Earnings Call Transcript
Zymeworks Inc. (ZYME)
Earnings Call Transcript - ZYME Q3 2022
Operator, Conference Operator
Ladies and gentlemen, thank you for your patience. This is the conference operator. Welcome to Zymeworks' Third Quarter 2022 Results Conference Call and Webcast. Please note that all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for questions. I will now hand over the conference to Jack Spinks, Head of Investor Relations at Zymeworks. Jack, please proceed.
Jack Spinks, Head of Investor Relations
Good afternoon, and welcome everyone. My name is Jack Spinks, Head of Investor Relations here at Zymeworks. Today, we will discuss our third quarter 2022 financial results, as well as provide an update on our ongoing business. Before we begin, I would like to remind you that we will be making a number of forward-looking statements during this call, including statements that relate to the implementation of our strategic priorities, development plans and timing, anticipated therapeutic effects and commercial potential of our current and future product candidates, expected regulatory interactions, anticipated data releases and timing thereof, expected financial performance and future financial position, our ability to execute new collaborations and partnerships and receive milestones from existing arrangements and other information that is not historical information. Forward-looking statements are based upon our current expectations and various assumptions and are subject to the usual risks and uncertainties 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. Later in this call, Neil Klompas, our President and Chief Operating Officer will be discussing our financial results, including certain adjusted non-GAAP measures. A description of our adjusted non-GAAP measures and a reconciliation to the most directly comparable financial results as determined in accordance with GAAP are described in detail in our press release, which is available on our website at www.zymeworks.com under the Investor Relations tab. As a reminder, the audio and slides in this call will also be available on the Zymeworks' website later today. Now, I will turn the call over to Neil, our President and COO.
Neil Klompas, President and COO
Thanks, Jack, and thank you everyone for joining us today for our third quarter earnings call. As a reminder, I'd like to note that while I'll be presenting the prepared remarks today, Kenneth Galbraith, our Chair and CEO and members of our executive team will be available for Q&A following this portion of the call. With that, I'd like to begin today's call with an overview of our financial results, followed by a few noteworthy updates on both our clinical and R&D programs, as well as an update on our key strategic priorities as laid out in January before we open the lines for Q&A. This afternoon, Zymeworks reported financial results for the quarter ended September 30, 2022. As reported, our revenue for the third quarter of 2022 was $2.6 million compared to $4.4 million in revenue for the same period of 2021. Revenues for the most recent three-month period primarily related to a $2.6 million reimbursement from our partners for research support and other payments. Research and development expense for the quarter ended September 30, 2022 was $37.1 million compared to $49.9 million for the quarter ended September 30, 2021. This decrease of $12.8 million from the prior year related primarily to lower employee compensation expenses due to a reduction in headcount from our restructuring earlier this year, a decrease in manufacturing costs and certain clinical expenses for zanidatamab due to a roll-off of clinical trial expenses related to HERIZON-GEA-01, as well as a decrease in licensing expenses related to certain preclinical activities. General and administrative expense for the quarter ended September 30, 2022 was $15.9 million compared to $15.5 million for the quarter ended September 2021. Excluding stock-based compensation and restructuring expenses, adjusted general and administrative expenses decreased by $0.1 million for the quarter ended September 30, 2022 compared to the same period in 2021. This decrease year-over-year was primarily related to a decrease in professional fees and other expenses in 2022. Zymeworks' net loss for the quarter ended September 30, 2022 was $47.8 million compared to $60.6 million for the same period in 2021, a decrease of approximately 20%. Our cash resources consisting of cash, cash equivalents and short-term investments were $166.2 million as of September 30, 2022. This cash burn of $75 million in the third quarter was higher than the prior quarter due to quarter-to-quarter timing differences in cash flows, largely driven by payments made in the third quarter of $11 million related to process performance qualification activities, $4 million related to clinical development, and additional timing-related cash outflows associated with insurance renewals, special projects, and other miscellaneous corporate items. Based on our current operating plan and assuming the receipt of upfront payments from the Jazz licensing agreement before the end of this year, we believe our cash resources will fund planned operations through at least 2026. As we noted on our recent conference call, following the announcement of the licensing agreement with Jazz, the transaction with Jazz has the potential to transform our financial position by the end of 2022 and is extremely important to our ability to deliver upon our key strategic priorities through 2023 and beyond. In addition, we continue to be active in evaluating the monetization of legacy financial and preclinical assets, as well as seeking new and expanded partnerships, licenses and collaborations across our product candidate portfolio as a core piece of our strategy for development and commercialization. Given the transformative nature of the licensing agreement with Jazz, we expect to be able to provide a summary of our key milestones for 2023 along with further financial guidance for 2023 early next year after the expected closing of the agreement and receipt of upfront payments by the end of 2022. For additional details on our quarterly results and for a description of our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financials, I encourage you to review our earnings release and other SEC filings as available on our website at www.zymeworks.com. For those who missed our call in October, I'd like to take a few moments to provide a quick update on our recent licensing agreement. To start, I want to note that we were extremely excited to sign and announce our exclusive licensing agreement with Jazz Pharmaceuticals for zanidatamab during the quarter. This licensing and collaboration agreement provides Jazz with the global commercial and development rights to zanidatamab, excluding those territories already governed by our Asia-Pacific partnership with BeiGene. Our agreement with Jazz provides significant potential economic value for Zymeworks and its stockholders and fulfills a major strategic objective that we identified and communicated in January of completing a global partnering transaction for zanidatamab within this calendar year. The agreement with Jazz was the culmination of a broad business development process, evaluating a range of potential commercialization options for zanidatamab, which we completed with the assistance of our external advisors on the transaction, MTS Health Partners. We strongly believe Jazz is the right company to help deliver this important HER2-targeted bispecific antibody-based therapeutic to patients globally. Jazz is a leading global biopharmaceutical company that brings a wealth of development and commercial experience in oncology. We expect that this transaction will enable Zymeworks to leverage Jazz's existing integrated capabilities and global infrastructure to commercialize efficiently and will be complementary to BeiGene's strength in their Asia-Pacific region. Notably, in the US there is a significant overlap with Jazz's existing Zepzelca call universe where they have built strong relationships and quickly established Zepzelca as the standard of care in second-line small cell lung cancer. Under the terms of this agreement, Zymeworks would receive $375 million in upfront payments in two separate tranches, which we anticipate will be received before the end of 2022. The tranches consist of a $50 million upfront payment subject to antitrust clearance under the US Hart-Scott-Rodino Act and a second payment of $325 million at Jazz's option upon the readout of the topline clinical data from the HERIZON-BTC-01 study, which is currently expected before the end of 2022. In addition, we are eligible to receive up to $525 million in regulatory approval milestones, with a further $862.5 million in milestones available to Zymeworks upon the achievement of specified commercial milestones. Zymeworks is also entitled to receive tiered royalties between 10% and 20% of net sales of zanidatamab pending approval. Zymeworks will also be reimbursed for 100% of costs associated with ongoing zanidatamab-related clinical studies, with Jazz funding 100% of future clinical development costs for studies not already in progress. While we and Jazz will establish and maintain various joint committees to coordinate future activities, such as development, manufacturing and regulatory affairs, under the terms of the agreement, Zymeworks will continue to oversee clinical studies that are ongoing today through their completion. Additionally, in partnership with Jazz, Zymeworks will submit the first BLA for zanidatamab and will partner with Jazz on future regulatory filings. This involvement is critical as we continue advancing our ongoing clinical studies of zanidatamab towards regulatory filing and hopefully approval, allowing our employees to finish what they have started many years ago with the goal from day one of striving to improve patient outcomes over the current standards of care in a variety of HER2 expressing tumor indications. While the ongoing pivotal studies of zanidatamab in BTC and GEA will be the initial focus of the collaboration, Zymeworks and Jazz expect to continue evaluating clinical data from ongoing Phase 1 and 2 clinical trials of zanidatamab for indications beyond BTC and GEA. As we wait for HSR clearance, our teams are diligently planning post-close integration and gathering information for integration planning purposes. To be very clear, we and Jazz are excited about the potential for the broad applicability of zanidatamab across a range of HER2 expressing cancers beyond GEA and BTC, including both metastatic breast cancer and colorectal cancer where we have ongoing clinical studies and potentially future indications for zanidatamab that may provide benefits to patients in difficult-to-treat cancers. The initiation of any new clinical studies for zanidatamab will be communicated publicly as and when appropriate, and we look forward to working with Jazz on continuing to maximize the global benefit to patients and stakeholders by optimizing zanidatamab’s development. Our announcement with Jazz represents the culmination of years of work by the Zymeworks team. Moreover, we believe that patients around the world will benefit from this agreement. By securing funding and capabilities from our partners Jazz and BeiGene, zanidatamab is now positioned to advance into the potentially broadest group of patients possible who find themselves in need of novel HER2-targeted therapies and who seek improved outcomes beyond the current standard of care. We look forward to providing additional updates on the completion of this transaction before the end of 2022. As a reminder, I encourage you to listen to our earlier webcast and to view the slides available on our Investor Relations website, which highlight the benefits of this transaction as they are critical to our go-forward strategy. I'll now spend a moment speaking to our early research and development programs before I turn back to our clinical programs. With the expected proceeds from our recently announced licensing agreement with Jazz, we intend to accelerate the development of our preclinical product candidates into clinical studies with the goal of five new INDs in the next five years, with the first two of those INDs still expected in 2024. While we recognize that recently, the focus has been on our HER2 clinical programs, our early R&D Day on October 20 highlighted our potential to build a clinical-stage oncology product portfolio of ADCs and multi-specific antibodies that go beyond HER2. We expect to continue to present additional details and to update the progress of our preclinical programs in scientific and medical meetings throughout 2023. Also, as previously mentioned, we are continuing to engage in discussions to broaden our early R&D efforts through partnerships and collaborations. Zymeworks' core expertise in antibody engineering and ADC chemistry led to the development of our technology platforms and ultimately to our clinical programs that have been in the spotlight in recent years. We have continued to hone and refine this expertise on the same platforms, which resulted in zanidatamab, zovodotin, and host of platform licensing and development agreements that remain active across the pharmaceutical industry. This expertise remains the foundation of our development of novel biologics and future clinical candidates and gives us the confidence that Zymeworks will continue to be a leader in both the multi-specific antibody therapeutic and antibody-drug conjugate modalities as we move forward beyond zanidatamab. The clinical candidates presented at our R&D Day included three Topoisomerase-based antibody-drug conjugates developed using our novel Topoisomerase payload and ADC platform, and a multi-specific two-plus-one format T-Cell engaging antibody developed using our Azymetric multi-specific platform. The result of the continued effort and focus we bring to developing novel multifunctional targeted therapies for difficult-to-treat cancers is a focus on diseases with the lowest five-year overall survival rates and where our advanced biologics may be able to make progress towards significantly improved outcomes for patients. While we expect that the anticipated near-term proceeds from our collaboration with Jazz will provide us with the funding for the development of a number of product candidates over a reasonable timeframe, we continue to seek partnerships and collaborations both regionally and globally as an integrated part of our R&D strategy to both broaden and accelerate our product pipeline and to maintain our leading position of our technology platforms. Looking forward, we expect to have numerous opportunities for the presentation of additional clinical data over the coming months. On December 9 at the San Antonio Breast Cancer Symposium, we will present initial data from our ongoing study in later-line HER2 positive, hormone receptor positive breast cancer patients treated with zanidatamab in combination with fulvestrant and palbociclib, Pfizer CDK4/6 inhibitor marketed as Ibrance. Moreover, I'm happy to announce that enrollment of the targeted 50 patients in this study was recently completed several months ahead of schedule. Additionally, later this year, we plan to present data in a manuscript accepted for publication detailing the results from our Phase 1 dose escalation and expansion study of zanidatamab as monotherapy in patients with locally advanced and/or metastatic HER2 expressing or amplified cancers. These data will provide additional patient follow-up from data previously presented at ESMO Asia in 2019 and will include more than 80 patients with various HER2 expressing cancers, including biliary tract cancer, salivary gland cancer, non-small cell lung cancer, ampullary cancer, endometrial cancer, and other HER2 expressing cancers. Furthermore, and importantly, we remain excited and on schedule to report topline data in 2022 from our HERIZON-BTC-01 Phase 2 pivotal clinical trial of zanidatamab monotherapy for the treatment of metastatic or advanced HER2 amplified biliary tract cancer. With this timeline, we would expect to present comprehensive clinical data from the HERIZON-BTC-01 trial at a major medical meeting in the first half of 2023. The outcome of this pivotal study may provide the support for initial global regulatory filings for zanidatamab in conjunction with our partners Jazz and BeiGene. We are making strides in recruiting and tracking patients for our multicenter global Phase 2 open-label first-line study of zanidatamab combined with standard first-line chemotherapy regimens in selected gastrointestinal cancers, including gastroesophageal adenocarcinoma, pancreatic tumor carcinoma, and colorectal cancer. The gastroesophageal adenocarcinoma cohort, initially reported in September 2021 at ESMO, continues to track the fully enrolled patient group, and we aim to present additional clinical data from longer-term follow-up at a significant medical meeting in the first half of 2023. We have also recently initiated another zanidatamab investigator-led trial to assess the safety and efficacy of zanidatamab along with an undisclosed agent as a chemotherapy-free treatment option for patients with HER2 positive advanced gastric and/or gastroesophageal junction cancer who have not responded to current standard treatments. This study is led by Dr. SunYoung Rha and Dr. Min Kyu Jung at the Yonsei Cancer Center in South Korea, and its findings may offer important insights into the potential of a chemotherapy-free zanidatamab regimen to enhance outcomes for this patient group. Additionally, we have another investigator-initiated Phase 2 single-arm open-label pilot trial assessing zanidatamab in patients with early-stage HER2 neu-positive breast cancer, sponsored by MD Anderson. These investigator-initiated trials yield valuable insights into the effectiveness of zanidatamab across a wide range of patient demographics and are crucial in continuing to establish the range of zanidatamab’s efficacy across different HER2 positive indications, treatment lines, and drug combinations. We also had the opportunity at last quarter's ESMO meeting to present initial promising data for our second clinical candidate and first antibody-drug conjugate zanidatamab vedotin or ZW49 for short, a biparatopic HER2-targeted antibody-drug conjugate. We presented encouraging preliminary results from a basket study of HER2 expressing cancers in 77 patients representing the first published clinical results since the IND in 2018. Specifically, in 29 patients dosed at 2.5 milligrams per kilogram every three weeks, zanidatamab zovodotin exhibited a confirmed objective response rate of 31% in a heavily pre-treated patient population across multiple HER2 expressing indications. Importantly, these data provided characterization of the tolerability profile of zanidatamab zovodotin with a manageable side-effect profile in relation to other HER2 targeted ADCs approved or in development. The most common reported adverse event, keratitis, was predominantly grade one or two in severity and shown to be reversible. Remember that no changes or discontinuation in dosing were required for grade one events. For grade two keratitis, further dosing of zanidatamab zovodotin is held until symptoms and clinical findings of keratitis improve to grade one or complete resolution, and then the dosing has resumed at a reduced dose of 2 milligrams per kilogram. The Phase 1 study remains ongoing, including our cohort of patients on a weekly regimen of zanidatamab, which I'm happy to report is now fully enrolled. We are still awaiting the full dataset from our Q weekly cohorts to determine a recommended Phase 2 dose, which we expect to be able to report over the next few months. Presentation of additional Phase 1 clinical data for zanidatamab zovodotin is expected at a major medical meeting in 2023. In addition to having a differentiated tolerability profile to other HER2 ADCs, zanidatamab zovodotin has not shown any overlapping toxicities with standard-of-care agents used in the treatment of cancer, including cytotoxic chemotherapy, and we have the ability to develop zanidatamab zovodotin as either a monotherapy or in combination with a variety of other agents. This flexibility is important, and we believe it allows for the potential differentiation of zanidatamab zovodotin in early lines of therapy where an ADC may be particularly useful to treat difficult-to-treat cancers in specific indications. Furthermore, the immunogenic cell death mechanism of action seen with zanidatamab zovodotin may provide an opportunity to combine with IO agents, in particular PD1 inhibitors. Our planned approach and development will be to look at indications where we can combine with standard-of-care chemotherapy that is used in early lines of treatment. As we discussed recently, we intend to explore the potential of zanidatamab zovodotin in the treatment of non-small cell lung cancer, which has three distinct subpopulations that can be targeted: HER2 amplified, HER2 expressing, and HER2 mutant. Given that PD1 inhibitors are actively used as standard-of-care in non-small cell lung cancer patients, we plan to evaluate this dual approach with zanidatamab zovodotin. We also would like to further explore the single-agent activity seen with zanidatamab zovodotin in other tumor indications such as colorectal, ovarian, endometrial, and bladder cancers, either as a monotherapy or in combination with current standard-of-care. Further, we are interested in studying zanidatamab zovodotin in HER2 positive metastatic breast cancer patients who have progressed on prior treatment with trastuzumab deruxtecan. In the data presented at ESMO, we had one patient with a best response of stable disease to prior treatment with trastuzumab deruxtecan who showed a durable response to zanidatamab zovodotin after progressing on TDXD. We are also considering studying zanidatamab zovodotin in the rapidly evolving HER2 low breast cancer population. As we've done every quarter so far this year, I think it's important to note the significant progress we have made in 2022 towards the completion, often ahead of the guidance of our key strategic priorities that were laid out in January. With the release of our initial results from our Phase 1 trial for zanidatamab zovodotin, the completion of our redomicile to Delaware, the announcement of our licensing agreement for zanidatamab, and the unveiling of our pipeline assets at our Early Research and Development Day, we've had a busy and exciting past few months where we have made great strides towards implementing and achieving our key strategic priorities. These goals were put in place to provide a measured and systematic approach towards what we believe to be the best way to generate long-term stockholder value, and I'm very proud of the work that our employees have made since January. However, the year is not over, and we still have an exciting couple of months ahead of us. We have additional data catalysts for zanidatamab, including the presentation of results from our late-line HER2 positive, hormone receptor positive metastatic or advanced breast cancer study of zanidatamab in combination with fulvestrant and palbociclib, as well as topline data from our Phase 2 pivotal study HERIZON-BTC-01. Further, we anticipate receiving payments under our collaboration agreement with Jazz totaling $50 million upon the receipt of Hart-Scott-Rodino clearance and an additional $325 million if Jazz elects to continue the collaboration following the delivery of top pivotal results, all of which is expected to occur before the end of this year. With these major events behind us, 2023 will be a continuation of the plans laid out in January. With a transformed financial position, multiple additional zanidatamab-related clinical data catalysts, continued development of our preclinical pipeline, and an aggressive partnership and collaboration strategy, we anticipate 2023 will bring continued progress and key developments across the company. As Zymeworks' President and Chief Operating Officer and having been with the team since 2017, I'm extremely excited about our accomplishments this year and the path ahead for the company. 2022 has provided challenges across the biotech sector, but I am confident that with our recently announced agreement with Jazz, the continued incredible momentum in our clinical programs and across our newly unveiled early R&D pipeline, and recent steps like our successful redomicile to Delaware, we can capitalize on the opportunities ahead of us. None of this would be possible without the tireless dedication of our team. On a daily basis, I continue to be impressed and made proud by the quality and magnitude of work done by our team. After undergoing a restructuring in January, our employees, whether they be scientifically, technically, clinically or business-focused, have all worked incredibly hard day-in and day-out to build a strong foundation and to secure our future path from which to grow a successful biotech company. With a more focused strategy and a nimble team, we have done more with less, and we will continue to take this approach with a lean, disciplined, and data-driven approach to future growth. To all those who have been with us through what has been a challenging year for everybody investing and working in biotech, Zymeworks now looks forward to the future from a strong financial and scientific footing. We expect to continue delivering upon these results, generating long-term value for our shareholders, and ultimately improving the lives of patients by generating antibody-based therapeutics with the potential to dramatically improve on the current standards of care in difficult-to-treat cancers. With that, I'd like to thank everyone for listening to our prepared remarks and I'll turn the call over to the operator to begin the question-and-answer session.
Operator, Conference Operator
Thank you. Our first question is from Stephen Willey with Stifel. Your line is open.
Stephen Willey, Analyst
Yeah, good afternoon. Thanks for taking the questions, congrats on the progress. So maybe just to clarify, it now sounds like you're guiding to receiving, I guess, both of the Jazz payments before the end of this year which, I think, is maybe a little bit different than what the prior guidance was with respect to getting the 50 and then likely securing the 325 tranche in the event that they opt in early 2023. Is that a byproduct of just your ability to kind of pull together the BTC data and to get that communicated in a more timely fashion?
Kenneth Galbraith, Chair and CEO
Yes. Steve, it's Kenneth Galbraith. I can take that question. No, I think our guidance is consistent with what we provided when we announced the Jazz partnership, and so if that wasn't clear, we have every expectation to believe that the Hart-Scott-Rodino process can be cleared this year, and we do believe that we will be able to provide the top-line data from the BTC study this year to enable Jazz to opt-in such a timeframe that both of those payments will be received before December 31 this year, and that's always been our guidance. I'm sorry if that was not clear from before.
Stephen Willey, Analyst
I believe I may have misunderstood something. Regarding the San Antonio presentation, I noticed that the target enrollment on clinical trials.gov is 86, while you mentioned it is 50. Is that difference due to accelerated dose-escalation? I'm curious about the discrepancy between those figures. Additionally, are there any significant differences between that study and the previous study involving Herceptin, Abemaciclib, and fulvestrant? Thank you.
Kenneth Galbraith, Chair and CEO
I'll let Dr. Josephson answer both of those.
Neil Josephson, Chief Medical Officer
Yes, this is Neil Josephson. Your observation about the study numbers is accurate. We always factor in the number of patients who require dose modifications as part of the dose-finding process in the study, which is why the number was higher. We intended to have 50 patients in the evaluable population at the safe dose level. Regarding your question about the earlier study, that was a three-arm study, while this one is a one-arm study. A key aspect of the earlier study involved a different CDK46 inhibitor, Abemaciclib, combined with Trastuzumab and fulvestrant. In our study, we are utilizing a different CDK46 inhibitor along with zanidatamab, which is a different HER2-targeted agent. The patient population we are treating is generally more heavily pretreated than what was seen in the earlier study, primarily due to the availability of additional HER2-targeted agents. So, those are the similarities and differences between the studies.
Stephen Willey, Analyst
Great. Thanks for taking the questions.
Operator, Conference Operator
Thank you. One moment for next question. And our next question is coming from the line of Charles Zhu with Guggenheim. Your line is open.
Charles Zhu, Analyst
Hey, good evening everyone and congrats on the progress and thanks for taking my questions. Maybe first one on ZW49; it sounds like you guys are really progressing forward or at least have made a lot of progress on the Q weekly dosing schedule. How should we think about the positioning of Q weekly relative to the Q3 weekly that you guys had recently presented at ESMO, and how should we also think about potential pushes and pulls between convenience versus possibly or potentially improved clinical profile, both as a single-agent as well as with combination partners that could have varying infusion schedules? Thank you.
Neil Josephson, Chief Medical Officer
Hi, this is Neil Josephson. I want to highlight a couple of points. First, the data we shared at ESMO focused on the Q3 week dosing schedule, and we believe that the activity and tolerability of this regimen met our criteria to proceed. However, we still need to analyze more data from weekly patients to determine if that dosing schedule is preferred. We haven't made any public announcements about our next steps, but we will choose one of the two dosing regimens. Your observation about balancing convenience with the activity and safety profiles of the different dosing schedules is crucial. We recognize that a Q3 week dosing schedule is more convenient to implement. Therefore, we are not just looking for something comparable or slightly better; we are aiming for a significantly better option to move forward with the Q weekly regimen. However, we have not fully analyzed all the data or made any announcements about our path forward yet.
Charles Zhu, Analyst
Well. I think that largely covers that question. Thank you. Yes, and maybe just one more from me, perhaps regarding ZW49. I know you guys have spoken about this before, but I guess how should we think about the potential value you could potentially extract in a hypothetical partnership as a function of additional in-house data that you might generate and where return on investment might be the greatest for Zymeworks? Thank you.
Kenneth Galbraith, Chair and CEO
I can address that. At ESMO, we presented an agent that we believe demonstrates enough single-agent activity to advance further. We feel confident in the tolerability profile of this agent compared to other HER2 ADCs currently in development. We have carefully considered potential indications where ZW49, in combination with other therapies like PD1 or standard chemotherapy, could deliver promising efficacy and a manageable safety profile. We aim to generate further data in these key areas of interest. We have outlined a clear development strategy, and our objective is to move ZW49 toward a registration pathway by 2025 while also seeking a partnership before we initiate registration studies, potentially outside the US, to maintain future commercialization opportunities for ZW49 domestically. We have a well-defined investment strategy for this molecule, and we believe that further clinical investment is justified based on our return calculations. We plan to execute a comprehensive and efficient development program and share our findings with potential partners as we approach the registration pathway by 2025. Many seem to underestimate the potential of zanidatamab in a partnership context among investors and analysts. We have demonstrated that we can effectively develop agents in-house and establish beneficial business partnerships to support continued development and commercialization. With ZW49, we are eager to pursue appropriate development initiatives and, at the right time, engage in a business partnership that allows us to capitalize on the promising data we have seen thus far.
Charles Zhu, Analyst
Got it. Great, thanks for taking the questions.
Kenneth Galbraith, Chair and CEO
Yes. Thanks, Charles.
Operator, Conference Operator
Thank you. One moment please for our next question. And our next question coming from the line of Yigal Nochomovitz with Citi. Your line is open.
Hosni Mubarak, Analyst
Hi, team. This is Hosni Mubarak filling in for Yigal. Thank you for taking my questions. I want to ask about the timeline updates related to the Jazz deal. It seems that Jazz will need to make an opt-in decision based on your timelines this calendar year, and they may have to potentially contribute $325 million before the end of the year. I'm curious when the reimbursement portion of that might start. Will it also happen before year-end or at some point in 2023?
Kenneth Galbraith, Chair and CEO
No, provided Jazz opt-in to the partnership then the R&D reimbursement starts from the date that we signed the agreement back, which was back on October 19. We haven't tried to quantify that kind of reimbursement in Q4, but obviously when we report our results for 2022 in the event that Jazz opt-in, then you'll be able to see the benefits of that, and the reduction of our cash burn rate in Q4.
Hosni Mubarak, Analyst
Okay, great. That makes sense. Maybe going back to the CDK46 combo data you'll be sharing later this year. Can you give us a sense of what you view as compelling for the combo versus historical standards?
Neil Josephson, Chief Medical Officer
This is Neil Josephson. I would like to emphasize that we are dealing with a patient population that has been heavily pre-treated and typically lacks good options. Our focus is on a chemo-free regimen that is well tolerated, shows activity, and provides durable responses. I don’t want to jump ahead regarding the data we will present, but these are the key factors we are examining, and you will have the opportunity to assess how this regimen performs in this population. Regarding the earlier question about a similar patient population that is even more heavily pre-treated, you can gauge the potential for positive outcomes by reviewing what is expected from standard-of-care therapy in late-line settings, which typically involves chemo combined with clinical trials.
Hosni Mubarak, Analyst
Okay, great. Thanks for taking my questions.
Operator, Conference Operator
Thank you. One moment please for our next question. And our next question coming from the line of Gena Wang with Barclays. Your line is open.
Gena Wang, Analyst
Hey, thanks for taking our questions. So for the Jazz deal, there were a lot of questions being asked around the criteria to exercise that option after the BTC pivotal readout, but thinking that BTC is a relatively small market and the bigger proportion of economics would likely be from the rest of the portfolio. I’m just wondering is there anything you would like to highlight in terms of read-through from BTC pivotal data to the rest, if indications GEA and breast cancer that Jazz might be interested in.
Kenneth Galbraith, Chair and CEO
No, that's a good question. The arrangement with Jazz and the opt-in was structured to allow them access to data from an important readout expected shortly after the agreement was signed. This seemed reasonable, and we established a clear and efficient process for it. There is clearly potential value in zanidatamab for the BTC and GA indications, as well as future indications, and I believe Jazz had their own insights regarding these as we did. I can’t comment further on that; however, the upcoming BTC pivotal data is very exciting for us. This marks our first opportunity for clinical data readout which could support our future regulatory filings, and we are thrilled about the possibility of aiding BTC patients, a group that has considerable unmet needs, especially in the HER2-targeted therapy space. Zanidatamab could be the first HER2-targeted therapy for these patients and can be administered in a chemotherapy-free regimen, which is highly significant. We look forward to the pivotal data readout and plan to present topline data at a major medical meeting in the first half of the year, followed by discussions with regulatory agencies worldwide to facilitate patient access. Additionally, we have been working on various other clinical studies, including our pivotal study with first-line GEA in combination with chemotherapy, and we are continuing to enroll in multiple breast cancer studies. We’re actively enrolling in our Phase 2 first-line GEA study with chemotherapy, with additional data expected to be reported in the first half of next year, as well as in our Phase 2 first-line BTC study with zanidatamab, where we are still accruing patients. This is an exciting time for us at Zymeworks, and we believe it's another opportunity to showcase the broad applicability of zanidatamab in various HER2-expressing tumors.
Gena Wang, Analyst
And, if I may have another one, how much reduction in R&D expenses would you expect from the reimbursement agreements?
Kenneth Galbraith, Chair and CEO
Zanidatamab has significantly impacted our cost structure, particularly in 2022, where we are conducting two pivotal studies and a substantial CMC campaign in preparation for our first BLA filing. With the agreement on zanidatamab with Jazz, the cash burn will shift to Jazz, as they will reimburse us for the ongoing studies and fund any new studies related to zanidatamab. We will not provide any guidance at this moment. After the completion of the deal at the end of this year, we expect to offer some financial guidance and key goals for 2023 early in January. You will need to wait for that guidance to understand how our cash structure and runway will evolve throughout 2023, apart from our prior indication that we anticipate our cash runway to extend at least through 2026 following the completion of this deal.
Gena Wang, Analyst
Got it. Thank you.
Kenneth Galbraith, Chair and CEO
You are welcome.
Operator, Conference Operator
Thank you. One moment please for our next question. And our next question coming from the line of James Shin with Wells Fargo. Your line is open.
James Shin, Analyst
Hi guys. Thanks for taking my question. I was going through the presentation today, and I noticed that the Jazz milestone payments seem to be based on various BTC and GEA indications. Are any milestones related to HER2 breast? And will the breast expenses be reimbursed by Jazz? And then I have a follow-up.
Kenneth Galbraith, Chair and CEO
Yeah. With the second part of your question. So, any ongoing clinical studies that we had underway as of October 19, we will continue managing those and we're obliged to manage those, and Jazz will fund those. So obviously, that includes not just BTC and GEA, but studies beyond that which we're undertaking in breast cancer and even colorectal cancer. So all of those studies will continue to be ongoing to their conclusion and funded by Jazz. New studies which we decided to go forward with will be 100% funded by Jazz and managed by them. As you'll note in the deal we have $525 million in regulatory approval milestones, which we have not identified what indications or what geographies those should relate to; obviously, with BTC and GEA being very advanced in both in pivotal studies, it's a safe assumption that a considerable amount of those regulatory milestones would apply to indications that we've taken much further along. But there are also regulatory approval milestones there for indications beyond BTC and GEA. I think you should expect that once Hart-Scott-Rodino is cleared and we can then start to work jointly with Jazz to make some of these decisions about new indications that we'll make public statements at the right time about additional studies that will be undertaken with zanidatamab beyond the ones that are currently ongoing.
James Shin, Analyst
Thanks, Ken. And then is there any updates on the U.S. filing timelines? I really appreciate the color on the 50 patients. I'm not sure how much you can say, but can you give us a ballpark on how much follow-up we will have and whether we'll be able to assess a stable DOR?
Neil Klompas, President and COO
I don't want to get into the specifics of the data presentations. What we are presenting at SABCS is an interim data cut, and you'll be able to see some patients who have been followed for a considerable amount of time. However, there will be others who have just recently joined the study, so this isn't a final data cut. Some patients will allow us to assess durability since they've been monitored for a long time, while others will have been in the study for a short duration. It's important to understand that this interim data cut doesn't provide the complete picture, but I believe you'll be able to gather some insights from it.
James Shin, Analyst
Thank you. That's it from my end.
Operator, Conference Operator
Thank you. One moment please for our next question. And our next question coming from the line of Akash Tewari with Jefferies. Your line is open.
Amy Li, Analyst
This is Amy, asking on behalf of Akash. Thank you for addressing our questions. We have two. First, regarding ZW191, it appears to demonstrate better antitumor activity preclinically compared to mirvetuximab. Why do you think that is? Could the difference in potency between the two be a factor? Additionally, Merck observed some initial responses in tumors with medium or lower receptor alpha levels, but those reductions were not maintained. Do you have confidence that the efficacy observed with ZW191 in folate receptor alpha may be maintained at exceptional levels? My second question is about the filing timelines in the US and internationally. In the US, can you apply for accelerated approval, and what type of data will be included in the filing package? Thank you.
Kenneth Galbraith, Chair and CEO
Thanks for the question. I'll just take the second one, then I'll see how much Dr. Paul Moore wants to answer of the multipart first question, but with respect to GEA, the only guidance we've provided so far is to complete the enrollment in our pivotal study by the end of 2023. We've made no guidance with respect to the filing timelines. The nature of the study has been published. So, I think as you're aware if we're able to recruit the patients by the end of 2023, then there will be a PFS and interim OS readout likely sometime in 2024, and depending upon that data that would give us the ability to consult with regulatory agencies about an accelerated approval pathway, and the full OS readout then would be approximately one year later in 2025, which will give us another opportunity for potential full approval in certain regulatory authorities. So we haven’t provided any guidance about that and we won't until we have the opportunity to obviously see the data and likely make some regulatory consultation, but I think the pathways for both accelerated approval and full approval were discussed broadly on a global basis with regulatory agencies. I think we're pretty clear on that, and right now we're just focused on recruiting a high-quality study on time and then looking at the data and deciding on what the next step is in conjunction with regulatory agencies and our partners BeiGene and Jazz. And I'll let Paul decide about the first question.
Paul Moore, Chief Scientific Officer
Thank you, Ken. This is Paul Moore. I appreciate the question. At our R&D Day, we aimed to outline our strategy for designing our BDCs by considering the entire molecule, including the antibody, payloads, linker, and the overall attributes. During development, we devoted significant time to selecting the antibody, ensuring effective internalization, which we believe is crucial for the final product. We have various payload options at Zymeworks, including our proprietary ones, but for this case, we chose to collaborate with another group, which distinguishes us from ImmunoGen's product. In terms of efficacy, we've been very encouraged by the results across different tumor types with varying folate receptor levels. We believe we can effectively target tumors with medium folate receptor expression. Additionally, regarding tolerability and selection, we felt confident proceeding based on the safety profile observed in non-clinical studies and Phase 2 trials. Overall, this comprehensive approach positions us well for a best-in-class product.
Amy Li, Analyst
Got it. Thanks.
Operator, Conference Operator
Thank you. There appear to be no further questions. I'd like to turn the conference back over to Zymeworks for closing remarks.
Kenneth Galbraith, Chair and CEO
Well, that's great. Thank you operator, and thanks everyone for spending some time with us and for your questions. As you're aware, we've had a pretty exciting few months at Zymeworks on many different levels, and I'm so pleased that our hard work has allowed us to be able to achieve many of the key milestones that I laid out hopefully very clearly on January 15th when I took over as CEO. For us, 2022 is not done yet; we have a number of data announcements coming out at SITC and San Antonio, and then we're very much looking forward to reporting our top-line data from our BTC study before the end of 2022 and then look forward to discussing with you in early January of 2023 and talking clearly about our key goals and milestones for 2023 and provide some financial guidance given the fact that our financial position is expected to be transformed by the opt-in of Jazz in our partnership after the BTC data is delivered to them. We’re really excited about the position of the company right now and how hard we worked to put ourselves in this position, and we’re very excited about the next couple of months in 2022 and very much looking forward to having continued performance with our team during 2023 and look forward very much to laying that out for you in early January next year. So thank you very much and have a nice day.
Operator, Conference Operator
Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.