Zymeworks Inc. (ZYME) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the Zymeworks zanidatamab ASCO GI Conference Call and Webcast. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Dr. Ryan Dercho, Senior Director, Corporate Affairs. Please go ahead, sir.

Thank you. Good afternoon, and welcome, everyone. As the operator said, my name is Ryan Dercho, Senior Director of Corporate Affairs at Zymeworks. Today, we will discuss the clinical results for Zymeworks' HER2 bispecific zanidatamab in biliary tract cancer and gastroesophageal cancer, which was presented at ASCO GI earlier today. The call will be led by Dr. Diana Hausman, Zymeworks Chief Medical Officer. And then we will have comments on patient advocacy, which will be provided by Melinda Bachini, the Advocacy Relations Director of the Cholangiocarcinoma Foundation, or CCF. Dr. Hausman will provide a summary of the data highlights, and the data will be further discussed by our lead investigator, Dr. Funda Meric-Bernstam, MD and Clinical Investigator and Chair of the Department of Investigational Cancer Therapeutics at the University of Texas MD Anderson Cancer Center. And concluding with the discussion from Zymeworks' Senior VP of Commercial, James Priour, and we'll wrap up with Dr. Ali Tehrani, Zymeworks President and CEO. The speakers will be available for Q&A after the prepared remarks. Before we begin, I would like to remind you that we will be making forward-looking statements during the call. Forward-looking statements can be identified by words such as will, continue, aim, may, potential of, initiate, lead to, 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 industry and at our stage of development. For a discussion of these risks and uncertainties, we refer you to the 10-Q for the quarter ended September 30, 2020, as well as to our other filings with the SEC. As a reminder, the audio of today's event and the slides will be available on Zymeworks website later today. I will now turn the call over to Diana.

Thank you, Ryan, and thank you, everyone, for joining us on today's webcast. As Ryan said, I'm Diana Hausman, the Chief Medical Officer at Zymeworks. The focus of today's call is to highlight the data presented earlier today at the ASCO GI meeting on zanidatamab in biliary tract cancer, or BTC, and gastroesophageal adenocarcinoma, or GEA, and provide a trial-in-progress update for our pivotal BTC study now named HERIZON-BTC-01. To start things off, we are honored to have Melinda Bachini, Advocacy Relations Director at Cholangiocarcinoma Foundation, CCF, as a guest speaker to provide comments from a patient perspective. Zymeworks has been a supporter and sponsor of the CCF, their educational programs and dedication to improving patient awareness. Welcome, Melinda.

Thank you. And on to Slide 4. Good afternoon, everyone. It's a privilege and honor to be here to discuss some of the most pressing unmet clinical needs in cholangiocarcinoma from a patient perspective. On to Slide 5. My name is Melinda Bachini, and I'm the Director of Advocacy with the Cholangiocarcinoma Foundation. I'm also an 11-year survivor of Stage 4 intrahepatic cholangiocarcinoma. I'm from Billings, Montana, a wife, mother to 6, grandmother to 1 and have had the experience of being treated with several different chemotherapy regimens, 5 surgeries, and ultimately I entered into a clinical trial that with the help of my immune system targeted a mutation in my cancer and is the reason I am here today. On to Slide 6. One of the most unmet needs of patients is access or I should say, lack of access, lack of access to experts, to biomarker testing, to clinical trials and to treatment. Slide 7. I felt it was very important to ask the patient community what they felt the unmet clinical needs were for our patients. Some of those are listed here. They wanted earlier and better diagnostics so that this disease could be diagnosed in earlier stages and they had a better chance at beating it. They wanted access to specialists in cholangiocarcinoma. They wanted the ability to have resources immediately after their diagnosis that explains what cholangiocarcinoma is. They wanted resources to be connected with the Cholangiocarcinoma Foundation so that they could be connected with others that are going through this disease and not feel like they're alone. Resources on treatment and clinical trials. They also would like better education for primary care docs, PAs, NPs and the local community oncologists about cholangiocarcinoma so that they could refer them to the specialists in this disease and provide them with options that would be beneficial. They want to bring better awareness to this disease so that we can have more funding for research. They want options for better treatment, timely results following their scans, a standard protocol for monitoring with scans and bloodwork. And they want a better understanding of what the risk factors are for this disease as many patients have none that are listed. They also want to have the ability to overcome the financial barriers and burdens of being diagnosed with cancer. On to Slide 8. Patients also want a provider who thinks outside the box. Patients aren't impressed with the standard of care options that are available right now. They want the ability to be able to enter into clinical trials immediately. They would like precision medicine personalized for each patient. They want their tumor to be treated based on what their tumor's made up of. On to Slide 9. In a survey of over 300 cholangiocarcinoma patients, over 90% said they view biomarker testing as an important and necessary part of their overall treatment plan. Yet I talk to patients every day who don't even know what biomarker testing is or haven't been offered this testing from their providers. On to Slide 10. An overwhelming 80% are willing to participate in a clinical trial, we just need the opportunity to enroll and have access. And again, I talk to patients and caregivers every day who aren't given the opportunity to enter into clinical trials or don't know about clinical trials -- don't know that they can travel to enter into a clinical trial. We just need to have the access because we're more than willing to enter into them. On to Slide 11. And that is why the Cholangiocarcinoma Foundation strives to be an advocate for all patients and caregivers, a convener, a connector and a funder to help promote research. On to Slide 12. We provide a specialist map for our patients to be able to find providers in the area that treat a high volume of cholangiocarcinoma patients and are involved in research. Slide 13. We have launched our Biomarkers Matter initiative and are working hard to make sure it gets into the hands of all providers, patients and caregivers touched by cholangiocarcinoma so that they can get the testing they need in a timely manner. Slide 14. We partner with our trusted partner Ciitizen to help patients gather their medical records and have the ability to contribute to research. We launched the clinical trial finder, which matches patients to clinical trials based on their inclusion/exclusion criteria to provide options to discuss with their medical provider. All of these are free to our patients. Slide 15. The Cholangiocarcinoma Foundation shares information for providing patient advisory boards to industry and academia partners. We host patient and caregiver support groups and provide educational webinars. We partner with investigators to list their clinical trials on our website to be shared with the cholangiocarcinoma community, and we are working closely with the FDA to provide feedback on revamping the eligibility criteria for clinical trials. And lastly, we convene our professional experts, patients and caregivers at our annual Cholangiocarcinoma Conference, which will be held March 31 through April 2 this year. Last year, it was virtual as it will be again this year. The last year, we were able to have over 1,650 participants from all over the world, and we're hoping to be able to connect even more this year. Thank you so much for the opportunity to talk and tell you about the unmet-clinical-need patients with cholangiocarcinoma.

Thank you, Melinda, for providing that overview of cholangiocarcinoma, especially from a patients' perspective. It's important to remind all of us that there are patients and their loved ones behind all the numbers that we talk about, and that is the real focus of all of our work. Today, I'll be providing a brief summary of data highlights from the 2 presentations made at GI ASCO for zanidatamab in biliary tract cancer and gastroesophageal adenocarcinoma as well as the trials and progress poster presenting Zymeworks' first pivotal study in HER2 gene-amplified BTC, HERIZON-BTC-01. I'll be followed by Dr. Meric-Bernstam, who will be able to provide her insights regarding the ongoing need in both biliary tract cancer and gastroesophageal cancer, her views on the significance of the zanidatamab data as well as her overall perspective on where the field is going today. Starting with biliary tract cancer, updated data was presented today from the ongoing Phase I study with a data cutoff date from November 2020. This represents a larger number of patients with longer follow-up than we have previously presented. Data was presented in a poster presentation for 21 patients with advanced, unresectable biliary tract cancer that had progressed after at least one prior line of treatment for metastatic or unresectable disease. This included patients with gall bladder cancer as well as intrahepatic and extrahepatic cholangiocarcinoma. All patients were HER2 positive, that is they were HER2 IHC 3+ or IHC 2+ and FISH positive or gene amplified. And they all received treatment with zanidatamab 20 milligrams per kilogram, IV, once every 2 weeks. zanidatamab was generally well tolerated with no treatment-related Grade 3 or higher adverse events and no treatment discontinuations due to adverse events. The most common AEs were similar to what we have reported for other cancers. Including Grade 1 or 2 diarrhea in 43% of patients and Grade 1 or 2 infusion reactions in about 1/3 of patients. Response data was available for 20 patients. As you can see in Slide 18, which is the waterfall figure, the majority of patients demonstrated a decrease in their target lesions or tumor burden. Confirmed responses were seen in 40% of patients with a median duration of response of 7.4 months, with several patients still active on treatment. Dr. Meric-Bernstam will help put these data in perspective. But I wanted to point out that the currently available treatment for these patients would be chemotherapy, which is associated with significant toxicity and a response rate of less than 10%. These data are what form the basis for the breakthrough therapy designation granted recently by the FDA to zanidatamab in previously treated HER2 gene-amplified biliary tract cancer and motivated us to work to bring zanidatamab to patients with its high unmet need. Slide 19, please. This slide is a diagram of the currently open pivotal study HERIZON-BTC-01. This is open at sites around the world, including North America, Europe, Asia and South America. HERIZON-BTC-01 is an open-label, single-arm, 2-cohort study, enrolling patients with HER2-amplified, ISH-positive biliary track cancer that has progressed after first-line treatment with gemcitabine and platinum-based chemotherapy. 2 cohorts of patients will be enrolled, cohort 1 consisting of approximately 75 patients who are ISH positive and IHC 2 or 3+ and an additional cohort of approximately 25 patients who are ISH positive and IHC negative or 1+. The primary end point of the study is confirmed response rate in cohort 1. Key secondary endpoints are safety and duration of response. Data was also presented in an oral presentation by Dr. Meric-Bernstam from our gastric cancer cohort in the ongoing Phase I study. This included patients with heavily pretreated HER2-expressing GEA, with 35 patients receiving single-agent zanidatamab and 28 patients receiving zanidatamab in combination with either paclitaxel or capecitabine. Patients included those with advanced, unresectable or metastatic gastric, GE junction or esophageal adenocarcinoma. Again, patients were heavily pretreated, having received a median of 2 to 3 lines of prior systemic chemotherapy, including HER2-targeted agents as well in approximately 90% of the patients. zanidatamab was, again, generally well tolerated, with the majority of adverse events Grade 1 or 2. Treatment-related Grade 3 events were seen in 3 patients. 1 patient each with Grade 3 diarrhea, 1 patient with a Grade 3 increase in serum creatinine, a marker of kidney function and 1 event of Grade 5 pneumonitis, which occurred in a patient receiving zanidatamab in combination with paclitaxel, who had recently discontinued trastuzumab deruxtecan. As can be seen in Slide 20, the majority of response evaluable patients treated with single-agent zanidatamab had a decrease in their target lesions with a confirmed response rate of 33% and a duration of response of 6 months as a median. In 24 response evaluable patients treated with chemotherapy, on to Slide 21, please, we again saw tumor shrinkage in the majority of patients with a confirmed overall response rate of 54% and median duration of response of 8.9 months. For context, in the GATSBY trial, which evaluated single-agent paclitaxel, the median response rate was approximately 20%. These data continue to demonstrate the activity of zanidatamab in gastroesophageal adenocarcinoma, the potential benefit of combining zanidatamab with chemotherapy and possibly other agents to further improve outcomes. We're encouraged by the level of activity we are seeing in these heavily pretreated patients and are excited to see potentially even greater activity in less heavily treated patients. These data give us confidence as we're moving forward with our program in first-line HER2-positive GEA as both we and our partner BeiGene continue to evaluate patients in 2 ongoing Phase II studies in first-line HER2-positive GEA, one with zanidatamab plus standard of care chemo in a study sponsored by Zymeworks; and a second study sponsored by BeiGene, which is evaluating the zanidatamab plus the PD-1 inhibitor tislelizumab, also in combination with chemotherapy. I would now like to introduce our lead investigator to the call, Dr. Funda Meric-Bernstam, MD, Clinical Investigator and Chair of the Department of Investigational Cancer Therapeutics at the University of Texas MD Anderson Cancer Center, to discuss the recent data presented at ASCO GI.

Thank you, Diana. It's a pleasure to be here and talk a little bit about HER2 and our experience to date on this clinical trial. Now I'd like to start out by, again, emphasizing that this is really a time for precision medicine in these diseases and for gastric cancer, where we already know HER2 targets after first-line therapy. We really have not had an opportunity to exploit that signal further. So clearly an opportunity to learn more. While in cholangiocarcinoma as well as gall bladder cancer, we really are recognizing that HER2 is an important driver. And Melinda really did a great job in, I think, expressing how important molecular profiling has become in these diseases. And we're all really very fortunate for the Cholangiocarcinoma Foundation's leadership in this area so that patients as well as physicians can recognize how important it is in clinical decision-making. And of course, with other targets getting approved recently, such as FGFR for cholangiocarcinoma, I think, there's already greater utilization of genomic profiling there. But I think the signal for HER2 is strong enough. It's definitely worth thinking about both considering genomics as well as maybe greater utilization of industry chemistry in these diseases. So to briefly talk about our experience to date, I was involved with this trial from the very beginning. And really very, very exciting Phase I program where we've booked across tumor types actually at the signal. I had the opportunity to present some of the data at ESMO about other tumor types. And today, we have the opportunity to present the data in biliary track cancer and in gastric cancer. For biliary tract cancer, I think Diana already highlighted that this is a very difficult-to-treat disease. And I think there's alignment on a first-line therapy option, but -- which is not currently exploring any of the -- the biomarker is driving the growth. And the current second-line chemotherapy option really leaves us wanting because of both the toxicity and the efficacy being quite limited. So it's really been terrific to see the signal in biliary tract cancer. And I want to highlight that this is not only a strong signal of efficacy with objective response rate, which is coupled with durability of the response, but also a quite tolerable regimen with very medically manageable infusion reactions and very low-grade diarrhea-related events aside. So this is really, I think, from a quality-of-life standpoint, unparalleled to what a patient would have gotten otherwise. So a very exciting signal, I think, in delivery cancer. So we're very, very excited about the current ongoing clinical trial that's being led by my colleague Shubham Pant at MD Anderson. As for gastric cancers in the rapid oral session, I was able to present the data. And here, we presented both the data with monotherapy and with combination of chemotherapy paclitaxel or capecitabine. And I think it's really important to see, even with monotherapy, there's a really meaningful objective response rate, which is quite durable. So with a confirmed objective response rate of 33%. So it demonstrates that in a patient population that was HER2-positive that had already gotten HER2-targeted therapy, that this is -- just targeting HER2 with this novel bispecific strategy is able to achieve disease control in substantial number of patients, while maintaining a good quality of life. And not surprisingly, we were able to enhance that efficacy signal further with a combination of chemotherapy, and here, we presented the data with paclitaxel and capecitabine. Again, with substantial increase in the disease control rate. This approach was literally a limited number of patients, but a 90% disease control with paclitaxel and 71% with capecitabine combination. So very, I think, impressive data from that standpoint. So I'll wrap up there, and just happy to answer questions at the tail end or subsequently.

Thank you so much, Dr. Meric-Bernstam for your insights and for your time and for your dedication to your patients and clinical trials overall. I'd now like to turn this over to James Priour, our SVP of Commercial.

Thank you, Diana, thank you, Melinda and Dr. Meric-Bernstam. I'm James Priour. I joined Zymeworks 9 months ago as Senior Vice President of Commercial to prepare for the global commercialization of zanidatamab. As you understand, the company is about to initiate its second registrational trial mid- this year in first-line gastroesophageal adenocarcinoma. I joined Zymeworks from Amgen, where I spent the past 11 years in commercial leadership, general management global portfolio strategic roles in Europe, Asia Pacific and Amgen global headquarter. I would like to provide a first perspective about the commercial potential of our lead asset zanidatamab, with a particular focus on our first 2 pursued indication in biliary tract cancers and gastroesophageal adenocarcinoma. In BTC, Zymeworks has initiated a global pivotal trial, HERIZON-BTC-01 for zanidatamab monotherapy in patients with previously treated HER2 gene-amplified biliary tract cancer. This single-arm trial is designed to support accelerated approval based on a primary end point of objective response rate and may enable submission of a biologic license application as early as 2022. In GEA, the data presented today at ASCO GI support our plans to launch a second global pivotal trial as first-line treatment for advanced HER2-positive GEA in mid-2021 with our partner BeiGene, one investigational arm looking at zanidatamab with chemo and another one at zanidatamab plus chemo plus checkpoint inhibition. We are also very excited that regulators have recognized the promise of zanidatamab. The FDA has granted breakthrough therapy designation for zanidatamab in patients with previously treated HER2 gene-amplified biliary tract cancer and 2 Fast Track designations to zanidatamab, 1 as monotherapy for refractory BTC and 1 in combination with standard of care chemotherapy for first-line gastroesophageal adenocarcinoma. These designations mean zanidatamab is eligible for accelerated approval, priority review and rolling review as well as intensive FDA guidance on an efficient drug development program. zanidatamab has also received orphan drug designation from the FDA for the treatment of biliary tract, gastric and ovarian cancers as well as orphan drug designation from the European Medicines Agency for the treatment of gastric cancer. Unleashing the commercial potential of zanidatamab in gastric cancers hinges, in our view, on 3 key pillars: rapidly enter biliary tract cancer, a cancer area with important unmet medical need with a fast-to-market trial and confidence that we hope we will boost our uptake -- that this will boost our uptake later in the bigger opportunity of GEA; second, deliver robust zanidatamab clinical profiles, competitive versus current or emerging standards of care in these 2 cancers; and third, designing and executing region-by-region, fit-for-purpose, highly specialized go-to-market models based on deep understanding of the market size, the customer landscape and the specific patient management dynamics. Let me provide more details on these 3 key pillars for BTC and GEA, respectively, with a focus on the 3 regions where Zymeworks will lead the planning of the commercialization, i.e., North America, Europe and Japan, since you know our partner BeiGene will launch zanidatamab in Asia Pacific. First about BTC. BTC is a rare cancer lacking approved HER2-targeted therapies for patients overexpressing HER2. Based on IPD immunity based model, combining SEER, GLOBOCAN and literature published data, we estimate that the annual number of incidence addressable first-line and second-line patients by zanidatamab in North America, Japan Europe is approximately 5,000, with most of them, and importantly, most of them in Europe and Japan. The current standards of care are chemotherapy, FOLFOX in second line and gemcitabine plus cisplatin in first line that delivers suboptimal outcomes with median PFS of respectively 4 8 months and median OS of around 12 months. We are encouraged by our early-phase data with zanidatamab that we can meaningfully increase the efficacy with a better safety profile. The positive HERIZON-BTC-01 study, our accelerated approval trial, may enable submission of a BLA, as you heard me say already, as early as 2022. In terms of go-to-market model for BTC, a rare and highly specialized cancer with limited competition, offers Zymeworks the opportunity to commercialize zanidatamab either alone in North America, EU and Japan, or with a well-established regional partner like BeiGene for -- for APAC, sorry. We plan to initiate assessments region by regions about the commercialization strategy in 2021. For GEA, GEA is a bigger opportunity than BTC because of the higher global incidence of gastric cancer, first of all, in overexpression rate of HER2 in these patients. The estimated annual number of incidence, addressable first-line patients by zanidatamab in North America, Japan and Europe is close to 30,000, annually. Like BTC, the bulk of the opportunity resides in Europe and Japan. Current standard of care is trastuzumab plus chemotherapy, to which pembrolizumab might well be combined in the future depending on the results of the ongoing trial KEYNOTE-811. We, again, are encouraged by our early-phase data that zanidatamab has the potential to displace trastuzumab as next-generation foundational HER2-targeting backbone therapy in combinations to treat HER2-overexpressing GEA patients. For GEA, which is a more frequent cancer than BTC, with more intense competition, Zymeworks will look into plans to expand its established regional commercialization models for BTC to launch its first-line GEA indication. And again, we plan to conduct assessments region by region in 2021. So in conclusion, we think we have a robust strategy, rapidly entering the BTC market with zanidatamab and deliver the first ever HER2-targeted therapy in this indication and obtain or generate familiarization of clinicians with our drug. Then following close behind by expanding into the larger first-line indication of -- in GEA by providing zanidatamaab-based combination competitive versus current or emerging standards of care. And third, we will design fit-for-purpose, highly specialized regional go-to-market models, which makes us very excited at Zymeworks in 2021 to make progress towards sending advanced or metastatic BTC and GEA cancer patients back home to their families. This is free progression -- sorry, progression-free, with their free-of-disease progression, which is exactly the company's mission. So thank you very much for your attention. I would like to turn this back over to Diana.

Thank you, James. And a special thank you to our guest speakers for the invaluable insights they've provided. Ali Tehrani, CEO of Zymeworks, will provide closing comments in just a moment. Before turning this over to Ali, I wanted to say that I have been at Zymeworks since we treated our very first patient, and it has been a privilege to see a concept turn into something palpable with the potential to truly help patients. As a clinician, this is what I dedicated my career to, and it's exciting to see zanidatamab move forward to help realize this goal. I'd now like to ask Ali for his closing comments.

Thank you, Diana, and thank you to everyone for joining us today. I just wanted to provide some closing remarks, and I wanted to also echo my excitement about the potential benefits that zanidatamab could bring to BTC and GEA patients around the world for what we just heard and what was just presented. In my opinion, what was just shared is just the tip of the iceberg. We are on track to further showcase the potential benefits of zanidatamab in early stages of treatment of gastroesophageal adenocarcinoma and, in fact, other HER2-positive tumor types. We are working diligently to share our data at upcoming medical conferences later this year, such as ASCO in June. I want to end by thanking all of the patients that participated and, in fact, are participating in our current studies. And I also want to thank the investigators and, of course, our team, who are dedicated to helping patients around the world. Thank you very much.

Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.