Zymeworks Inc.

Thank you for standing by. This is the conference operator. Welcome to the ZineWorks third quarter 2025 results conference call and webcast. As a reminder, all participants are in a 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 11 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and then zero. I would now like to turn the conference over to Sarah Nell Inamander, Senior Director of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you for joining our third quarter 2025 results conference call. As usual, 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. For discussion of these risks and uncertainties, we refer you to our latest STC filings as found on our website and as filed with the STC. In a moment, I will hand over to Leonie 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 third quarter 2025. Following this, Dr. Sabina Mikan, our Senior Vice President of Clinical Development, will provide progress updates on our phase one programs, CW191 and CW251. We will then pass the call over to Dr. Paul Moore, our Chief Scientific Officer, who will provide a brief overview of recent R&D developments. At the end of the call, Leonie Sabine, 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 also be available on the Zion Watch website later today. I will now turn the call over to Leonie.

Thank you, Chanel, and good afternoon, everyone. I'd like to start the call by walking you through recent progress on both clinical and preclinical programs within our wholly owned product pipeline. As you know, our team was pleased to present initial clinical data from the phase one trial of ZW191, an antibody drug conjugate targeting folio receptor alpha at the ENA conference in October. Sabine will provide a recap of the data we presented during our poster presentation later on today's call. We are encouraged by the preliminary Phase I data for GW191, which provides early clinical validation of our ADC approach, and we are pleased to announce that we have dosed the first patient in the Phase I clinical trial of GW251, a DAR4 ADC targeting GPC3 in hepatocellular carcinoma. Again, Sabine will talk more about the trial design later on today's call. We also continue to present preclinical data of ZW1528, a bispecific inhibitor of IL-4 and IL-31 to address respiratory inflammation at the European Respiratory Society Annual Congress. Additional information can be found on the ERS Congress website and a copy of the poster is available on the publications page of ZynWorks website. Meanwhile, our partner programs also continue to provide encouraging data at ESMO. Our partner, Jazz, presented a trial and progress poster on the DISCOVERHER PAN206 Phase 2 study of Xanadatamab in HER2 overexpressing solid tumors, as well as a two-year follow-up in first-line metastatic colorectal cancer showing durable responses and a favorable safety profile. In addition, yesterday, JAS announced that the ITT population for the primary PFS and interim OS analysis of the Horizon GEA-01 trial will include the full patient population enrolled in the study of 920 patients. Also at ESMO, J&J presented translational findings from the first in-human study of prasaritimig in metastatic prostate cancer. linking T-cell phenotypes with clinical activity. These updates highlight the strong momentum in our partnered portfolio and the long-term value these collaborations continue to build. With this in mind, I'm pleased to announce that this quarter, we recognized a $25 million development milestone as revenue from our collaboration partner, J&J, in association with Clinical Progress of Class Miramig, a first-in-class bispecific T-cell engager targeting KLK2 in phase three studies in metastatic castration-resistant prostate cancer, which was engineered using Zynwerks as a metric platform. As a reminder, we remain eligible to receive up to a further $434 million in development and commercial milestones from the J&J Collaboration, in addition to potential mid-single-digit royalties on global product sales. In addition, this quarter, we earned royalties of $1 million based on Zahira net product sales by Jazz and B1 Medicines. And we look forward to pivotal data from the Horizon GE01 study expected in the fourth quarter. I'd also like to highlight that as of November 4, 2025, we have completed share repurchases of $22.7 million of the remaining $30 million under our previously authorized share repurchase program, which reflects the leadership team's confidence in the company's outlook, the strength of our pipeline, and our long-term commitment to shareholder value. This program was primarily funded from Zahira development milestones and cumulative royalties received from Jazz and B1 related to initial regulatory approvals in biliary tract cancer in both the US and China, allowing us to efficiently deploy excess capital while maintaining full flexibility to fund operations and growth initiatives. This action reinforces our view that the stock remains undervalued, and it aligns with our disciplined, balanced approach to capital allocation designed to drive sustainable long-term returns. Turning now to our financial results, total revenue was $27.6 million in the third quarter of 2025 compared to $16 million for the third quarter of 2024. The increase was primarily due to a $25 million non-refundable milestone recognized from J&J in relation to clinical progress on prasaritamig in phase three studies in metastatic castration-resistant prostate cancer. and $1 million of royalty revenues from Jazz and B1 medicines. These increases were partially offset by a reduction in development support and drug supply revenue from Jazz, and due to a non-recurring milestone from GSK that was achieved in the third quarter of 2024. Overall operating expenses were $49.7 million for the three months ended September 30, 2025, compared to $50.2 million for the same period in 2024, representing a decrease of 1%. The decrease was primarily due to a reduction in expenses from ZW220 and ZW251, Zanidatamab and Zanidatamab-zobidotin, and a decrease in personal expenses. This was partially offset by an increase in preclinical and research expenses for our ZW209 and ZW1528 programs, progression of clinical studies for ZW171 and 191, and an increase in non-cast stock-based compensation expense. Net loss was $19.6 million for the three months ended September 30, 2025, compared to a net loss of $29.9 million for the same period in 2024. This was primarily due to an increase in revenue, partially offset by a decrease in interest income and an increase in income tax expense. As of September 30, 2025, we had $299.4 million of cash, cash equivalents and marketable securities, which is a decrease in cash resources compared to $324.2 million as of December 31, Our cash resources as of September 30, 2025 did not include the $25 million milestone from J&J recognized in the third quarter and expected to be received in the fourth quarter. We remain well capitalized and based on our current operating plans, we expect our existing cash resources as of September 30, 2025 when combined with the assumed receipt of certain anticipated regulatory milestones, will enable us to fund planned operations as 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 clinical development by our partners. For additional details on our quarterly results, I encourage you to review our earnings release and other SEC filings as available on our website at www.signworks.com. With that, I'd like to hand over to our Senior Vice President of Clinical Development, Dr. Sabine McCann, to run through progress on our clinical development programs.

Thank you Leonie and good afternoon everyone. I'd like to start off by providing a recap of the initial phase one data for ZW191 as presented at the AACR NCI EORTC conference last month. As it pertains to the safety, we're encouraged by the tolerability profile that we've seen. The safety profile for ZW191 allowed us to escalate dose up to 11.2 mg per kg, which is quite high for topoisomerase payload of this potency, similar to Durextecan. Across all treated patients, there was a low incidence of grade 3 or higher treatment-related adverse events, and adverse events leading to dose interruptions or reductions were infrequent. The most commonly reported events were nausea, fatigue, and anemia, which are generally consistent with our expectations for an ADC. Importantly, There were no serious treatment-related adverse events, no discontinuations due to adverse events, and no deaths observed in this study. These findings support a favorable safety profile, particularly in a population that has been heavily pretreated. Overall, these data gave us confidence that this drug is well-tolerated at clinically active doses, providing a solid foundation for ongoing and future studies. Moving now to the efficacy results. This slide shows the waterfall plot summarizing the best change in tumor size across dose levels. What we see here is also very encouraging. There are meaningful reductions in tumor size across multiple dose levels with objective responses observed at doses as low as 3.2 milligrams per kilogram and the majority of patients continuing on treatment at data cutoffs. Importantly, these responses were seen across the spectrum of folate receptor alpha expression, an important observation as we think about future development and patient selection. In participants with gynecological cancers, dose between clinically relevant doses of 6.4 and 9.6 milligrams per kilogram, we observed an objective response rate of 64%. Taken together, these early data show promising anti-tumor activity across multiple dose levels and tumor types. reinforcing the potential of this program to be a best-in-class folate receptor alpha-directed ADC. Based on the integrated assessment of safety, efficacy, and pharmacokinetic data, we have selected two doses of 6.4 mg per kg and 9.6 mg per kg for optimization, with approximately 30 patients planned in each cohort. Enrollment is expected to begin in this quarter. and this will allow us to further refine the balance between efficacy and safety and inform optimal dose registrational studies. We expect to share additional data at a future medical conference with a larger and more mature data set. Overall, early results support ZW191 as a potential Western class asset with promising early activity and a manageable safety profile. We continue to be data driven in planning further development for registration and expanding into earlier lines of therapy and in combination. As we move forward, our focus remains on disciplined clinical execution while exploring strategic partnerships that could accelerate development and expand global reach. Based on the encouraging clinical findings with DW191, we are moving forward with the clinical development of our second ADC candidate, CW251, and are pleased to confirm the dosing of the first patient in our Phase I open-label multicenter study of CW251. The study is actively recruiting and aims to enroll approximately 100 participants across North America, Europe, and the Asia-Pacific region. The patient populations includes advanced or metastatic hepatocellular carcinoma that has progressed after standard of care treatments, where regardless of glypekin 3 expression levels and with measurable disease as per resist. Part 1 of the study will evaluate escalating doses of ZW251 to determine safety and maximum tolerated dose. Part 2 of the study includes randomized dose optimization at two selected doses of ZW251 in order to further evaluate safety and explore efficacy according to the resist evaluation criteria. I will now hand over to our Chief Scientific Officer, Dr. Paul Moore, to provide an overview of R&D developments.

Thank you, Sabine. I'd like to just add a few final thoughts on the developments disclosed this quarter for both ZW191 and ZW171. Firstly, the initial data presented on ZW191 provides important translational insights that could help accelerate and reduce risk in the future development CW251, and other pipeline ADCs using our CD06519 payload. As you can see on this slide, behind 191 and 251, we also have preclinical stage candidates targeting more novel antigens such as Li6E and PTK7. Also, our NAPI2B program remains ID ready, and we continue to explore next generation ADCs. Importantly, each of our ADCs has been tailored to factor in target biology by toggling drug-to-antibody ratio and FC modifications. Furthermore, we've also ensured to utilize the most optimal antibody to deliver an internalized payload, whether this be a superior monoclonal antibody to benchmark, as in ZW191 or LISEC-C, or a bi-paratopic antibody, such as in the case of PTK7. Our approach of tailoring these parameters to target biology, patient population needs, and preclinical safety efficacy data aims to ensure optimal therapeutic windows while minimizing off-target toxicities. Secondly, I wanted to touch briefly on our decision to discontinue the development of CW171, and importantly, the valuable insights both scientifically and operationally that we took from this experience. Internally, we hold ourselves to very high standards when it comes to our target product profiles. That discipline is important because we have a broad and productive pipeline, and we want to ensure our capital and our focus go to programs with the clearest path to meaningful patient benefit. Based on the totality of the dose escalation data, we concluded that as a monotherapy, this program did not fully meet our internal threshold to advance further within our portfolio. as it was unlikely to support a benefit-risk profile consistent with the desired monotherapy target product profile. It was not an easy decision, as we continue to believe there is potential for mesothelin-direct therapies, including ZW171, perhaps in specific subpopulations, in combination settings, or through the right external partnership. For our fellows, it was the right choice to prioritize programs that were closely aligned with our long-term strategic and clinical goals. Our experience of taking 171 through dose escalation significantly strengthened our understanding of T-cell engager design and provided clinical experience which will aid us in executing future clinical trials for our next generation T-cell engagers. For example, we were able to advance 171 safely and efficiently through dose escalation in under a year, which is a real testament to our team and technology. We also deepened our understanding of dosing strategies, routes of administration, and investigator engagement, all of which we can apply to our next generation of trial-specific T-cell engagers. The study also reinforced our hypothesis around the importance of co-stimulation for T-cell engagers, the use of our novel CD3 epitome, and tailoring our candidates for patient characteristics and target biology. Our ongoing portfolio management is a reflection of our discipline, our high scientific standards, and the strength of our portfolio. We will continue to hold ourselves and our target product profiles to high standards of success and remain focused on advancing the programs we believe can have the most impact for patients, partners, and shareholders. With that in mind, we look forward to presenting three post-presentations at the CINCI Annual Meeting this weekend, with one showcasing the versatility and application of our innovative Tri-GCE CoSIM the CellEngager platform to enable diverse targeting strategies across different target tumor types, one featuring a next-generation tumor target mass style 12 enabled by his metric, and the third covering new research co-authored with Neogenomics on ADC resistance mechanisms using spheroid models. Together, we believe these presentations showcase our continued leadership in advancing innovative and targeted oncology research. With that, I'll hand over to our chair and CEO, Ken Galbraith, to conclude today's call and open up the call for Q&A.

Thanks, Paul. Over the last two years, we've redefined what this company can achieve by combining R&D innovations, smart partnerships, and disciplined capital allocation to help deliver potential best-in-class therapies while helping to grow shareholder value. Our partnership-based model continues to generate value today while also providing opportunities for growing potential cash flows. We plan to continue leveraging partnerships across our wholly owned pipeline to bring in external capital and accelerate development. We believe this approach allows us to make control of our R&D innovation while helping to de-risk clinical developments and to help ensure that every investment we make has the potential to contribute meaningfully to durable value creation. As we look beyond important near-term events for our pipeline and partner programs, our long-term focus is on compounding returns from Zahira and protecting and enhancing future cash flows that can be reinvested to drive the next wave of innovation. With this in mind, this quarter we announced some changes for our Board of Directors to align governance and leadership with the next phase of our strategy. We welcomed two new directors in August, and three members transitioned off the Board effective today. We'd like to thank those three directors for their service to Zahira. In October, we appointed Dr. Adam Shiavik, as Acting Chief Development Officer to help advance our portfolio and strengthen our partnership-driven strategy. With this refreshed leadership, we believe we're well-positioned to translate our scientific innovation into a scalable model that builds durable royalty streams and delivers sustainable long-term value for our shareholders. To close, I want to emphasize that our capital allocation decisions, whether investing in R&D, advancing partnerships, or returning capital through share purchases, all serve one purpose, to help build sustainable long-term value. Our R&D priorities remain focused on programs with clear differentiation and strong scientific rationale, and we'll continue to fund those using partnerships to extend our reach and offset development risk. Those collaborations also provide a meaningful revenue floor through milestones and royalties, giving us the flexibility to invest with conviction and discipline. This is how we plan to sustain momentum through focus, partnership, and the power of compounding. I want to thank you for your continued support. I'd like to turn the call back over to the operator for the question and answer session. Operator?

Thank you. We'll now begin the question and answer session. To join a question queue, you may press star 11 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your headset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from the line of .

Can you hear me?

Yes, we can hear you.

Oh, perfect. Great. Thank you for taking the question and congrats on the progress. Two from me, if you don't mind. First one, we heard it from Jess yesterday and I think earlier today as well, but wanted to get your thoughts perhaps on the update and the PFS analysis for Horizon GEA to include the ITT rather than the PITT population. Your thoughts here and perhaps what drove that change?

Yeah, thanks, Charles. I think Jazz provided some guidance on that yesterday in their earnings call and their remarks, and I think in question and answer session. We don't have anything to add beyond what Jazz has shared, other than we're aligned with the regulatory strategy that they laid out for the reorder of Verizon and how to analyze that data. So, I really can't add anything beyond that.

Got it fully understood. And perhaps for my second question, Wanted to say congrats on the folate receptor alpha data at triple meeting. That was quite impressive. Kind of also wanted to get your thoughts on what does this mean for GPC3, especially when we're thinking about a DAR4 construct in the liver cancer population? And similarly, if we see anything that comes close or is similar or even exceeds what we saw with 191, what would your thoughts be? on potential development in-house versus partnership versus out-licensing of this asset in liver cancer. Thank you.

Yeah, no, good question, Charles. Yeah, we're as intrigued as your question suggests as well, and looking forward to, you know, continued recruitment in ZFA191 and dose escalation, moving to dose optimization, which will provide a larger, more mature data set at the same time as we announced we're recruiting patients now in the ZW251 study. Sulfur-arachnotical execution is as good as it has been to date with our prior programs. We're looking forward to that. I think in terms of what we think about that, I think maybe I'll give Sabine and then Paul both a chance to add their flavor to that, because it's a really, really interesting, intriguing question for us as well. So, I don't know. Sabine, if you want to go first, and I'll ask Paul to follow up.

Yes, I can go first, Deb. So as you know, hepatocellular carcinoma is a population with very high unmet medical need, particularly post-first-line setting. There are not many treatment options for those patients, and that's why we think we should be able to create a difference given the construct of our ADC and what we've observed in DW191 based upon the clinical data that we've observed. One of the key concerns with the hepatocellular population is concern for safety because this patient population often is very fragile and they have underlying liver disease. So the concern for safety is very important. And it is for this reason that we have selected Ador4 for this ADC molecule. And given the safety profile that we've observed with CW191, we're fairly confident that we should be able to have a good safety profiles and to be able to have a therapeutic window in terms of treatment for hepatocellular carcinoma patients. I'll pass over to Paul.

Yeah, I think something really captured the key points. I think the tolerability from the 191 study, it was both the tolerability was really what we were hoping for, but we also got the efficacy. And we've gone with the DARA-4. We know from pre-consult studies that we can maintain the same, we can get to the same activity level with that. So we were really being careful on just making sure we had the most tolerable molecule to develop in such a, you know, a challenging cancer indication. And I think the data from the phase one sort of supports that we're in the right direction with the way that we selected the payload. We were very careful in how we picked that payload in the sort of the space of the topoisomerase inhibitors that it would support a tolerable profile while maintaining our ability to get good dose into patients. And you can see that from our data. I think ultimately we want these molecules to be combinable with other modalities as well so that we can go up in line. But obviously, at first, we've got to establish the profile as a monotherapy. And this really energizes us now after seeing the 191 data to really chase after the 251.

Thanks for the question, Charles. Got it. Thank you.

One moment for your next question.

The next question comes from the line of Yaron Werber of TD Cohen. Yaron, please go ahead.

Great. Thanks so much, and congrats as well on the thought receptor alpha. I got maybe a couple of questions actually on the pipeline. Maybe the first one while we're staying on GPC3, B1 today on their call said that with their bispecific, the GPC3-401BB, They actually established proof of concept, so they're moving forward. That's definitely very encouraging. In terms of the payload that you're using is Irinotecan and typically, I'm sorry, Etopo-1 kind of based payload. That's not, are topo ones typically used in liver cancer? And kind of maybe give us a little bit of a sense from the preclinical data, what are you expecting in terms of showing efficacy? And then secondly, for the next IND in the first half of next year, the DL03, CD3, CD20A tri-specific, We know DL03 is a great target, and we've seen a lot of activity with both the bite-specific on the market and the ADC. CD28 has not worked out so far in most other cases, so what makes you more optimistic this time around? Thank you.

Yeah, it's good. I'll let Paul talk about the DL03, and then maybe let Sabine and Paul both comment about CPC3. That's okay.

Yeah, so yeah, maybe I'll take the second question first, and then... So, great question, Yaron, on why do we think we can make CD28 work where others have had challenges, right? And so, I think we do take precedence from the CAR-T space where adding in co-stimulation has shown benefits, so something like CD28 or like 4,1-Bb that you referred to in the context of the B1 molecule. And a lot of people have chased after that because of the attraction of getting that CD28 co-stimulatory signal to the T cell to maintain or enable activity that you don't achieve just by having signal one through CD3. And I think what the challenge has been is actually getting that timing, that simultaneous engagement of CD3 and CD28. in in the kinetics and the timing that you need to get that benefit so that so that is what we took the challenge on when we developed the tri-specific so that we we knew that when we engaged cd3 that t cell could be then engaged with cd28 and no one's really developed a solution until what we think we have the solution for that and so that's where you know we we feel we can make make you know an impact you know based on our pre-clinical data that gives us encouragement that we'll see that impact in in the clinical setting so it's a little bit to do with just the way we design it i was trying doing cdc by specific plus the cd28 by specific and in some cases that may work but we feel a more precise way is to hit the same t cell with the primary in the in the secondary signal in a concerted in a in a manner that can be done with a single molecule So that's the DLL3. And certainly, you know, with presented data, we'll show a little bit more actually at CITSE this week, and that, you know, really shows the benefit that we can achieve with that above, like, a bispecific molecule, but doing it safely in the preclinic setting. For the TPC341BBE, and I think also your question was about why do we think a chemo can work there? um in in the in the liver setting and and certainly it isn't a standard of care chemotherapy for for liver cancer but there is you know there is precedent for chemo working in in liver cancer it's just that it's not it just can't be tolerated it's not just well uh you know given as a systemic treatment so we think there is precedent there and we think the way that we can deliver payload or PMO such as a topo inhibitor with our ADC gives us the opportunity to do it in such a way that we can thread the needle and get the right level of payload to the patient that can enable then the sustained exposure that will give you the benefit but still with doing it within a tolerable profile so that's kind of the pre-clinical hypothesis or you know the hypothesis and the pre-clinical data that we have is showing that when we've looked at like a scan of different HCC PDX models we see you know eight out of ten or that sort of range of responses of models responding but we can go up to like you know 100 mgs per kg uh with this molecule in in cinnamolagus monkeys so we have the safety tolerability profile with the evidence of efficacy with some glimpses that in patient population they can under certain conditions respond to chemo we think we can open that window up with the adc so being anything you want to add from a medical perspective with this patient population and the idea of chemo versus a

Yeah, so I would like to say that chemotherapy has been tried in hepatocellular carcinoma with limited success, but there have been some incidents of success there, especially trying localized chemotherapy that's been effective, and that actually makes us believe that giving cytotoxic in an ABC format, particularly with our higher internalizing antibodies and the fact that Hepatocellular carcinoma has very high expression of GPC3. It gives us confidence that we should have the therapeutic window that is needed in this patient population to be successful.

Thank you for the question.

One moment for your next question.

The next question comes from the line of Andrew Berens from LeRinc Partners. Andrew, please go ahead.

Hi. Congrats on the progress. Just a question. I know JAWS is controlling the trial, but I was wondering would the increase in the to the intent to treat analysis today also increase the number of PFS events that are necessary to trigger the analysis?

Just try to put this announcement in context. Yeah, and thanks for the question, Andy. I think, you know, going to answer the same idea before.

I think Jazz provided all the guidance that's appropriate around that decision of the patient population that will be utilized for the IPT patient population, both from a PFS perspective and OS. And I don't want to, you know, go further than the guidance they've Obviously, we've been working on this study for four years from a Zymerck's perspective, and proximity to data is very close, and so I just let Jazz provide that guidance, and it'll just have to wait for, you know, a future announcement and presentation to understand anything further beyond that.

Okay. Thank you.

One moment for your next question.

The next question comes from the line of Stefan Wiley of Stifle. Stefan, please go ahead.

Yeah, good afternoon. Thanks for taking the questions. Just curious how we should be thinking about the starting dose levels of 2501 relative to 191. I know obviously different DARS, different target organs, but is there anything you can qualitatively or maybe even quantitatively about how you're thinking about pushing dose here. And I guess, did that dose escalation schema for 251 change at all as some of the 191 data started to come in? I just have a follow-up.

Yeah, good question, Steve. Sabine, do you want to – obviously, we haven't disclosed the The starting dose, we'll obviously look to do that probably in a similar way we did with 191. But Cindy, is there anything you want to add about the dose schema for dose escalation for 2.1 as it relates to the 191 schema that now people have seen?

So I would say that the Chemo for 251 is very similar to 191, although, as you rightfully pointed out, this is a DAR-4 as opposed to 191, which was a DAR-8, so there are differences. And also, 191 was our first ADC into the clinic, so we were very conservative with our initial starting dose. And now that we've gained some clinical experience, particularly with regards to safety, we're I can say that we have more confidence in our starting dose, but we are not disclosing that yet. We will be disclosing that later, similar to what we did with 191.

Okay. That's helpful. And then maybe just a question for Paul. Just curious how big the universe of target antigens you think is for a tri-specific format beyond DLL3. I know that target has a pretty exquisite expression profile between tumor and healthy tissue that obviously mitigates some of the concerns about amplifying off-tumor talks with a signal tube. But just curious where and how you might be able to leverage this format to other targets of interest. Thanks.

Yeah. No, thanks, Steve. That's definitely very much in our mind. And actually, I sort of alluded to that we have actually a presentation this weekend at CITSE and what we're going to show there is application of the technology to different targets and the way that we design the molecule for the target. So the base molecule on the context of the CD3, CD28, we know sort of the positions of those molecules. We're not telling people really the secret sauce there or how they're in the geometry of the molecule. But what we also can think about is how do you then target the antigen and design the targeting of the tumor antigen in such a way to get that maximal window. We are looking at that. We're looking at it in targets both in solid tumor and in hematological cancers. You know, we can deploy, again, sort of the two-plus-one strategies. We can think about logic-gated strategies as well. So there are ways, but it isn't metric. It's so versatile and flexible that we can put in multi-binding sites to help us get more selectivity in targeting it. we can share more of that. But we're very much thinking about how do we tailor that so that we can have that therapeutic window. We don't rule out the use of masking. We do have masking technology. We're actually applying that to the IL-12 molecule. And that can also be adapted to our T cell engagers. So we have that. toggle if we feel we need it as well. But we just run it through. We test all the different permutations of the molecules, let the data drive, and then we have the preclinical models that then allow us to understand the toxicity profile and the therapeutic window. So we're very excited about the application of that. And again, looking forward to pushing forward with the DLL3 program. But we do have other molecules coming behind as well.

All right, thanks for taking the questions. Thank you, Steve.

One moment for your next question.

The next question comes from the line of Brian Chang of JPMorgan. Brian, please go ahead.

Hey, guys. Thanks for taking our call this afternoon. Just two quick ones from us. So in a trial design for GPC3, you know, we notice that you're recruiting patients actively through the, you know, patients who have been through a standard of care. So just one is, you know, Paul, you know, I'm curious, you know, what you saw in a preclinical setting that gives you confidence that GPC3 will be active in the post-IO setting you know, given that NEVO IPI got approved in the first line, HCC, not too long ago. And then just on the biomarker side, I'm curious if, you know, if you perceive a potential need for, you know, to develop a biomarker assay, you know, near term, is there a need for it today? Just curious what you think about that front too. Thank you.

I'll let Paul start on that. I think Sabine may have something to add also on those, but I'll go ahead, Paul.

Yeah. No, thanks. So I think from the preclinical setting, your question was, how do we, you know, what's our confidence that we can go behind other standards of care, right? So I think, you know, the expression level of GPC-3, we've looked at that. And, you know, that doesn't, we don't anticipate or anything, there's no proof that would be modulated by, you know, standard, you know, IO treatment. So I think, you know, the complementary mechanisms and how they work wouldn't really preclude us you know, going with a targeted medicine that's going after GPC3. And, you know, we've got preclinical data in different PDX models. Some of those will have been collected, you know, potentially after treatment, right? But I think just mechanistically, we don't see that as a barrier. And I think one of the, Yarin mentioned, you know, there's encouraging data with other GPC3 modalities that are also going behind, you know, they would be tested behind standard of care from those clinical trials. So we take encouragement from what others have seen with GPC3 targeted therapies using different modalities. We just feel the ADC modality can just give us an additional mechanism and the power of that approach can just give us an opportunity for more meaningful differences and benefit there. So that would be the thinking there. And then on the biomarker side, just like we did with folate receptor, we will look you know, we will look at GPC3 levels and make a decision on whether, you know, that would be something that we would need as we move forward in clinical development, and we'll collect that data, you know, as we go, you know, on that. And Sabine can reiterate that or elaborate on that more.

So I'm answering a question regarding naval IPI being approved not too long ago. I don't think that changes are for a development plan. If you look at the treatment landscape for first-line hepatocellular carcinoma, the treatment currently includes checkpoint inhibitors and VEGF, and also checkpoint inhibitors plus CTLA. So prior to approval of NEVO-IPI, DERV or TREMI has been approved as well. So it's the same mechanism of action, and it really doesn't have an impact on how we think an ADC, particularly a topoisomerase ADC, would perform in this setting. So I think we remain confident with regards to that. And I think Paul answered all your questions regarding the biomarker. We're enrolling similar strategy to our 191, enrolling patients regardless of expression and be able to ultimately do a correlation of how the expression level relates to clinical activity.

Got it. Thank you. Thanks, Sabine. Thank you, Brad.

One moment for your next question.

The next question comes from the line of Manyak Mantani of the Riley Securities. Manyak, please go ahead.

Yes, good afternoon. Thanks for taking our questions and congrats on a productive quarter. Can you talk a little bit more about your expectations on durability for 191, just given what you've seen at the dose levels you're at, and at what point you'd also be able to explore combination, you know, obviously important in PROC, but also in other solid tumor types that you may want to explore there, and just kind of, you know, put it together when you think, you know, you have a sort of partnership enabling package here, you know, just your latest thoughts on that, and then I have a follow-up.

No, thank you. I'll just answer the partnership question quickly, and then I'll turn it over to Sabina. I think you can answer part one, A, B, and C of your first question. But, you know, obviously, we found the data from 191, although early in initial clinical data, very interesting. I think there are others who are interested in other ADCs that are differentiated. We think ours clearly are. And so, we'll continue to talk to parties who might have an interest in joining us And moving that forward, that might allow us to accelerate development, might allow us to find a better ability to compete even on a time basis and explore the full potential of CW191. So we'll continue to have those discussions. And as I think you've seen, that data was very intriguing to KOLs and obviously people on this call and especially to us. And I think there are potential partners where that data was also very intriguing. And so we'll continue to let the data mature and to collect more data and have ongoing discussions at the same time. And I'll let Sabine answer the subparts of your first part of your question, if that's okay.

So with regards to durability of responses, I think some of the key things when you look at efficacy is the number of patients who responded. So our overall response rate looks pretty encouraging, particularly in the doses we would like to take forward, that is 6.4 to 9.6 milligrams per kilogram. Key things that we noted were we have a pretty wide therapeutic index with responses starting at 3.2 milligrams per kilogram. That actually gives us a lot of confidence. And if you look at our swimmer's plot that we shared in our pollster, a few things that give us encouragement is that most of the responses, particularly at higher doses, occurred early. And looking at the waterfall plot, the depth of responses, we had a pretty good depth of responses in terms of reduction in tumor size for the target patients, even though our follow-up is relatively short. And vast majority of patients are staying on treatment. So combined with our safety profile, which would hopefully allow patients to stay on treatment for a long period of time, I think that would help us give the durability that we're going to need to achieve the PFS and OS that would be important in these indications.

And then on, thank you. And then on the learnings from 171 to 209, were there any step-up dosing learnings you're looking to apply here as the DLL-3 program gets into the clinic? I know you're not saying what dose levels you may start at, but I was just curious, the therapeutic window, Should be very different consideration given the target differences in mesothelin and DLL3 from an off-target toxicity standpoint. Any thoughts there would be great. Thank you for taking our question.

Yeah, thanks. I'll let Paul talk about just learnings from our 171 program and how they might apply to our thoughts around 209.

Yeah, and I think one of your questions was just thinking about, you know, the dosing and how we go about thinking about the step-up. What we did for 171 was we used QSP modeling and we leaned on prior clinical precedents to allow us to really nail what we thought was a good starting dose and then how we could accelerate through the dose escalation. And that approach, we'll use a similar approach for projecting the starting dose and the step-ups for 209. And what I would say is that those projections, when we looked at the exposure levels and the PK, they seemed to really fit nicely with what we had projected. So we're anticipating that we can use that again. Obviously, the target toxicity profile, the safety profile is a little bit different for DL3 than it is for DL2. But we still, you know, we still think there's relevant learnings from the design of them, from the clinical design. But then also, you know, there was also some design features in 171 that we're also carrying over into 209. I think that also gives us confidence then that now that we have that human experience with that approach, that it sets us up well for 209.

Super helpful. Thank you, guys.

Yeah, thank you for the questions. Yeah, thank you.

One moment for your next question.

The next question comes from the line of Robert Burns of HC Wingwright. Robert, please go ahead.

Hi, guys. Thanks for taking my questions. Just one, if I may. So one of the things that I noticed in the presentation for ZW191 was that you used an eight score categorization, low negative zero to 74, intermediate . 175 to 199 and high 200 300 versus the majority of the competitors are using a ps2 plus method to define high versus low So I was just curious about the correlation between those two different scoring methodologies So we can sort of assess them in a more apples-to-apples comparison

Yeah, thanks for the question, Robert.

I think I'll let Sabine start addressing that question and then see if Paul has something to add to that response as well. But excellent question.

So, I would say that HCOR is a pretty well-known and very well-validated research method in evaluating expression levels of different targets, and it combines both intensity, which is really measured in ICU treatments for 1, 2 plus intensity, as well as number of patients with positive, number of cells with positive scores. So it's a pretty well integrated method for evaluating the number of payer cells that express the target. And it has had a pretty good correlation with both TPS score, which is often used in certain assays that are ultimately commercialized as well as IHC scores. So that is why we use the H score. It's a composite, and it's got a pretty wide range from 0 to 300, and that gives us a pretty good evaluation across the range for the expression level. So one of the things that we did also do in our poster is categorize the ACE score into three different categories, high, intermediate, and low. And within those categories, the high category that we defined correlates with high expression of folic receptor that is used for treatment with ELA here. And that is a measure where we can evaluate how many of our patients responded who would have been candidates for Elihir versus patients who were low or negative and were not candidates for that treatment. Paul, if you want to add something, please go ahead.

Yeah, no, I think that's good. Yeah, no, great, Sabine, you covered it. I think with the H score, it just gives us a little bit more granularity across that than using the PS2 plus score. But by having the H score, the score, the way that that specimen is sample is scored with the test, we can, as Sabina alluded to, we can also calculate the PS2+. That's doable. So we can take that data and analyze it whichever way we want. But we felt for this analysis, this was the appropriate way to show the age score because it just gives people more breadth and understanding of the profile of the patients that we're seeing.

Yeah, no, I completely understand that, and I appreciate the granularity. So, you know, just if you don't mind, would it be an accurate assumption to say, you know, the patients that you defined as high expression per the age score of 200 to 300 would fit the category of PS2 plus greater than or equal to 75, or would there be some discrepancy between them?

It should be a very high correlation.

Okay. I guess last question from me, you know, given the data that we've seen from RNA-S as well as the Eli Lilly compound, obviously they were using a PS2 plus scoring system. In those non-high patients, you know, how do you think that ZW191 stacks up against those two compounds in the lower expressing or intermediate expressing folate receptor alpha patients?

So as you said, it's all from our data.

Sorry.

Go ahead.

So, as you saw from our data, we showed pretty transparently across a spectrum of eight scores across low and negative that we observed clinical activity across folate receptor expression levels, looking at data from which we are pretty confident about and we're showing pretty good activity. given in our sample size, we had roughly around two-thirds of patients who were low-negative roughly, which correlates very well to the number of patients who are not candidates for ELAHIR. And comparing our data to the competitors, you talked about Greena S and Lilly, I think we feel pretty confident about our activity in the low-negative patient population. from what we've observed so far. Obviously, we're going to continue to follow our patients, so we're rolling very actively in our study, but only with more patients in dose escalation and longer follow-up, and we're initiating our part two dose optimization, which will provide us more data at the doses that we would like to move on. I think that would give us a lot of confidence in our activity across the spectrum for folate expression levels, including low and negative.

Awesome, thanks for taking my questions, and I can't wait to see the additional data for ZW-191. Thank you.

Yeah, thanks, Robert.

One moment for your next question. The next question comes from the line of Akash Tewari of Jefferies. Akash, please go ahead.

Hi, this is Stevie on for Akash. Thank you for taking your question. On ZW191, it looks like a key differentiator between this and other next-gen folate receptor alpha ADCs is safety, specifically on grade 3 cytopenia. Can you talk about the importance of this difference in terms of potential combinations, maybe in earlier treatment lines? Thank you.

Good question. You know, I think we see a number of potential differences, differentiating factors between ZW191 and data we've seen from others, but I'll let Maybe Sabine talked specifically about the tolerability profile we've seen so far in our data set.

With the tolerability profile, we're very pleased, particularly with our safety event rate. Most of the safety events that we saw were pretty expected, as we mentioned. with which we're mostly nausea, vomiting, cytopenias. Our cytopenia rate is actually, we're very pleased with that rate because this is something that you would expect very typically from a topoisomerase ADC. And the rates that we observe for anemia, neutropenia, and thrombocytopenia are well within expected for an ADC, particularly for the fact that we're going at relatively high doses compared to other ADCs with similar payload. So with that, we are confident that that would help us drive efficacy. And at the same time, the safety profile with cytopenias helps us combine with treatments in earlier lines of therapy. As you know, in ovarian cancer, earlier lines of treatment consists of a combination of platinum, taxanes, and bevacizumab. So that gives us a lot of confidence to combine with all of these treatments going in earlier lines of treatment, particularly some of the pitfalls that we've seen with other ADCs, phytofolate with combinations in earlier lines is neutropenia, and that often leads to reduction in doses to the point that it affects efficacy. And we're hoping with our safety profile, and particularly the lower rates of neutropenia that we're observing, CW191 should be able to be combinable with the platinum agents at a much more efficacious dose. So that's one of the key areas. The other thing that we're thinking about in earlier lines of therapy from tolerability perspective, obviously, is the ability to treat patients for much longer, particularly in the maintenance setting. And I think these are all areas where we can differentiate.

Great. Thank you.

Thanks for the question.

One moment for your next question. The next question comes from the line of John Miller of EVCOR. John, please go ahead.

Hi, guys. Thanks for taking my question. I'll follow on a question on the DLL3. I guess we've seen some really great data from other T-cell engagers there even pretty recently. So I'd love, what do you think are the key places where you'd hope to differentiate? What would make your molecule a best-in-class molecule, in your opinion, and where do you think you can target that? And then I've got a follow-up.

Okay. Paul, do you want to? Yeah. Yeah, no, I think absolutely. I mean, DLL3, a lot of excitement. It's a practical target in solid tumors. You know, we're getting, you know, encouraging response rates. For sure, we think, you know, there may be patients that could still, that could benefit from, that don't respond, that don't have the T cells that can really mount a response or mount a prolonged response. And that's really what we're trying to do here with our molecule. So really, really change the game and really get, you know, the next level of response and durability of response is really what we're hoping for. And we think by having the CD28 co-stimulation, it gives us gives us opportunity to do that. So, you know, there may also be some benefits in, you know, the mechanism that can lead to thinking about the duration of response and then treat, you know, the way that we dose the molecule. You know, they could also be, you know, intrinsic in the design and the fact that we have that extra T cell response. But that will await further analysis. But it's really, you know, more patients responding and longer responses. Again, that's the goal, Jonathan, and our data suggests that we can, from a preclinical, we have a chance to achieve that.

Fair enough. I guess since you were talking earlier about being almost finished with your repo, I am curious, given the expected upcoming milestones from Jazz and B1 on the GEA readouts, What is your expected use for future milestones? Should we be expecting that repo will make a return when you have cash inflows in that response, or is that money spoken for for your internal programs?

A really good question. I think, you know, I think as we started this last year, we do want the ability to always have an authorized stock repurchase program that then gives us the ability to allocate capital to reducing share count and what we think is attractive prices to boost TSR. So, we always want to have that optionality. So, I think you should expect that we will always have an authorized stock purchase plan in place. We get to decide when and how we use that for shareholder benefits. So, I think you should just expect as we're getting to the end that we should, you know, always have one in place to be able to do that. It's not the only place we've been allocating capital over the past period of time. We have been allocating capital to R&D programs that make sense for us, and when the data justifies it, continuing to move forward with additional investment as we are with CWM 191. We've obviously talked a little bit about our strategy of maybe creating another area to allocate capital as capital comes in from milestones and royalties from Zahira and hopefully eventually Pasrita MIG, having the ability to then decide to allocate that capital back into a royalty portfolio, given that those royalty portfolio we have right now, it earns very attractive annualized rates of return, we think, from holding it from development through commercialization and having the ability as some of those gains are realized through payments from our partners to put that back into an attractive royalty portfolio that could generate you know, really interesting rates of return is something, another piece of the puzzle and strategy that we've talked about putting in place, and we'll talk more about this in the weeks and months ahead. So I think you should see us in the future, you know, be disciplined on capital allocation. I think we'll obviously have a stock repurchase plan authorized, and we've obviously shown that we'd like to use it to generate TSRs. We'll allocate capital into R&D, what we think is differentiated and productive and data justifies it. And I think we'll develop the capability, infrastructure, and strategy and interest to consider putting some of the cash flows that come out of our licensed products back into a royalty portfolio with potentially other licensed products. And we'll talk more in the future about the strategy and differentiation of how we think we can accomplish that. And I think all three of those together, having the optionality delegate capital to those resources is important for us. And then getting the mix right is important for us. I think if we can do all three of those in the right way at the right time and the right mix, you know, we can generate some very interesting long-term PSRs in ZymeWorks, and that's what we've been working on and will continue to work on as our licensed products move from development to commercialization.

Great. Thank you.

One moment for your last question.

The last question comes from the line of Egal Novkomovic from Citi. Egal, please go ahead.

Hi, this is Juwan on for Egal. Thanks for taking our question and congrats on the progress. Maybe just a quick one from us. You spoke on it a bit already, but just wondering if you could provide additional color on potential timelines of third-party milestones beyond what might be expected from Jazz. Thank you.

Yeah, we haven't as a practice provided much guidance in that regard. Obviously, we've tended to wait until we've earned or received milestone payments as we did this quarter with the $25 million that we earned from Johnson & Johnson with respect to Paz-Niederbeck moving into phase three studies. So, for right now, I think we'll keep that guidance. I think as we move forward, especially with Zahira into commercialization, we might provide some additional guidance around milestones from both JAS and B1 as they become closer, more approximate, and more probable, just so people understand a little bit more about capitals that might be realized in those licensed products, and then, you know, obviously then where that capital might be allocated to. So, until then, you just have to wait and see, but not too long, I think.

Got it. Thank you. You're welcome.

This does conclude the question and answer section. I would now like to hand the call back over to Chair and CEO, Ken Gavray. Ken, please go ahead.

That's great. So, thanks, everyone, for your time and attention and questions on today's call. Obviously, back in 2021, we designed and initiated a really important clinical study within a data map, the Verizon GL1 study. And we're really pleased that JAS continues to be optimistic and confident of reporting out the top line data in this quarter. And we're as interested as anyone in understanding that data set and what the potential is for XANA data map to be practice changing in this patient population. And we're very pleased that we won't have to wait that long to understand that. And so, please stay tuned and look forward to talking about that further with our partners, JAS and B1. as appropriate. So thank you very much for your time and we'll talk to you all very soon.

This concludes today's presentation.

You may now disconnect.