Earnings Call Transcript - ZYME Q2 2023

Operator, Operator

Thank you for your patience. This is the conference operator. Welcome to the conference call and webcast for Zymeworks' Second Quarter 2023 Results. Please note that all participants are in listen-only mode and that this call is being recorded. Following the presentation, there will be a chance for questions. I will now hand over the call to Diana Papove, Director of Corporate Communications at Zymeworks. Diana, you may proceed.

Diana Papove, Director, Corporate Communications

Good afternoon, and welcome, everyone. My name is Diana Papove, Director of Corporate Communications here at Zymeworks. Today, we will discuss our half year 2023 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 without limitation those forward-looking statements identified in our presentation slides and the accompanying oral commentary. 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. In a moment, Chris Astle, our Senior Vice President and Chief Financial 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 measures 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 from this call will also be available on the Zymeworks website later today. Now, I will turn the call over to Chris, our Senior Vice President and CFO.

Chris Astle, Senior Vice President and CFO

Thanks, Diana, and thank you everyone for joining us today for our second quarter 2023 earnings call. I'll be presenting prepared remarks and participating in the Q&A today. Our Chair and Chief Executive Officer, Kenneth Galbraith; and our Chief Scientific Officer, Paul Moore, will also be available for Q&A at the end of the call. With that, I will begin today's call with an overview of our financial results followed by a review of a few recent developments and updates across our business. This afternoon, Zymeworks reported financial results for the second quarter and six month period ended June 30, 2023. Zymeworks’ net loss for the six month period ended June 30, 2023 was $75.5 million, or $1.13 per diluted share compared to a net loss of $137.2 million for the six month period ended June 30, 2022. The decrease in net loss of 45% was primarily due to revenue from our collaboration agreement with Jazz, a decrease in research and development expenses and an increase in interest income, which were partially offset by an increase in general and administrative expenses. Revenue for the six month period ended June 30, 2023 was $42.6 million compared to $7.4 million for the same period in 2022. Revenue during this period included $40.9 million for development support and drug supply revenue from Jazz. Net of a credit issued to Jazz for amendments to our partnership agreement and $1.7 million for research support and other payments from our other partners. Revenue for the same period in 2022 included $7.4 million in research license fees, research support, and other payments from our other partners. Research and development expenses for the six months ended June 30, 2023 were $85.3 million compared to $118.5 million for the six months ended June 30, 2022. Excluding stock-based compensation and 2022 restructuring expense, research and development expense decreased on a non-GAAP basis by $27.9 million in the first half of 2023 compared to the same period of 2022. This decrease was primarily due to lower manufacturing expenses for zanidatamab and a reduction in development costs. As a result of the terms of our amended collaboration agreement with Jazz, partially offset by an increase in preclinical expenses compared to the same period in 2022. In addition, salaries and benefits expenses decreased compared to the same period in 2022, due to lower headcount in 2023 and lower non-recurring severance expenses. For the six months ended June 30, 2023, general and administrative expenses were $38.6 million, compared to $27.3 million for the same period in 2022. General and administrative expenses increased by $11.3 million for the six months ended June 30, 2023, compared to the same period in 2022, or a $7.8 million increase on a non-GAAP basis, excluding stock-based compensation and non-recurring restructuring expenses. This increase was primarily due to an increase in professional services expenses, partially offset by a decrease in salaries and benefits costs as a result of lower headcount in 2023 following our prior year restructuring activities. Overall, our total employee headcount has been reduced by almost 50% over the last 18 months, from 455 full-time employees as of December 31, 2021, to 237 full-time employees as of June 30, 2023. Our cash resources consisting of cash, cash equivalents and marketable securities were $431.4 million as of June 30, 2023, a net reduction of $60.8 million from December 31, 2022. For the six months ended June 2023, our cash used in operations was negatively impacted by working capital movements, primarily due to higher levels of receivables, which we expect to partially reverse by the end of 2023. During the second quarter, there were a number of financial impacts on our balance sheet due to our amended collaboration agreement with Jazz in May 2023. As of June 30, 2023, we have approximately $46 million in receivables from Jazz, reflecting reimbursement for zanidatamab development costs, which we expect to be reimbursed subsequent to the end of the second quarter. In addition, we received $15.4 million from Jazz for the purchase of prepaid expenses for zanidatamab development contracts that will be transferred to Jazz, which has been deferred on our balance sheet as of June 30, 2023 and will be offset against the related prepaids when the underlying agreements are legally transferred to Jazz. Moving forward, the accounting for our Jazz collaboration should be simplified given that the majority of zanidatamab development expenses will be incurred directly by Jazz. Any continued zanidatamab development expenses incurred by us and reimbursed by Jazz will be reflected as a reduction in operating expenses rather than collaboration revenue. We continue to expect further development support and drug supply payments from Jazz which we will continue to report as collaboration revenue. Due to the transfer of a significant number of our employees dedicated to zanidatamab development to Jazz, we recently decided to vacate our existing Seattle office location and have secured a fit-for-purpose office facility in Bellevue to accommodate our remaining Seattle based workforce. The majority of the financial impact related to this decision will be reflected in our Q3 financial results. With the continued focus on the balance sheet and the significant transformative impacts of the non-dilutive inflows from our licensing and collaboration agreements with Jazz and BeiGene, we continue to expect to have cash resources to fund planned operations at least until the end of 2026 and potentially beyond. As of August 9, 2023, we had approximately 67.79 million shares of common stock outstanding. During the second quarter, we issued 3.35 million shares of common stock pursuant to our at-the-market facility for net proceeds of $26.2 million. For additional details on our quarterly and six month ended results, for a description of our non-GAAP financial measures, and a reconciliation of GAAP to non-GAAP measures, I encourage you to review our earnings release and other SEC filings as available on our website at www.zymeworks.com. Now, I'd like to spend a few minutes talking about our recent business highlights. The first half of 2023 is highlighted by several important developments that reflect progress in our product pipeline. Together with Jazz, we presented full clinical results from our Phase 2b study of zanidatamab monotherapy in previously treated HER2-amplified biliary tract cancer at the American Society of Clinical Oncology Annual Meeting in June in Chicago. We also announced our next expected investigational new drug application candidate ZW220, a NaPi2b-targeted topoisomerase 1 inhibitor antibody drug conjugate scheduled for IND filing in the first half of 2025. This announcement is the most recent step in our 5 by 5 goal of having five new INDs for preclinical development candidates from our ADC and MSAT product portfolio filed and approved to commence clinical studies by 2027. Our other preclinical development candidates ZW171 and ZW191 currently remain on track with expected IND filing in 2024. We were also pleased to announce that industry veteran Carlos Campoy has joined our Board of Directors. Carlos is a skillful, thoughtful, and performance-driven financial executive with a successful track record in leading culturally diverse pharmaceutical and biotechnology organizations through complex transformational changes in the U.S. and internationally. We look forward to his input as a member of our Board. We're also pleased to report that both of our regional hubs in Dublin and Singapore are operational and will be instrumental in clinical study execution for our early stage R&D portfolio over the next several years in Europe and the APAC regions. Our early stage development organization in the United States continues to expand in both Bellevue and our planned new hub in California in light of our planned U.S. clinical study. Now, I'd like to spend a few minutes talking about our R&D portfolio. Our presentations at ASCO represent an important milestone in the development of zanidatamab and in our partnership with Jazz and BeiGene. Multiple abstracts were presented, including data from the HERIZON-BTC-01 Phase 2b pivotal study zanidatamab monotherapy in previously treated HER2-amplified BTC patients. The results were published simultaneously in Lancet Oncology. Presentations at ASCO also included updated results from a Phase 1b/2 study of zanidatamab in combination with the docetaxel as a first-line therapy for patients with advanced HER2-positive breast cancer. In the ASCO presentation for the Phase 2b pivotal study, we announced that data from 80 patients with HER2-amplified BTC defined as in situ hybridization positive, immunohistochemistry 2 plus or 3 plus demonstrated a confirmed objective response rate of 41.3%. With the Kaplan Meier estimated median duration of response of 12.9 months. The KM estimated median PFS was 5.5 months, with a range of 0.3 to 18.5 months. As our lead investigator, Shubham Pant, MD, Professor of Gastrointestinal Medical Oncology and Investigational Cancer Therapeutics at The University of Texas MD Anderson Cancer Center, noted in our press release announcing the results, a confirmed ORR of 41.3% median duration of response of 12.9 months and median PFS of 5.5 months represents a significant step forward for second-line treatment of HER2-amplified BTC, where current chemotherapy treatments have been reported to provide only a 5% to 15% ORR and median PFS of 1.4 to 4 months. Additional presentations on zanidatamab are planned for the second half of 2023, including two poster presentations, recently accepted for presentation at the European Society of Medical Oncology or ESMO in Madrid this October. In partnership with Jazz, we will be presenting quality of life outcomes from the Phase 2b HERIZON-BTC-01 study evaluating patients with zanidatamab-treated HER2-positive biliary tract cancer. In partnership with BeiGene, updated results from the Phase 1b/2 study of zanidatamab plus chemotherapy and tislelizumab as first-line therapy for patients with advanced HER2-positive gastric/gastroesophageal junction adenocarcinoma will be presented. These results provide data with a longer follow-up period from the original data presented on this clinical study at ASCO 2022. The future potential milestone and royalty payment from our zanidatamab licensing and collaboration agreement with Jazz and our agreement with BeiGene remain unchanged and are expected to continue to be a significant source of non-dilutive capital for Zymeworks as zanidatamab progresses towards the final stages of regulatory review, which would include additional regulatory and commercial milestones as well as double-digit royalties of up to 20% of sales. We continue to support efforts and regulatory interactions by each of Jazz and BeiGene for initial regulatory filings for potential accelerated approval of zanidatamab in second-line BTC. As announced by Jazz yesterday, they have alignment with the U.S. FDA on a confirmatory study in first-line metastatic BTC to support Jazz's U.S. regulatory efforts. With an initial focus in BTC and gastric, we believe that zanidatamab has the potential to improve the current standard of care and address a large unmet need in a range of HER2 positive cancers. HERIZON-GEA-01, the pivotal trial evaluating zanidatamab in first line GEA is ongoing and top line data are expected in 2024. Much of our progress in the first half of 2023 has been a reflection of our goal to have five novel therapeutic candidates in clinical studies by 2027. We are building a very exciting pipeline based on the strength of our technology platform and look forward to our expected IND filing for ZW171 and ZW191 in 2024. We also remain on-track to initiate a Phase 2 clinical study of zanidatamab zovodotin or zanizovo plus pembrolizumab in HER2 positive non-small cell lung cancer patients. In addition, we continue to explore a pathway for further clinical development of zanizov in post T-DXd breast cancer patients likely in collaboration with a strategic partner. As discussed, we have nominated ZW220 as our third preclinical development candidate in our 5/5 objectives and are moving forward with a planned IND filing in the first half of 2025. We believe that NaPi2b represents an excellent target for TOPO summarized 1 based antibody drug conjugate and a potential first-in-class opportunity. NaPi2b is highly expressed in 64% of serious ovarian cancer and 68% of lung adenocarcinomas as well as being a relevant biomarker of interest in other solid tumors. ZW220 is another example of therapies that are built on Zymeworks' drug conjugate platform technology, leveraging cysteine conjugation with a cleavable traceless linker to enable potential optimization of the appropriate drug to antibody ratio or DAR, that are novel topoisomerase 1 inhibitor payload technology. The monoclonal antibody incorporated in ZW220 was developed in-house and selected based on its favorable binding profile and efficient internalization and payload delivery. The DAR in ZW220 was selected to balance efficacy and tolerability by incorporating an average of four topoisomerase 1 inhibitor payloads for antibody. We look forward to the continued development of our early stage R&D portfolio and to reporting on the continued progress. We do expect to have opportunities throughout the second half of 2023 to provide presentations at medical and scientific meetings on our progress with zanizov ZW171, ZW191, ZW220, and other product candidates. On the partnering front, we expect to continue to pursue partnerships where advantageous to progress our preclinical development programs and to broaden our clinical development program for zanizov. As we leverage our focused R&D engine, we intend to continue our work to generate candidates with the potential to be co-developed with partners. For these development programs, we will continue to seek attractive economics with upfront payments that help fund development of our in-house candidates as well as attractive royalty and commercial milestones and/or retained commercial rights to such product candidates in the United States. In summary, we remain on track for important achievements and milestone opportunities during the remainder of 2023 and especially 2024 when we expect top-line data from the first line GEA Phase III study of zanidatamab to be reported. 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, Operator

Thank you. Our first question will be coming from Jon Miller of Evercore. Your line is open.

Jon Miller, Analyst

Thanks so much for taking the question, guys, and congrats on the progress with the financial belt tightening, especially. Maybe two from me. Could you speak a little bit to the bar in first line BTC as opposed to second line BTC? What are you looking for in OS there? And how are you thinking about those two populations differently? And then secondly, on the new announcement ZW220, can you speak a little bit more to the design there? What's driving your excitement for the target and maybe why you chose a lower DAR versus 191.

Kenneth Galbraith, Chair and CEO

Yes. Thanks, Jon. I'll take the first question. So obviously, you saw our pivotal data in second line BTC that we announced late last year, and had more detail at ASCO. And again, it was a pretty impressive response that we saw from zanidatamab as monotherapy in patients who had to fail a therapeutic regimen that included gemcitabine, which could also have included a PD-1 regimen, which about a quarter of the patients did. The confirmed responses were pretty much the same between folks who had a prior PD-1 and those who didn't. Obviously, it's a pretty compelling picture that we saw from the second line BTC patient population, and that's why we're working very hard with Jazz and BeiGene right now to complete the regulatory interactions we need to and get those filings in. When we think about our first line BTC treatment patient population, we're obviously looking to understand how moving into an earlier line of therapy for patients and working in combination with other standard of care, which in this case, in most parts of the world, is a PD-1 plus gemcitabine could really improve upon what zanidatamab has powerfully done on its own as monotherapy. So, I don't think we've talked about the nature of that clinical study; I'm sure we will once it's filed and the confirmatory studies are up and running. I don't think we'll talk much about what we're looking for other than zanidatamab monotherapy is pretty powerful in that second line patient population. We would expect moving up into an early line of therapy in combination with other agents could be a pretty interesting opportunity to change the standard of care. For that patient population, we know zanidatamab has a great tolerability profile, demonstrating that efficacy as monotherapy, which allows additional agents to be added to a therapeutic regimen and still be tolerable for patients. We know from the detailed subpopulation data that was published out of the Topaz study earlier this year that specifically patients with the RBB2 mutation did not do very well on a survival curve. So, we really think the right approach for that patient population is a HER2 targeted therapy in combination with other agents of standard care. We're really excited to run that study and see what we can do to improve the standard of care and won't define it ahead of that. For the ZW220 question, I'm going to let Paul talk a little bit about that ADC and how it was constructed and why we're excited to move that program forward into the 5 by 5.

Paul Moore, Chief Scientific Officer

Yeah. Well, thanks, Ken. Thanks for the question, Jon. Yes, maybe just pointing out some of the differences or some of the design features of the molecule. So, obviously, the target is NaPi2b. That is reasonably well validated as a target that's highly expressed in ovarian cancer and non-small cell lung cancer. Our preclinical package really supports the ability to target that molecule with the ADC that we've developed. Some other key features of our molecule, the payload that we've selected there is our topoisomerase inhibitor payload that Zymeworks has developed and has the features that we feel are important to support an ADC, especially for cancer types like ovarian and non-small cell lung cancer. We think the topoisomerase inhibitor approach is appropriate for hopefully getting favorable responses in the clinic. Then we did a lot of preclinical work to decide on the DAR. You asked a question about why we picked DAR4. There, what we found was that we really could dose very high safely in non-human primates. We went up to 90 mg/kg with that dose and repeated dosing and didn't see any evidence of any toxicity, no evidence of thrombocytopenia, which was favorable. What we also observed with that DAR was very nice activity in various tumor models, T-DX models for ovarian cancer. So, that taken together really supported our decision on that molecule.

Jon Miller, Analyst

Makes sense. Thank you.

Operator, Operator

Thank you for your question. One moment while we prepare for the next question. And our next question will be coming from Yigal Nochomovitz of Citigroup. Your line is open.

Yigal Nochomovitz, Analyst

Hi, thanks. If you could just spend a little bit more time talking about 220. Obviously, there's been some news in the space with NaPi2b's recent high-profile failure. So can you just talk about a bit more about your commitment to the target and more specifically how your molecule may differ, both in terms of the degree of site-specific conjugation, the payload, obviously, it's your own antibody? If you could just comment on that, given the competitive dynamics for that target. Thank you.

Chris Astle, Senior Vice President and CFO

Yeah. I'll let Paul extend upon that if you can, Paul. I'm sorry. Paul, your line's muted, I believe.

Paul Moore, Chief Scientific Officer

Sorry about that. So just getting back to the questions. What I mentioned previously, so in our drug compared to the Mersana drug, the payload is one key difference. In our drug, we've used a topoisomerase inhibitor that we had developed internally, and so, that's different than what Mersana had used. They had used Auristatin payload, and previously, Roche or Genentech had also targeted NaPi2b and used a similar inhibitor. We feel like using a topoisomerase payload here is a key difference in what's been previously attempted. We think that that topoisomerase is favorable for the tumor types that we're looking into. We also see a very favorable balance of safety and efficacy in our preclinical setting. So, we think that's very important. We also then took the time to think about the DAR, but as I mentioned, we're going with a little bit of a lower DAR than what Mersana had used. We feel that also differentiates from us. The backbone antibody, we also mentioned we've developed internally, and we're very comfortable with the antibody. In the preclinical setting, what we observed when we went to high doses – we have entered many mg per kg – repeat dosing with the DAR4 ADC, we saw no new evidence of thrombocytopenia, which could be a signal indicating potential bleeding toxicity, and we did not see that. So, we think overall with the safety profile and the design of the molecule with a TOPO payload, this really puts us in a good position to tackle patients who over-express NaPi2b in the clinic.

Yigal Nochomovitz, Analyst

Okay. Thank you very much. And then just one specific question as you look with your partnership with BeiGene, assuming that ZW220 gets commercialized in China, how will that work from the manufacturing perspective? Will that be produced by BeiGene and their Biologics facility or will that be done on your side?

Kenneth Galbraith, Chair and CEO

No. zanidatamab is manufactured by Wuxi, and has been supplying ourselves and BeiGene with clinical material. In a commercial setting, Wuxi will supply both BeiGene and Jazz for the initial launch quantities. If you've read our collaboration with Jazz, you'll see they have the ability to set up their own manufacturing at some point and we'll do a tech transfer to them. Obviously, BeiGene would have the same ability to do that. So right now, we've controlled that process all the way along for the benefit of our partners, and we'll be setting up commercial arrangements that allow Wuxi to supply BeiGene and Jazz directly. I think we're very comfortable on a supply basis. For the initial filings being made by BeiGene and Jazz, the CMC module was prepared by us because we did all the work, and that's already been prepared. So, it’s not a rate limiting factor too. So an initial filing by BeiGene or an initial filing by Jazz should not be that far away.

Yigal Nochomovitz, Analyst

Okay. Thanks, Ken.

Operator, Operator

Thank you for your question. One moment while we prepare for the next question. And our next question will be coming from Charles Zhu of Guggenheim. Your line is open.

Charles Zhu, Analyst

Hey guys. Thanks for taking the question and congratulations on all the progress. Fully appreciate that this is in partnership with BeiGene, but regarding zanidatamab and gastric cancer, can you help us set expectations for the upcoming Phase 1b/2 data at ESMO as well as how you think the recent update from the KEYNOTE-811 study may frame the competitive landscape for HERIZON-GEA?

Kenneth Galbraith, Chair and CEO

Yeah. Great question, Charles. I just don't know if I can answer it. For the second part, we obviously had a top line data release on KEYNOTE-811. That data, I understand, is going to be at ESMO, although some of it's being discussed with regulators now. From the top line data release, it appears that the regimen was only statistically significant or clinically meaningful depending upon what we read in the PD-L1 positive patient population in HER2. Obviously, we will await to see that data at ESMO and see what that means for us. I think they aren't exactly comparable studies. They're not head-to-head and also not comparable. The patient populations are different. Don't forget, we have esophageal cancer patients in our study in addition to gastric and gastric esophageal junction. So, it'll be hard to make a direct comparison between those two. But obviously, we'll take a look at what that data looks like. In all the work we've done in gastric cancer with zanidatamab, we find it works effectively so far in our early clinical studies, regardless of PD-L1 status, which I think would be an advantage for it to be used. We obviously added an arm of our Phase 3 HERIZON-GEA-01 study to include tislelizumab in a randomized fashion so that we could clearly understand what adding a PD-1 to zanidatamab and chemo might mean and for which group of patients. This randomized data will tell us that. I'm glad we added that arm. As you’ll remember from last year, we had an early data release on the small Phase 2 study that BeiGene initiated looking at zanidatamab plus chemo plus tislelizumab; it was very immature data, so it was hard to interpret anything out of it. This is again a year later. Even though it's a small study, you need to be careful with that. I think you’ll start to be able to tease out what adding a PD-1 to zanidatamab plus chemo could mean for a patient population who's PD-L1 positive, and we'll just have to wait for that abstract to be presented or poster presented at ESMO in October, in Madrid, and we wouldn't want to say anything before that data has to be presented. We'll just have to await that October in Madrid.

Charlie Zhu, Analyst

Got it. Great. Sounds great. And thanks again for taking the questions.

Kenneth Galbraith, Chair and CEO

You're welcome. Thank you.

Operator, Operator

Thank you. One moment for the next question. Our next question is coming from Derek Archila of Wells Fargo. Your line is open.

Unidentified Analyst, Analyst

Thank you. Hey guys, congratulations on the quarter. This is Adam on for Derek. Just a couple of questions from us today. Maybe if we can get an update on the plans for zanizovo’s Phase 2 combo trials, in non-small cell lung cancer and breast cancer; has an anti-PD-1 been chosen yet? If not, does it make sense to move forward with the same checkpoint inhibitor for both indications, or would you expect to proceed with different CPIs for that study? Thank you.

Kenneth Galbraith, Chair and CEO

No, good question. Thanks, Adam. As we said in the script, we're moving forward to initiate our study of zanidatamab plus PD-1 in the non-small cell lung cancer space. I don't think we'll talk more about which PD-1 or the design of the study until it's up and running, but we're doing everything necessary now to get that. As you can imagine, the breast cancer study is still being formulated. We're looking for the right combination agent and the right pathway. Until we do that, we won't broaden out that study. It's also obviously a more complicated and longer-term study than the non-small cell lung cancer study. We’re going to continue to be active in conversation with potential partners who might be able to assist us in a way that we can't. We need to balance capital allocation between not just zanidatamab, but also the other five new medicines bringing into the clinic in the next period of time. We'll update that as we go forward. Once the study is up on clinical trials and we've initiated the first patient, we'll have more to say about that study. We plan to have an abstract accepted to discuss Phase 1 data from zanidatamab as we've closed that trial off. Once those titles are made public, we'll talk a bit more about which conference and what that data set will look like.

Unidentified Analyst, Analyst

Great. Makes sense. And then maybe on DW-191, given its potential to target tumors pretty much independent of FR alpha receptor expression models, can you maybe walk us through your current thinking on the trial design? Like in particular, how it may compare to other FR alpha programs like Mervs and Marcella?

Kenneth Galbraith, Chair and CEO

Thank you very much. We believe we have developed a suitable initial clinical plan for dose escalation and dose expansion cohorts for studying this ADC. This ADC was created to leverage the various tumor types related to our target of interest and to account for the different expression levels in the patient population. Our goal is to understand our effectiveness across multiple tumor types as early as possible in Phase 1, particularly in high expressers, and to assess our impact on medium and low expressers in those types. Once the study is listed on clinical trials, we will provide more details about its design. It’s unfortunate about the situation with the Mersana molecule at this stage in its clinical development. However, after studying ZW as a biological target for a long time, we recognize there might be a competing product ahead of us, which can actually simplify our clinical development and regulatory pathway. This puts us in a position to potentially be first in class in that indication if we proceed quickly with the right molecule. This is an exciting opportunity for us, so we are focused on accelerating progress with our TOPO payload, the antibody we developed, the DAR we selected, and our strong preclinical package.

Unidentified Analyst, Analyst

Great. Thank you.

Kenneth Galbraith, Chair and CEO

You're welcome.

Operator, Operator

Thank you. One moment we have a follow-up question coming from the line of Yigal Nochomovitz of Citi. Your line is open.

Yigal Nochomovitz, Analyst

Thanks for taking the follow-up. Just two quick follow-ups on NaPi2b. Any early work on a biomarker strategy for this target? And then second, you mentioned ovarian and non-small cell lung. I think in the past, your competitor, Mersana, had indicated that non-small cell lung, the expression of NaPi2b may be variable. I'm just curious your thoughts on that and which tumor types you would want to prioritize in an early Phase 1. Thanks.

Kenneth Galbraith, Chair and CEO

I think we won't discuss our Phase 1 strategy until the study is listed on clinical trials, which will be soon. However, we are definitely interested in this target for both ovarian and non-small cell lung cancer. We want the opportunity with the right ADC, which we believe we have, to see what impact it may have on actual patient populations. These targets are intriguing since expression levels in ovarian and non-small cell lung cancer are approximately 60% for both. This opens up different pathways to consider in approaching this patient population, including whether to enhance enrollment or not. As our clinical study progresses, you'll gain a clearer understanding of our approach. We appreciate the range of potential indications here, though it's not as extensive as 171 and 191. There is diversity and variability in the targets we are targeting. For NaPi2b, we have the chance to be first in class if we act swiftly with the right strategy, unlike the folate receptor where there are competitors ahead of us also utilizing the TOPO payload.

Yigal Nochomovitz, Analyst

Thanks.

Operator, Operator

One moment, please. One moment for the next question. And our next question will be coming from the line of Stephen Willey of Stifel. Your line is open.

Unidentified Analyst, Analyst

Hi, guys. This is Tully on for Stephen Willey. I have two quick questions. The first one is, if I understood correctly, it sounds like you guys are still planning to present data from ZW49 by the end of this year. Would it be possible to give us just a big picture color on what this data presentation would entail? And second, for ZW49 in breast cancer, HER2 low breast cancer, or a post in HER2, you mentioned that you guys would likely conduct this trial with a strategic partner. What would actually define it as like an ideal strategic partner? What would you be looking for in order to make your decision? Thanks.

Kenneth Galbraith, Chair and CEO

Yeah. Thank you for the question. So we do have an abstract accepted at a medical meeting before the end of 2023 to present some additional zanizov data from the Phase 1 study. Again, we won't talk about what that is until the abstract title is made public. So, you'll just have to wait for that to occur on the timetable, but we're happy that we have an abstract accepted. This presents an opportunity to share additional data from zanizov in our single-agent study Phase 1. Regarding zanizov going forward in development, we see this as a combination in ADC that can be used in combination with a multitude of agents to generate efficacy and target a patient population that is the post-T-DXd patient population. This is what everyone is trying to find to fill that space for physicians and patients when they progress or fail or are intolerant to T-DXd. Obviously, it's why we're interested in non-small cell lung cancer. There, the combination was easier to determine. In breast cancer, we would like to do some additional single-agent activity in HER2 low as well as in post-T-DXd failures, but we thought it was very important to determine our combination strategy. What agent we would be combining with? What patient population would that be targeted at? How would we get access to that patient population? These answers might help to execute this program with a partner, but until we answer these questions about which agent we might look at in combination, and what the specific setting will be, it's hard to finalize those discussions with partners. We're still working on defining the pathway, and hopefully, we can broaden out this program.

Unidentified Analyst, Analyst

Thank you.

Kenneth Galbraith, Chair and CEO

Thank you.

Operator, Operator

Thank you for your questions today. This concludes today's Q&A session. I would now like to turn the call back over to Ken for closing remarks. Please go ahead.

Kenneth Galbraith, Chair and CEO

Yeah. Thank you very much for attending our call and asking questions. I know it's late in the earning season, but we really appreciate your interest. Hopefully, your takeaways from this call are that we remain right on track with where we thought we would be with an exciting 2024. We've confirmed the guidance of reporting top line data from the HERIZON-GEA-01 study with zanidatamab plus chemo and also plus tislelizumab. We look forward to reporting that data next year. This is really important for zanidatamab. We're excited about Jazz's optimism regarding the potential reach for zanidatamab, not just in BTC but GEA, breast cancer, and beyond that they expressed on their call yesterday, which is great. We're right on track with the two new INDs, the first ones for ZW171 and ZW191 next year, and starting those clinical studies, which is great. We're right on track with nominating our third compound, which we want to aggressively pursue in timing, and we're working very diligently on the fourth and fifth selections of our portfolio. We're hoping to round that out more quickly than we previously anticipated. Beyond that, we're still remaining financially disciplined in keeping our cash runway to at least 2026 and beyond so we can pursue this 5 by 5 strategy in a way that allows us to move in an unencumbered fashion and still have discussions around new partnerships to help us with those five molecules potentially or to work with us on things beyond those five molecules. We feel really comfortable with our position right now and we have a lot of opportunities in the remainder of 2023 to share ongoing data and results up and down the portfolio from zanidatamab to ESMO, to zanizov at another conference, and other products in the portfolio. We look forward to the opportunity to sharing additional progress and data and results at conferences for the remainder of 2023. Thank you for paying attention, and we look forward to the next update.

Operator, Operator

This concludes today's conference call. Thank you all for participating. You may now disconnect, and everyone have a great evening.