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Presentation

Zymeworks Inc. misses on earnings expectations. Reported EPS is $-0.59 EPS, expectations were $-0.1.

Operator: Good day, and thank you for standing by. Welcome to Zymeworks Inc. First Quarter 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Shrinal Inamdar, VP of Investor Relations. Your line is open.

Shrinal Inamdar: Thank you, operator. Good afternoon, everyone, and thank you for joining our first quarter 2026 results conference call. As usual, I would like to remind you that we will be making a number of forward-looking statements during this call, including, without limitation, those forward-looking statements identified on our slides and the accompanying oral commentary. These forward-looking statements are based upon our current expectations and various assumptions and are subject to risks and uncertainties, including those associated with companies in our industry and at our stage of development. For a discussion of these risks and uncertainties, we refer you to our latest SEC filings as found on our website and as filed with the SEC.

In a moment, I will hand over the call to Kenneth H. Galbraith, our Chair and CEO, who will provide an overview of recent business updates. Kenneth H. Galbraith will then hand the call over to our Chief Financial Officer to discuss our cash position and financial results for the first quarter 2026. Paul A. Moore will then provide a brief summary of new preclinical data disclosed at AACR on our pan-RAS ADC platform, and following this, Sabeen Mekan, our SVP and Chief Medical Officer, will provide progress updates on both the Phase 1 clinical trial of ZW191 and ZW251. At the end of the call, Kenneth H. Galbraith, our CFO, Sabeen Mekan, and Paul A. Moore will be joined for a Q&A session by Scott Pashton, our Chief Business Officer, and Adam Sherwitz, Head of R&D.

As a reminder, the audio and slides from this call will also be available on Zymeworks Inc. website later today. I will now hand the call over to Kenneth H. Galbraith.

Kenneth H. Galbraith: Thank you, Shrinal, and good afternoon, everyone. We are pleased to be reporting on further progress this quarter on both our wholly owned and partnered assets. The PDUFA date of 08/25/2026 for zanatumab in first-line GEA in the U.S., together with the completion of an sBLA filing in China for first-line GEA, marks an important inflection point and near-term foundational value-driving opportunity for Zymeworks Inc. These regulatory milestones provide increasing visibility toward commercialization in first-line HER2-positive GEA, accompanied by continued clinical development in additional settings such as breast cancer, helping to establish a clear baseline for zanatumab’s value. If you did not get a chance to tune in, we would urge you to listen to Jazz’s disclosures within their earnings call earlier this week on preparedness and launch activities for GEA in anticipation of an FDA approval later this year on or before the PDUFA date.

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With our partners Jazz and BeiGene bringing established commercial capabilities, we believe zanatumab is well positioned to translate potential approvals and label extensions into meaningful uptake, significant milestone payments, and durable royalty revenues. This includes near-term milestone payments of $250 million upon approval in the U.S. for GEA from Jazz and $15 million upon approval in China for GEA from BeiGene. Importantly, this momentum also illustrates the broader strength of our business model. Recent data presented at the American Association for Cancer Research Annual Meeting, alongside this continued regulatory progress for zanatumab, reinforce the strategic advantage of integrating our R&D portfolio with royalty participation within a single organization.

We will continue to be intentional about maintaining a portion of our R&D portfolio unencumbered, preserving optionality for future transactions, and aiming to capture upside beyond structured royalty streams. Advances across our ADC portfolio at AACR, including the presentation of three new preclinical RAS-targeting ADC candidates featuring proprietary payloads, as well as encouraging Phase 1 data for ZW191, highlight the scalability of our platform and its ability to generate multiple potential future value drivers. Taken together, we believe this integrated model, anchored by near-term catalysts such as potential global approvals for zanatumab and supported by a productive and innovative pipeline that provides future optionality for our emerging royalty portfolio, positions us to deliver durable compounding returns for shareholders over time.

Over the past quarter, we have also strengthened our leadership team with the addition of our CFO and the full-time appointments of Scott and Adam, who bring deep experience in strategic capital allocation, investment, and dealmaking. We are also pleased to announce the appointment today of Mr. Paul Schneider, who joins us as General Counsel from Pfizer. All of these appointments enhance our ability to systematically identify, structure, and execute opportunities that align with our long-term value creation framework. With that, I would like to hand the call over to our CFO, who will provide an overview of our financial highlights for 2026.

Unknown Speaker: Thank you, Ken. Having now spent my first month at Zymeworks Inc., what stands out for me is the potential for us to build a novel strategy of royalty aggregation and growth—one that is differentiated by the integration of our productive R&D engine with a quality portfolio of royalty interests. My focus as I step into this role is to ensure we execute with discipline, particularly in how we allocate capital, prioritize programs, and evaluate external opportunities. That includes maintaining a high bar for investment, strengthening operational rigor, and leveraging our integrated model to drive both near-term visibility and long-term compounding value. I am excited to join the team to build on this momentum and position Zymeworks Inc.

as a leader in this emerging model. As part of this, we are evaluating ways to potentially evolve our financial reporting in order to provide better visibility into returns on invested capital and the performance of both our R&D and royalty portfolios. We intend to build on the OpEx framework we introduced last quarter, adding greater transparency around how that investment translates into key value drivers for shareholders. I will now talk through the financial results for 2026. Total revenue was $2.4 million for the three months ended 03/31/2026, compared to $27.1 million for 2025. The decrease was driven mainly by the achievement of nonrecurring clinical milestones in 2025, as well as continued declines in development support and drug supply revenue from Jazz.

Revenue in the current-year period reflects ongoing collaboration activity and increased royalty revenue, which is expected to grow over time as commercial sales of Zanidatumab (Zahera) increase. Overall operating expenses were $49.5 million for the three months ended 03/31/2026, compared to $52.7 million for 2025. The decrease in research and development expenses was primarily driven by lower third-party program costs following reduced activity on later-stage and discontinued programs, partially offset by increased investment in early-stage clinical and preclinical programs, as well as increased unallocated costs related to leadership transition. The decrease in general and administrative expenses was primarily driven by lower professional fees, consulting, and information technology-related costs, partially offset by higher salaries and benefits reflecting the previously disclosed leadership transition.

Net loss was $44.2 million for the three months ended 03/31/2026, compared to a net loss of $22.6 million in 2025. The change in 2026 was primarily due to a decrease in revenue driven by the nonrecurring clinical milestones earned in 2025. Despite the year-over-year change in earnings, we ended the quarter with a strong cash position, providing flexibility to fund operations and our capital allocation strategy. Turning to capital allocation, we have made progress on our share repurchase program, which reflects our commitment to disciplined capital allocation and enhanced long-term shareholder return. As of 05/06/2026, the company has utilized approximately $95.8 million of the approved $125 million repurchase program to acquire approximately 3.93 million shares at an average price of $24.37 per share, exclusive of commission expense and estimated excise tax.

As of 05/06/2026, the company had approximately 73 million common shares outstanding. As of 03/31/2026, we had $403.8 million of cash resources consisting of cash, cash equivalents, and marketable securities, compared to $270.6 million as of 12/31/2025. Based on our current operating plans and assuming full execution of the $125 million share repurchase plan, we expect our existing cash resources as of 03/31/2026, when combined with the anticipated regulatory milestone payments of $440 million related to the potential approvals of Zanidatumab (Zahera) in GEA in the U.S., Europe, Japan, and China, to fund our planned operations beyond 2028. This anticipated cash runway does not take into account any contribution from additional future milestone payments or royalties related to Zanidatumab (Zahera) or other current licensed product candidates, or contributions from future partnerships and collaborations.

For additional details on our quarterly results, I encourage you to review our earnings release and other SEC filings available on our website at www.zymeworks.com. I will now pass the call over to Paul, who will provide a summary of our preclinical presentations at AACR.

Paul A. Moore: Thank you. It has been another busy AACR for Zymeworks Inc. with six poster presentations, an oral presentation for ZW191, and two invited talks from our research leadership team—one covering multispecifics and the other ADCs. For the call today, I wanted to focus on the pan-RAS ADC platform that we unveiled at AACR, which has attracted a lot of attention over the last few weeks. You may recall at our R&D day in 2024, we first outlined our plans to pursue novel payloads, and so it is particularly satisfying to now see that intention translated into clear execution. Against that backdrop, the decision to focus on RAS payloads reflects both the strength of the screening outcomes and the quality of the candidates identified.

It marks a meaningful step forward in delivering on the strategic direction originally outlined. As you are aware, we have also been encouraged by the continued progress of our proprietary TOPA payload—purpose-built for ADCs—from the preclinical setting into the clinic, which Sabeen will talk about in a few minutes. Based on that foundation, our focus has been on what comes next. As we think about the next generation of ADCs, we have been intentional in addressing certain core aspects: deploying additional mechanisms of action through payload selection, enhancing efficacy, overcoming resistance, and further improving safety. These priorities have guided our investment in both novel targets and novel payloads, particularly as resistance can emerge through multiple mechanisms, including target evolution or following sequential ADC treatments.

In parallel, RAS inhibitors have generated significant interest given recent developments in the field; however, toxicity remains a key limitation. We believe an ADC-based approach offers a compelling way to address this by improving targeting and enabling more sustained tumor exposure, with the potential to enhance efficacy while reducing systemic side effects. This profile may also better support combination strategies. To explore this, we generated and functionally characterized more than 117 novel pan-RAS inhibitors derived from our scaffold work in-house. For this first thesis for our TOPA payload, our selection criteria extended beyond potency alone. We prioritized molecules with properties best suited for an ADC modality, and as shown in our AACR dataset, they support potent efficacy in xenograft models, favorable pharmacokinetics, meaningful bystander activity, and a tolerability profile in nonhuman primates that collectively support further development.

From a safety perspective, our lead payload candidate, evaluated in the context of a life-size pan-RAS ADC, demonstrated encouraging results in nonhuman primates with no observed body weight loss, skin toxicity, or GI toxicity at doses up to 120 mg/kg, representing the maximum dose tested. The dataset also highlights the ability of an ADC approach to sustain tumor-targeted inhibition of the RAS pathway over an extended period, and how it differentiates both in distribution and biological effect from a pan-RAS small molecule inhibitor delivered orally. Following a single dose of RAS ADC in a mouse xenograft model, we observed sustained accumulation of the RAS payload in the tumor at levels higher relative to those observed in normal organs. This differential exposure is also reflected in the durable RAS pathway inhibition, as measured via DUSP6 levels, in the tumor out to 14 days, with clear differentiation between tumor and normal tissue.

In contrast, while the small-molecule pan-RAS inhibitor delivered orally achieves RAS pathway inhibition, the magnitude of inhibition in tumors overlaps with that observed in normal tissues such as skin, liver, and colon, consistent with the broader distribution and uptake pattern of the small molecule relative to the tumor-targeted design of the pan-RAS ADC. Again, for the pan-RAS ADC, what we see is a more selective inhibition of the RAS pathway in tumor relative to skin, in contrast to the small molecule that shows activity across both skin and GI, aligning with the toxicity profile observed clinically for pan-RAS inhibitors. Taken together, we believe that this differentiation underscores the potential for ADCs to fundamentally reshape how RAS-targeted therapies can be deployed in patients.

As far as the mechanism goes, we have not divulged full details, but it is a RAS on-inhibitor. Our focus so far has been on the functional behavior of the molecules and how the overall design translates into pathway modulation and tolerability. At AACR, we also presented the application of this platform across three different therapeutic candidates. We chose our targets with intent to reach deeply into cancers where RAS mutations drive disease at scale, including non-small cell lung cancer, pancreatic cancer, and colorectal cancer, ensuring both relevance and impact. All candidates incorporate the bystander-active pan-RAS payload. On the antibody side, we leverage our antibody engineering expertise to optimize internalization, tumor penetration, and kinetic properties to determine whether this modality delivers on its promise to provide target-driven, tumor-selective RAS inhibition.

The candidates include ZW439, a Claudin 18.2-targeting pan-RAS inhibitor ADC for the treatment of RAS-mutated pancreatic cancer; ZW427, a L1CAM-targeting ADC carrying a novel pan-RAS inhibitor payload for the treatment of RAS-mutated cancers, including colorectal, pancreatic, and non-small cell lung cancer; and ZW418, a biparatopic PTK7-targeting ADC incorporating the same RAS inhibitor payload for the treatment of non-small cell lung cancer. The data we have seen so far across these three candidates—targeting PTK7, L1CAM, and Claudin 18.2, respectively—that we shared at AACR reinforce both the design of the payload and the broader principles underpinning our ADC platform. I will leave it there for now and am happy to go into more detail during the Q&A session.

Sabeen, I will now hand over to you to run through the updates on our clinical development program for ZW191 and ZW251.

Sabeen Mekan: Thank you, Paul. As in the data presented at AACR, we observed strong antitumor activity for ZW191 across both ovarian and endometrial cancers. Starting with ovarian cancer, we observed tumor regression of at least 30% in 68% of patients and, importantly, some degree of tumor shrinkage in 85% of patients. Disease control was achieved in 94% of patients, with an overall response rate of 56% across all dose levels. When we look at the clinically relevant dose range of 6.4 to 9.6 mg/kg, disease control was observed in all patients, with a confirmed ORR of 61%. It is important to underscore that this ovarian cohort represents a particularly challenging population who are heavily pretreated. All of these patients were resistant to carboplatin therapy, the majority had prior PARP inhibitor exposure, and there was no limit to the number of lines of therapy.

This makes cross-trial comparisons difficult and, in our view, highlights the strength of the antitumor activity of ZW191. In relapsed or refractory endometrial cancer, we observed tumor regressions of at least 30% in 50% of patients, with 70% experiencing some degree of tumor shrinkage. Disease control was achieved in 80% of patients, with an overall response rate of 40% across all dose levels. At the 6.4 to 9.6 mg/kg dose range, ORR increased to 57% with disease control in 86% of patients. Across both tumor types, responses were observed starting at 3.2 mg/kg, and importantly, activity was seen regardless of expression level, including in low or negative tumors. Median follow-up time was approximately seven months, with a number of patients still on treatment, supporting the durability of signals we have discussed.

Turning to safety, ZW191 is being evaluated at higher doses than some other programs in the space. Regardless, we are pleased with the safety profile we are observing at these doses, which mainly consists of cytopenias and GI events at low rates that are very manageable and in line with the total ADC class. Importantly, no unexpected or new safety signals were observed with longer follow-up. The 6.4 and 9.6 mg/kg doses are being further evaluated in a larger dataset in dose optimization. As previously reported, this approximately 60-patient cohort is fully enrolled, and the results should assist in defining the optimum dose to move forward into subsequent clinical studies. Given the consistency of efficacy across the active dose range, we believe there is flexibility to optimize dose to further refine tolerability without compromising activity.

We also believe the profile remains compatible with combination approaches, with appropriate dose selection and monitoring. At AACR, we presented a poster on preclinical combinations with ZW191. In nonclinical studies, ZW191 demonstrates activity across all levels of FRα expression and shows promising combination potential with standard-of-care therapies, supported by a favorable tolerability profile. These data provide an important translational foundation for the clinical observations of activity in lower or negative FRα-expressing tumors and support the breadth of activity we are beginning to see emerge in the clinic. In addition, the combination data reinforce the potential to position ZW191 in earlier lines of treatment. We believe these combinations should be feasible with appropriate dose selection and monitoring.

Overall, we view these data as supporting a compelling and increasingly well-defined benefit-risk profile for ZW191. We look forward to the opportunity to present additional updates on our Phase 1 study at future medical meetings, including at ESMO GYN in Denmark during June, where we will be presenting efficacy analyses plus folate receptor alpha expression levels from the Phase 1 study. I also want to touch briefly on the protocol updates for our ongoing trial for ZW251. As we think about expansion opportunities beyond our initial indication for hepatocellular carcinoma, GPC3 expression provides a compelling biological rationale across multiple tumor types. Across published datasets, we see GPC3 expression in approximately 86% of hepatocellular carcinoma and, more broadly, in a range of 60% to 100% depending upon the tumor subtype, staining methodology, and patient population.

Notably, in squamous non-small cell lung cancer, GPC3 expression has been observed in roughly 60% of tumors, which supports the inclusion of squamous non-small cell lung cancer as a relevant population for further exploration. We are also exploring germ cell tumors, where high GPC3 expression has been reported, particularly in nonseminomatous subtypes such as yolk sac tumors and choriocarcinoma. While pediatric germ cell tumors are relatively rare, expanding into adult germ cell tumors meaningfully broadens the addressable population and introduces more mixed histologies. Importantly, in these mixed tumor settings, the bystander activity associated with our ADC may be particularly relevant, as it has the potential to address both GPC3-positive and adjacent antigen-low or -negative tumor cells within the same lesion.

In our Phase 1 study, we are assessing GPC3 expression retrospectively from available tumor samples. This approach allows us to better understand the distribution of GPC3 expression across tumor sites without restricting enrollment and helps inform future patient selection strategies. Overall, we believe the addition of these tumors positions us to efficiently map GPC3 expression across tumor types and identify those settings where the biology and mechanism of action are best aligned. Our Phase 1 dose-escalation study continues to recruit on schedule, and we look forward to having the opportunity to share the clinical data at the appropriate time at a future medical meeting. I will now hand the call back to Kenneth H. Galbraith for closing prepared remarks.

Kenneth H. Galbraith: Thank you very much, Sabeen. Looking ahead at the potential catalysts for 2026, we remain on track to deliver on the majority of these objectives and continue to see opportunities for a steady cadence of data and pipeline progress. As I mentioned earlier, with the near-term U.S. PDUFA date set for zanatumab and the sBLA submission in China, there is greater visibility to near-term milestone payments from Jazz and BeiGene and more meaningful royalty revenues upon potential launches in the U.S. and China. We also continue to follow progress from our collaboration partner, Johnson & Johnson Innovative Medicines, with respect to their broad clinical development program for pasotuxizumab, a novel KLK2 T-cell engager for prostate cancer patients.

I do want to highlight that we are now guiding to an IND in 2027 for ZW1528 compared to our prior expectation of 2026. As we have continued to evaluate the IL-33 biology across the competitive landscape, we see an opportunity to further deepen our understanding and refine the clinical development strategy as recent clinical data outcomes are disclosed at upcoming medical meetings. Given the novelty of the target, we believe taking this additional time positions us to enter the clinic with a more focused and differentiated plan. However, the core preclinical package, including GLP toxicology, is largely complete and compelling. More broadly, we are also evaluating how partnerships and collaborations can support the advancement of our R&D pipeline.

As we think about capital allocation and execution, we do see opportunities to bring in external partners where, in doing so, we can enhance speed, scale, or probability of success. We remain very encouraged by the progress of ZW209 as well as the broader TriTCE portfolio behind it. ZW209 is IND-ready and still maintained as a potential IND in 2026, which we believe should provide confidence in both the maturity of the program and its underlying safety profile. We have multiple additional targets in development within the TriTCE platform, and we continue to view this as a key driver of long-term value. We have demonstrated our ability to repeatedly extract high-quality assets from a single platform. Our asymmetric platform enabled the development of zanatumab, supported partner programs such as pasotuxizumab, and continues to drive our wholly owned pipeline, including our TOPA ADC programs built on optimized antibodies and our RAS-targeting ADC candidates, as well as our multispecific antibody product candidates behind ZW209 and ZW1528.

Importantly, we believe this capability is transferable beyond our internally generated R&D pipeline. We have the ability to supplement and scale our existing capabilities through acquisitions, rapidly apply our technologies, and efficiently advance novel candidates into the clinic, as we have consistently demonstrated. We have been very active in external processes to assess potential acquisitions and feel well funded to do so with the proceeds of the Royalty Pharma note and the upcoming expected GEA approval milestones and enhanced royalty income from zanatumab, but we are also remaining disciplined in our approach to acquisitions to ensure we find the right opportunities for our long-term strategic objectives at the right price. At the same time, our capital allocation framework remains disciplined and highly focused on per-share value creation.

Since initiating our share repurchase program in 2024, we have retired approximately 8.3 million shares through the deployment of roughly $155.8 million in capital for a weighted average repurchase price of approximately $18.70 per share. This represents over 10% of our common shares outstanding. Notably, our average repurchase cost remains at a meaningful discount to today’s share price, reinforcing our view that these buybacks have represented an attractive and accretive use of capital on behalf of shareholders. Over time, our repurchases are designed to continue to reduce our share count while increasing each remaining shareholder’s participation in the future economics of the business. We believe these repurchases have represented an attractive use of capital given the disconnect we have seen between our market valuation and the long-term value of our commercial royalty interests and development pipeline.

This balanced approach of pairing growing and durable royalty revenues with opportunistic share repurchases and a disciplined investment strategy is designed to enhance intrinsic value per share and support increasing total shareholder return over time. With key leadership appointments recently completed, we are well positioned to execute with focus and discipline. We look forward to advancing our strategic priorities and providing clear updates on our progress in the quarters ahead. Overall, while we are being thoughtful in how we sequence and advance programs, we remain confident in the depth of the pipeline and the opportunities it presents. With those closing remarks for the prepared portion, I would like to thank everyone for listening, and I will turn the call over to the operator to begin the question-and-answer session.

Operator?

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first caller is from Eva Fortea-Verdejo with Wells Fargo. Your line is open.

Eva Fortea-Verdejo: Congrats on the program, and thanks for taking our questions. A couple from us. First, how should we be thinking about cadence of data for some of your internal pipeline in the next 12 months? The second question is on the pan-RAS ADCs. Can you provide some color on timing to reach the clinic and whether you plan to pursue the early clinical stages of development yourself?

Kenneth H. Galbraith: Thanks for that question, Eva. I will take the first one, and then I will pass the second one to Paul to answer, and then happy for Adam to add to Paul’s comments as well. I think we have tried to provide as much guidance as we can on the cadence of data. Obviously, we presented some additional updates on ZW191 at AACR, and we also just had an abstract accepted for ESMO GYN in June in Copenhagen. So we will continue to have a cadence of updates as we understand our data, and then we will present that always in a peer-reviewed format, because we think that is best practice. You should expect that at oncology meetings throughout the course of 2026 you will see additional progress on both clinical and preclinical programs in our oncology portfolio.

Until we provide guidance about accepted abstracts—just as we are doing now with the ESMO GYN conference coming up next month—that will be the only forward guidance we will provide. I will turn it over to Paul to answer your second question.

Paul A. Moore: Yes. I think your second question, Eva, was on the timing of the RAS ADCs and when they could be in the clinic. At AACR, we shared the strength of our conviction in the choice of the targets, the choice of the payload, and the mechanism. There are certain IND-enabling activities that you still need to do—manufacturing and CMC readiness for Phase 1—but we are well positioned from here to enter into that phase. As Ken alluded to, and maybe Adam can also expand upon, our balance of what we can push internally as well as through partnerships is very much at the front of our mind, and that will also be a factor in driving when they enter the clinic. But certainly, they are well positioned to enter into the IND-enabling stage and be ready shortly for clinical testing.

Eva Fortea-Verdejo: Very helpful. Thanks.

Kenneth H. Galbraith: Adam, would you like to add, or are you okay with that?

Adam Sherwitz: No, I think that is well said. We have a lot of belief in these compounds—super exciting coming out of AACR—and we are moving them forward as we can. As soon as we have a definitive date, we will share with you.

Operator: Thank you for your question. Our next question comes from Charles Yue-Wen Zhu with LifeSci Capital. Your line is open.

Charles Yue-Wen Zhu: Hello. Can you all hear me alright?

Kenneth H. Galbraith: Yes, Charles.

Charles Yue-Wen Zhu: Perfect. No technical difficulties this afternoon. Thank you very much for taking our questions, and congrats on all the progress. Two quick ones from me. One, it sounds like you amended the protocol for ZW251 to include additional tumor types. As you head towards initial clinical data for that asset, how important would it be to include some of those other tumor types beyond liver cancer as part of that initial clinical data package? Second, on the IND filing for ZW1528, your IL-33/IL-4 receptor alpha bispecific has been pushed out a bit. It sounds like you are waiting to see a little bit more about the IL-33 biology. Could you help us understand what you are looking for in the full data, and maybe also remind us on your asset—are you able to block both oxidized and reduced forms of IL-33?

Kenneth H. Galbraith: Great questions, Charles. We will take your second one first. I will make a brief comment and pass it to Paul for more of the technical question, then we can go back to ZW251 with Sabeen. We saw some data results last year with respect to IL-33 antibodies and other programs that were not successful, and we tried to understand what that meant and why. This year, as you mentioned, we have seen a top-line data release of a positive Phase 3 study outcome in IL-33 in a patient population similar to what we would like to study. We have not seen the detailed data yet presented at a medical congress. We would like the opportunity to understand that data when it is presented and discuss it with our clinicians who are helping us with our planning around the clinical development program we have in mind for ZW1528.

It is prudent to make sure we understand the differences between some of the negative studies and what is being seen as a positive study before we dive into the clinic. Paul?

Paul A. Moore: Thanks, Charles. Your question was about the blocking of IL-33—both the oxidized and the reduced forms. We have been characterizing that and we feel that we have the potential to block both pathways. We are still dissecting more of the mechanism, but we clearly have a very potent IL-33 blocker, and it works very well also in the context of the bispecific. There is biology associated with having the IL-33 binder in a bispecific format with IL-4 that we are very excited about, and we think it really differentiates our approach from others. To your point, we feel that on the IL-33 side, we will be able to block both forms.

Sabeen Mekan: To your question regarding ZW251 and inclusion of additional tumor types such as squamous non-small cell lung cancer and germ cell tumors, our rationale is as follows. We initially entered the clinic with ZW251 in hepatocellular carcinoma due to the high unmet need, high levels of GPC3 expression in this tumor type, and very little expression on normal tissue. Over time, as we have gained confidence with our ADCs—particularly with our folate receptor alpha ADC where we saw activity at lower levels of target expression—we became more comfortable exploring other tumor types as well. We have reviewed the literature and our internal data for GPC3 expression in squamous non-small cell lung cancer and germ cell tumors and feel comfortable including these tumors in our study. It is fairly common for dose-escalation studies to include multiple solid tumors, which is what we are doing at this stage.

Charles Yue-Wen Zhu: Thank you very much for taking our questions, and congrats on everything.

Operator: Thank you. Our next question is from Jonathan Miller with Evercore. Your line is open.

Jonathan Miller: Hi, thanks so much for taking my question, and congrats on all the progress. I would like to ask about the novel pan-RAS ADCs. In your criteria for selecting the pan-RAS payload you ended up choosing, it looks like you looked at a number of different molecules across a variety of characteristics. It is notable that most other second-gen or next-wave pan-RAS programs have prioritized high potency, and it does not seem like that was your priority next to other things. Could you give a little more granularity on what you were selecting for in the payload and why you did not think pushing potency as far as it could go was the key to success?

Paul A. Moore: Thanks, Jonathan. To clarify, it may have come across that we emphasized compatibility as ADC payloads and de-emphasized potency. We definitely had a potency bar that we wanted to achieve, and you can see it in the data we shared—for example, in target-matched comparisons, our RAS ADC shows very strong potency. There was definitely a potency threshold we required in the ADC context. But because it is a payload class with known liabilities, there are other attributes we needed to factor in, including bystander activity, pharmacokinetic properties, and the balance of tolerability. What we have identified gives us a very impressive window: activity in xenograft models in the ~1 mg/kg range, with tolerability in nonhuman primates at up to 120 mg/kg. Taken together, that is a compelling profile and gives us a lot of excitement about the platform, especially because we can then plug and play across different targets.

Jonathan Miller: Makes sense. As a follow-up on the NHP tolerability comment—you are citing ADC dose levels. We are used to looking at tox profiles for other pan-RAS programs with naked small molecules. Can you give a sense of the relative amount of payload you are delivering preclinically so we can think about it?

Paul A. Moore: These are DAR-8 ADCs, which can help you estimate relative payload delivery. Our focus has been to show the differences in distribution and tolerability enabled by the ADC versus a small molecule—hence the experiments comparing tumor versus normal tissue distribution. That is the key here. We think this allows us to dose quite high and still maintain tolerability. We have therefore focused on demonstrating that differentiation rather than attempting direct mole-to-mole comparisons with small molecules.

Operator: Thank you. Our next question is from Yigal Dov Nochomovitz with Citigroup. Your line is open.

Yigal Dov Nochomovitz: Hi, thanks, and congrats on all the progress. Two questions. Jazz commented on their earnings call regarding some MFN pricing headwinds associated with the ex-U.S. launch of Zahera. Can you comment on that with respect to your royalty base for your ex-U.S. royalty stream for Zahera and how that factored into your thinking about underwriting the $250 million note with Royalty Pharma? And second, regarding the second interim for overall survival for Horizon GEA, which is coming in the middle of the year—will that be included in the label, or would that be a post-approval update? And can you comment on what the threshold is for that second interim?

Kenneth H. Galbraith: Thanks, Yigal. On your first question, I do not think we want to comment further than Jazz’s observation about Zahera potentially having more pricing pressure outside the U.S. than inside the U.S. That is not unexpected for Zahera or any pharmaceutical in today’s market. The way we modeled out Zahera—and, I would assume, the way Royalty Pharma modeled it—would have taken into account pricing pressures that may be more significant outside the U.S. than inside. We will have to wait and see how the GEA launch goes. There is a tremendous clinical benefit already seen with the second-line biliary tract cancer opportunity with Zahera and the clinical data for GEA, and that clinical value is typically reflected in pricing and reimbursement. On the second question, other than the fact that Jazz continues to guide that the next interim analysis would be by midyear, we are not able to comment further on regulatory strategy related to that dataset.

Operator: Thank you for your question. Our next question comes from Mayank Mamtani with B. Riley Securities. Your line is open.

Analyst: Hi, this is Paulo on for Mayank. Thank you for taking the questions. On the FRα program, what is the specific durability or subpopulation edge that distinguishes it from competitors enough to drive a deal? And on RAS, to expand on the internal versus partnership balance, can you speak specifically on the partnership funnel post-AACR? Has the data driven incremental inbound interest, and if so, which one of the three molecules is leading those discussions?

Kenneth H. Galbraith: Thanks. I will cover the second part first, then ask Sabeen to comment on where we think ZW191 might be differentiated. We are open to and have active conversations across our R&D portfolio—from the most advanced clinical asset like ZW191 to some of the earliest opportunities. We are looking for ways to share capital, share risk, move more quickly to keep up with competition, and manage the breadth of our R&D pipeline. We have a range of discussions ongoing, but we will not provide further details until we have completed transactions, after which we will discuss the rationale and next steps. Sabeen?

Sabeen Mekan: In terms of ZW191 being differentiated from other ADCs, we clearly see that ZW191 activity is much higher than current standard of care in platinum-resistant ovarian cancer. Compared to the approved folate receptor alpha ADC, we are showing stronger response rates as well as a well-differentiated and improved safety profile. Versus other emerging ADCs in development, we are, at least numerically, showing the strongest response range, and we have observed encouraging durability in Phase 1. We are dosing at higher dose levels than many others in the space, yet we maintain a very manageable safety profile—low rates of cytopenias, no prophylactic growth factors—and overall good tolerability. We believe delivering higher dose intensity with manageable safety will translate into better efficacy at scale and help differentiate us.

Operator: Our next question is from Rene Benjamin with Citizens. Your line is open.

Rene Benjamin: Good afternoon, and congratulations on all the progress—great AACR for you. For Sabeen, on the ESMO GYN conference coming up, what should we expect—further follow-up from existing patients, or might we see updated or initial data from the fully enrolled cohorts? Relatedly, in the AACR data, can you talk through rates of discontinuation and dose reduction, especially in the context of Project Optimus? And for Paul, can you walk us through the decision-making process when determining whether to make a biparatopic antibody versus not? For the pan-RAS payloads, you have one that does and two that do not—how do you make that decision?

Sabeen Mekan: For ESMO GYN, we will be presenting folate receptor alpha expression level analyses from our Phase 1 dose-escalation study for ZW191. Data from the dose-optimization cohorts will be presented later when mature; we just finished enrollment of that cohort. Regarding AACR, dose reductions are common with ADCs, and our dose reduction rate was expected given longer-term follow-up. Most reductions occurred later in treatment. Despite these, we still see strong efficacy, indicating patients received high dose intensity as we moved through dose levels. Discontinuations likewise occurred with longer follow-up; our median follow-up was over seven months, with some patients much longer.

Paul A. Moore: On selecting biparatopic versus monoclonal, we empirically screen for the vehicle that gives the best delivery with the payload: internalization, tumor penetration, and activity, while maintaining favorable pharmacokinetics. If a monoclonal achieves optimal delivery, we use it. For ZW191, our monoclonal outperformed other FRα antibodies we had, and adding biparatopic binding did not add benefit. For targets like PTK7, the structure is amenable to biparatopic binding with multiple binding sites, and we found biparatopics delivered activity beyond what we could get with a monoclonal. We also compare against known or published antibodies where possible; for PTK7, our biparatopic outcompeted prior clinical antibodies in our hands.

Operator: Thank you. Our next question is from Stephen Douglas Willey with Stifel. Your line is open.

Stephen Douglas Willey: Thanks for taking the question. How are you thinking about the scope of incremental development you are willing to independently pursue with ZW191? Do you want to generate more data in other tumor types besides ovarian? Do you want to initiate combo trials? How are you thinking about ROI associated with additional work on this asset?

Kenneth H. Galbraith: Thanks, Steve. As with all programs, we are thoughtful about staging investments to understand strategic and competitive positioning and how datasets inform further investment. With ZW191, we were encouraged by dose-escalation data, funded additional patients to achieve the AACR dataset, and moved quickly to invest in dose-optimization cohorts of ~30 each (rather than 20) to gain additional insight. We will let those data mature and proceed from there. It is a very competitive landscape in gynecologic tumors, with multiple competitors ahead of us in ovarian and endometrial cancer. Without a partner, it would be hard to move quickly to fully leverage ZW191’s properties. We will present dose-escalation data next month, let dose-optimization mature, and then decide on further Zymeworks Inc. investment versus prioritizing a partnering transaction to support larger studies.

Operator: Our next question is from Yaron Werber with TD Cowen. Your line is open.

Yaron Werber: Thanks. First, as you think about developing the next targets, how do you determine between an oncology target or an inflammation target, given the platform’s flexibility? Second, regarding the RAS inhibitor payload itself—was that chemistry developed completely in-house, or did you use a known scaffold that you then varied?

Kenneth H. Galbraith: Historically, Zymeworks Inc. focused initially on solid tumor indications. As we expanded into ADCs, we stayed within solid tumors, but we have since become more open to targets relevant in heme-onc and autoimmune/inflammation, and we have increased our efforts there. We are largely therapeutic area-agnostic; we look for areas where our approach can deliver superior patient benefit. We let opportunities guide us rather than preallocating effort by therapeutic area.

Paul A. Moore: For initial proof of concept, we used a published pan-RAS inhibitor to demonstrate that an ADC approach could work. We then generated a large panel of novel payloads in-house, focusing on properties compatible with ADCs—chemistry, linkerability, stability—while maintaining potency. These are novel structures created by modifying and optimizing for ADC use rather than repurposing an existing small molecule as-is.

Operator: Thank you for your question. Our next question is from JPMorgan. Your line is open.

Analyst: I am curious if you could give us directionally how to think about your development strategy for your pan-RAS ADC approaches. You have different targets carrying a pan-RAS payload—how should we think about positioning, and whether it makes the most sense to go after pancreatic cancer first, or lung, or colorectal? Do you have a sense of which target has the best probability of success based on where you are today?

Kenneth H. Galbraith: Thanks for the question. As you saw at AACR, we do not like to do things one at a time. We believe in applying the technology to multiple opportunities simultaneously to create optionality in ordering and prioritization, and to pay attention to competitive dynamics. Paul can add color on target and indication rationale.

Paul A. Moore: Our strategy is to design ADCs with the tumor in mind—leveraging targets that provide strong coverage in RAS-mutated populations across tumor types, which gives us a broad “universe” to pursue without being constrained by a single target. Each ADC may have strengths in particular tumor types. For instance, PTK7 has high penetrance in RAS-mutated non-small cell lung cancer; Claudin 18.2 is relevant in pancreatic cancer; L1CAM provides coverage in CRC and PDAC. The molecules provide optionality for different development paths, whether internally or via partnerships. We are not discussing specific sequencing today, but our selections were driven by expression penetrance, internalization, and delivery characteristics that position us well in lung, pancreatic, and colorectal cancers.

Operator: This does conclude our question-and-answer session. I would now like to turn it back to Kenneth H. Galbraith for closing remarks.

Kenneth H. Galbraith: Thank you, everyone, for joining us. I know it is a very busy earnings season this week in particular, so we really appreciate you taking the time to listen to our progress. We very much look forward to reporting progress over the weeks and months ahead. Thank you very much for your participation in today’s conference. This does conclude our program.

Operator: You may now disconnect.

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