Zymeworks Inc.

being recorded. After the presentation, there will be an opportunity to ask questions. To ask a question, please press star, then one, one on your telephone keypad. I would now like to turn the conference over to Shurnal Inamdar, Senior Director of Investor Relations. Shurnal, please go ahead.

Thank you, Ofresa, and good afternoon, everyone. Thank you for all joining our fourth quarter and year end 2024 results conference call. Before we begin, I would 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. 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 discussion of these risks and uncertainties, we refer you to our latest SEC filings as found on our website and as far as the SEC. In a moment, I will hand over to Leonie Paterson, our Executive Vice President and Chief Business and Financial Officer. Leonie will be discussing recent corporate updates along with financial results for our fourth quarter and year ended 2024. Following this, Dr. Paul Moore, our Chief Scientific Officer, will talk about key highlights from our fourth quarter, including our expanded focus on autoimmune and inflammatory diseases, as well as hematological oncology. At the end of the call, Leonie, Paul, and Ken Galbraith, our chair and CEO, will be available for Q&A. As a reminder, the audio and slides from this call will be available on the Zymox website later today. I will now hand the call over to Leonie. Over to you.

Thank you, Chanel, and thank you all for joining us today. We're pleased to be reporting on another successful quarter marked by the approval of Xanadatamab and continued progress on our clinical development strategy. Our R&D day in December last year was a great opportunity for us to about just how far we've come, not only with the development of our wholly owned pipeline over the past two years, but also the larger impact we have been able to make through our global strategic partnership. Over the last decade, we have built a strong track record of successful partnerships with some of the world's leading pharmaceutical companies. And this timeline slide highlights this commitment to scientific innovation and collaboration. During this time, our cutting-edge platforms such as Affect and Azimetric have driven multiple partnerships across oncology and beyond, with industry leaders including Bristol-Myers Squibb, Daiichi Sankyo, Janssen, Merck, GSK, Jazz, and Beijing. One of the key aspects that we believe makes us a preferred partner is our ability to rapidly evolve our platforms to address emerging therapeutic challenges. whether it's bi-paratopic engineering or the development of our Type 01 platform for ADCs, we strive to continuously push the boundaries of biologics and multifunctional therapeutics. Looking ahead, we remain focused on advancing our next generation of wholly-owned therapeutics. Our expansion into autoimmune and inflammatory diseases, as well as hematologic indications, reflects our commitment to staying at the forefront of innovation and value creation. For our partners, this means continued access to potential best-in-class biologics, a de-risk approach to development, and a shared vision for bringing transformative therapies to patients. Over the past year, there has been significant progress in our partner programs, achieving multiple key milestones that reflect the strength of our collaborations and the commercial potential of our pipeline. In total, we have earned over $45 million over the past 12 months from our partnerships, which I will outline in more detail in the following slides. More recently, in January 2025, we achieved a $14 million research milestone from GSK under our 2016 license agreement related to a clinical milestone, which we believe is a testament to the potential long-term value of our innovative approach. As part of this agreement with GSK, we remain eligible for further research, development, and commercialization milestones, underscoring the potential for continued value creation. In relation to our partnership with Jazz, Zahira achieved net product sales of 1.1 million in Q4 2024, following the product launch in December 2024 and FDA approval in November 2024. Our royalties from net sales by Jazz have been reflected in our income statement in Q4 2024. These recent achievements reflect the strength of our partnerships and the ability of our innovative platforms to drive additional clinical and commercial success. We remain committed to advancing breakthrough therapies, expanding our collaborations, and unlocking new opportunities for growth. With this foundation of trust, proven execution, and differentiated technology, we are well-positioned to continue exploring the potential for partnerships and unlocking new opportunities together. Our goal is to advance our broad and diverse pipeline towards clinical trials as we continue to evaluate and pursue synergistic global and regional business development opportunities, leveraging ZionWorks experience as a trusted and preferred strategic partner. Now turning to our financial position, This afternoon, Zonworks reported financial results for the fourth quarter of 2024. Zonworks net loss for the year ended December 31st, 2024 was $122.7 million or $1.62 per diluted share, compared to a net loss of $118.7 million in 2023. The increase in net loss was primarily due to its $17.3 million non-cash impairment charge recognized in 2024 related to Xanadatamab, ZovaDota, and an increase in income tax expense, which was partially offset by lower research and development and general administrative expenses. As reported, our revenue for the year ended December 31st, 2024 was $76.3 million compared to $76 million for the same period in 2023. Revenue for 2024 included $25 million of milestone revenue from JAS in relation to the FDA approval of Zahira for the treatment of HER2-positive BTC. $37.5 million for development support and drug supply revenue from JAS. $8 million of milestone revenue from Beijing in relation to the acceptance by the CDE of the NPA in China of the BLA for Xanadatamab for second-line treatment of HER2-positive BTC, $2.5 million of milestone revenue from GSK in relation to the sequence pen nomination under the 2016 License Agreement, $3 million from Beijing for drug supply and research support payments, and $0.2 million from other partners for research support and other payments. Revenue in 2023 included $71.8 million $5 million for development support and drug supply from JAS, $1.6 million from Beijing for drug supply and other research support payments, and $2.9 million from our other partners for research support and other payments. Overall, operating expenses were $213.4 million for the year ended December 31st, 2024, compared to $214.1 million in 2023. representing a slight increase of 0.3% year over year. This slight increase in overall operating expense has resulted in from a decrease in both research and development expenses and general administrative expenses. This was offset by a non-cash impairment charge of $17.3 million as a result of the company's decision to discontinue the Xanadatamab-Zobidotin clinical development program which utilized the technology represented by acquired and processed research and development assets. The decrease in research and development expenses year over year was primarily due to a decrease in expenses from the data map as a result of the transfer of responsibility for this program to JAS and a decrease in expenses for ZW171 and ZW191 as the majority of manufacturing and IND Enabling studies were completed in 2023 prior to filing of the IND applications in 2024. This decrease was partially offset by an increase in manufacturing and IND enabling supporting activities for ZW220 and ZW251, along with other preclinical and research activities. Stock-based compensation expense increased primarily due to new grants during 2024, and a lower expense in 2023 as a result of the cancellations and modifications of awards in respect of employees transferred to JADS. Turning to G&A, the decrease in G&A expense was primarily due to a decrease in external consulting expenses for information technology, legal fees and other expenses for advisory services, insurance and depreciation and amortization expenses compared to 2023. This was partially offset by costs incurred due to the termination of our long-term facility lease in Seattle in 2024 and an increase in stock-based conversation expense over 2023, primarily due to new grants during 2024 and reversal of conversation expense for option cancellations and modifications in 2023. Other income, net was $20.5 million for the year ended December 31st, 2024, compared to $18.8 million for the same period in 2023. Other income net for 2024 included $19.9 million of interest income and $0.8 million of foreign exchange gains, partially offset by other miscellaneous charges. Other income net for 2023 included $19.7 million of interest income and $0.3 million of miscellaneous income partially offset by $1.2 million of foreign exchange losses. Currently, we have approximately 69.6 million shares of common stock outstanding and approximately 5.1 million shares of common stock issuable under pre-funded warrants. As of December 31st, 2024, we had $324.2 million of cash resources consisting of cash, cash equivalents, and marketable securities. As compared to $456.3 million as of December 31st, 2023. 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.ziworks.com. Based on current operating plans, our strong financial position of $324.2 million in cash resources as of December 31st, 2024 together with certain anticipated regulatory milestone payments, continues to provide an expected cash runway into the second half of 2027. Just a reminder that we may also be able to extend this runway or fund an expanded R&D scope through potential additional regulatory approval milestone payments in connection with our existing partnerships, most notably with Jazz in Beijing, and potentially new partnerships and collaborations which we may choose to form. In addition, pending applicable regulatory approvals, we are eligible to receive commercial milestone payments based on annual sales of the Sahara and also tiered royalties between 10 and 20% on Jazz's annual net sales and between 10 and 19.5% on Beijing sales. We began earning royalty revenue from our Jazz partnership associated with BTC approval in Q4 2024. With that, I'd like to hand over to our Chief Scientific Officer, Dr. Paul Moore, who will provide an overview of key highlights from our R&D Day, which took place in December 2024, as well as provide updates on our Phase I clinical trials for ZW171 and ZW191. Paul Moore, Chief Scientific Officer, ZW171 and ZW191. Paul Moore, Chief Scientific Officer, ZW191. Paul Moore, Chief Scientific Officer, ZW191. Paul Moore, Chief Scientific Officer, ZW191.