Zymeworks Pivots to Revenue-Focused Model with Multi-Asset Strategy Following Positive Trial Data

Zymeworks Inc. (Nasdaq: ZYME) has unveiled a comprehensive business transformation designed to capitalize on its emerging portfolio of licensed healthcare products while maintaining robust in-house research capabilities. The shift represents a significant evolution from traditional biotechnology operations toward a revenue-aggregation model focused on generating sustainable shareholder returns.

Strong Clinical Momentum Underpins New Strategic Direction

The company’s strategic repositioning follows encouraging results from the Phase 3 HERIZON-GEA-01 trial evaluating zanidatamab-hrii for first-line treatment of gastroesophageal adenocarcinoma (GEA), alongside advancement of pasritamig into Phase 3 registration studies under J&J’s development. These clinical developments have created a compelling financial foundation for the company’s new operating framework.

Under existing partnership arrangements, Zymeworks positions itself to receive substantial near-term milestone payments tied to regulatory approvals of Ziihera in global markets. The agreement structure includes potential payments of $250.0 million from the United States, $100.0 million from the European Union, $75.0 million from Japan, and $15.0 million from China upon successful commercialization in GEA. Beyond immediate regulatory milestones, the company expects ongoing royalty streams as Ziihera penetrates global oncology markets and expands into additional indications including breast cancer.

Regarding pasritamig, Zymeworks retains eligibility for up to $434.0 million in additional development and commercialization milestones through its partnership with J&J, coupled with mid-single digit royalty participation on product sales.

Integrated Operating Model Balances Multiple Value Streams

The newly articulated strategy combines three complementary approaches: leveraging cash flows from licensed products such as Ziihera and pasritamig, pursuing selective acquisitions and partnerships to build healthcare asset revenues, and maintaining dedicated internal R&D resources focused on early-stage therapeutic development.

Chief Executive Kenneth Galbraith explained that this integrated approach enables the company to reinvest anticipated proceeds from licensed products into additional revenue-generating assets while continuing to advance proprietary clinical candidates. The company has recruited Scott Platshon as Acting Chief Investment Officer to strengthen execution of this diversified strategy.

Management conducted a thorough capital allocation review with external financial and legal advisors to determine the most efficient structure for long-term value creation. The strategy contemplates deploying excess capital through both reinvestment in non-traditional biotech assets and direct shareholder returns via stock repurchases or special dividends.

Capital Allocation Framework and Share Repurchase Authorization

To optimize shareholder returns, Zymeworks’ Board has authorized a new $125.0 million share repurchase program. Since August 2024, the company has deployed approximately $60.0 million in cash resources to repurchase and retire approximately 4.4 million shares, representing roughly 6% of outstanding equity. These repurchases were primarily funded through Ziihera development milestones and cumulative royalties received to date.

As of September 30, 2025, Zymeworks reported $299.4 million in cash, cash equivalents, and investments. The company has implemented selective R&D adjustments, including pausing clinical development of ZW220 and ZW171, along with corresponding cost reductions to create operational efficiency.

Based on current cash reserves and anticipated Ziihera GEA milestone payments across major regulatory jurisdictions, management projects sufficient funding to support planned operations through 2028. This runway excludes potential contributions from additional future royalties, other licensed products, or new partnership collaborations.

R&D Operations and Partnership Strategy

Zymeworks’ internal research organization will continue advancing its pipeline of multifunctional therapeutics while actively pursuing new partnership opportunities. The company believes external collaborations will play an increasingly important role in funding ongoing development activities and reducing reliance on internal capital, thereby preserving the long-term value of existing scientific platforms and programs.

Disciplined capital allocation to R&D, combined with financial support from both existing and prospective partners, is expected to reduce pressure on milestone and royalty payments from the licensed product portfolio to fund internal research initiatives.

Investment and Analyst Engagement

The company hosted a webcast at 8:30 am Eastern Time to discuss implementation of its growth strategy and respond to investor questions. Zymeworks investor relations contacts are available to address inquiries regarding the company’s financial position, milestone expectations, and strategic initiatives.

For additional information on the share repurchase program terms and conditions, shares may be acquired through open market transactions in accordance with SEC regulations governing accelerated share repurchase arrangements and Rule 10b-18 provisions.

About Zymeworks: The company operates as a global biotechnology organization managing licensed healthcare assets while developing a diverse pipeline of novel, multifunctional biotherapeutics. Core focus areas include cancer, inflammation, and autoimmune disease treatment. The company engineered Ziihera using proprietary Azymetric technology and maintains separate commercialization agreements with BeOne Medicines Ltd. and Jazz Pharmaceuticals Ireland Limited across different territories. Additional information is available at www.zymeworks.com.