Zymeworks Inc. (ZYME) Earnings Call Transcript & Summary

Welcome, everyone, to the next session of Citi's Virtual Oncology Leadership Summit. I'm Yigal Nochomovitz. I'm one of the biotech analysts here at Citigroup. If you have questions for the company, for Zymeworks, please just e-mail me at [email protected], and I will make sure to relay the questions over as appropriate. So, with that, it's my great pleasure to welcome some of the senior leadership from Zymeworks. I have with me, Chris Astle, SPV and CFO of the company; and Paul Moore, the CSO of the company.

So, thank you both very, very much for joining. It's great to have you here. So, maybe one of you could give a quick overview of the company just in terms of the platform technologies, the key pipeline assets. And then from there, we can dig into some of the details in terms of your clinical programs. Thanks.

Thank you for having us here, and I'll kick off and hand over to Paul to talk a little bit more about the platform and sort of our pipeline. But as Zymeworks, we're a global biotechnology company with the goal of developing a diverse pipeline of novel multifunctional biotherapeutics to improve the standard of care for difficult-to-treat diseases. Zymeworks in-house protein engineering expertise and computational technology provides a scientific capability to navigate complex tumor microenvironments to engineer 2 key therapeutic modalities, multi-specific antibodies and ADCs to produce a diversified portfolio. With our unencumbered assets, we're exploring new opportunities for developing collaborations in early-stage clinical programs with potential for multiproduct partnerships with the next 5 INDs over the next 5 years with our 5 and top programs and that will allow us to accelerate our development and while also retaining U.S. rights. We have benefited from our current collaborations, and we plan to continue with a balanced and diverse pipeline portfolio between MSAT and ADCs with continuous advances to our technology, plus expanding potential opportunities that we have. Our partnerships on Zyme, our Phase III clinical multi-specific antibody with Jason BeiGene has really been a transformative partnership for our company, both in terms of creating significant value for our shareholders and de-risking our balance sheet, but also serve as a validation for our ability to create clinically means assets and have a significant commercial value. I'll hand it over to Paul to talk a little bit more about the platform and our pipeline.

Yes. Thanks, Chris, and thank Yigal for the invitation to present on behalf or to discuss our programs on behalf of Zymeworks. So, Yes. On the pipeline and the platform, I think Chris mentioned and you're probably familiar with zanidatamab, that's our lead program overall. That was built on our multi-specific platform or Azymetric platform. So, that's kind of a foundational capability that was developed proprietary technology developed at Zymeworks, which we actually use in zanidatamab, which basically combines 2 binding sites to HER2. One is the pertuzumab, one is trastuzumab, and that molecule had very impressive preclinical profile and has a very exciting clinical data, it shows that it does more than just a combination of those 2 antibodies. So, that's pushing forward. And as Chris mentioned, we have that partnered with Jazz and BeiGene, and they're really driving the clinical development towards pivotal trials and readouts. Behind that, we have that same molecule attached to a payload. So, that's our zanizobiKalar or zanidatamab zovodotin CW49, and that's progressing in the clinic. We have that in a Phase II trial in lung cancer. And then behind that, what we've really pushed and really focused on is our 5x5 platform, which is where we're developing 5 new molecules in 5 years, was the initiative there. We're ahead of schedule on that. And that is a balance of our ADCs, proprietary ADCs and multi-specifics next-generation T cell engagers. And we think we can talk more about that as we discussed today.

So, you said you're ahead of schedule. So, that means you're going to have the 5 INDs before 2026 or are you going to have more INDs by 2026, Tell us what that means more specifically?

Sure, sure. So, I think when we rolled that out, the Norton curve was 5 INDs in 5 years, 5 in the clinic from 2022. So our kind of our goal is really 2022 to 2027. What we've already achieved there is, we anticipate being on schedule with all 5 in the clinic in the first half of 2026. So, that's sort of ahead of schedule. But we've actually already nominated 4 of those programs of the 5, so 2 are going into the clinic this year. And one of those is the T cell engager targeting mesothelin. That's our 171 program. The other one is our fully receptor using our proprietary TOPO payload and our sort of differentiated thinking on ADCs for that program. And then next year, we have 2 programs going into the clinic, one targeting NaPi2b, again with the TOPO platform and then the fourth against it, which is a target in liver cancer. So, we're sort of diversifying out of ovarian cancer and lung cancer with the third TOPO ADC.

Well, you mentioned the TOPO a few times, and I want to make sure we talk about that because it's very interesting. And you just had a paper very recently, I believe, delving into the MOA and the rationale for that TOPO1 payload. So, tell us about that, how is it different from what's already out there? What are the key advantages? And what are the takeaways from that publication?

Sure. This is something that our EDC team had been -- we have our own chemists and EDC team here at Zymeworks, and they have been working on thinking about payloads for many years and also examining the literature, understanding the field, thinking about what's the balance of payload potency, what's the right payloads, what's the linker. So, that thinking was sort of driving then the design and the work that was done to get our novel payload. And so, the payload is part of the Camptothecin family. There, what we wanted was a version of that kind of payload that had the potency, the bystander activity that we thought was in the sweet spot for that family of payloads. So, the team kind of engineered or designed analogs that sort of changed some of the side chains to get something that had that feature at that balance, potency, bystander activity sort of bicuspid properties. And then, a subset of like 100 of those were then tested on different antibodies to show that it then gave us the right balance of efficacy and its safety. And for us, we really feel having a molecule that we can have it a safe profile, but still, of course, efficacy is important in the design. So, we were not focused on highly potent, highly stable linkers, but we're not necessarily thinking that way. We feel based on the literature and based on clinical experience a more balanced potency for the capitations along with some designed instability in the linker is kind of the sweet spot that we wanted to be in. So, that's where we are with that program. Happy to discuss more about that.

Well, I think we can back to Zani later, but I want to stick with your new programs. So, you mentioned 171 mesothelin CD3. You prioritize that one getting to IND. I think along with the polar receptor alpha in the first half of next year. So, let's get into a little bit more detail as far as why you prioritize this one? And what has been the pre-clinical profile so far? Obviously, with bi-specifics, one of the key challenges, especially with the CD3 targeting, as we all know, is the CRS. I'm sure you've addressed that.

I've obviously been working with T cell engagers in prior positions. So, I had quite a lot of experience in working on both liquid targeting CD3 engagers, short-acting, long-acting, different potencies of CD3s. And the team also here at Zymeworks has been spending quite a bit of time thinking about the right design and components of the antibodies. So, maybe just thinking of a T cell engagers high level, obviously, there's been more success in liquid tumors, solid tumors is starting to see success. So, clearly, there needed to be some enhancement knowing the design of the molecules to really push through and get more sustained activity and efficacy. So, our team spent quite a bit of time varying with the user metric the same heterodimer structure that we use in Zani, we could use that, and that allowed us to actually try and vary the different ends of the bispecific, try different CD3, try different orientations of the targeting arm. And through that screening, we found a structure that really gives us very impressive efficacy when we compare it to previous mesothelin CD3s, okay? And so that was the data that drove us to selecting, it was somewhat empirical driven. But as we designed that, some of the features that we've wired into the molecule, we are using a proprietary anti-CD3, which we feel has the right profile for killing supporting efficacy, but the cytokine release is limited. And then we're also using what we call this 2+1 design, which others have been proposing and using and there's actually been some encouraging data from, I guess, Amgen with their 2+1 structure. So we've also employed a 2=1 structure. But what we found was it wasn't just any 2+1 structure that worked there. We had to have the mesothelin arms in a certain kind of geometry and structure or to really give us that breakthrough efficacy that we see in animal models. And then when we've taken that into safety studies in primates there, we see a very good safety profile. We've got pretty high doses relative to other T cell engagers, and we see safe profile. So, the 2+1, the concept there is really to try and drive more targeting to cells that have higher levels of expression and limit the targeting to cells that have lower levels of expression. So getting that threshold where you get on target on tumor activity, but limit on target off-tumor activity is so one of the other design features, I think, supports this safety profile. But we still maintain a very good efficacy profile on tumor cells.

So with the 2+1, just trying to understand, you mean 2 domains of the -- And then those on 2 like on the same arm or you have one on each?

So, maybe have it set up, we know where the CD3 should sit and then we have mesothelin one on one. So, we have a CD3 mesothelin and then we have mesothelin arm on the other side. We have that just pigeon a little bit details. We changed that from having single change to fabs. It doesn't work. And we've tried different 2+1 structures. It doesn't give us the efficacy impressive efficacy that we see with this particular structure.

And I was mentioning the CRS. So, what's sort of the goal there in terms of how much you want to tune down the CRS, given what we've seen with other programs you're very familiar with, obviously or do you want to be to be in a good regime?

Yes. I mean, there, we've profiled that in all the sort of preclinical studies you can do in vitro and then also in vivo, and we compare against benchmarks from tire potency CD3s and we certainly see lower cytokine release. So, I think, again, in the nonhuman primate, we didn't see spikes. It was very tolerated. Certainly, some molecules. They're not tolerated at doses above make per kid since we were able to go up to 10-plus mg/kg with that. So that, to us, gives us confidence that we've managed that mining stock issue. But, of course, we'll have to see what happens when we go in the clinic.

And then I know the IND is not going to be filed until when you said the first half of this year, correct?

Well, I think what the guidance we've given for both programs, both the 171 million and the 19 is that we will be filing INDs this year on both of them. But we are aggressively pursuing that. You can be Sure.

And then there's a lot of ways you could do this in terms of development, the high mesothelin-expressing cancers or you would be more focused on specific indications? How are you thinking about the early clinical plan?

So, obviously, we're in the process of generating the clinical protocol just now as we're finding touches to the IND. So, we'll obviously have the escalation. We've got some thoughts on escalation that allow us to hopefully get up through patient doses. There we would be enriching for patient populations that we know where mesothelin expressed. So, we know it's high in ovarian, we know it's high in pancreatic. We know it's high in mesothelioma. So, during the escalation, we would just be driving towards recruitment and getting into a safe dose. And then on the expansion phases there, again, it would be the indications that we've indicated ovarian pancreatic, non-small cell lung cancer, there's also a subset of colorectal cancer. And at that point, we need to think about, is the pensions of mesothelin such that you take all comers within those? Or do you narrow in and focus in on a subset of population where maybe the mutual population isn't as broad as in other tumor types?

By the way, I know this one is a fairly specific question, but I think people would be curious, with the tumor mesothelin domains, is it basically just the same domain twice? Or is one targeting one epitope and another one target is not different epitope?

No, it's the same binding site. So yes, it's the same rating. That's something we could have changed. We could have done that, but that's not what we did here.

So, then let's talk about 191, which is also making its way through the IND this target is obviously known entity, a receptor alpha as we know. So, of course, the question we received since last summer since announcing this and I'm sure you're continuing to get is talk about how you expect this further-receptor alpha ADC to be differentiated from some of the competitors out there that we're well aware of?

Yes. Not specific. Yes, a question that we often get. And we've thought a lot about because it is an investment there in this program. Clearly, we feel like our molecular approach is differentiated and a lot of the preclinical data that we've got supported that decision. So, it was somewhat data-driven because when we're developing our molecule, we're also benchmarking against competitor molecules or other molecules in the space. But maybe just to talk about how we've designed and how our philosophy towards designing ADCs or ADCT. So, there's different components. There's an antibody. There is a drug conjugate, there's a linker. All of those could be toggled and optimized, and that's what we've done, right? And we've done it in the context of thinking about the tumor indication that we're trying to be applying the modality to. So, we mentioned the top payloads earlier on the call. So, that's clearly a fundamental component of our design feature for this bullet for 191. And so, we're applying that payload, which again, we spend a lot of time thinking about the right properties of that payload. We think topotecan or campuses are appropriate for ovarian cancer and non-small cell lung cancer, which is where the pullet receptor we'd be targeting, which is differentiated from the approved full receptor program from ImmunoGen and AbbVie. So, that's a clear differentiation there. We've also spent quite a bit of time on the antibody itself. We didn't just take a 4 receptor antibody and a touch of payload. We screened quite a deep panel of on receptor antibodies and found an antibody that we felt really push the needle on efficiency and internalization, we could have done and we did evaluate biparatopic there likely had in Zani, but we didn't need it because the antibody that we got out of the gate right from all the screening really supported good internalization good payload delivery. So, we've the change the antibody, changed the payload. And then also, based on the success of the Daiichi programs in the context of in HER2, we've also thought a lot about the inert amount of the lease payload that you need to also balance efficacy, but also safety profile. So, that all was wired in. And we've taken that molecule through preclinical testing. We've compared it to mirvetuximab, and we see efficacy with this molecule that's we can get deeper and broader responses. So, one of the features of mirvetuximab about bias approved, but it's only approved in a subpopulation of politer expressing ovarian cancer. So, we feel that there's opportunity below in the mid- to low expression, which would really broaden the opportunity for a FOLFIRI receptor targeting ADC. And so there, we see activity in that population in PDX models in preclinical studies where we don't see activity but mirvetuximab. In the higher expressing tumors, we see activity, as you would expect with mirvetuximab and with our molecule, but in the mid to low, we see efficacy with our molecule that we don't see there. So, that broadens the potential. So, we think efficacy could be better based on the design, but then we can also go broader across more patients with design as well.

So, maybe you could expand a little bit on that in terms of how much bigger a population? I mean, how low can you go in polyreceptor alpha expression and still pack a punch in terms of relative to what we know is available today.

Yes. So we presented that. So, you think of one measure of boiler acceptor is like a score expression. So, you can score that goes from 0 to 300, right? So 0 is nothing, or 300 feet plus on all 100% of the sales. And so, again, we've looked preclinically at that work. And what we feel is that even in tumors that score is lower than 100, we see activity with our ADC. So, if you think about the population right now that can be tackled by mirvetuximab, I think people would think that that's maybe 25%, 30% of the population. If you took the cut point, we would be hoping that we can go into that additional, maybe not all 70%, maybe you have to have at least some level of target there. And that's something that we will learn as we develop and clinically develop it. But certainly, we feel like we can -- I'm throwing out a number here at least double the population, maybe even more than that it could be treated with the design that we see and the features that we see preclinical hold, frankly.

Well, I guess that gets into my next question in terms of the tactics and plan for the first studies. So, initially, would you just want to do a POC with kind of more of the classical approach in the high expressors? Or would you be open to starting, as you say, with the broader population, maybe not all the way to the other end of the spectrum, but something with a more relaxed cutoff on expression of our output? And then of course, in ovarian and some of the gynecologic malignancies of combinability is an important question, especially with the anti-VEGF such as bevacizumab or just the plan on chemotherapy? So, where do you stand as far as that approach?

I'm glad you mentioned the combinability because that is something that, again, with the feature of our ADCs and this going with what we consider moderate payloads, but it's still within the range of other proposes that have been successful, but we feel by going with that more modest and not high potency palbo that we are set up to do combination studies. That opens that up because you don't have as much potential talks associated with your molecule that you have to consider. So, that very much is in our thinking. Initially though, of course, you have to get monotherapy data and you have to do a monotherapy study. There, again, our clinical teams thinking about the design. We've got the way Zymeworks is set up for its clinical execution, we do have opportunities to look in different geographies. So, we'll go look for patients, recruit as quickly as we can on the escalation. And then once we get into the expansions, we will be thinking exactly of the different subsets, the how, the Merin experience, the MR, the lows, the poly receptor negative is based on the available combine diagnostic and all of those will have wired into our clinical design so that we can get a sense of how broad is the opportunity for a molecule.

And just to remind everyone, I think, just to clarify, for 171, is it also the TOPO preload, the novel TOPO preload or different?

So, 171 is CD3 engager. 191 is the...

I'm sorry, that one doesn't have the number yet. And then with regards to 191 the DAR, it sounds like it's more of a modest start, but you disclosed that?

For the 191 we did, we look at DAR, DAR4, and we actually feel with the safety profile and that payload that the data was very good in the monkeys, it was safe, and so we're going with DAR8 rate there.

And then time lines for the R&D, as you said, for one-on-one at some point this year.

Yes.

And now the next one is sort of, I guess it's sort of related to the full receptor alpha, the NaPi2b, the ZW220, you had a strategic choice as far as which to prioritize. It seems like you've decided obviously to move the full receptor alpha ADC first versus the NaPi2b ADC. But, of course, they're both interesting. So, what is the strategy there as far as the decision to move forward with the folks at alpha 1 first? But sure, leave the NaPi2b for later.

Yes. No, that's a reasonable question. I think if you just look at the 3 molecules that we've nominated or described for that we're pursuing the 191 fully receptor, then NaPi, then glypican 3. And what we've done there is, because it is a novel platform, payload, we did want to get a benchmark also on an opportunity with the target that has got -- is more validated there's an ADC vehicle, right? So, we wanted to benchmark with fully receptor. And as we develop that molecule and looked at it, we thought, wow, this has got a great opportunity, so we push that forward. I think the team also then was also looking at other targets, and we were somewhat drawn to targets that could benefit from improvement and improved EDC modality. NaPi has some evidence of activity. But so far, it has challenges clinically, and we felt, okay, our technology could also leverage off of some initial signals that it could support EDC, but then add in some features that could then push it forward. So, they could really make a molecule that could make a difference and a activity. So that was the thinking on the nappy. And then negligent, then you can see that that's a target that is somewhat validated in hepatocellular, but with different modality and then we're adding an ADC, which we really see as an opportunity to sort of augment what other people are doing there and expand the opportunity for EDC. So, it's kind of from more validated, it's less validated to validate a target but not for an ADC. And then as we're continuing to evolve our ADCs and our advanced platform, like the next generation, we will probably move into more novel targets and novel approaches on the target side, but we wanted to stay a little bit more within validated targets at this point.

And, of course, you've gotten this question many times, but everyone is still interested. And we saw some, obviously, setbacks with competitors within NaPi2b target with their ADCs. So, of course, you looked at that and how we incorporated that into your design for your construct.

Sure. We Rosato program and of course, Mersana had programs and what programs had encouraging signs of clinical activity, but ultimately didn't make it. We had limitations. And I think some of the features that we've been designed in NaPi have obviously leaned on some of the limitations of those programs, okay? So again, here, we're using the TOPO payload. So, neither of those programs use a total payload, which is what we feel for ovarian in lung cancer, again, just like we're thinking popular is that it really gives you potentially a better opportunity for responses. We then also thought about the antibody. Again, we benchmarked the antibody just like we did before receptor. We picked an antibody. We feel very good internalizer and supported PLO delivery. And then on the DAR in this case, we have gone with a lower DAR. We feel for this target, potentially just to balance the safety efficacy, you can sort of open up a therapeutic window by keeping the DAR little bit lower, and our preclinical data supported that we saw good efficacy with this ADC. NaPi EDC in a range of different NaPi expression so we don't feel like we're losing too much in the potency by going with the DAR4, but we just are been erring a little bit on the side of caution based on the challenging we get with higher DAR on-target off-tumor toxicity or even off-tumor toxicity. So, that was our thinking there.

And this one, I think, if I'm not mistaken, you've guided for the IND in 2025?

That's right. First half 2025.

But everything has been locked down as far as all the pieces of the puzzle, right? The payload, the DAR, all that has been sorted out.

That's right. So, we've settled with Bear we settle in the antibody, the linker all that component and that we're gearing up for the regulatory filing enabling activities, like the GLP talks and GMP manufacturing, that's all in progress or planning for that.

And then the fourth of the 5 INDs, if I'm counting right. ZW251. So this is the GPC3 you mentioned for hepatocellular carcinoma. There are not a lot of ADCs targeting GPC3, from what I understand. So, tell us why you picked that and why it's a compelling target in this cancer in HCC.

Yes. No, absolutely. Yes. So, the target GPC3, one of there has been other modalities targeting that, you're right, not much on the ADC front, more on T cell targeting strategies, T cell bispecifics, CAR-Ts, and certainly, and even maybe radio-labeled modalities are looking at that, too. The appeal we had for it was just how cleaner targeted is on normal tissue, but expressed in hepatocellular cancer. So, the target itself was attractive. We could have developed the T cell engager or we have T cell engager capability. But we actually, as we develop the ADC and we look at the profile and our thinking again on differentiation from other modalities that are targeting it, we really latched on to the EDC because we just, basically, the data drove our decision there. So when we looked in multiple PDX models, hepatocellular PDX models, I think nearly all of them are nothing down in the tumor. So the tumors are being treated. When we then put the molecule, the design the ADC into nonhuman primate studies. Again, we saw a very favorable safety profile there. And as we just think about the need in hepatocell carcinoma, it's just quite limited the lines of therapy, the types of support those patients have, is clearly a need for better therapies. So, for us, it just all added up into very supportive of moving forward there. Obviously, we have to think about liver targeting therapies, small molecules, took that type of peal will that payable and support antitumor activity and balance the safety that you could have there. But that, again, featured into our thinking on the DAR. We've gone with the DAR4 there on this molecule as well. So, that's kind of high level on that.

So, that one, the construct has also settled as far as our...

Locomotive.

And a similar question around combinability with some of the typical therapies in HCC like atezolizumab and bevacizumab as well as you mentioned the small molecule like Nexavar.

Right. Yes, it's not definitely, but we're thinking and again, right now, checkpoint inhibitors, there is rationale there to combine with EDCs. So that, again, is one of the reasons why we went with the DAR4, just like in this case, to have is that combinability option to have more bandwidth to do that by using the lower door without impacting efficacy. So, we're thinking about that. Again, I think we mentioned as well like geographic locations, where do you recruit the right patients and where you really push this. That's also something that our team is very much thinking about. And as you may be aware, we have a hub in Singapore. We have a hub in Europe in addition to North America presence. So, that will be also something that we're thinking about is where do we really push patient recruitment and clinical development for this program, too.

And then the last one, which is the fifth. It sounds like you haven't really spent much time talking about this TriTCE.

Yes. No, we haven't - we've presented some interest in data at AACR and SITC last year, and we'll have more presentations, the upcoming AACR. What we've spent our team has spent quite a bit of time on the TriTCE, that tri-specific T cell engagers is actually incorporating additional capability into the molecule other than just pure CD3. So, for our TriTCE, Coston, that incorporates CD28 specificity into the molecule. So we will have co-stimulation in addition to primary T cell accuration through Tri-CD3, plus a tumor antigen. That's the tri-specificity. And others are really looking at CD20, maybe more on a bispecific strategy. So, people might take target against a tumor target with CD28 and develop that as a bispecific or and then combine it, say, with checkpoint inhibitor or combine it with bi-specifics, that's a CD3. What we are doing is actually putting it all into one molecule, but putting the CDC, the CD28 and the tumor antigen into one molecule. But to develop that, you have to be very careful on the potency of the CD28 and the CD3, you can't have those molecules having activity that's independent of tumor antigen engagement. And so, what we've done is we spend a lot of time thinking about the geometry and also the affinity of that CD3 and CD28 that can then play with tumor antigen. And we've presented some of that data, but that's the platform that we anticipate the fifth molecule leveraging off of, but we haven't nominated the target that we're going to go with that yet, and we're working on that just now.

Some people might be wondering just a basic question, I think it's a pretty easy answer, but it'd probably be helpful just to explain it. You wouldn't want to combine, say, an ADC mode with a CD3 engager that those have to stay separate. And that would be, I guess, over a kill or is there a reason why you would avoid that?

Yes, that's right. I mean I think getting has been able to then design that molecule in such a way that say, you wouldn't wipe out your T cells, for instance, or if you've got that on there. I mean, I wouldn't do that. I don't think we're ready for that. But I think what we are also looking at is ways that we combine our bispecific technology or multi-specific technology with EDCs. And I think there's a big opportunity there, and that's part of our advanced program is thinking about bispecific EDCs and or somewhat a biparatopic but bispecific, it opens up other opportunity. So, I think merging our engineering capability with our EDCs, that places us in a sweet spot at Zymeworks that we see major opportunity there for that.

Well, let's circle back to the zanidatamab, I wanted to make sure we talked about the earlier-stage programs since that's where you're committing a lot of capital. But if we could just talk about Zani and the licensing as well as the opportunity in BTC and GEA, just remind us what are the next readouts? What are the next milestones? And how are you going to continue to develop that asset as well as the cousin molecule, the Zani, which is, of course, the ADC version, which I believe you retain the rights to?

Sure. Well, we'll start on zanidatamab. It's really important to cover because it is a very significant value driver for the company still. So, we entered into separate agreements with BeiGene and Jazz. BeiGene has China and the rest of the Asia Pac territory excluding Japan, and Jazz has all the other territories, including the U.S. and Japan. And they both have exclusive rights to develop and commercialize a same territories. So, Jazz has initiated a rolling BLA submission for the second-line BTC in the U.S. with data from the Pivotal Horizon BTC01 trial. And we can also expect us to move forward with the China regulatory submission this year, too. And following that, we expect top line PFS data to read out in late 2024 from the Phase II I-am-horizon GA-01 trial. Just around the economics. So, Jazz has made a onetime payment of $325 million as the initial upfront with a further option payment of $50 million, which came through in the fourth quarter of 2022. And Zymeworks is eligible to receive further $525 million of certain regulatory milestones achievement of certain regulatory milestones and up to $862 million in potential commercial milestones for a total of about GBP 1.76 billion. Very significant deal for Zymeworks and on top of that, we also have the royalties on net sales, and these are tiered royalties between 10% and 20% on Jazz's net sales then the Beijing contract, we received an upfront of $40 million, and we have milestones totaling a potential of up to $390 million, and we've received about $20 million of those to date. And again, very similar teal royalties on the net sales between 10% and 19.5% on the bit net sales. Yes. And Paul, maybe you want to just talk a little bit more about what the status of a as some of the additional indications that might be coming through.

Yes. I mean there were obviously Jos and Beijing are controlling the clinical development. But I think, for sure, there's opportunities we saw exciting data in other tumor types in our Phase I study and then there was also still opportunity in breast cancer, depending on navigating the lines of therapy. So, I think, again, here, we started to per a little more to Jazz. But certainly, on paper, the potential is broad beyond BTC and GEA and that's both based on the expression profile of HER2 and also just based on the impressive efficacy and activity of zanidatamab and the safety profile and the differentiated mechanism, I think, affords opportunity in those other indications.

So, the GEA Phase III readout is coming up in the second half of this year? Obviously, that working is critical or important at least to capturing a lot of the downstream economics that Chris referenced. So, can you just kind of talk about what -- how to think about that readout, what do you expect from the control arm in that trial? What would be the bar for success? And what would a compelling clinical readout look like?

Yes. I mean I think, obviously, there was the KEYNOTE 911 data, right? So, we have sort of a sense on what the expectation, the benchmarks would be of what you want. One of the limitations for that molecule is that it's been restricted to the PD-L1 that regimen is restricted to the PD-L1 positive. We feel we will see activity outside of that. So, that broadens the patients that could benefit from Mazany regimen. And there as well, I think all indications so far from the clinical results, if that holds from what we've seen in Phase I, we've got a very impressive efficacy, both in response rate, but also in the durability of response that we hope will really move the need up. So, again, data will drive, but all signs from our earlier Phase I data that we published are very encouraging for us if that maintains, I think that will add benefit to what's presently approved.

And with Zani Zo, so that one is obviously the different payload, the rent. This is the ADC version of zani. What is the plan there? I mean that one has been kind of chugging along in the clinic for several years. It's not an uncrowded space given in HER2 and quite a lot of HER2 ADCs as you know. So, what's the opportunity for Zani Zo? And did you ever consider going back to the drawing board, so to speak, and adding doing the new top payload with Zani? Because emphasizing that is being very different differentiated.

Yes. Sure. I could take this, it's Chris. Regarding Zani and its design and where it sits within the landscape. So there, as maybe we've shared, we've performed Phase I studies in treated patients and seen responses. We've established a recommended Phase II dose for that, where we can have a very manageable safety profile there. ILD is not an issue for that molecule. So the profile, we feel is differentiated, say, from in HER2 on the safety side. There, where we see opportunity for our investment right now is in lung cancer. And there, we see opportunity because we think combinability of our molecule is feasible with that recommended Phase II dose in that safety profile and then the mechanism of action of combining that with something like PD-1 lends itself to really have the potential to get better for patients that are not presently getting benefit from existing enough benefit from existing therapies. So, that's our thinking there. And the rationale for the combination with PD-1 is again is, we've got preclinical data mechanistically, the Arista type the vedotin payload there that's on Zani Zo. We've shown that they really drive a lot of immunogenic cell death, even that opens a potential that you're getting at an immune response that could then be sustained by combined with PD-1, and we've seen that clinically with other vedotin-based molecules now clinically validated. So that, I think, is a one way for us there with that. And then with lung cancer, I think there's opportunity in the HER2 population that could benefit from an alternative modality. Beyond that, I think there are other opportunities. Clearly, people will get resistance to total payloads and HER2. And so, there's opportunity to also have other modalities in the HER2 space that are not total based, and that hasn't escaped us. But I think right now, regarding getting additional clinical data and some validation, we feel like the lung cancer is the opportunity to focus in on just that.

And maybe this is a question for Chris. In the years past, you talked more about some of the partnering efforts with the base technology. Design Link and so forth. Do you have any updates there in terms of that aspect of the company? I mean you do have quite a few external partners collaborating to build molecules using your technology with other targets? For example, if I think one of them is tissue factor. But there are others. I'm just curious if you could provide any high-level comment there.

So, yes, as you know, time has been fairly prolific over the years, striking a number of partnership deals across our discovery platform. We still have our scientific platform. We still have many good partners, the tissue factor ADC being developed with Exelixis. A lot of those programs are still advancing and still moving up through into clinical development. And yes, we're very much open for business on the platform side. What I would say is what Zymeworks focus really is applying our science and our scientific discovery engine to developing our own assets. As you've just heard, this has been very successful. And Paul's area is very productive and producing a multitude of assets but coming through to IND in the coming years. All of those assets, including zani zovodotin , we actually recouped the rights from Beijing for the BeiGene territory for Zani Zo to have Zani Zo, which is globally unencumbered, but all the additional INDs that we have now coming through the pipeline and encumbered. So, when it comes to future partnerships, what we're really looking to do is partner those assets like we did with Zani with Jason BeiGene, so we can bring in additional nondilutive capital and do some risk sharing on the R&D expenses and that discovery and development process and collaborating on the clinical development of those assets with other partners but also, we'd like to retain U.S. rights on these assets. Our strategy is to become a fully integrated commercial biopharmaceutical company and retaining U.S. rights for one or more of the assets that we have coming through into IND would really help us achieve that goal whilst also we sharing and showing some of the expenses of development with another partner. But yes, still on our legacy platform, still very active, a significant number of partners. Those deals represent a potentially high number of biobox, but it's not really a core area of focus going forward in terms of growing value for the company.

So then, in terms of just the cash runway and so forth, can you just walk us through those basic parameters? I mean what's the current cash? What's the runway? Do you have enough capital to get the 5 INDs that we've discussed with Paul all the way through into the Phase I studies or do you need additional funds to make that happen.

Yes, absolutely. So, our unaudited year-end cash position is around $456 million. So, we have a very substantial balance sheet at the moment. That does fund our activities through the next few years, our cash from way guidance is into the second half of 2027, which assumes certain additional regulatory milestones are matched with our partners. But, yes, that's a really good, robust cash from way and that does fund our R&Ds through to the key proof-of-concept elements and moving them up into Phase on clinical studies. And as I said, these assets are all unencumbered. So, we have additional optionality to further extend that runway by doing some additional partnerships, bringing in some upfronts from partnerships and risk sharing on the R&D expenses to further extend that runway beyond 2027.

And then just final question. I guess you can both jump in. In terms of 2024 and the Catalyst inaction points, just maybe walk us through what you have there. Obviously, there's the GEA readout, but that's a little bit separate from the core focus, as you mentioned, Chris, you have the INDs, but maybe help us understand what investors should be looking forward to chart the path this year.

Yes, absolutely. I mean it is worthy of note that the pivotal top line data coming out on the GEA later this year, is a core value driver for the company and that will be coming through our partners in Jazz and BeiGene later in the year. So, definitely something to watch. As Paul has described as well, we have our 2 INDs coming up in 2024. So those details of those Phase I studies, launching across multiple regions will be coming out this year as well. And also there's Aliso Phase II trial initiation this year. And those are the core ones Paul, any others to call out.

Yes. That's right. I think on the later-stage programs, that's the right call. We'll have presentations at AACR. So, we have some abstracts of approved for that, and we'll have presentations and that we'll talk a little bit maybe more about our pipeline coming through. And then as we mentioned earlier, we'll be nominating the 5th of the 5x5 towards the end of this year as well. So, sticking to that. So, I think there from the side we continue to progress our advanced portfolio as well as well as pushing forward with the 2 INDs and getting them already for filing next year and the supportive work that needs to be done on those, but not sure we'll present too much more on those this year.

All right. I think we covered a lot in a short amount of time. So, we're very efficient. But thank you both, Chris and Paul. I appreciate the time. I'll look forward to the updates you just highlighted. Thanks.