After tumultuous year, Zymeworks delivers 'unequivocal, unprecedented' pivotal data, boosting shares 30%

“Very clear, unequivocal and unprecedented” is how Zymeworks CEO Kenneth Galbraith heralded results from a mid-phase study of biliary tract cancer drug zanidatamab, which sent shares soaring nearly 30%.

Zymeworks' stock rose Monday to $8.23, compared to a previous close of $6.46. The rise happened as Zymeworks presented mid-stage topline data showing that zanidatamab led to an objective response rate of 41.3% and a median duration of response of 12.9 months in patients who have previously treated HER2-amplified and expressing biliary tract cancers.

“We believe these results are unprecedented in this patient population,” Galbraith said in a call with investors Monday morning.

The pivotal phase 2b HERIZON-BTC-01 study is an open-label, single-arm test of zanidatamab, a HER2-directed bispecific antibody.

Zymeworks is now gearing up for a regulatory submission for zanidatamab, although executives would not provide a specific timeline for that beyond saying that conversations with U.S. and other regulatory officials would occur in 2023. The therapy has been granted a breakthrough therapy designation, which grants an expedited review, so Galbraith said the company is hoping to secure “the earliest consultation we can with FDA.”

Another conversation that Zymeworks will need to have is with its collaborators, Jazz Pharmaceuticals and BeiGene. Both companies have secured certain rights to zanidatamab, with Jazz recently paying $50 million upfront for rights outside of certain Asian markets.

Executives were mum on what happens next with Jazz. Zymeworks provided the data to its partner last week for their consideration. 

“I think the data clearly speaks for itself, and I think we’ll let Jazz speak for themselves when they choose to do so,” Galbraith said.

Zymeworks could be in line for $325 million should Jazz opt to take zanidatamab forward after a look at the pivotal data. The deal granted Jazz the right of first refusal with the initial $50 million payment, plus up to $525 million in milestones tied to regulatory events, a further $862.5 million in commercial payments and tiered royalties.

It’s been a rough year for Zymeworks, with Galbraith taking the helm and executing a round of layoffs that claimed half of its senior management team and 25% of lower-level employees. Then shareholder All Blue Capital in April proposed a $773 million deal to take Zymeworks private—and slammed the biotech’s management for “serious missteps.” The company rejected the offer and vowed to roll on.

Zymeworks will submit full results from the HERIZON study for presentation at a future medical meeting in the new year. The company also plans to present data from a phase 2 trial of patients with first-line gastroesophageal adenocarcinoma in January.