Earnings Call Transcript - ZYME Q1 2022

Operator, Operator

Good day and thank you for being here. Welcome to Zymeworks First Quarter 2022 Results Conference Call. Currently, all participants are in listen-only mode. After the presentations from the speakers, we will have a question-and-answer session. Now, I am pleased to introduce your first speaker today, Jack Spinks, Head of Investor Relations. Thank you, and please proceed.

Jack Spinks, Associate Director of Investor Relations

Good afternoon, and welcome everyone. My name is Jack Spinks, Associate Director of Investor Relations here at Zymeworks. Today, we will discuss our first quarter 2022 financial results as well as provide an update to 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. Clinical development of our product candidates, related clinical trials, anticipated clinical data presentations, potential therapeutic effects of zanidatamab and our other product candidates, expected financial performance and future financial position, the commercial potential of technology platforms and product candidates anticipated continued receipt of revenue from existing and future partners, our preclinical pipeline, anticipated sufficiency of cash resources and other potential sources of cash to fund our planned operations into the second half of 2023 and potentially beyond, our ability to execute new collaborations and partnerships 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 Chief Operating Officer will be discussing our financial results, including certain non-GAAP measures. A description of our 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. As a reminder, the audio and slides from this call will be available on the Zymeworks' website later today. With that, I will turn the call over to Neil.

Neil Klompas, Chief Operating Officer

Thanks Jack and hello everyone. Thank you for joining us today for our first quarter earnings call. I would like to start today's call with a note on our recently received unsolicited non-binding proposal from All Blue Falcons. As we mentioned in our press release issued on April 28, 2022, the Zymeworks' Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Zymeworks' shareholders. I would also like to remind everyone listening that this was an unsolicited and non-binding proposal and as such no formal offer has been made by ABF. If a formal offer is made, it will be reviewed by the board and its advisors. And a formal recommendation by the board will be made to shareholders in due course. While we recognize there may be further questions on this matter, we will not be able to comment beyond what we have publicly disclosed and are already issued in our press release. For the remainder of the call today, we very much look forward to discussing our business and operations as we continue to work towards our corporate goal of building shareholder value by enabling patients to return home to their loved ones disease-free. With that, I will continue with the discussion of our financial results followed by an update on our clinical and preclinical activities and general corporate updates. As a reminder, I'd like to note that while I'll be presenting the prepared remarks today, our entire executive team will be available for Q&A following this portion of the call. This afternoon, Zymeworks reported financial results for the quarter ended March 31, 2022. As reported, our revenue for the first quarter of 2022 was 1.9 million compared to 0.6 million in revenue for the same period of 2021. Revenues for the three-month periods were primarily related to research support and other payments from our partners, which often include cost-sharing arrangements. Research and development expense for the quarter ended March 31, 2022 was 62.5 million compared to 44.3 million for the quarter ended March 31, 2021. These increases from the year related primarily to higher clinical trial expenses for zanidatamab due to the initiation of the HERIZON-GEA-01 study, and a corresponding increase in associated drug manufacturing expenses. Additionally, the Company incurred severance and other expenses due to its restructuring program. These increases over the prior year were partly offset by lower clinical trial expense for ZW49. General and administrative expense for the quarter ended March 31, 2022 was 12.1 million compared to 1.3 million for the quarter ended March 31, 2021. General and administrative expense for the quarter ended March 31, 2022 included non-cash stock-based compensation recovery of $5.1 million comprised of $2.2 million expense from equity-classified awards and a $2.9 million recovery related to the non-cash, mark-to-market reevaluation of certain historical liability classified awards at $3.9 million from restructuring expenses. Excluding stock-based compensation and restructuring expenses, general and administrative expense increased by $3.2 million for the quarter ended March 31, 2022, compared to the same period in 2021 on an adjusted non-GAAP basis. The increase year-over-year was primarily related to severance and other expenses incurred due to the Company's restructuring program in 2022, as well as a non-recurring sales tax refund recognized in 2020, which offset expenses in the prior year. Zymeworks net loss for the quarter ended March 31, 2022 was $72.7 million compared to $44.6 million for the same period in 2021. The increase in net loss was primarily due to increases in research and development expenses and general and administrative expenses in 2022, as compared to 2021, as we previously noted. However, it is worth highlighting that the increased operating expenses in this quarter, driving net loss are expected to trend lower in upcoming quarters, relative to current levels. Based on our forecasted operating expenses and largely driven by the ramp down of clinical expenses due to the completion of enrollment in our HERIZON-BTC-01 study and exiting the startup phase of our HERIZON-GEA-01 study in combination with a reduction in manufacturing expenses driven by the completion of a significant portion of our process performance qualification runs. We believe there will be a reduction in operating expenses throughout the remainder of 2022 and into 2023 based on the spending prioritization, restructuring, and non-recurring spending related to future BLA filings, I spoke to above. Our cash resources consisting of cash, cash equivalents, and short-term investments were $300.5 million as of March 31, 2022. Based on our current operating plan and in combination with proceeds from certain existing collaboration payments, we anticipate receiving our cash resources will fund our planned operations into the second half of 2023, and potentially beyond. In addition, we continue to make good progress towards our previously announced goal of executing on new partnerships and collaborations in order to potentially increase this runway beyond 2023 via non-dilutive capital. For additional details on our quarterly results and for a description of our non-GAAP 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. I also want to provide a brief update on the restructuring efforts we announced in January. As described on our last earnings call, by March 1, we had exceeded our previously announced workforce reduction of at least 25%, which we had guided as being completed by the end of this year. The reduction and realignment of our workforce included 50% of the senior management team. And in January, we noted that we would be initiating a search for a new Head of Global Research and Development. To that end, I wanted to note that the search for our new Chief Scientific Officer or CSO is progressing well. And I look forward to providing more information over the course of the year. Additionally, on behalf of the entire leadership team and our Board of Directors, I want to thank our outgoing Senior Vice President of Regulatory Affairs, Dr. Bruce Hart, as he leaves the Company to pursue new opportunities. I know I speak for everyone on the Regulatory Affairs team and across the organization as we wish him well in his future endeavors. In parallel with the ongoing progress made in the selection of a new CSO, we are actively advancing targeted hires across the organization, aligned with the transformation of our workforce. We will continue to update the market with further details as they arise. With that, I would like to move on a clinical update for our lead programs. As announced last week, I'm very excited to highlight that ahead of our published guidance of mid-year 2022, we together with our partner BeiGene have recently completed enrollment in the HERIZON-BTC-01 study. Our pivotal trial evaluating zanidatamab as monotherapy in patients with previously treated HER2-amplified biliary tract cancer or BTC. BTC is a hard-to-treat cancer, and advanced or metastatic cases are associated with a poor prognosis. Globally, approximately 210,000 patients are diagnosed with BTC each year. With HER2 being expressed in between 5% to 20% of BTC cases and there being currently no approved HER2-targeted therapies for this indication, zanidatamab stands to potentially help many patients around the globe. Zymeworks is committed to developing new therapies for hard-to-treat cancers like advanced or metastatic HER2-amplified BTC, and completing our enrollment in our first pivotal study is a major milestone and a testament to the hard work and dedication of our outstanding team and the clinical sites and investigators that we are privileged to work with on this study. With the last patient enrolled and a primary endpoint of objective response rate, we are updating our guidance regarding the HERIZON-BTC-01 study timeline. We expect to lock the study database by the end of the year and share results by early 2023. Additionally, we expect the full details of this study to be presented at a major medical meeting in 2023. It is worth reiterating that the FDA has granted zanidatamab breakthrough therapy designation for patients with previously treated HER2-gene amplified biliary tract cancer. As such, zanidatamab is eligible for accelerated approval, priority review, and rolling review by the FDA at such time that a BLA is submitted. In addition, our partner BeiGene recently received breakthrough therapy designation for zanidatamab from the center for drug evaluation of China's National Medical Products Administration for treating patients with BTC who have failed prior systemic therapies. As soon as the pivotal data is available, we and our partner BeiGene expect to have discussions with various regulatory agencies to inform our next steps. At the upcoming meeting of the American Society of Clinical Oncology or ASCO, our Asia Pacific partner BeiGene will present two studies with zanidatamab used in the first line settings. The first presentation scheduled for June 4, highlights Phase 1b2 data of zanidatamab in combination with the CAPOX regimen of chemotherapy and the PD-1 inhibitor tislelizumab for the first line treatment of HER2-positive advanced or metastatic gastric and gastroesophageal junction adenocarcinoma or GEA. This is the first clinical data presentation of zanidatamab in combination with chemotherapy and a PD-1 inhibitor. And this regimen is currently being studied in one of the treatment arms of the ongoing Phase 3 HERIZON-GEA-01 study. The data in first line HER2-positive GEA complements the interim Phase 2 results with zanidatamab and the standard of care chemotherapy in the same indication that was presented at the European Society for Medical Oncology Annual Congress in September of last year. The data presented at ESMO showed a confirmed objective response rate of 75%, a median duration of 16.4 months, and a median progression-free survival of 12 months, and exhibited a manageable safety profile in 28 response evaluable patients. The second presentation at ASCO is scheduled for June 6, where our partner BeiGene will present preliminary Phase 1b2 data for zanidatamab in combination with docetaxel for the first line treatment of patients with HER2-positive metastatic breast cancer. It is important to note that this will be the first data presented for zanidatamab in a first-line setting for advanced or metastatic HER2-positive breast cancer. As a reminder, in December, we presented data on zanidatamab in a late-line breast cancer setting where zanidatamab plus chemotherapy demonstrated encouraging anti-tumor activity in heavily pretreated patients with HER2-positive breast cancer. The data presented for 2022 efficacy evaluable patients resulted in a confirmed overall objective response rate of 36.4% and a median progression-free survival of 7.3 months. The combination of zanidatamab and chemotherapy was well tolerated with a manageable safety profile. We look forward to building upon these results in a setting where we believe zanidatamab exhibits characteristics that are well suited for these early lines of therapy. The third abstract submitted to ASCO contained interim data on late-line hormone receptor positive, HER2-positive breast cancer patients treated with zanidatamab in combination with fulvestrant and Pfizer's Ibrance. The abstract was selected for publication only; however, we subsequently withdrew the abstract from the meeting. To ensure this promising regimen is appropriately recognized and presented to clinicians and the public, we will continue to let this data mature in the patient population evaluated. As such, we plan to submit an abstract containing a larger data cut to a major medical conference in the fourth quarter of this year. Currently more than 50% of late-line HER2-positive breast cancer patients are also hormone receptor positive, which represents a substantial addressable patient population, and we look forward to presenting a more mature data cut pending abstract acceptance at a conference later this year. In addition to the milestones on zanidatamab, we continue to make progress in the development of ZW49, our second clinical candidate and first antibody-drug candidate utilizing our ZymeLink platform technology with an auristatin-based payload. During the first quarter, we completed enrollment of 30 patients in the Q3 weekly expansion cohorts at 2.5 milligrams per kilogram. We continue to evaluate dosing on an alternate schedule of weekly dosing for three weeks on followed by one week off drug to better understand the impact of more frequent dosing. We are currently studying an expansion cohort for weekly dosing at 1.5 milligrams per kilogram while in parallel, continuing dose escalation for a weekly regimen of 1.75 milligrams per kilogram. We continue to be encouraged by the progression of this study and we look forward to sharing the complete Phase 1 data findings at a medical conference later this year together with next steps in the clinical plan for ZW49. This quarter, we also highlighted a topic that is worth repeating here. In March at World ADC London, our team presented information detailing our next-generation Topo-based ADC platform. We are excited about this new technology, as it expands the scope of the existing ZymeLink ADC platform beyond traditional auristatin and provides Zymeworks and potential partners, the ability to select indication-specific payloads. Again, this enables the development of clinically and commercially relevant Topo antibody-drug conjugates that have shown preclinically to be potent, selective, and importantly bystander active. The approach to generating these potential Topo-based therapeutic candidates centered around an initial panel of potent effective derived payloads with multiple lead chemistries identified exhibiting favorable biophysical properties and a range of potency and bystander activities. We were able to benchmark, and we believe improve upon current ADCs in development by our competitors. With preclinical PK characteristics similar to a parental antibody, strong efficacy across multiple different tumor-associated antigens in diverse preclinical xenograft models and an excellent tolerability profile in preclinical models suggesting a favorable therapeutic index. We believe that our Topo-based payloads will complement our existing auristatin-based payload technology, which is currently used in ZW49 and allow further fit-for-purpose and indication-specific creations of ADCs. We look forward to sharing more details on the next-generation, Topo-based therapeutic candidates, as well as potential multi-specific therapeutic candidates in our preclinical pipeline with progress throughout the year and at our early-stage R&D Day scheduled for later this year. I would like to restate that our corporate goal as outlined in January is to advance two new product candidates that utilize our proprietary platform technologies and to submit two IND applications by the end of 2024. We are encouraged and excited by the preclinical results we've seen to date and look forward to sharing more about these programs and the supporting data at our R&D Day in the fourth quarter. In addition, I'd like to remind everyone that our data presentations are available on our website. Since we detailed our key priorities in January, we have already made significant progress on many of these objectives. To highlight a few, we said we would improve our balance sheet and we successfully closed a public offering against a very challenging macroeconomic backdrop and in parallel executed a reduction in workforce, in parallel with a focus on priority R&D programs, ahead of our target schedule. We said that we would fully recruit our pivotal study HERIZON-BTC-01 by the middle of this year, and as I noted earlier, we have completed enrollment ahead of expectations our previous guidance. We said we would present updated zanidatamab data at a major medical meeting. And again, as I noted earlier on this call, data from zanidatamab in combination with tislelizumab and chemo in the first-line gastric setting, as well as zanidatamab in combination with chemo in the first-line breast cancer setting will be presented at ASCO by our partner BeiGene. We said we would continue to work towards improving our balance sheet and we continue to make good progress on completing other non-dilutive funding initiatives that will extend our cash runway as well as being very active in discussions on new partnerships and collaborations that should secure funding for our planned operations beyond 2023. And finally, we said we would continue to advance our core technology platforms and more importantly communicate the value creation catalyzed by our investment in R&D. We presented our new Topo-based payload at World ADC London, and we remain committed to building on this R&D momentum over the course of this year and remain on track for two new IND filings by the end of 2024. In closing, our board and management team are acutely focused on building shareholder value through delivering on all of the 2022 and 2023 priorities we outlined in January, and hopefully exceeding expectations for our operating performance. With more to come in the coming months with respect to data updates for zanidatamab at ASCO and other medical conferences, a comprehensive update on ZW49 and various presentations pertaining to our portfolio and R&D activities. I know I speak on behalf of our entire company when I say we are very excited about the future of this company and we are committed to delivering upon our goals in a manner that benefits both our patients and our shareholders. With that, I will turn the call over to the operator to begin the question-and-answer session. With me today are Kenneth Galbraith, our Chief Medical Officer, Dr. Neil Josephson, and our Chief Financial Officer, Chris Astle.

Operator, Operator

Your first question is from Stephen Willey with Stifel. Please go ahead.

Stephen Willey, Analyst

Understood that there's probably not much to say regarding the Blue Falcon update here, but just with respect to the ASCO updates, is there anything that you can say just with respect to expectations around patient numbers? And then maybe just anything that you may be able to say around the expected duration of follow up that we should be looking for in the GEA in the front-line metastatic breast presentations?

Kenneth Galbraith, Chief Medical Officer

Steven, regarding your first question, I will let Dr. Josephson address the ASCO point. We issued a written statement last week about the letter we received, and I can't provide more details at this time as outlined in that statement and at the beginning of this call. I want to assure you that at Zymeworks, we approach everything with seriousness, urgency, and professionalism, always keeping the interests of our shareholders in mind. When we have additional information to share publicly beyond last week's statement, we will do so as deemed appropriate. Until then, any private discussions we have with the group that sent us the letter or other parties will remain confidential until we find it necessary to make a public statement. That's all we can say for now. I will now turn it over to Neil Josephson to respond to your question.

Neil Josephson, Chief Medical Officer

Thank you for your question. As mentioned, this is Phase 1B/Phase 2 data. From a high-level perspective, the patient numbers will be similar to what we have previously presented in Phase 2 data. This presentation is from BeiGene, but the figures will align with past results. Regarding the duration of follow-up, these are both interim data cuts for GEA. If you review our earlier presentations, you can get an idea of the general follow-up duration we will have. We will provide some duration of response, but again, it's still an interim data cut. In breast cancer, the data needs to mature over a longer period due to the standard of care's longer progression-free survival, so this is an interim data cut as well. For both cases, the data will be less mature regarding duration from the breast cancer perspective.

Stephen Willey, Analyst

Okay. That's helpful. And I know that there's a lot of discussion around trying to procure non-dilutive funding through various collaborative structures. And I guess can you speak to the preference for doing more earlier-stage platform-oriented deals versus I guess transactions that are focused around specific assets? I mean, it kind of seems like the former maybe won't necessarily inflect the balance sheet. I know that you're probably somewhat limited on the ladder, but if you could just maybe speak a little bit to where you're spending most of your time on the collaborative run right now. Thanks.

Kenneth Galbraith, Chief Medical Officer

Yes, sure. I can do that. And I guess there are two things. One is there are some financial options that we can pursue that are non-dilutive which could strengthen the financial position further. I think we talked about some of those earlier this year, when we talked about the strategy of strengthening our financial position in a series of steps over a period of time, which is what we have been doing. So as soon as we have more of those complete, then you'll see us talk about them. I think if you go back to January, one of the things I talked about early on about any changes in strategy for Zymeworks when I took over was to try and have a strategy of more ultimately integrating partnerships and collaborations throughout the product portfolio. And the strategy was simple. We could find ways to, by doing that business, to accelerate the timing of development beyond what we currently have out to broaden our program scope beyond the current studies which we have ongoing. Improve our commercial competitiveness, leverage our shareholder investment capital with partners' capital, and all of those were structured to improve the long-term value of our R&D programs beyond what we could have done on our own without those partnerships in place. I think we've been very active and busy since then in discussing interest from quality companies throughout the product portfolio, because I think our goal is to find ways to integrate partnerships, collaboration successively throughout everything we do both pre-clinically and clinically. And I think as we have something to announce in completed arrangements throughout the portfolio then we will obviously talk about it.

Operator, Operator

Your next question is from Yigal Nochomovitz with Citi. Please go ahead.

Ashiq Mubarack, Analyst

Hi, team. This is Ashiq Mubarack on for Yigal. Thanks for taking my questions. How should we interpret ASCO choosing not to grant an oral or post-presentation for your CDK-46 combo, in late line breast cancer? I mean, was there just not enough data or maybe how much data were you intending to present and maybe how much more will you present later this year in the fourth quarter?

Kenneth Galbraith, Chief Medical Officer

Good question. Neil J, do you want to talk about that?

Neil Josephson, Chief Medical Officer

Yes. I mean, it's hard for me to speculate as to why ASCO makes decisions. I can say that again this is an interim data cut, so the presentation later on will be a more mature version of an interim data cut. We're still enrolled in the study. We are very excited about the results and interested in sharing those results, but we wanted to share the results in a way in which people could evaluate them more fully than just in an abstract. So for that reason, we made a decision to submit to a subsequent meeting.

Ashiq Mubarack, Analyst

Okay. Maybe I'll sneak in one on ZW49. I guess when can we expect some strategic updates regarding which tumor types you'll be advancing? That seems likely to be after the data in the second half, but is there any chance you might provide some strategic clarity before that?

Kenneth Galbraith, Chief Medical Officer

Yes. I think I will take that one.

Neil Josephson, Chief Medical Officer

Please go ahead.

Kenneth Galbraith, Chief Medical Officer

Yes. Okay. I can take that one, Neil. I think we have been, in addition to continuing to dose the study and we gave you enough progress today. I think we have been working very hard to determine what the next study for Zymeworks looks like and what the next clinical study looks like for ZW49, on the basis that we find an acceptable dosing regimen to move forward with. And I think as soon as we are comfortable talking about the structure and timing of that, which could be in advance of presenting all the data then we will do so. So, I think as soon as we have enough certainty of what we want to do, we will obviously talk about that and it's not dependent upon doing it at the same time as having the full Phase 1 data set available in a peer review meeting.

Operator, Operator

Your next question is from the line of Charles Zhu with Guggenheim Securities. Please go ahead.

Charles Zhu, Analyst

Good afternoon guys. And thanks for taking my questions. I do have a few if you don't mind, but just to start off really quickly. What are the benchmarks that you'd potentially need to hit for HERIZON-BTC in second line disease? And how should we also think about those benchmarks, not only across the entire study, but also potentially on a cohort-by-cohort basis, stratified by IHC score? Thanks.

Kenneth Galbraith, Chief Medical Officer

Neil J, do you want to pick that one?

Neil Josephson, Chief Medical Officer

Sure. Most patients with biliary tract cancer, after the first line of treatment, generally have no standard care options unless they qualify for therapies like FGFR inhibitors. The ABC-06 study shows that combination chemotherapy, which most patients would access, yields low response rates and does not significantly extend survival compared to best supportive care. This indicates a considerable unmet need in this area. Our Phase 1 data in biliary tract cancer demonstrates that we have a highly effective drug for patients who have already been treated. While I can't specify what the FDA will require for approval, our observed activity in terms of response rates and duration of response is notably superior to what would be expected from chemotherapy. Once we compile all the data, we will present it to the FDA along with safety information, and decisions will be based on the comprehensive data set. The study consists of two patient cohorts based on IHC status: Cohort 0 includes patients with IHC 2+ and 3+, all of whom must have amplification, which is the primary group the FDA will consider for approval. The second cohort includes IHC 0 and 1+, which serves as an exploratory group to assess if patients with low expression can still respond to the drug. We will have all this information once the study concludes, but the primary focus for efficacy will be the IHC 2+ and 3+ populations, typically viewed as HER2 positive in similar diseases.

Charles Zhu, Analyst

And how are your front-line biliary tract cancer studies progressing? Could you just quickly remind us on progress on that front?

Neil Josephson, Chief Medical Officer

Yes, I'm happy to take that as well. We have a Phase 2 study that is currently enrolling patients and it is actively recruiting now.

Charles Zhu, Analyst

And if I could just squeeze one more in. Across your partnered assets, which includes Exelixis XB002 and T Cell Engaging over J&J, you should potentially have first-in-human clinical data perhaps throughout the second half of this year into next year as well. How much visibility do you have into how those studies are progressing? And to what extent have you included those potential near-term milestones in your runway guidance?

Kenneth Galbraith, Chief Medical Officer

Good question. To the extent we have visibility from partners regarding the programs, we do not discuss them publicly to maintain confidentiality. They are all strong partners, and we hope they progress with those agents as they have so far. We let them report on their progress and we only share milestones as we receive them. Generally, we do not factor future milestones into our cash flow forecasts, as this represents potential upside, and we avoid including partnering collaborations in our current cash flow projections. We only discuss what we are certain about when we talk about the second half of 2023. Additionally, once we finalize non-dilutive financing, receive more milestones from our earlier agreements, or close a partnership transaction, we will update our guidance. Therefore, we tend to be very conservative regarding our cash runway.

Operator, Operator

Your next question is from Josh Schimmer with Evercore. Please go ahead.

Josh Schimmer, Analyst

Thanks for taking the question. As we look forward to additional data for zanidatamab in breast cancer, given the competitive space for HER2-targeting agents, maybe can you give us a sense of the type of profile you are looking for in order to advance that into further studies? Thank you.

Kenneth Galbraith, Chief Medical Officer

Neil J, do you want to take that one too?

Neil Josephson, Chief Medical Officer

Sure. I think that you have to understand the way that we're developing zanidatamab in breast cancer. We are developing it as a combination agent. So, we're developing it in areas, in which other HER2-targeted therapies are used as combination agents. And so from that standpoint, the benchmarks are the benchmarks for the agents that are available and standard of care in different lines of therapy. We're developing it both in late line and early line. And so I mean, I think if you just look at what standard of care is those are the benchmarks that we're thinking about when we are thinking about where we can develop and where we will serve patients the best.

Operator, Operator

Your next question is from Jessica Fye with JP Morgan. Please go ahead.

Unidentified Analyst, Analyst

Hi, this is Nick on for Jessica. Thanks for taking our questions. Understanding you may not be able to comment on this, but wanted to see if you guys have thought about re-engaging or if you have re-engaged with strategic following the unsolicited bid from All Blue Falcons?

Kenneth Galbraith, Chief Medical Officer

Well I guess what I can say is mid-January, we talked about the fact that we wanted to have a more fulsome strategy around integrating partnerships and collaborations into our entire product portfolio for the reasons that I outlined. So, we've been engaged with discussions with parties with regards to their interest in one or more partnerships or collaborations that involve one or more of the programs just we have given zanidatamab, ZW49, the pre-clinical Topo, next ZymeLink platform, and the multi-specific antibody therapeutic platform. Some of those discussions might be narrow. Some of those discussions might be broad. So, we have a pretty open engagement with a host of strategic parties. And that's been ongoing since I got here, and we'll continue to be ongoing as we look how to integrate these things into build long-term value in the Company that we couldn't do if we didn't have those partnerships in place.

Operator, Operator

Your next question is from Nick Abbott with Wells Fargo. Please go ahead.

Nick Abbott, Analyst

Good afternoon. Thanks my question. So starting with BTC, can you tell us what proportion of patients are enrolled in China and Korea versus outside of those territories? And when is the earliest the Company would be ready to file a BLA?

Kenneth Galbraith, Chief Medical Officer

Good question. Neil J, do you want to take that or do you want me to answer that one? I mean, I don't think we are going to talk specifically about exactly where patients are being enrolled from. But I can tell you that, it is a disease that is more prevalent in Asian countries, but it's also prevalent in South America and also in terms of if you are thinking about our territory which we still have ownership of zanidatamab in Japan. BTC is definitely a disease that is significant in our territory that we control. And we have enrolled it globally, basically is what I can say. I don't know, Ken, do you want to talk about the approval approach or... Yes, our primary objective was to collaborate closely with BeiGene to ensure the study was fully recruited as quickly as possible, and I'm pleased we achieved that sooner than anticipated since I joined in January. This cooperation is crucial as it influences when we can expect the data from the study to discuss with regulatory agencies not only in the U.S. but also in all regions where we plan to file independently or in conjunction with BeiGene. We have indicated that data should be available by early 2023, and if we can expedite that timeline, we will. Once we reach that milestone, we will be prepared to engage with regulatory agencies worldwide to establish timelines for approvals, whether in BeiGene's regions like China or Korea, or other markets, and we will provide as much detail as possible regarding the timing and nature of those regulatory submissions. We conducted these studies globally with the expectation that they would back regulatory applications in multiple nations, and we will address any additional local study requirements for approvals once the data is available. Until then, we will remain cautious about our projections. We have indicated that we believe we can complete the study sooner, and after the data is released, we will provide further insights regarding the implications for filings and potential approvals, particularly if there are accelerated pathways available in some countries.

Nick Abbott, Analyst

Okay. But you mentioned in the prepared comments that you spent a lot of money in manufacturing in PPQ runs. So, do we take it the product supply? This doesn't seem like there is any real obstacles as far as CMC goes. It's really just the data in its sufficiency to support registration.

Kenneth Galbraith, Chief Medical Officer

Yes, we decided to accelerate investment in CMC including all the PPQ runs. So that would not be a limiting factor to any filing strategies we could take that may be possible quicker than you might think. So, we're hopeful that by the end of this year, we will have satisfied all the requirements that we need to be able to make any filings we make with respect to CMC. We've got a high-quality group there we're working really well. I think that will not be a limiting factor to decisions about when and where to file for zanidatamab and in BTC and that was strategic. It's ahead of itself, but I think that will help us accelerate the process once we look at our data.

Nick Abbott, Analyst

And then also another question, I think you said there are sort of wide-ranging partnerships ongoing. Why ranging scope with various partners, but given the unsolicited bid does this change the tenure or the timeline specifically as zani partnership?

Neil Klompas, Chief Operating Officer

No, I think the tenure we set up when I first got here. So I think all the contacts we've had with potential partners, we would've talked to before or were new to evaluating Zymeworks potential require collaborations know that we're very open to looking at different structures, different options, in which we can engage them. So, I don't think that has changed at all with the letter we got from the group. You mentioned, I think a part of our strategy you talked about in our equity financing that we completed end of January, was to give ourselves the ability to do this in a very mannered fashion, hoping then that we get to pick the highest quality partners and the best deal terms possible. But once we find the right partner and collaboration and the right financial terms, we think work for our investors in that structure, we can move to close that one and continue discussions on the other part. I think overall what we'd like to see is the ability to integrate partnerships and collaborations in different ways throughout the product portfolio from early right through to zanidatamab. The goal is to complete all of that in the appropriate structure and framework with the right partners over a period of time. It's probably not as long as you might think.

Operator, Operator

And then last one for me. Can you talk a little bit about data expectations from other zanidatamab indications such as colorectal or lung?

Neil Klompas, Chief Operating Officer

Yes, Neil, do you want to talk about any, I don't think we've given any guidance on that yet. We may give some after presentation, but anything else you want say, Neil J other indications?

Neil Josephson, Chief Medical Officer

Yes, we are enrolling in the Phase 2 study. We have a cohort with front-line colorectal cancer patients, but we don't have any guidance about when the data will be presented.

Operator, Operator

Your next question is from Akash Tewari from Jefferies. Please go ahead.

Akash Tewari, Analyst

So, maybe more holistically, it seems both the previous management team at Zymeworks and the current one has talked about a potential partnership on ZW25, but it hasn't seemed to have come to fruition yet. What data do you think we can show at ASCO that might make a strategic partner get interested? Is there a certain catalyst that you think partners are looking for in order to validate the platform and to justify further investment? Additionally, what does a formal offer entail versus All Blue versus the one you've already received? Is there a general timeline for how long your review will last? And lastly, for BTC and GEA, what would be the cost needed to fully fund those trials and get them onto the market for ZW25? Thank you.

Kenneth Galbraith, Chief Medical Officer

Thank you for those questions. I will do my best to address them. As I mentioned earlier, beyond our written statement from last week, we cannot provide further comments on those discussions. I hope my earlier remarks were clear. Once we have something to discuss, we will share it when appropriate. We need to be patient on that front. I cannot comment on the partnering and collaboration discussions that took place before I became CEO. However, since I started in mid-January, I have communicated clearly with everyone, both new and existing contacts, about our openness to various potential structures and our intention to partner and collaborate more extensively than before as we grow this company. I believe this is well understood by potential pharmaceutical partners. They have my mobile number and know I will respond if they show interest. Thus, I don’t believe there’s any concern regarding our willingness to engage with them. We have previously collaborated under confidentiality agreements with earlier datasets and can interact under current confidentiality terms, sharing data before peer review meetings, as referenced. This applies to ZW49 as well. Therefore, I don’t think our discussions with them will be delayed until ASCO, as they can access more immediate data under appropriate confidentiality restrictions. We are eager to engage and explore collaboration structures that would create value for our investors. These discussions are ongoing, and once we find the right partner for the appropriate program and pricing structure that benefits our investors, we will finalize that deal and make an announcement. Those involved in the process are not waiting for additional datasets from peer review meetings. Regarding the costs, while we have not provided specific guidance, we are aware of our cash runway and understand what we can manage independently versus what may necessitate partnership dependence. As we outline the next clinical steps for zanidatamab and ZW49, we will clearly communicate how we plan to fund those initiatives.

Operator, Operator

Your next question is David Martin with Bloom Burton. Please go ahead.

David Martin, Analyst

Good afternoon. My first question is a follow-up to an earlier question on the first-line breast study that's coming up. You mentioned that you're benchmarking combination data, combination regimens with existing HER2-targeted drugs, you know, I think in particular CLEOPATRA is a good one to look at. But how do you view the potential for zanidatamab to change the first-line hurdle and standard of care? And what does that mean for zanidatamab going forward?

Kenneth Galbraith, Chief Medical Officer

Dr. Neil J?

Neil Josephson, Chief Medical Officer

Sure. So, HER2 is obviously in a front-line study and has the opportunity to change standard of care in that setting if it's a positive study from the standpoint of efficacy and safety. I would say that trastuzumab and pertuzumab are really well-established therapies and will still be well-established therapies regardless of the readout of the front-line study within HER2. So from that standpoint, I can't predict the future to say what exactly our data will look like versus theoretical data from this study that's ongoing now. But I can say that when we look at the early line landscape that we know that both in HER2 and both trastuzumab and the combination of trastuzumab and pertuzumab with a taxane are going to have a home in early-line therapy. And so when we think about our approach to developing zanidatamab in breast cancer, we are thinking of it along the lines of how a combination agent works.

David Martin, Analyst

Okay. And then my second question, it is about the offer, but it's mainly asking for a clarification. You emphasized that it was unsolicited and non-binding and I'm wondering if that means to you that you don't need to engage with All Blue Falcons until they make a formal offer? Or is it something, am I interpreting that wrong like it is something that you should be engaging with them?

Kenneth Galbraith, Chief Medical Officer

No, I think the comment I mentioned before was clear. I mean, we got a letter. All we know is what was in the letter and the security filing, that's all we know. We did put a written statement out last week saying that we have received it and we were studying it appropriately, which I think you understand we would, as I said, with real seriousness, as we do everything with urgency, professionalism and the interest of all shareholders is there. What we specifically decide to do next publicly or in private discussions, we will do that. And then, we will make a public statement when it's appropriate and necessary. I don't think we will talk about the next steps until we've made a determination what those are.

David Martin, Analyst

So I shouldn't read into that positioning one way or the other, I guess, wait and see what happens.

Kenneth Galbraith, Chief Medical Officer

Yes. I think you can choose, others will read into a lot about this. But sincerely, I think we made a written statement last week, which I think was pretty clear. I think the comments I made today are very clear that to the extent that we need to make a public statement about something, we will do it as appropriate and necessary. After the work that we need to do internally do that like to the extent that we have private discussions with the group that sent us the letter or other third parties, we maybe discussions with, we will keep those discussions private, until such time as this necessary, appropriate to make any of those discussions public.

Operator, Operator

Your next question is from Gena Wang with Barclays. Please go ahead.

Unidentified Analyst, Analyst

Hi. Good afternoon. This is Harshita on for Gena. Thank you for taking our questions. I know this was touched upon before, but for the data updates at ASCO, I know you provided guidance on more additional color on patient numbers and follow-up. But I was curious, are you able to provide any benchmarks on what we should see in terms of response rates at the ASCO updates for both GEA and breast cancer?

Kenneth Galbraith, Chief Medical Officer

Dr. Neil J, do you want to answer that question if you can.

Neil Josephson, Chief Medical Officer

Yes, I think that if you want to think about benchmarks for what to think about in terms of breast cancer and we all know that CLEOPATRA response rates in the first line, well we know that that the TOGA and JACOB are response rates and PFS in gastric cancer. I mean, I think those are the areas that we're going in, too, with these Phase 2 studies. And so the data that we would be interested in comparing to, I mean there are lots of caveats about cross study comparisons, but when you're thinking about what do we need to do to become standard of care? You have to look at those as the benchmarks to which you would aspire to.

Operator, Operator

And your final question is from Robert Burns with H.C. Wainwright.

Unidentified Analyst, Analyst

Hi, this is Mitchell. Thank you for taking our questions. First one, I just wanted to ask again on the ASCO data, if you could describe what more we could see qualitatively from the abstract to the presentation?

Neil Josephson, Chief Medical Officer

Yes, I think that there's a little bit longer follow-up in the gastric cohort and in the breast cohort, but there will obviously be a much more detailed presentation of data in terms of showing depth of response and duration at least in what we can show at an interim cut in terms of patients that are still on and how long they've been and continue to respond. So, you'll get that color which you can't really get from an abstract. And like I said, there'll be a little bit later data cut.

Kenneth Galbraith, Chief Medical Officer

Sorry. And just to add, we will be scheduling an investor webcast at the end of our second presentation. And so that we were able to talk about other aspects of zanidatamab's clinical development plans beyond the data you might see in the abstracts and the presentations as well as answer questions that may arise from that. So, we're hoping to have a more fulsome presentation beyond the two specific data sets that are available and answer questions about zanidatamab broadly.

Unidentified Analyst, Analyst

And when thinking about your appetite for business development opportunities, how do you consider and how do you consider is what is a critical mass?

Kenneth Galbraith, Chief Medical Officer

I would like to focus on finding ways to integrate partners through collaborations in our program. This approach can help us move faster and enhance what we are currently doing. It can also strengthen our competitive position as we progress. We can leverage both our shareholder capital and partner capital effectively, something I have experience with. Historically, partnerships have allowed us to expand our clinical programs in a timely manner and improve commercial statuses beyond what partners could achieve alone. For instance, we are currently conducting two pivotal studies with BeiGene while primarily driving these efforts ourselves, and we've seen success in that model. There are numerous opportunities for us to excel independently within our early-stage preclinical pipeline, but integrating partnerships as I suggested can create long-term value for our investors as well. We need to consider how we structure each partnership, as it will likely vary based on engagement and product line. I believe adopting this strategy will strengthen our company and make us more appealing for future growth, enabling us to develop products more quickly and capture greater market share post-approval. Once we finalize and announce our first product, we can discuss the reasoning and how it aligns with our strategic message, as well as how it may influence subsequent developments. As we implement this strategy through specific transactions, we'll provide further insights on how it aligns with our overall strategy. I hope this is helpful.

Operator, Operator

And that concludes the question-and-answer session. I will now hand a conference over to Ken Galbraith for any closing remarks.

Kenneth Galbraith, Chief Medical Officer

That's great. I really appreciate your attention and questions today to the business design. So hopefully you've seen it from the performance out of the quarter we just announced that we are working very hard and very urgently around the priority as I set out as a new CEO, and mid-January, and that's independent of the worst biotech stock market we've seen in a long time. I think we're very focused as a team. I think things are going very well. I think I'm ahead of schedule in the reset that we wanted to make in the organization. And I think we're going to see that as the year goes along, that you'll hopefully continue to see operating performance that meets all the priorities and deadlines we have hopefully exceeds continues to exceed expectations around that. I think we're really looking forward to reporting progress in the weeks and months ahead to you on the things that we outlined today. So, thank you for your attention. We really look forward to seeing you at ASCO, if you're there or listening in on an investor webcast, and we look forward to talking more about Zymeworks and specifically zanidatamab at ASCO. So, thank you very much.

Operator, Operator

Thank you. Your ladies and gentlemen, this concludes today's conference call. You may now disconnect. Stay safe and well.