaningful prolongation of survival over best supportive care.

So this is an area of significant unmet need. I think if you look at our Phase 1 data in biliary tract cancer, you can see that we have a very active molecule, in patients who've had a previous treatment. And so I can't speak to exactly what the FDA would say is needed for approval. But what I can say is that the activity that we've seen, both from the standpoint of response rates and duration of response, are significantly better than what you'd expect to see, if patients were treated with chemotherapy. And when we have all the data, we will present it to the FDA, in conjunction with the safety data and the decision will be made based on the totality of that data.

In terms of how to evaluate patients based on IHC status, the study has 2 cohorts. Cohort 1 is a patient population of IHC 2+ and 3+ patients. All the patients in the study have to have amplification. That is the primary efficacy valuable cohort. That is the cohort that -- of patients that the FDA will primarily look at for how approval is given. The second cohort, the IHC 0 and 1+, that is an exploratory population of patients. So we want to see, A, if there are a lot of patients that don't express at high levels, and if they do express at lower levels, are they able to get a response to the drug? And so all of that information, once the study reads out will be available. But again, it's the IHC2+ and 3+ population, which is generally what in other diseases, is considered as being HER2-positive, that would be the primary efficacy of valuable patient population.

Got it. That makes sense, great. And how are your frontline biliary tract cancer studies progressing? Could you just quickly remind us on progress on that front?

So yes, I'm happy to take that as well. So we are -- we have a Phase 2 study that is enrolling those patients and it is actively enrolling now.

Got it. Okay. And if I could just squeeze one more in; across your partnered assets, which includes Exelixis XB002 and the 2 T cell engagers over at J&J. You should potentially -- or they should, I should say, have first-in-human clinical data perhaps throughout second half of this year into next year as well. How much line of sight do you have into how those studies are progressing? And to what extent have you included those potential near-term milestones into your runway guidance?

Yes, good question. We -- to the extent we have line of sight from partners about the programs, we don't talk about it publicly, so we maintain that confidentially. So we -- they're all great partners. We hope they make progress with those agents that they have so far. So we only report -- we let them to report [our] progress, and we just report our milestones when we received. As a general rule, we do not incorporate future milestones into our cash flow forecasting, that's [upside], just so we don't forecast partnering collaboration and strategy that we're undertaking right now. We don't forecast that into our cash flow runway. So only things that we know we're going to have, is what we talk about, when we talk about second half 2023. And obviously, we do get some of these non-dilutive financing initiatives complete, or we receive more milestones from our early legacy agreements, or once we get a partnership transaction closed and announced, then we'll give update on guidance. So we tend to be very conservative about the cash runway.

Got it. Great.

Your next question is from Josh Schimmer with Evercore.

As we look forward to additional data for zani in breast cancer, given the competitive space for HER2 targeting agents, maybe you can give us a sense of the type of profile you are looking for, in order to advance that into further studies?

Neil J., do you want to take that one, too?

Sure. I think that you have to understand the way that we're developing zanidatamab in breast cancer. We are developing it as a combination agent. So we're developing it in areas in which other HER2 targeted therapies are used as combination agents. And so from that standpoint, the benchmarks are the benchmarks for the agents that are available and standard-of-care in different lines of therapy. We're developing it both in late line and early line. And so I mean, I think if you just look at what standard-of-care is, those are the benchmarks that we're thinking about, when we are thinking about where we can develop it, and where it will serve patients the best.

Your next question is from Jessica Fye with JPMorgan.

This is Nick on for Jessica. Understand you may not be able to comment on this, but I wanted to see if you guys thought about reengaging or if you have reengaged with strategics. following the unsolicited bid from All Blue Falcons?

Well, I guess, what I can say is mid-January, we talked about the fact that we wanted to have a more fulsome strategy around integrating partnerships and collaborations into our entire product portfolio, for the reasons that I outlined. So we've been engaged with -- in discussions with parties with regards to their interest in one or more -- [part] of such collaborations that involve one or more of the programs which we have, zani, ZW49, the preclinical TOPO, next-gen ADC platform and the multispecific antibody therapeutic platform. Some of the discussions might be narrowed. Some of those discussions might be broad. So we have a pretty open engagement with a host of strategic parties, and that's been ongoing since I got here. And we'll continue to be ongoing, as we look how to integrate these things into build long-term value in the company, that we couldn't do if we didn't have those partnerships in place.

Your next question is from Nick Abbott with Wells Fargo.

Starting with BTC, can you tell us what proportion of patients are enrolled in China and Korea versus outside of those territories? And when is the earliest, the company would be ready to file a BLA?

Good question. Neil J., do you want to take or do you want me to answer that one?

Yes. I mean I don't think we're going to talk specifically about exactly where patients are being enrolled from. But I can tell you that, it is a disease that is more prevalent in Asian countries, but it's also prevalent in South America and also in terms of -- if you're thinking about our territory, which we still have ownership of zani in Japan, BTC is definitely a disease that is significant in our -- in territory that we control. And we have enrolled it globally, basically, is what I can say.

I don't know, Ken, do you want to talk about the approval approach or...

Yes, I think we'll -- so just to be clear, so we -- our first goal is to work very cohesively with BeiGene to get that study fully recruited as soon as we could. And I'm happy that we did that earlier than we might have thought, when I got here in January. I think it's good cooperation between us and BeiGene. That's important, because it obviously starts the talk on when the data would be available from that study for us to discuss with regulatory agencies, not just in the U.S. but in all the areas that we intend to file, by ourselves or -- in cooperation with BeiGene. So we've guided on data being available by early 2023. Obviously, if it's possible to do it sooner, we would.

I think once we get to that point, we'll be in a position to discuss the next steps, which are to -- discuss with regulatory agencies globally where necessary, and where we think we can set timing for approvals, whether it's in BeiGene territory in China or Korea or else (inaudible) ours, then we'll be as fulsome as we can be about guiding the timing and nature of those regulatory filings. And again, we ran those studies on a global basis, hoping they would support regulatory filings in many countries, to the extent we have other requirements for regional or local studies for filing for approval, we'll set that out, once we have the data available in hand. So I think until we get that, we just won't get ahead of ourselves.

On timing, we've given guidance -- with good guidance, we thought good to study. If sooner, we have given guidance on the data that has been available. And once we get to that point, we'll give more guidance about what that means for filings and potential approvals, depending upon whether it's an accelerated pathway, which is available in a few countries already for us.

Okay. But you mentioned in the prepared comments, that you spend a lot of money in manufacturing and PPQ runs. So do we take it the products supply? It doesn't seem like there's any real obstacles, as far as CMC goes? It's really just the data and its sufficiency to support registration?

Yes. We decided to accelerate investment in CMC, including all the PPQ runs so that, that would not be a limiting factor to any filing strategy that we could take, that may be possible quicker than anything. So we're hopeful that by the end of this year, we will have satisfied all the requirements that we need to make in -- any filings we make with respect to CMC, we've got a high-quality group there. We're working really well, and I think that will not be a limiting factor to decisions about when and where to file for zani and BTC and that was strategic. It's ahead of itself, but I think that will help us accelerate the process, once we look at our data.

Okay. And then also another question, I think you said there are sort of wide-ranging partnerships ongoing, wide ranging scope with various partners. But given the ABF, (inaudible), does this sort of change the tenure of the timeline, specifically as a zani partnership?

No, I think the tenure was set up when I first got here. So I think all the contacts we've had with potential partners, we would have talked to before or who are new to evaluating Zymeworks on potential partnership collaborations, know that we're very open to looking at different structures, different options in which we can engage them. So I don't think that has changed at all with the letter we got from the group you mentioned. I think part of our strategy we talked about in our equity financing, that we completed end of January, was to give ourselves the ability to do this in a very mannered fashion, hoping then that we get to pick the highest quality partners and the best deal terms possible. But once we find the right partner, and the right collaboration and the right financial terms we think work for our investors in that structure, we can move to close that one and continue discussions on the other part.

I think overall, we'd like to see is the ability to integrate partnerships and collaborations in different ways throughout the product portfolio from early right through the zani. And the goal is to complete all of that in an appropriate structure and framework with the right partners over a period of time. It's probably not as long as you might think.

Okay. Great. And then last one for me, can you talk a little bit about data expectations from other zani indications, such as colorectal or lung?

Yes. Neil J., do you want to talk about any -- I don't think we've given any guidance on that yet. We may give some at our ASCO presentation, but anything else you want to say Neil J., about other indications?

Yes. We have -- we are enrolling Phase 2 -- in a Phase 2 study, we have a cohort with frontline colorectal cancer patients. We are -- and -- but we don't have any guidance about when the data will be presented.

Your next question is from Akash Tewari with Jefferies.

So maybe more holistically, it seems both the previous management team at Zyme and the current one has talked about a potential partnership on ZW25, but it hasn't seemed to have come to fruition yet. What data do you think we can show at ASCO, that might make a strategic partner get interested, right? Is there a certain catalyst that you think partners are looking for, in order to validate the platform and to justify further investment? Additionally, what does a formal offer entail versus All Blue versus the one you've already received? Is there a general time line for how long the review will last? And lastly, for BTC and GEA, what would be the cost needed to fully fund those trials and get them onto the market for ZW25.

Well, I'll answer as many as I can. Sorry. So as I said earlier, beyond the written statement we made last week, we can't comment further on any aspect of those discussions and hopefully ahead is straightforward. I think once we have something to talk about, then we will, when it's appropriate and required. So I think we have to be patient on that.

I can't comment to the partnering and collaboration discussions before I got here as CEO. All I can say is that, as the new CEO who started in mid-January, I was very clear with all the folks we had talked to and new folks about our openness to considering a multitude of different structures and our desire to partner and collaborate much more than we had before in building this company from early stage to late stage. I think that's really clearly understood by a lot of potential pharmaceutical and partners out there. They all have my mobile phone number. They know I'll always pick it up if there's any interest. So I don't think we need to worry about our openness to engage with them.

Obviously, we've engaged some of them previously under CDA with prior data sets. We are able to interact with them now under confidentiality agreements, and share data in advance of the peer review setting that we had discussed, and that would apply ZW49 as well. So I don't think there's anything that folks -- that we're in discussion with, will need to wait for ASCO because they did have the ability to get more real time data under confidentiality and restrictions that you would understand.

So, I think we're very open to engage. We're very open to structures around partners and collaborations, as long as they work for building value for our investors, and I think those discussions are active and busy. And as soon as we have the right partner for the right program, at the right pricing structure that works for our investors, then we will conclude that deal and announcements. I don't think anybody in that process is waiting for additional data sets that might come out of peer review meetings.

And sorry, and your last question about the costs, we haven't given guidance around that. So, we obviously know where our cash runway is. We obviously know what we could afford to do on our own, versus things that might only be possible for us to start being partner dependent. So I think as we give guidance for the next clinical steps for zani and ZW49, we will clearly address how we're going to fund those.

Your next question is from David Martin with Bloom Burton.

My first question is a follow-up to an earlier question on the first line breast study that's coming up. You mentioned that you're benchmarking combination data, combination regimens with existing HER2-targeted drugs, you know, I think in particular, CLEOPATRA is a good one to look at. But how do you view the potential for an HER2 to change the first-line hurdle and standard-of-care? And what does that mean for zani going forward?

Dr. Neil J?

Sure. So, HER2 is obviously in a front-line study and has the opportunity to change standard-of-care in that setting, if it's a positive study from the standpoint of efficacy and safety. I would say that trastuzumab and pertuzumab are really well established therapies and will still be well established therapies regardless of the readout of the front-line study within HER2.

So from that standpoint, I can't predict the future to say, what exactly we are, our data will look like versus theoretical data from this study that's ongoing now. But I can say that, when we look at the early line landscape, that we know that both in HER2 and both trastuzumab and the combination of trastuzumab and pertuzumab with a taxane are going to be -- are going to have a home in early line therapy. And so, when we think about our approach to developing zanidatamab in breast cancer, we are thinking of it along the lines of how a combination agent works.

Okay. And then my second question, it is about the offer, but it's mainly asking for a clarification. You emphasized that it was unsolicited and non-binding and I'm wondering if that means to you, that you don't need to engage with All Blue Falcons, until they make a formal offer, or is it something -- am I interpreting that wrong, like it is something that you should be engaging with them?

No, I think the comment I mentioned before was clear. I mean, we got a letter. All we know was what was in the letter and the security filing, that's all we know. We did put a written statement out last week, saying that we have received it and we were studying it appropriately, which I think you understand we would, as I said, with real seriousness, as we do everything with urgency, professionalism in the interest of all shareholders there. What we specifically decide to do next publicly or in private discussions, we will do that. And then, we will make a public statement when it's appropriate and necessary. I don't think we will talk about the next steps, until we've made a determination of what those are.

So I shouldn't read into that positioning one way or the other, I guess, wait and see what happens?

Yes. I think you can choose, I am sure others will read into a lot about this. But sincerely, I think we made a written statement last week, which I think was pretty clear. I think the comments I made today, are very clear that, to the extent that we need to make a public statement about something, we will do it, as appropriate and necessary, after the work that we need to do internally do that. Like to the extent that we have private discussions with the group that sent us the letter or other third parties we are going to be having discussions with, we will keep those discussions private, until such time as is necessary and appropriate to make any of those discussions public.

Your next question is from Gena Wang with Barclays.

This is Harshita on for Gena. I know this was touched upon before, but for the data updates at ASCO, I know you provided guidance on more additional color on patient numbers and follow-up. But I was curious, are you able to provide any benchmarks, on what we should see in terms of response rates at the ASCO updates, for both GEA and breast cancer?

Dr. Neil J., do you want to answer that question if you can.

Yes, in terms of benchmarks, I think that if you want to think about benchmarks for what to think about in terms of breast cancer, and we all know that CLEOPATRA response rates in the first line, well, we know that the TOGA and JACOB response rates and PFS in gastro cancer. I mean, I think those are the areas that we're going in -- 2 with these Phase 2 studies. And so the data that we would be interested in, comparing to, and there is lots of caveats about cross study comparisons, but when you're thinking about what do we need to do, to become standard of care, you have to look at those as the benchmarks to which you would aspire to.

And your final question is from Robert Burns with H.C. Wainwright.

This is Mitchell. The first one, I just wanted to ask again on the ASCO data, if you could describe what more we could see qualitatively from the abstract to the presentation?

Yes, I think that there's a little bit longer follow-up in the gastric cohort and in the breast cohort, but there will obviously to be a much more detailed presentation of data in terms of showing depth of response and duration, at least in what we can show at an interim cut, in terms of patients that are still on, and how long they have been on, and continuing to respond. So you will get that color, which you can't really guess from an abstract. And like I said, there will be a little bit later data cut.

Okay, great. And -- yes...

Sorry. And just to add, we will be scheduling an investor webcast at the end of our second presentation aspect of zani's clinical development plans beyond the data you might see in the abstracts and the presentations, as well as answer questions that may arise from that. So, we're hoping to have a more fulsome presentation beyond the 2 specific datasets that are available and answer questions about zani broadly.

And when thinking about your appetite for business development opportunities, how do you consider and have you considered what is a critical mass?

Yes, I think it's a little of before, I think the one thing that I did want to take a little bit of a change in Zymeworks, was to try and find a way to integrate partners and collaborations throughout this program as I mentioned, because it can allow us to go more quickly. It can allow us to do things beyond what we currently can do. It'll improve the commercial competitiveness further far along as we go. And I think it's a way to leverage our shareholder capital with partner capital. And I think there's a way to do that, that builds long term value, doesn't give up upside, doesn't take away the possibility of future M&A from those partners or existing partners or new parties. So I think there's a way to do that well and I've done that before.

And I think if you look at use Daiichi Sankyo and AZ as an example, where I don't think it's necessary entirely for Daiichi Sankyo to need anyone for a HER2 or the other ADCs they are developing, but I think the AstraZeneca [vessel] is a way to bring in a partner, give up some economics around the program, but obviously as you've seen, being able to build a much broader clinical program more in parallel, more timely and improve the commercial status for them, beyond what they could have done themselves.

So I think we're in a similar line, I'm thinking that they're -- we're running 2 pivotal studies with BeiGene as a partner, but mostly on our own, and we're able to do that successfully. I think there's many things we can do on our own, that will work out well in the early stage pre-clinical pipeline. But there's an opportunity to integrate partnerships in the manner as I said, that can build a long term value to our own investors, as opposed to just the partners investors, in accelerating timing, breadth of programs, competitiveness. Then I think we can do that in such a way, that it'll build value and won't take away from future M&A value or ability to grow the business around those partnerships. How we integrate a series of those things throughout the product portfolio? What structure we take with each individual partnership, which will probably be different, depending on how we engage and who we engage and what the product line is.

I think we can do that in such a way, that we'll be a stronger company, I think more attractive for future value growth, and I think we'll be able to develop more products more quickly and improve our competitiveness, so we can get more market share, once we get approval for these agents. So I think once we get the first one, complete and announced, we can talk about the rationale for why we did the way, why it fits the messaging I just gave you, and then how it might impact what to think about is the next one beyond that.

So the timing and structure and scope of these will -- could change over time, depending upon what the first one looks like. And maybe the second one can go beyond that. So as we unravel -- as we unroll this strategy with specific transactions, we can talk more about how this is online with the strategy I just laid out. Hope that's helpful?

And that concludes the Question-and-Answer Session. I will now hand the conference over to Ken Galbraith for any closing remarks.

That's great. Really appreciate your attention and questions today to the business at Zymeworks. Hopefully you've seen it from the performance out of the quarter we just announced, that we are working very hard and very urgently around the priorities I set out as a new CEO, in mid-January, and that's independent of the worst biotech stock market we've seen in a long time. And I think we're very focused as a team. I think things are going very well. I think, I'm ahead of schedule in the reset that we wanted to make in the organization. And I think we're going to see that as the year goes along, that you'll hopefully continue to see operating performance that meets all the priorities and deadlines we have, hopefully exceeds -- continues to exceed expectations around that. And I think we're really looking forward to reporting progress in the weeks and months ahead to you, on the things that we outlined today.

So, thank you for your attention. We really look forward to seeing you at ASCO, if you're there, or listening into the investor webcast, and we look forward to talking more about Zymeworks, and specifically zanidatamab at ASCO. So, thank you very much.

Thank you. Your ladies and gentlemen, this concludes today's conference call. You may now disconnect. Stay safe and well.