Zymeworks Inc.

Thank you for standing by. This is the conference operator. Welcome to Zimework's first quarter 2024 results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To ask a question, press star 1 1 on your telephone keypad. To withdraw your question, please press star 1 1 again. I would now like to turn the conference over to Srinal Inupdar, Director of Investor Relations. Srinal, please go ahead.

Thank you, Operator. Good afternoon. I'd like to welcome you to our first quarter 2024 results conference call. Before we begin, I'd like to remind you that we'll be making a number of forward-looking statements during this call, including, without limitation, those forward-looking statements identified in our slides and the accompanying oral commentary. Board-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 discussion of these risks and uncertainties, we refer you to our latest SEC filings as found on our website and as filed with the SEC. In a moment, I'll hand the call over to Ken Galbraith, our Chair and Chief Executive Officer. we'll be discussing recent corporate updates along with our financial results for the first quarter of 2024. Following this, Dr. Paul Moore, our Chief Scientific Officer, will talk about recent data shared at the annual American Association for Cancer Research, or AACR, meeting and key takeaways. At the end of the call, Ken, Paul and Bijal Desai, our VP of Finance and Strategy, will be available for Q&A. As a reminder, the audio and slides from this call will also be available on the Zion Watch website later today. I will now turn the call over to Ken.

Thank you, Chanel, and thanks to everyone for joining us today on our first quarter 2024 earnings call. With that, I'll begin today's update with an overview of key achievements from our development programs as well as our financial results. We're pleased to be reporting on another busy quarter where we've had a chance to present some really interesting data from our R&D team, which showcased the capabilities and internal expertise we have in screening and optimizing our candidates as presented at AACR, which Paul will speak to later in this call. Beyond that, we've also made progress on the clinical development readiness of our teams, including conducting steering committee meetings and various regulatory agency consultations to fine-tune our clinical strategy for our two upcoming Investigations on Drug Applications, or INDs, and foreign equivalents coming up this year. We've also been strengthening our presence in key locations to carry out a broad Phase I clinical trial program in North America, Europe, and Asia Pacific, with the majority of our patients in our upcoming Phase I studies expected to be recruited outside the United States. And I look forward to talking more about our plans in the near future when we've posted our respective study protocols publicly on the Clinical Trials website and are actively recruiting in the dose escalation stage of our Phase I studies. To support this continued growth, we've brought in Dr. Neil Gallagher to join our experience board. His experience and leadership in leading multiple development programs through the global regulatory approval will support our efforts to rapidly advance our 5x5 programs into clinical studies and our continued pipeline expansion of novel antibody drug conjugates and multi-specific antibodies in the years ahead. Dr. Gallagher is in very good company and will provide complimentary guidance along with the new and longer serving members of our board. I'm very confident that these advances, coupled with R&D reprioritizations and some difficult but necessary personnel decisions over the past two years, will position us for success as we approach pivotal milestones for Zymergs this year and in the years ahead by focusing our resources and energy on our most advanced and highest potential clinical value drivers. On our later stage asset, we're very pleased that JAS is completed its BLA submission seeking accelerated approval for Xanadatamab in second-line biliary tract cancers, or BTC, in the United States as monotherapy. Yesterday, Jazz also guided that their plans to submit a marketing authorization application, or MMA, to the European Medicines Association for Xanadatamab are proceeding. Similarly, Beijing is expecting to submit their BLA for Xanadatamab with the National Medical Products Administration in China during the second half of this year. JAS also initiated a Phase III confirmatory trial for Xanadatamab as first-line treatment in BTC in combination with the current standard of care, and enrollment for this trial is ongoing. JAS has also noted that they expect to present updated data with longer follow-up, including overall survival findings, from the Phase IIb Horizon BTC01 trial at the 2024 ASCO Annual Meeting. Additionally, JAS is targeting the top-line PFS data readout from the pivotal Phase III trial for Xanadatamab in first-line gastroesophageal adenocarcinoma, or GEA, in late 2024. Furthermore, Jazz announced they expect to initiate a Phase III trial anticipated for the second half of 2024 for Xanadatamab in in HER2-experienced patients with HER2-positive breast cancer. We sincerely appreciate the progress achieved and commitment shown by our partners, Jazz and Beijing, in leading Xanadatamab towards commercialization initially in BTC, and then with additional clinical development investment for potential label expansion, including in GEA and metastatic breast cancer. Turning now to our financial position this afternoon, Zymerx reported financial results for the first quarter of 2024. Zymerx net loss for the three months ended March 31, 2024, was $31.7 million, or $0.42 loss per diluted share, compared to a net loss of $24.4 million for the same period in 2023. The increase in net loss was due mainly to a decrease in revenue, which was partially offset by a decrease in operating expenses and an increase in interest income. As reported, our revenue for the three months ended March 31, 2024 was $10 million compared to $35.6 million for the same period in 2023. Revenue for the three months ended March 31, 2024 included $9.9 million for development support and drug supply revenue from JAS and $0.2 million from our partners for research support and other payments. Revenue for the same period in 2023 included $34.4 million in revenue for development support and direct supply payments from JAS and $1.2 million from our partners for research support and other payments. The decrease in revenue from JAS was the result of a transfer of responsibility for certain clinical trials regarding Xanadatamab to JAS for our transfer agreement and amended collaboration agreement with JAS. Overall operating expenses were $47.8 million for the three months ended March 31st, 2024 compared to $62.9 million for the same period in 2023, representing a decrease of 24% year-over-year. The decrease in overall operating expenses resulted from a decrease in both research and development expense, as well as a decrease in general and administrative expense. The decrease in R&D expense was primarily due to a decrease in expenses within a data map as a result of a transfer responsibility for the program to JAS for our transfer agreement and amended collaboration agreement. This decrease compared to the same period in 2023 was partially offset by an increase in preclinical expenses, primarily with respect to the preclinical product candidates ZW171, ZW191, and ZW220. Salaries and benefit expenses decreased compared to the same period in 2023 due to a lower headcount in 2024, which was partially offset by an increase in stock-based compensation expense in 2024. The decrease in general administrative expense was primarily due to a decrease in expenses related to external legal spending and insurance expenses compared to the same period in 2023. As of 30th, 2024, we had approximately 70.7 million shares of common stock outstanding and approximately 5.1 million shares of common stock issuable under pre-funded warrants. As of March 31st, 2024, we had 420.5 million of cash resources consisting of cash, cash equivalents and marketable securities as compared to 456.3 million as of December 31, 2023. Based on our current operating plans, we expect our existing cash resources as of March 31, 2024, when combined with receipt of certain anticipated regulatory milestone payments, will enable us to fund planned operations into the second half of 2027. For additional details on our quarterly and year-end results, I encourage you to review our earnings release and other SEC filings as available on our website at www.zimeworks.com. With respect to our FCC filings, you may notice that our current shelf registration statement expires later this year, and as a matter of good financial housekeeping, we filed an automatic shelf registration statement today to take advantage of our new, well-known seasoned issuer, or WICSI status. This automatic shelf registration statement, like our existing ATM equity program, provides us with flexibility to consider various financing alternatives in the future, as other biotechnology companies do, but does not commit us to raise any new equity capital. As further financial housekeeping, you may see some further upcoming filings with the SEC to bring our existing prospective supplement filings regarding our exchangeable shares and our ACO program under our new WCSE automatic shelf registration statement. Slide seven, our strategy of refocusing the business and building a diverse clinical stage product pipeline of anybody drug conjugates and multi-specific anybody therapeutics continues to provide a solid foundation helping to achieve our long-term goal of identifying additional product candidates and seeking valuable partnership options where appropriate to assist in global development and commercialization. Our strong financial position of $420 million in cash resources as of March 31, 2024, together with certain anticipated regulatory milestones payments, gives us an expected runway into the second half of 2027. We may also be able to extend this runway or fund an expanded R&D scope through potential regulatory approval milestone payments in connection with our existing partnerships with Jazz in Beijing or new partnerships and collaborations which we may choose to form. In addition, pending regulatory approval, we are eligible to receive commercial milestone payments based on annual sales of ZenaDataMap and tiered royalties between 10 and 20% on Jazz's annual net sales and between 10 and 19.5% on Beijing's sales. With that, I'd like to hand over to our Chief Scientific Officer, Dr. Paul Moore, We'll talk more about the really interesting work our team presented at AACR on our ADCs and multi-specific antibody therapeutics. Over to you, Paul.