Zymeworks Inc. (ZYME) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Gena Wang. I'm Smid-cap Analyst at Barclays. Welcome to our second virtual global healthcare conference. First, I wish everyone stay healthy, and I would like to thank all the participants, investors, companies and especially our event team and the corporate access team who made this virtual health care conference possible. And with that, I would like to introduce our next presenter, Ali Tehrani, President and the Chief Executive Officer, from Zymeworks. Ali, over to you.

Thank you, Gena, and thank you to the Barclays team. I will now share my screen. Just apologies for 1 second as I share my screen here. So I'm having some technical difficulties here in doing this. I think...

Seems that you need help, guide, Ali?

No, there's just an issue here with -- there we go, there we go. I think I figured it out. So if I go here, and over here. I've got it, okay? Share screen. Here we go.

Perfect.

Perfect. So I just want to quickly remind everyone of the legal disclaimers outlined here around forward-looking statements that I will make in this presentation and/or throughout this deck. I want to start by providing an overarching guidance for 2021 and 2022, which, in many respects, will be data-driven, very data-rich and very catalyst-rich years. There will be data for both of our clinical programs, zanidatamab, also know as ZW25, and of course, ZW49. There will be advancements for our preclinical programs and platforms. There will be advancements of our programs into new programs, into clinical studies by our existing pharma partners, which, of course, also creates revenue and there will be new business development activities, which I will discuss and highlight as we go forward. As highlighted on this slide, our corporate priorities provide some of the key specifics. Namely for this year, we are focused on providing data to support our long-lasting thesis that zanidatamab can become the standard of care and the first-line treatment for metastatic biliary tract and gastroesophageal cancers. Alongside the opportunities in BTC and GEA, we're also focused on providing data in support of the differentiation and benefit of zani in pre and post-metastases in breast cancer. Naturally, the bar here is to showcase zani's benefits versus the triplet combination and a very notable combination of Herceptin plus PERJETA plus chemo. We are also very keenly focused on generating data that very clearly shows the differentiation and the positioning of ZW49 as an ADC for treatment of HER2-positive cancers, especially as another option alongside zani. And to ensure that oncologists have the best possible options to treat their patients across the spectrum of HER2-positive needs from HER2 low to HER2 high and different tumor types. Last but not least, as highlighted by our announcements yesterday, starting with this coming AACR, we are very excited to share our research and development of novel first and best-in-class preclinical programs and platforms that shape our pipeline for the foreseeable future and, of course, future business development opportunities as well. Here is an overview of our pipeline as it stands today. And the takeaway from this slide is the breadth and the depth of our pipeline. Specifically looking at the very bottom and all the items in green, we are developing a number of next-generation multifunctional assets in oncology, that also have the potential to set the stage for the development of therapeutics and programs in the future in inflammation and autoimmune disorders, meaning that we very much have in our vision the start of other therapeutic areas in the near future. Also, all of this should be noted that is enabled by underlying platforms that can continue generating many assets for the foreseeable future and again, of course, set the stage for new pharma partnerships in such a way where we can do nonexclusive deals and tech transfers, as we've been known to do. Namely, to that end, we are very proud of our existing partners, all of which are still active and ongoing. And as you can note here, 2 have advanced programs into clinical studies. We fully expect that one or more of the other partners will also advance programs into the clinic this year which, of course, will result in payments and revenue for Zymeworks. The financials of our existing deals are highlighted here. One thing that should be noted is that these are tech transfer deals, as I mentioned before, meaning that they have very little impact on our resources because the respective partner is responsible by themselves for the development and the advancement of their own programs into clinical studies and beyond. And of course, as they do, we receive payments along the way. Payments that come from a tech transfer, signing of the deal, all the way into preclinical success into clinical success, into regulatory success, all the way to commercial and ultimately, royalties. And if everything was to work out in all of the deals that we have signed, we stand to potential receive -- potentially receive up to $8.6 billion. And as you can see, we've received over $200 million to date with more to come. Also the other key aspect to note here is that these are nonexclusive deals, which means they do not preclude Zymeworks from our own R&D objectives and it frees our hands that -- leaves our hands free to be able to pursue what I showcase in terms of programs and platforms and future clinical opportunities on the previous slide. Now I want to draw your attention to our lead programs. As a reminder, we've developed zanidatamab, ZW25, to address HER2-positive cancers where HER2, the target, is the driver of the cancer and needs to be stopped in terms of signaling inside the cancer cells and also interacting with neighboring receptors that ultimately results in the potential for resistance and a patient becoming refractory. The thesis for zani is to come in early and stop the cancer from proliferating and ultimately becoming metastatic. As I mentioned, this is accomplished through signal blockade. This is accomplished by the formation of a cluster on the surface. This is accomplished by a very complex biology that makes zani the potential future of foundational drug in HER2-positive cancers, especially at the early stage. In that vein, we also developed ZW49 to ensure there is a solution, a very viable solution on the table when HER2 is no longer the driver of the biology of HER2-positive cancers and more so becomes a biomarker, an indication that this cell is cancerous. In this case, ZW49 as an ADC binds to the target, gets until internalized and through its payload destroys the cancer cells from the inside. We believe ZW49 is a transformative ADC where you can develop highly-potent ADCs without compromising safety. And it will alongside zani provide, as I mentioned before, a very viable solution to oncologists to have 2 drugs that can best help their patients and ensure that their cancers are stopped. If we look at the need in the space, we see that all 8 approved HER2-targeted agents are essentially for either third-line plus breast cancer or with -- in the case of gastric cancer, only Herceptin is approved as a frontline agent. In essence, what this simply means is that HER2 over-expression is linked to many different tumor types, which presents the need, the opportunity for developing and addressing these unmet needs, which include colorectal cancer, pancreatic cancer, lung, biliary, all of which can become HER2-positive cancers. We see this as a very viable opportunity to help these patients who don't today have a targeted therapy as a solution. And for the most part, rely on chemo or other small molecule agents and can benefit from antibody-based therapeutics, which are much more specific and potentially much more potent. And also, this presents the opportunity to showcase the power of both zanidatamab and ZW49 to enter and to compete in the -- in a very competitive field of HER2-positive breast cancer and also gastric cancer. This is another level of abstraction where, again, you see that the majority of the activity and approvals have been in the smallest subsets of need. If we look at breast cancer, for example, the approvals have primarily been focused on third line, possibly second line. But in terms of what is now known as HER2 low or all the other sort of disease morphologies that are not HER2 high, the need remains highly unmet with the potential of different solutions coming to the table and addressing them. And quite frankly, for everything that is unmet, there simply just won't be a singular solution. There is room for multiple agents. There is room for multiple approaches to really address these large unmet need in both breast cancer and gastric let alone all the other tumor types that I showed you in the previous slide that essentially have no solution. So now let me go over exactly how we plan to position zani -- zanidatamab as a foundational therapeutic in HER2-positive cancers and as the therapeutic that could become the standard of care in several different HER2-positive tumor types and address the need that I mentioned before. Looking at this slide and at the very left, you note different tumor types. We've called that biliary tract cancer, gastroesophageal adenocarcinoma, breast cancer and colorectal. This is a snapshot of all the different HER2-positive tumors that we are studying zanidatamab. But the objective, the strategy can really be deciphered here. In biliary tract cancer, our objective is to go with zanidatamab will ultimately Herceptin does not have a label and did not go into. And we want to really showcase zanidatamab as a monotherapy and potentially with chemo as an option that could really become the first-line treatment and the standard of care there. An approval here also opens the door for compendia listings and for the path into the other tumor types, as I mentioned before, such as endometrial, such as cervical, colorectal, so forth and so on. In our gastroesophageal studies, the underlying thesis was to showcase the differentiation and the benefit of zanidatamab plus chemo versus Herceptin plus chemo, which has been go-to solution for this tumor type. Now today, we do know that the field is more and more morphing and changing towards the use of Herceptin plus chemo and a PD-1 agent, which exactly is the reason why we have that study capture here as well. In our breast cancer, set of studies, we also are aiming to show the benefit of zanidatamab now versus Herceptin plus PERJETA plus chemo, which has been the dominant go-to solution in anywhere from neoadjuvant all the way to front-line metastatic breast cancer. And our studies here, whether it is zani plus chemo or zani plus other agents such as Pfizer CDK4/6 or ALX's CD47 solution or other targeted solutions is to ensure and to demonstrate that zani can be the next-generation, best-in-class solution as Herceptin and PERJETA go generic and can provide a chemo-free solution, can provide a solution even in HER2-low patients. And last but not least, in our colorectal study, we aim to, again, as I mentioned, like our BTC approach, to really open the field with zanidatamab in terms of going beyond just breast cancer and gastric cancer. And ultimately, through all of these studies demonstrate that the future of HER2-positive cancers, especially in early lines, can be addressed by zanidatamab. Now in terms of data release, as I mentioned before, what is key to note that this year, and I will provide a snapshot of the data. We already shared our data for late-line BTC and GEA at ASCO GI, where it clearly demonstrated why we received breakthrough designation for zanidatamab in biliary tract cancer. And then as we go forward, looking at ASCO and ESMO, we are very excited to share our data in the gastroesophageal frontline setting, where we have 2 Phase IIs underway. One Phase II is underway by us where we're looking at zanidatamab plus chemo in front-line GEA, where, again, the standard of care is Herceptin plus chemo and in a different Phase II frontline GEA, where our partner, BeiGene, is running the trial, we're looking at the triplet combination of zanidatamab plus tislelizumab, which is BeiGene's PD-1 plus chemo which, as I mentioned before, sets the stage for the future of standard of care in frontline gastroesophageal. We are on track based on this data to set the stage for the kickoff of a Phase III pivotal, multi-arm registrational study to ultimately submit a BLA for frontline GEA in the future. And as I mentioned before, the data from these 2 Phase II frontline GEAs will start to roll out from ASCO to ESMO in collaboration with our partner, BeiGene. In terms of the data release for breast cancer, again, in the second half of this year, we will do our utmost best, and we're planning, and we're right now looking at all the different conferences to share our data to showcase our conviction in breast cancer, especially in terms of showing that benefit over Herceptin plus PERJETA as that formidable treatment paradigm that is available right now in front-line breast cancer. And that data set in breast cancer will start to roll out in the second half of this year. And on top of what you see here, there are many other studies that are being planned. They are being ready to be kicked off. And between now and as these datas become available on the market, we will also inform you in the new studies that will be initiated and patients that will be enrolled. So there's a lot more to come. As I mentioned, I wanted to quickly review the data. This data was showcased at ASCO GI this year. And what you're looking at is monotherapy zanidatamab in late-line BTC. This is well above the standard of care in this line, where basically, chemo is used as an option, and the response rate is in single digits, where we are generating close to 40% response rate in a small number of patients, but quite representative of what can be possible and the reason we were able to secure our breakthrough designation. This response has been durable as seen here. And you can see that where the dotted line is presented, many of our patients have crossed the 6-month line where alternatively based on the second line or second line plus with chemo, they barely make it to 3 or 4 months. If we were to look at our data that we presented, again, monotherapy zanidatamab for late-line gastroesophageal, as you can see here, we have a response rate that is close to almost 40% with really deep and durable responses for an agent that is not utilizing chemo. If you were to compare this to the standard of care in front line, which is Herceptin plus chemo, that is a 47% response rate. And in late line, without the use of any chemo, monotherapy, zanidatamab is nearly generating the same rate. In terms of the duration, as you see here, you see that many of our patients stay on study for a lengthy period of time. And as that -- this data cut that was shared at ASCO GI, many remain on study, which shows that we have a very attractive agent and a very promising agent. Now this also is the data that we shared at ASCO GI, which perhaps sheds light on how the data that we are excited to share at ASCO and ESMO could play out. Here, you see what happens when you add chemo to zanidatamab in late-line GEA. Some of the things to note here is first and foremost, our rate with a small is 54%. Again, remember that frontline GEA has a 47% response rate with Herceptin plus chemo, and we're well above that. Notably, some of the other agents in the space, ADCs and otherwise, do not get to 54%. So in late line, just zani and chemo, we've shown that we are ahead of the others. And in fact, we're very excited to share the data when PD-1 is added to this and show how much more we have room to improve to the benefit of patients. In the bottom, note the patient tumor types, note where you see 1 plus, note where you see FISH negative, the IHC and the FISH status have provided. Where some of these patients started in our study as HER2 high, but ultimately, were confirmed to be HER2 low. And this shows our excitement of the potential of zani above and beyond just HER2-high patients. Again here, you see the duration. And here, you see that much like the other data points, we have the opportunity to really change the landscape for patients. So again, I want to mention that in the development plan, there is a lot of room for the data that is going to be shared and presented to support our thesis for zanidatamab as a foundational drug here. Our thesis is highlighted here. I'm not going to go over this because we're running out of time, and I want to get to Q&A. And of course, I want to talk about ZW49. This is my last slide before we jump into Q&A. And what I wanted to highlight is that our dose escalation in our Q3W and/or q weekly is continuing. We have patients in both studies, and we are excited about dosing up and going to the next level. We have also initiated an initial expansion cohort, as we've mentioned before, at 2.5 mgs per kg Q3W, where multiple patients have been enrolled. The enrollment started in Q4. And we're excited to ultimately further demonstrate the differentiated safety aspect of ZW49 and the efficacious positioning and competitive nature of ZW49 in the space of HER2-positive cancers as we go through our dose escalation, as we define or recommended Phase II dose and as we move into a Phase II with this asset. So let me pause here and get to some questions. Thank you for your attention. I will stop sharing here.

Thank you, Ali. That's very comprehensive overview. We don't have too much time left, but I do want to ask the one question each -- for each program. So I think for the ZW25, certainly, GEA looks very exciting at the biliary as well. And what would be your thoughts for the first-line trial design for GEA -- for the pivotal study?

For the first-line GEA study?

Yes.

It is a multi-arm randomized study. The control arm is Herceptin plus chemo. And the study Arm 1 is zanidatamab plus chemo and study Arm 2 is zanidatamab plus tislelizumab plus chemo. Our objective over the standard of care, which is 47%, is to basically be materially above that 47% rate and the other competing agents.

Okay. So then the primary endpoint will be overall response rate in the 1 or 2...

That is one of the endpoints alongside potentially PFS.

PFS. Okay. Good. And then second question regarding ZW49. You mentioned that if I hear correctly, you're also enrolling once-weekly dosing. Is that right?

We're escalating. We're escalating in once weekly and every 3 weeks.

Okay. So once weekly, I don't know if you could share the dose, what's the starting dose?

Starting dose was 1 mg per kg.

Okay. And then those accelerating, would that be just double the dose or by 1 milligram?

Smaller increments, not large increments because the total amount of cumulative dose will be much higher than every 2 or 3 weeks, and we'll be sure to provide an update as quickly as we can on it. But in the past, we've said that we are moving by smaller increments by almost 1/4 or half increments.

Okay. Okay. That's good. And so second half this year, when we have the data update, like can you lay out what kind of cohorts we will see the data?

That is our aim, as we've communicated before, is that we want to be in a position in the second half of this year to discuss our go-forward plans with ZW49 in terms of recommended Phase II dose and the data supporting it.

Okay. Will you be focusing on specific tumor type to...

We are enrolling -- correct. We are enrolling in multiple different tumor types. We're enrolling in breast cancer, we're enrolling in gastric cancer, and we're enrolling in a sort of a basket cohort and different HER2 levels.

Okay. I think the question I'm asking is because last update because of the different tumor types, it was a little bit difficult to assess the real like activity because we have a small number. So for this,additional enrollment, will we see more concentrating HER2 breast cancer so that you have a more definitive understanding of the activity?

Correct. That is our aim is to provide specific answers related to specific tumor types.

Okay. Perfect. We are running out of time, but thank you very much, and we're looking forward to later this year. And hopefully, we will see great data.

Thank you very much. Thank you for having.

Thank you, Ali.

Bye.