Zymeworks Inc.

Thank you for standing by. This is the conference operator. Welcome to ZOMWorks second quarter 2025 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, please press star 1 and 1 on your telephone keypad. I would now like to turn the conference over to Trinnell and Amdur. Senior Director of Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Thanks for joining our second quarter 2025 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. 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. The discussion of these risks and uncertainties will refer you to the latest SPC filings as found on our website and as part of the SPC. In a moment, I will hand over to Yoni Patterson, our Executive Vice President and Chief Business and Financial Officer, who will provide an overview of our recent business and partnership updates, along with financial results for our second quarter 2025. Following this, Dr. Sabine McCann, our Senior Vice President of Clinical Development, will provide progress updates on our phase 1 programs, DW1-1 and DW1-1. We will then pass the call over to Dr. Paul Moore, our Chief Scientific Officer, who will give an overview of recent R&D developments, as well as an update on IMD clearance for our second TOPO agency candidate, DW251. At the end of the call, Leonie, Sabine, Paul, and Ken Gilroy our chair and CEO will be available to your name. As a reminder, the audio and slides from this call will also be available on the NIMACS website later today. I'll now hand the call over to Marion Cioni.

Thank you, Chanel, and thank you all for joining us today. Our first walkie-through are highlights for the second quarter of 2025. On our clinical programs, we presented trial and progress posters for DW171 and DW191, which are both progressing in their respective Phase 1 studies. Sabine will provide more color on the dosing regimen and study design for each of these trials later in the call. We are also pleased to have announced the IND clearance of our second TOPO1 inhibitor payload ADC, DW251, for the treatment of HCC. Based on our observations of DW191 in the clinic to date, we are excited to get the study up and running With this development, GW251 would be our third product candidate in active Phase 1 trials in 2025. Two additional product candidates are on track to enter the clinic in 2026, while GW220 remains IND ready. Together, these developments demonstrate consistent execution across our R&D programs and long-term business strategy. On our preclinical pipeline, we are pleased to have presented inaugural data on a novel IL-4, IL-33 bispecific in development for COPD at the American Thoracic Society International Conference. Paul will talk more about the preclinical data presented later in the call and how we see ZW1528 positioned in the competitive landscape. Meanwhile, Xanadatamab continues to progress. to the presentation of updated long-term survival data at ASCO, highlighting that among 41 GEA patients with centrally confirmed HER2-positive tumors, treatment with Xanadatamab in combination with physician's choice of chemotherapy resulted in a median progression-free survival of 15.2 months and a median overall survival of 36.5 months. We believe these data reflect the durability and tolerability of Xanadatamab and support our thesis of patients staying on treatment longer. This builds on the meaningful efficacy and tolerability profile seen to date with Xanadatamab and provides further confidence for the highly anticipated Horizon GEA pivotal study data readout. We look forward to the top-line progression-free survival data from the Horizon GEA-1 study expected late in the fourth quarter of 2025, as Jazz announced this week. JAS also recently announced the initiation of a Phase 2 trial studying Xanadabab as an answer to increase pathological complete response rates, improve long-term outcomes, and reduce overall toxicity. Lastly, conditional regulatory approvals for Xanadabab in China and Europe for second-line HER2-positive biliary tract cancer this quarter, also expand international patient access and potential future royalties payable to Zyneworks. Beyond this, our platform partnerships also continue to produce. At the ASCO annual meeting, J&J Innovative Medicines reported phase one trial results for Pasirutimib, a first-in-class T-cell engaging bi-specific antibody targeting human calocrine or KLK2, expressed on the surface of prostate cancer cells. Pasiridamig demonstrates pulmonary anti-tumor activity in prostate cancer patients to establish a proof of concept for KLK2 as a target in prostate cancer and to warrant further development by J&J. Pasiridamig also demonstrates a favorable safety profile with very low rates of cytokine-release syndrome and could be safely administered in an outpatient setting. J&J has registered trials to evaluate pathoerotomic across four phase one trials to explore dosing regimens, both as monotherapy and in combination with a range of agents, including checkpoint inhibitors, taxanes, antigen receptor pathway inhibitors. We look forward to learning more from J&J on the advancement of this program. We view this development as a strong signal of both scientific conviction and continued investment in the KLKT program. Also at the ASCO Annual Congress, our partner Daichi Sankyo presented a trial in progress poster for a phase one first in human study of DS2243, by specific T cell engagement in patients with advanced tumors, solid tumors. Similarly, we look forward to following Daiichi's progress in this program. Continuing on to the topic of partnerships, this quarter progress continues across our strategic partnerships, further validating the strength and versatility of our platform, as well as our strategic partnering model, which enables broad and accelerated clinical development with the right collaborators. The achievement of key development milestones from these partnerships generated meaningful revenue, helping us to offset our measured R&D cash burn. As you can see on the slide, we have a strong network of leading pharmaceutical partners whose complementary capabilities could serve as meaningful future catalysts alongside our own, with the potential to enhance our enterprise value and competitive advantage long-term. Let me walk you through a few examples of that. The recent conditional approval of Xanadamab in China and Europe, obtained by our partners, Jazz and Beijing, meaning that we are anticipating an increase in royalty revenues and ZymeWorks for the remainder of 2025 and beyond. Also, under the terms of our agreement with B1 Medicines, the NMPA approval in China resulted in a $20 million milestone payment, which we recognize as revenue this quarter, along with $18.3 million of the third revenue recognized in connection with reaching this milestone. While the initial royalties being reported from V1 this quarter are modest, they represent the first tangible signal of near-term revenue growth from Vanadatamab's international approvals in biliary tract cancer. As a reminder, we are eligible to receive tiered royalties of up to 19.5% of net sales in B1 territories, increasing to up to 20% when cumulative amounts foregone as a result of a royalty reduction of 0.5% reaches a cap in the low double-digit millions of dollars. Similarly, this quarter, we also recognize $7.5 million option exercise payment in relation to our 2014 licensing agreement and collaboration agreement with BMS. As a reminder, we remain eligible to receive up to $313 million in development and commercial milestones from the BMS collaboration in addition to potential tiered royalties on global product sales. As we look forward, To the second half of this year, our partner programs are expected to continue advancing, and with that, we anticipate the potential of additional net-in development milestones to be achieved. These events are tied to meaningful clinical progress from our partners, and while the timing is driven externally, we see clear potential for additional non-dilutive cash inflows to materialize. Now turning to our financial results. Total revenue was $48.7 million in the second quarter of 2025 compared to $19.2 million for the second quarter of 2024. The increase was primarily due to a $20 million non-refundable milestone from B1 upon conditional approval of the BLA data map for second-line treatment of HER2 plus BTC by the NMPA in China, plus the recognition of $18.3 million deferred revenue in relation to the achievement of that milestone. $7.5 million from BMS due to the exercise of the commercial license option and $0.6 million of royalty revenues from JAS and B1. These revenues were partially offset by reduction in development support and drug supply revenue from JAS and other non-recurring milestones achieved in the second quarter of 2024. Overall operating expenses were $49.4 million for the three months ended June 30, 2025, compared to $62.1 million for the same period in 2024, representing a decrease of 20%. The decrease in operating expenses was primarily due to the $17.3 million non-cash impairment charge recognized in 2024 related to Zanadata Mavs of Odotan and reduction in cost for Xanadabab, Zovidotin, and DW220. These were partially offset by an increase in DW171, 191, and other preclinical research expenses for DW209 and 251. Yet income was $2.3 million for the three months ended June 30th, 2025, compared to a net loss of $37.7 million for the same period in 2024. This was partially due to an increase in revenue and a decrease in operating expenses, which included an impairment charge of $17.3 million on intangible assets in the second quarter of 2024, partially offset by a decrease in interest income. As of June 30, 2025, we had $333.4 million of cash resources consisting of cash, cash equivalents, and marketable securities. which is an increase in cash resources compared to $324.2 million as of December 31, 2024. We remain well capitalized and based on our current operating plans, we expect our existing cash resources as of June 30, 2025, when complied with the assumed receipt of certain anticipated regulatory milestones will enable us to fund planned operations into the second half of 2027, which is anticipated to take us through multiple catalyst events on our pipeline. These achievements underscore the strength of our foundational partnerships and the relevance of our platform across multiple products moving into the clinical development by our partners. For additional details on our quarterly results, I encourage you to review our earnings release and other SGC filings is available on our website at www.zineworks.com. Well, now I'd like to hand the call over to SVP, Clinical Development, Dr. Sabine McCann, to run through progress on our clinical development programs.