Zymeworks announces strategic initiative to optimize Ziihera cash flows

Zymeworks (ZYME) announced a strategic initiative focused on optimizing future cash flows from Ziihera, other licensed products and other healthcare assets. This strategic initiative is driven by an emerging licensed product portfolio with potential long-term and predictable cash flows, following yesterday’s announcement of topline data from the Phase 3 HERIZON-GEA-01 trial, taken together with pasritamig being advanced to Phase 3 registration studies by Johnson & Johnson (JNJ). For Ziihera, under the company’s existing arrangements with Jazz and BeOne, Zymeworks has the potential to receive substantial near-term milestone payments related to future regulatory approvals in GEA totaling $440M, as follows: USA – $250M; EU – $100M; Japan – $75M and China – $15M. The company also expects that royalty revenue from Ziihera sales will increase as potential regulatory approvals are obtained in global markets for GEA. In addition, Zymeworks could be eligible to receive future milestones and increased royalties from the development, regulatory approval, and commercialization of any additional indications for Ziihera by Jazz and BeOne, including breast cancer.For pasritamig, under the company’s existing arrangements with J&J, Zymeworks remains eligible for up to $434M in additional milestone payments for continued development, regulatory approval and commercialization of pasritamig by J&J as well as a mid-single digit royalty on pasritamig sales. “With Ziihera as our foundational licensed product, we have made the strategic decision to evolve from a traditional biotechnology company into a royalty-driven organization differentiated by in-house R&D capabilities,” said Kenneth Galbraith, chair and CEO. “By having the capability to reinvest expected proceeds from the development and commercialization of Ziihera, pasritamig, and potentially other products, we aim for continued growth in value of our royalty portfolio while continuing to invest in R&D focused on internal and acquired product candidates as a source of future innovation and partnerships.”