Jazz Pharmaceuticals plc (JAZZ) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to Zymeworks zanidatamab Licensing Agreement webcast. [Operator Instructions] And the webcast is being recorded. I would now like to turn the conference over to Jack Spinks, Head of Investor Relations at Zymeworks. Jack, please go ahead.

Good morning, and welcome, everyone. Thank you for joining. My name is Jack Spinks, Associate Director of Investor Relations here at Zymeworks. Before I turn the call over to Ken, our Chair and CEO, who will speak to you today about this morning's announcement of Zymeworks Licensing and Global Development collaboration with Jazz Pharmaceuticals, I'd like to first briefly remind you that during today's call, we'll be making forward-looking statements. Forward-looking statements to be identified by words such as should, would, will, continue, may, potential, initiate, look forward to, expect, believe, plan, anticipate, enable and similar words. 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 industries and at our stage of development. In this webcast, forward-looking statements include statements about the anticipated benefits of our agreement with Jazz, the anticipated timing of closing of our agreement with Jazz, satisfaction of closing conditions and receipt of upfront payments. The commercial potential of zanidatamab and our and Jazz's ability to obtain regulatory approval of and successfully commercialize zanidatamab; our ability to achieve additional milestones and payments under our agreement with Jazz, the timing and status of ongoing and future studies and the related data, our expectations and ability to successfully advance our other product candidates and future product candidates we identify and advance through our R&D and partnering efforts, implementation of our corporate goals and meeting expected time lines, advancement of zanidatamab zovodotin into registrational studies and other product candidates in clinical studies; the timing of and results of interactions with regulators, including future IND filings, our expectations regarding future R&D efforts, partnering activity and development priorities, our anticipated cash runway following closing of the agreement with Jazz, our ability to obtain clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and satisfy the other terms and conditions of the transactions contemplated by the agreement between us and Jazz and statements about the anticipated development of our business and accomplishment of our strategic priorities. For additional details regarding our agreement with Jazz, please refer to our current report on Form 8-K filed this morning with the SEC. For detailed information about the risks and uncertainties faced by Zymeworks. Please refer to our filings with the SEC and on SEDAR, including the Risk Factors section of specs filings, which filings may be found on our website at www.zymeworks.com, as well as the SEC and SEDAR website. As a reminder, the slides for this morning's call are available now on our Investor website, and the audio sources in this morning event will be available on Zymeworks website later today. I will now turn the call over to Ken Galbraith, our Chair and CEO. Ken?

Thank you, Jack, and good morning, everyone. Thank you for joining us. Today, we're extremely pleased to announce a significant licensing and global development agreement with Jazz Pharmaceuticals, which provides Jazz with global commercial and development rights to zanidatamab, excluding those territories already governed by our Asia Pacific partnership with BeiGene. This agreement creates significant value for Zymeworks and its stockholders and to fill the major strategic objective we identified in January of this year of identifying and enacting a global partnering transaction for zanidatamab within this calendar year. We're excited to partner with Jazz. Jazz is a leading global biopharmaceutical company that brings a wealth of development and commercial experience in oncology. This transaction enabled Zymeworks to leverage Jazz's existing integrated capabilities and global infrastructure to commercialize efficiently. Notably, in the U.S., there's a significant overlap with Jazz's existing Zepzelca [indiscernible] universe where they built -- have built strong relationships and quickly established Zepzelca as a standard of care in second-line small cell lung cancer. Jazz made an attractive financial proposal, which we believe reflects the potential value of zanidatamab. And the agreement is structured in a manner that meets our financial objectives for this transaction, and we look forward to partner with Jazz to advance the development of zanidatamab as rapidly as possible to provide a foundational HER2-targeted therapy for patients with difficult-to-treat cancers who currently have limited treatment options. We also believe that a partnership with Jazz will complement Zymeworks' existing relationship with BeiGene to help optimize global capabilities for the future development and commercial success of zanidatamab. As Jazz utilizes its global capabilities and infrastructure in a complementary manner to BeiGene strength in China and other Asia Pacific regions. We very much look forward to working with our new colleagues at Jazz immediately and going forward to advance zanidatamab towards patients in global markets while we await formal closing of the transaction, which is expected before the end of 2022. In short order, I'll speak to the transaction and this positive impact on the future of Zymeworks. However, I think it's worth taking a moment to speak about zanidatamab and the history behind developing this exciting molecule. Zanidatamab is a unique bispecific HER2-targeting antibody, that was engineered using our Azymetric platform. It targets 2 distinct extracellular epitopes of the HER2 protein and induces tumor cell death through multiple distinct mechanisms of action. As you can see in the graphics, the unique geometry and biparatopic nature of zanidatamab prevented from binding to the same HER2 molecule, which in turn allows HER2 receptor cross-linking and clustering on the cell surface, driving enhanced internalization and HER2 receptor down regulation. Zanidatamab also promotes immune cell killing of tumor cells via antibody-dependent cellular cytotoxicity and phagocytosis and supports efficient complement-dependent cytotoxicity of HER2-positive tumor cells. A publication exploiting the unique and differentiated mechanism of action of zanidatamab is expected to be available in 2023. Zanidatamab was developed in-house by our team of scientists and protein engineers using our Azymetric bispecific antibody platform the same leading multi-specific platform being used by Bristol-Myers Squibb, Johnson & Johnson, Merck and other global pharmaceutical companies under various technology licensing and collaborative agreements with Zymeworks. Zanidatamab investigational new drug application was accepted by the FDA in 2016, and the first patient was dosed in our initial Phase I clinical trial shortly thereafter. Steady clinical progress resulted in the FDA granting breakthrough therapy designation for previously treated advanced HER2 gene-amplified biliary tract cancer or BTC, in 2020 as well as the initiation of 2 pivotal studies. The first in BTC and the second in HER2-positive GEA patients. With results of numerous clinical trials reported over the past 4 years, studies of zanidatamab have generated clinical data showing promising efficacy and tolerability in multiple indications, and we confirm our expectations on a top line data readout from its first pivotal clinical trial before the end of this year with full clinical data in BTC expected to be presented at a major medical meeting in the first half of 2023. This would represent zanidatamab's first opportunity for filing review with global regulatory agencies. This slide shows the range of diseases where HER2 is a potential therapeutic target, and the green checks indicate where we've seen single-agent antitumor activity with zanidatamab in our clinical studies. HERIZON-BTC-01 is our first civil study of zanidatamab as monotherapy in previously treated advanced HER2 gene-amplified biliary tract cancer. And again, we confirm our expectations that this study will report out top line data before the end of this year. Our second registrational study, HERIZON-GEA-01 is in frontline HER2-positive gastroesophageal adenocarcinoma and evaluate zanidatamab in combination with standard chemotherapy with or without tislelizumab, a PD-1 inhibitor from BeiGene. This study is actively enrolling patients globally, and we currently expect to be fully enrolled by the end of 2023 with top line data expected in 2024. In addition to these pivotal studies, zanidatamab is being evaluated in Phase II trials in multiple other HER2 expressing indications, including in several lines of treatment in breast cancer, as well as in first-line BTC patients and first-line colorectal cancer patients. Maturing data from these ongoing studies may support the potential for zanidatamab to benefit patients across a variety of indications and underscores our belief that zanidatamab has significant value that can be realized by broad clinical development in the future. Now turning to the licensing and global development agreement announced today. We're very pleased to announce this exciting collaboration with Jazz Pharmaceuticals, which covers exclusive global commercial rights to zanidatamab, excluding certain Asia/Pacific territories already included in our partnership with BeiGene. Out of the terms of the agreement, Zymeworks to receive $375 million in upfront payments in 2 separate tranches both currently expected before the end of 2022. Consisting of a $50 million upfront payment, subject to expiration or early termination of the process under Hart-Scott-Rodino and a second payment of $325 million at Jazz's option upon readout of the top line clinical data from HERIZON-BTC-01. In addition, we're eligible to receive up to $525 million in regulatory milestones. A further $862.5 million in milestones are available to Zymeworks upon the achievement of specified commercial milestones. Zymeworks is also entitled to receive tiered royalties between 10% and 20% of net sales of zanidatamab pending approval. In addition, Zymeworks to also reimbursed for 100% of costs associated with ongoing zanidatamab related clinical studies, which has to fund 100% of future clinical development costs for studies not already in progress. While we and Jazz will establish and maintain various joint committees to coordinate future activities, plus a development, manufacturing and regulatory, Zymeworks will continue to oversee clinical studies that are ongoing today through completion. Additionally, in the partnership with Jazz, Zymeworks will submit the first BLA for zanidatamab and we'll partner with Jazz on future regulatory filings. This involvement that will continue is critical as we continue advancing our ongoing clinical studies of zanidatamab towards regulatory filing and hopefully approval, allowing our employees to finish what they started many years ago with the goal on day 1 of striving to improve patient outcomes over the current standard of care in a variety of HER2-expressing tumor indications. As you heard say everybody on the call, zanidatamab is a significant step forward for Zymeworks as a company and represents validation of the valuable development work our company has undertaken that bring zanidatamab to this stage of development. Importantly, this transaction allows us to secure the necessary commercial capabilities and infrastructure for zanidatamab from our collaboration partners, Jazz and BeiGene in order to bring zanidatamab to a broad patient population globally. After this transaction, we will focus our efforts and attention on advancing our exciting early-stage product pipeline, while continuing to work with both Jazz and BeiGene to seek regulatory approvals and potential launches of zanidatamab in global markets. We'll also focus on incremental clinical development investments in zanidatamab zovodotin, or ZW49, our first antibody drug conjugates in clinical trials, with the goal of having this program move into at least 1 registrational study by 2025. In addition, we believe this transaction will enable us to more aggressively fund and rapidly advance product candidates with a focus on our key technology platforms both our next-generation antibody drug conjugates and our multi-specific antibody therapeutics. As Dr. Paul Moore, our new Chief Scientific Officer and research leadership team will speak to in detail at our earlier R&D Day tomorrow, Thursday in New York City. We believe Zymeworks has the capacity and capability to advance 5 new product candidates into clinical studies within the next 5 years. Inclusive of potential INDs for ZW171 and ZW191, which are both currently expected in 2024. Building on our experience and expertise from the discovery and development of zanidatamab and zanidatamab zovodotin, we believe that there is the potential to build an internal oncology portfolio of best-in-class compounds, utilizing our expertise in ADCs and multispecific antibodies. Importantly, we also continue to -- intend to continue our focus on advancing and expanding our product candidate portfolio through future partnerships and collaborations. We believe the collaboration we're announcing today provides further validation of our ability to consummate collaborations with high-quality partners on financially attractive terms that enhance our ability to build and grow Zymeworks into a successful biotech company. Going forward, we plan to seek partners for ZW49 and future product candidates in markets outside the U.S. prior to initiating any registrational studies. While we're training U.S. rights for potential future commercialization of our own products, in the U.S. in the future. Leveraging our partner's global commercial capabilities, similar to what we're doing today for zanidatamab with both Jazz and BeiGene as well as retaining commercial rights for potential future commercial launch in this market our considerations we will evaluate in the future as we grow and develop our capabilities within Zymeworks. As we look to the future, we intend to focus our R&D strategy on clinical development opportunities in difficult-to-treat cancers where we can leverage our in-house multi-specific antibody therapeutics and antibody-drug conjugate platforms. With these antibody platforms and our ability to develop indication-specific treatments in either the multispecific or drug conjugate format, we seek to develop first and second line opportunities in difficult to treat patient populations with accelerated approval pathways. Further, we'll look to develop product candidates and therapeutic indications with the potential for attractive market share, which we define as greater than $500 million in global potential details in the lead indication for a product candidate. This focused R&D strategy with our 2 research pillars of our multi-specific and antibody drug conjugate platform, we believe we can drive the next wave of best-in-class antibody-based multifunctional therapeutics and provide us an opportunity to continue the success we've seen with zanidatamab and zanidatamab zovodotin today. We do look forward to speaking about this further at our early R&D Day tomorrow in New York, as I mentioned. With the shift in investing our own cash resources away from zanidatamab into other product candidates, we will be able to dedicate additional time in R&D funding to further study zanidatamab zovodotin, our biparatopic antibody drug conjugate currently in Phase I. As we recently presented at the European Society of Medical Oncology Meeting in Paris, zanidatamab zovodotin has shown encouraging single-agent activity in multiple HER2-expressing tumor types with an acceptable tolerability profile in heavily pretreated patient population. With no signs of pulmonary toxicity, such as interstitial lung disease, no significant neuropathy and no significant neutropenia noted to date across the 100 or so patients that we've now treated in our ongoing Phase I clinical study. We believe this tolerability profile is unique and differentiated compared to all the other HER2 ADCs in development currently. With the current activity and safety data seen to date from our ADC, we believe there are multiple avenues of development of the drug and indications that are both commercially meaningful and where additional novel approaches are needed as first or second line standard of care. One indication of interest for further clinical evaluation is in treating patients with non-small cell lung cancer across the 3 distinct patient subpopulations of HER2 amplified, HER2 expressing and HER2 mutants. With zanidatamab zovodotin's tolerability profile and lack of interstitial lung disease or overlapping toxicities with potential combination agents such as cytotoxic chemotherapy, and potential synergies when used in combination with PD-1 inhibitors, we believe additional clinical studies in this patient population are warranted as both monotherapy and in combination with current standards of care, such as PD-1 inhibitors. There's also a potential to explore zanidatamab zovodotin's differentiated safety profile and single-agent activity in other indications, such as metastatic breast cancer patients with lower levels of HER2 expression or after previous treatment with other HER2-targeted ADCs. We also have seen promising initial responses in gastroesophageal patients and in other pan-tumor indications such as ovarian, endometrial and bladder cancers that may warrant further valuation in clinical studies. With the strengthened financial position that this agreement brings Zymeworks, we will be able to fund further development of zanidatamab zovodotin as appropriate in order to further study is potential effectiveness and differentiation in these indications. We look forward to providing further guidance related to the scope of the development program and specific goals for 2023 after final determination of the recommended Phase II dose, additional commercial assessment and any necessary regulatory consultation. The other important aspect of this transaction lies in its ability to transform the financial profile of the company and our balance sheet. Given the current state of the biotech equity markets, additional attention needs to be given to availability and cost of capital as compared to potential returns from additional preclinical, clinical and commercial investments. We have been applying enhanced financial discipline at Zymeworks since I began earlier this year as we evaluate additional investments across our product portfolio and company infrastructure. As mentioned earlier, under the terms of the agreement, we expect to receive payments of $375 million from Jazz prior to the end of 2022. These expected funds, when combined with our existing cash balances, which were approximately $242 million as reported on June 30, 2022, providing a significantly improved balance sheet to support our planned development activities. We believe that this significantly improved cash position, together with the expected R&D funding from Jazz for zanidatamab development and expected milestone payments from other existing collaborations should provide funding of our planned operations through at least 2026 and potentially beyond. With closing this transaction and finalization of future spending plans, we expect to be able to provide further financial guidance in conjunction with disclosure of our 2023 corporate goals and expected milestones in early 2023. As we recognize a significant milestone for the company today, we have an exciting next few years ahead of us in all aspects of our business. We expect to see numerous zanidatamab related clinical data catalysts highlighted by the anticipated release of our top line data from our first pivotal study, HERIZON-BTC-01 in second line HER2 amplified biliary tract cancer patients later this year. Next year, we look forward to presenting the full results of pivotal trial as well as follow-up data from our Phase II study of zanidatamab in frontline GEA, which was initially presented at ESMO last year. In the latter half of 2023, we currently expect to complete enrollment for our second pivotal trial, HERIZON-GEA-01 in first-line gastroesophageal adenocarcinoma patients. Longer term in 2024, we're focused on submitting 2 new IND applications and further leveraging our platform to drive additional preclinical product candidates into the clinic. With this agreement today, we are continuing to successfully implement our strategic priorities in the manner discussed with the commencement of my role as CEO in January. We successfully negotiated a transaction that provides a meaningful improvement to our current financial position and future cash runway. Through this agreement, we have the opportunity to continue accruing benefits from regulatory approvals and commercialization of zanidatamab while aggressively advancing our pipeline of product candidates, including zanidatamab zovodotin, ZW171, ZW191 over the next few years with the goal of potentially having 5 new product candidates in clinical studies over the next 5 years. We've been able to negotiate a transaction with a structure that provides significant upfront payments consistent with the late stage of clinical development of zanidatamab. Support for funding ongoing development cost of zanidatamab, significant potential future milestones based on regulatory approvals of zanidatamab, which they expect are achievable and a fair and reasonable share of the successful commercialization of zanidatamab without the necessity for future investment in building our own commercial infrastructure now. Hopefully, this transaction provides an indication of our ability to form and integrate important partnerships and collaborations that will be helpful to every aspect of our business. We continue to have discussions about interest in further partnerships and collaborations throughout our product pipeline and look forward to reporting progress on these in the future. While this transaction with Jazz provides a significant financial benefit for the company and stockholders, we believe that patients will be an important beneficiary of this agreement through our ability to secure the funding and capabilities from our partners, Jazz and BeiGene, that allows zanidatamab to advance to a broad group of patients globally in need of additional novel therapies that may improve patient outcomes beyond the current standard of care. We also have the opportunity to reinvest the proceeds of this agreement over time to utilize in further discovery and developing additional best-in-class therapeutics, targeting towards difficult-to-cancer consistent with our mission to seek novel approaches to cancer therapy that has the potential to dramatically improve patient outcomes over the current standard of care. I want to thank you all for listening to the prepared remarks. I'll now pass the call over to the operator for Q&A, where myself and the Zymeworks executive team are available to answer questions.

[Operator Instructions] Our first question comes from Stephen Willey with Stifel.

And congrats on the transaction. I know this has been a work in progress for a while now. Ken, I know there's a lot to focus on just kind of the option-based nature of the $325 million. Can you maybe just kind of speak to the decision to structure that in such a manner? And then can you just I guess, provide a little bit of commentary as to whether or not this is just a truly subjective decision on Jazz's part? Is it defined by some threshold response rate or duration of response data that comes out of the trial? And is that decision somehow -- or I guess could that decision somehow be affected by some extraneous circumstances? I guess, specifically anything which might emerge during that time frame on the competitive front?

No, that's a great question, Steve. I think in our discussions with Jazz, we had come to the meeting of the minds on working together and the financial parameters of that agreement. I think we both felt very strongly that rather than waiting for the pending top line data disclosure from BTC before this year, that optimizing value in the brand and also optimizing the value of that brand for both of us. It was in our interest to start working closely together immediately to get them engaged and working forward on zanidatamab. In doing that, though, we had to face the unique circumstance and reality that we had a top line data readout coming up before the end of this year, which we were not able to share with them nor do we know the data today because as you know, under ClinicalTrials.gov, the primary outcome measure of overall -- ORR and the important secondary measures are subject to independent central review. And we could not break the data integrity or validity of the study by sharing it with potential partners. And again, we don't have that data. So I think we decided that we could be creative and structure the upfront payments in a way that Jazz would have that data available to them before they were asked to hand over the vast majority of the upfront payments. I think we were quite comfortable with the timing of being able to get through the Hart-Scott-Rodino process and make that data available to them before the end of this year, such that the entirety of the upfront payment of $375 million could be provided to us by the end of the year. That second payment is structured entirely at their option. They'll be provided with the data and all the analyses; they'll be asked to make that second payment entire their option to decide whether they want to make that payment. Obviously, they don't make that payment on the time frame, then the agreement is terminated. But we felt that was the best way to structure it rather than providing some kind of subjectivity rather than providing some discount to them on the risk associated with the measures out of that study, the best way to do it from our perspective. And obviously, they agree to it because we've agreed in and issued the agreement was to simply make sure that data was available before the majority of the upfront payment was required to be paid by them. And we're very confident in our ability to make that data available to them in order for them to decide to make that second payment.

Okay. That's helpful. And then maybe just a couple of quick more questions and I'm not sure if you can speak to these or not. But I guess, can you say what the time frame is with respect to how long Jazz has to make that decision once you have delivered the BTC data? And then I guess the second question just completely escaped me. I guess if you could just answer the first. And the regulatory payments, I'm not sure if you can speak to how those fracture out between BTC and GEA?

Yes, sure. So I think the nature of the second payment and process, there will be some disclosure of that in filings, we'll make related to this agreement, you also wait and read that. But I think from our standpoint and Jazz's standpoint, we can deliver zanidatamab before the end of this year. There's a very tight time frame for them to then make that second payment to us. And the time frame we've given them should be sufficient for them to evaluate that data and make that decision. And I think we were -- I think it was a completely reasonable request for them to be able to at least have that data before they hand it over the majority of the upfront payment. So we came up with that creative structure of bifurcating the upfront into 2 payments. And we feel confident we can deliver the data and we feel confident that they'll still believe in zanidatamab and want to move forward with the agreement. Otherwise, we would have waited. But we did give them the complete option to make that decision based on the data. And we feel quite comfortable in making that decision. And I think the time frame for turnaround is quite tight. And so our expectation is that the entirety of the upfront payment will be paid to us before the end of this year. On your second question, we won't comment further. We obviously have a pretty significant ability to earn milestone payments on regulatory approval of zanidatamab, both for the current pivotal trials and beyond that. The timing of how that's broken down by geography and indication is not something that will go further into until those milestones are earned and received and announced.

Our next question comes from Yigal Nochomovitz with Citi.

Ken and team, congratulations on the deal. Very good news. I just wanted to follow up quickly on Steve's question. So just as far as I understand it, this is totally subjective up to Jazz with regard to the $325 million for HERIZON-BTC, meaning as far as I understand it, that there's nothing in the agreement that outlines specific clinical scenarios in terms of degree of benefit and/or specific p-value thresholds that would automatically trigger the payment of the $325 million. Could you elaborate a little bit on that aspect?

Yes. It's entirely at their option. And I think that was the only way that we both felt that this could work. And again, we -- I think we'd agreed on the collaboration, the financial parameters, I think we have this unique situation with the data set coming out that we don't have access to the key measurements in the data set because they are an independent central review, both we and Jazz want to make sure we don't affect the integrity or validity of that data set in getting into this agreement. So we had to get a little creative on deal making and bifurcate the upfront payments into 2. One based solely on Hart-Scott-Rodino exploration and the other is directly related to our ability to give them the data and have them look at it before being asked to make the next payment. I think it's a pretty reasonable request. I'm very comfortable with the way that we structured this relationship. I think allowing us to go forward now so we can get our partner on board working with us collaboratively with a pending data set coming up that could be our first registration going forward was extremely important to both of us. We both realize it's the way to optimize value in zanidatamab, the way not to lose time against competition, we both have an economic interest in doing that. I think we're able to structure something that we both feel comfortable with proceeding today as opposed to waiting until that data was available and then striking a deal, I think -- we're very confident in the top line data, which will be coming out this year. We believe that zanidatamab has a place in biliary tract cancer treatment in patients in second line. And so therefore, we think this is a way to allow the deal to go forward now did not have an impact on the economics of the deal other than structuring the upfront into 2 different payments. And then once those are behind us, we can move forward in the relationship and we'll be 2 months further ahead, and there's tremendous value in that for both of us. And I think it was just a creative deal structuring moment between the 2 companies to allow us to go forward, without impacting the integrity ability of that top line data set, which is extremely important for both of us.

Okay. Got it. And then I just had 2 other hopefully quick ones. So you mentioned full 100% R&D reimbursement from Jazz. So to the extent that you can characterize just ballpark it, what sort of numbers are we looking at in terms of what level of R&D reimbursement you would expect from Jazz to get through the pivotal trials for both BTC and GEA? Just roughly how much above the $375 million in upfront would that reimbursement number look like?

Yes. We won't give out guidance on that today. Obviously, it's a funding mechanism. So -- to the extent that Jazz funds and reimburses our development costs, you'll see those on an ongoing basis going forward. And again, that reimbursement starts today. So obviously, it's one of the benefits of us starting the agreement today moving forward, and they're working with us today, which is great. I think it's no surprise if you look at prior disclosures we've made at least this year, almost 70% of our cost structure is related to zanidatamab. So obviously, going forward, and this is all ongoing studies right now currently. So this stretches out for some time period. And we're obliged to do the work. We're happy to do the work. We want to finish what we started, and we're obligated to do this on Jazz's behalf and they're required to reimburse it. It's a pretty substantial change in our financial burn rate. If we look at zanidatamab, being 100% fully reimbursed. Obviously, we have expectations that we'll continue to do work on ZW49. And as you'll hear tomorrow that we want to ramp up the preclinical pipeline beyond 171 and 191. I think once we get through the completion of this transaction at the end of this year and once, we have a chance to fully flesh out our 2023 plans and goals and milestones, we will provide financial guidance on spending early in 2023 when we talk about our 2023 guidelines and milestones, but it's not possible for us to do that today.

Understood. And then just 1 final one, thinking about clinical development synergies between the 2 companies. I noticed on the Jazz pipeline, they have a solid tumor drug called lurbinectedin, which is being developed in Phase II for a number of solid tumors and in Phase III for small cell lung cancer. Was there any discussion potentially of thinking of ways to do combo work with any and lurbinectedin or mechanisms just too far field from one another that wouldn't really be a priority?

Yes. Yes, I don't think we'll talk about potential synergies with their pipeline currently. I think you'll have to wait to hear more about how we intend to work with Jazz and BeiGene for further development opportunities. I think we're -- having spent time with Jazz, we're extremely impressed with the development experience in oncology in that organization. And I think they have a whole host of folks who have worked on things inside their portfolio, and we're very interested in having them work with us on the development of zanidatamab as we move forward. And again, I've been very impressed with the expertise and execution on the commercial side of Jazz. And so I think -- we think bringing that development and commercialization experience of zanidatamab is going to be a significant step towards optimizing the potential value of zanidatamab. And obviously, the value of that brand in conjunction with being a very good complementary piece to BeiGene's current strengths in the Asia/Pacific market outside of Japan. So I think in all of our analysis, it's a very attractive financial proposal from Jazz. I think there's no doubt denying that. I think that proposal is worth it because I think zanidatamab is a potentially extremely valuable addition to HER2-targeted therapy. And obviously, Jazz agrees because they've signed up to that. And I think we're really excited to work with Jazz and BeiGene on further developments and getting to regulatory filings, getting approvals, getting launches done and really seeing the true benefit that zanidatamab can bring to hopefully it's a pretty broad patient population. So I think it's a really interesting fit for Jazz with zanidatamab, and I think from Jazz's perspective, if you look at their growth pattern, where they're going in the future, I think zanidatamab is a perfect product for them to add to their portfolio. And in the future, they're going to be extremely glad that they did this.

And our next question comes from Charles Zhu with Guggenheim Partners.

Congrats on this agreement. Maybe just switching gears for my first question a little bit. To what extent did zanidatamab's opportunity in GEA factor into Jazz's decision? And how much line of sight that they have into the ongoing Phase II front-line study prior to making this agreement?

Yes. Good question, Charles. Obviously, Jazz did a tremendous amount of due diligence on zanidatamab. And we made accessible to them everything that was available to us on our confidentiality including data that you mentioned around the ongoing Phase II GEA study in first line with zanidatamab plus chemotherapy, which we have guided that we expect to put data out in a peer-reviewed medical meeting in the first half of next year. So we gave them everything that we could to allow them to make the best financial proposal and obviously signed this agreement for at the zanidatamab . The one piece we couldn't provide them because we don't have it and don't know it, is that the outcome data for the second-line BTC study that will read out before the end of this year. And obviously, we didn't have that. We couldn't provide that to them. We both did not want to affect the validity or integrity of that ICR process, which is extremely important from a future regulatory perspective. So we provide them everything we could, including what you mentioned. We just had to creatively feel make around the unique situation that we both find ourselves in without having access to data that's pretty imminent but wanting to work together quickly. And I think the structure we came up with was acceptable to both of us. I'm very confident that we'll be in a position before the end of this year with the upfront payments behind us, the 2 conditions, Hart-Scott-Rodino and making the data available from BTC to them behind us and focus forward on development and commercialization of zanidatamab in their territory.

Got it. Great. Yes, that makes sense. And for my second question, apologies, I'm probably beating a dead horse, but is there a scenario where HERIZON-BTC succeeds based on your predetermined endpoints and Jazz for whatever reason chooses not to opt in?

Yes, it's entirely their option. We've signed an agreement today. We've announced it. We're going to start working forward. There's obviously a $50 million first tranche of the upfront payment that's payable once Hart-Scott-Rodino expires or terminate early. And so it's entirely their option if they would like to not make that second payment after seeing the data, that's entirely up to them. I know from our perspective, and I think from their perspective, we entered in this partnership on the belief that we would be moving forward together. But I think it's entirely a reasonable request before they hand over the vast majority of the upfront payment, which is very sizable that they're allowed to see the data set that comes out of our BTC pivotal study. And I think we feel confident in our ability to deliver to them. And we feel confident in the fact that we think it's going to support the broad applicability of zanidatamab even beyond BTC. And so we felt confident enough of that structure to strike that deal today. And I think we do get the benefits of working with them earlier, which are substantial for the brand and for both of us. And I think given the imminent nature of that data set at the same time as we're currently going through the Hart-Scott-Rodino process, we're quite comfortable with that. But it's entirely their option, their decision. There's no rationale required. There's no minimum benchmarks of any time whatsoever. We'll make the data available to them. They have a quick time frame to make a decision about making the second tranche fragment or not. And if they don't do it, the deal terminate.

Got it. Fully understood. Congrats.

And our next question comes from Akash Tewari with Jefferies.

This is Amy on for Akash. So I guess the first one, just a question around the $325 million option around HERIZON-BTC. Given we already have prior data for HERIZON-BTC. Just wanted to see what are the remaining questions on the program? Is Jazz looking to see longer durability data? Is there an ORR bar? Is there a concern for ORR getting rotor time? Would they be okay with a 40%? We're trying to understand if this is a derisking, I guess, -- derisking hurdle for BTC? Or are they using it kind of to read across to other indications like breast as well? And then overall, what's your confidence that this gets executed?

Yes. No, thank you. I know it's kind of a unique structure for a unique situation. I think you may be reading too much into this. We've obviously provided due diligence a substantial amount of information on zanidatamab, including whatever we put around biliary tract cancer, including our prior data that was available in our earlier clinical study. The one thing we could not provide them with under diligence though was any data or outcomes related to the ongoing pivotal study because we don't have it and we can't break the blind or the database lock on that because it will affect the validity and integrity of the data. So we could not provide that. So I don't think there's anything specific in line other than I think it was a pretty reasonable request that there's an imminent data set coming up, but it would be nice to see that ahead of having to write a pretty substantial check in the majority of the upfront payment. And I think we were quite happy to make that request. And we do get, as I said, the benefits of working earlier with Jazz now rather than waiting until that's available. We're confident in our ability to provide the data for them to make that decision. We're quite comfortable with the structure of how that decision is made in quite a time period to make the final payments and such that everything will be done by the end of this year, so we're quite confident in our ability to complete the transaction as indicated. But I think we did this unique structure for a unique situation. And I think you might be reading too much into it other than it'd be nice for them to see that data set before writing a much bigger check, and we're quite comfortable with doing that based on the benefits that the brand gets in both of us get from starting now as opposed to waiting. And obviously, they must have some comfort that, otherwise, there wouldn't be any reason for them to sign and announce a deal today, commit just providing a $50 million check that's related to Hart-Scott Rodino and not the data. So obviously, we're they must have some level of comfort and expectation of moving forward on this partnership, otherwise, there'd be no reason to agree with this today. But again, it's entirely their option. We'll make the data available to have a quick turnaround time to make the second payment but it's entirely to their option to decide if they want to do that. And if they don't do it, then the agreement is terminated.