Zymeworks sings to the tune of $325M with Jazz opt-in for HER2 cancer drug

Zymeworks is capping a rocky year with a committed partner.

After announcing it would dole out $50 million to become the second partner on Zymeworks’ HER2 bispecific, Jazz Pharmaceuticals was met with some questions from analysts around the financing engineering of the deal, particularly curious as to why the duo linked up before a crucial readout of the drug, known as zanidatamab.

But with a 41.3% objective response rate in a pivotal trial in biliary tract cancer earlier this week, the pair will march forward. Jazz is forking over $325 million to exclusively develop and commercialize zanidatamab in the US, Europe and Japan. If the collaborators make it to the end of the album, the payout could be $1.76 billion for Zymeworks, as well as tiered royalties between 10% and 20% on Jazz’s net sales. BeiGene holds the China, South Korea, Australia and New Zealand rights to the drug.

Rob Iannone

“This important milestone strengthens our confidence in advancing this therapy for cancer patients with significant unmet need. While our initial focus will be on the ongoing clinical programs in BTC and GEA, these data add to the growing body of evidence that zanidatamab has anti-tumor activity across multiple HER2-expressing cancers,” Rob Iannone, EVP and global head of R&D at Jazz, said in a statement Wednesday morning.

Kenneth Galbraith

Zymeworks CEO Kenneth Galbraith told Endpoints News earlier this week that his biotech will confab with regulators in the US, China, Korea, various countries in Latin America and elsewhere now that the topline results from the four-continent study are in.

Shares of Zymeworks $ZYME rose about 5% before Wednesday’s opening bell. The opt-in marks a pivotal moment in the year for the Canada-based biotech, which started the year with a CEO departure, a C-suite juggling and a round of layoffs. There was also a hostile takeover offer and a legal change to Delaware.

By going all in, Jazz gets a drug in an ensemble of studies, including the aforementioned biliary tract cancer, as well as a pivotal trial in HER2-positive gastroesophageal adenocarcinoma and earlier-stage investigations in breast cancer, colorectal cancer and solid tumors. Various breakthrough, fast track and orphan designations are attached to zani, as it’s known simply.

AstraZeneca and Daiichi Sankyo’s HER2 drug Enhertu is leading the way, and Zymeworks has that team to thank for laying the groundwork on market education, Galbraith told Endpoints this summer on the sidelines of ASCO.

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