Zymeworks Inc. (NASDAQ:ZYME) has made great progress in advancing its pipeline. That’s because it has been able to report positive results from a phase 1b/2 study using zanidatamab + chemotherapy + tislelizumab for the treatment of 1st-line patients with advanced HER2-positive gastroesophageal adenocarcinoma (GEA) at the European Society of Medical Oncology (ESMO) Annual Congress. Such data was presented by its partner for this program BeiGene (BGNE).
Why I believe Zymeworks Inc. is an important biotech to consider for investment is because there is a major catalyst that is going to be released in the coming year. This is going to be the release of results from the phase 3 HERIZON-GEA-01 study in 2024, which is using the zanidatamab combination regimen for the treatment of 1st-line patients with advanced HER2-positive GEA. Zymeworks has also established a partnership with Jazz Pharmaceuticals as well to advance zanidatamab for the treatment of patients with HER2 expressing cancers.
Lastly, this company is incorporating the “5 by 5” strategy, which is the advancement of multiple products into the clinic. It recently nominated its fourth clinical candidate known as ZW251 for the treatment of GPC3-expressing liver cancer. An IND filing for this candidate is expected in the 1st half of 2025, along with ZW220, which is an NaPi2b targeted topoisomerase 1 inhibitor for the treatment of patients with ovarian and lung cancer. Other candidates being deployed as part of this strategy are ZW191 for folate receptor alpha (FRa) expressing tumors and ZW171 for pancreatic and ovarian cancer. IND filings for these candidates are expected in 2024.
Zanidatamab Combination For Treatment of HER2 Expressing Cancers
Zymeworks has made significant progress in advancing its pipeline, because it featured updated results from a phase 1b/2 study of zanidatamab plus chemotherapy in combination with tislelizumab for the first-line treatment of human epidermal growth factor receptor (HER2)-positive gastric/gastroesophageal junction adenocarcinoma (G/GEJC). One thing to note is that this data was presented from a study by the biotech’s partner BeiGene. It was shown that this treatment combination produced an objective response rate (ORR) of 75.8% and a median duration of response (mDOR) of 22.8 months.
In addition, it was also noted that it was able to achieve a median progression-free survival (PFS) rate of 16.7 months. This positive data was enough for the biotech to move this program forward toward phase 3 clinical testing. This is a phase 3 study evaluating the use of zanidatamab + chemotherapy + tislelizumab for the treatment of first-line HER2-positive G/GEJC.
This study is expected to recruit up to 714 patients who are to be randomized to one of three treatment groups, which are as follows:
- Comparator arm A – Trastuzumab (Herceptin) plus physician’s choice of capecitabine plus oxaliplatin (CAPOX) or 5-fluorouracil (5-FU) plus cisplatin (FP)
- Experimental arm B – Zanidatamab plus physician’s choice of CAPOX or FP
- Experimental arm C – Zanidatamab and tislelizumab plus physician’s choice of CAPOX or FP.
The primary endpoints of the trial are going to be progression-free survival (PFS) by blinded independent central review (BICR) and overall-survival (OS).
There is going to be a major catalyst opportunity for investors to look forward to, which is the release of top-line data from this trial. It is expected that top-line data from this phase 3 HERIZON-GEA-01 study, using zanidatamab + chemotherapy + tislelizumab for the treatment of 1st-line G/GEJC, are expected in 2024.
Financials
According to the 10-Q SEC Filing, Zymeworks Inc. had cash, cash equivalents, and marketable securities of $390.2 million as of September 30th, 2023. The reason for the cash on hand is because, back in November 9th, of 2022, it entered into a Sales Agreement with Cantor Fitzgerald & Co. to sell shares of its common stock with an aggregate offering price of up to $150 million. This agreement was made by which the company could sell from time to time shares of its common stock to raise cash. On June 16th, 2023 it sold an aggregate of 3,350,000 shares of its common stock at a price of $8.12 per share.
With respect to this sale of shares, it raised approximately $27.2 million in gross proceeds and $26.2 million in net cash proceeds after expenses. This biotech is in excellent shape when it comes to cash. Why do I say that? It is because it believes that it has enough cash on hand to fund its operations through at least the end of 2026 and maybe even beyond.
Risks To Business
There are several risks that investors should be aware of before investing in Zymeworks. The first risk to consider would be with respect to the ongoing phase 3 HERIZON-GEA-01 study, which is using zanidatamab + chemotherapy + tislelizumab for the treatment of 1st-line patients with advanced HER2-positive gastroesophageal adenocarcinoma (GEA). That’s because despite positive results being released from this study like an improvement in objective response rate (ORR), median duration of response (mDOR), and progression-free survival (PFS), there is no assurance that the phase 3 study will achieve the primary endpoints with statistical significance.
A second risk to consider would be with respect to the zanidatamab program as a whole, which is that even though this company has been successful in using this drug for the treatment of G/GEJC, there is no assurance that a similar positive outcome will be achieved when it is tested against other HER2-expressing cancers.
A third risk to consider would be with respect to the partnerships that this company has established with BeiGene and Jazz Pharmaceuticals. That’s because even though these companies have seen promise in such a collaboration thus far, there is no assurance that they will stay on as partners as zanidatamab progresses through the clinic.
The fourth and final risk to consider would be with respect to the IND filings expected from all other antibody drug conjugates (ADCs) being advanced in the pipeline. These would be the other ADC candidates I listed above, such as the following:
- ZW251 : GPC3-expressing liver cancers being targeted
- ZW220 : NaPi2b targeted topoisomerase 1 inhibitor for treatment of ovarian and lung cancers
- ZW191 : Folate receptor alpha (FRa) cancers being targeted
- ZW171 : Pancreatic and ovarian cancers being targeted
Some of these candidates are going to have IND filings in 2024 and then some others in 2025. The point is that even upon such IND filings being submitted, there is no guarantee that the FDA will accept them, nor that Zymeworks will be able to initiate phase 1 studies for them. Even if early-stage studies are initiated for these other ADCs, there is no assurance that positive results will ultimately be released from them.
Conclusion
Zymeworks Inc. has made great progress in being able to advance its pipeline, especially when you consider how far along it has come with respect to generating clinical data. It had its partners BeiGene and Jazz Pharmaceuticals both submit poster presentations for zanidatamab data at the European Society of Medical Oncology (ESMO) Congress 2023, which took place on October 20th to 24th of 2023. Thus far, the data seems to be very good. For instance, with respect to the phase 1b/2 study using the zanidatamab combination in 1st-line HER2-positive gastric/gastroesophageal junction adenocarcinoma (G/GEJC), the objective response rate (ORR) achieved was 75.8%.
Zymeworks Inc. has an extensive pipeline, and this is especially true with it going to have two IND filing in 2024 and then another two IND filings in 2025 thereafter. However, there is another program I have not yet discussed. This would be with respect to the use of another candidate in its pipeline known as zanidatamab zovodotin, which is an HER2-targeted bispecific antibody drug conjugate (ADC). What’s unique about this candidate is that it incorporates both of Zymeworks proprietary Azymetric and ZymeLink Auristatin platform technologies, along with the addition of a proprietary cytotoxin.
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