Zymeworks Portfolio Update - Zymeworks

Thank you for standing by. This is the conference operator. Welcome to ZymeWorks conference call and webcast to discuss ZyMeWorks portfolio updates. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Srinal Anandar, VP of Investor Relations. Srinale, please go ahead. Thank you, Operator, and good afternoon or good morning, depending on where you're joining from. During today's call, Adam Shaywitz, our head of R&D, will provide an overview of how our R&B strategy and the Roche partnership, announced by Zymox on Friday last week, both work together as part of our broader business strategy. As a reminder, the Roache agreement remains subject to HSR clearance. Paul Moore, our Chief Scientific Officer, will then provide a deeper dive into the design of ZW209 and the online platforms and technologies that made the design and development of this molecule possible. Lastly, Sabine Mikan, our chief medical officer, will provide an overview of the data presented at ESMO on ZW191 and Xanidazimab by our partners JAS and B1. Ken Galbraith, our chair and chief executive officer, join us at the end as we open up for Q&A. As usual I'd like to remind you that we'll be making a number of forward-looking statements during the call, including without limitation those forward-thinking statements identified in our slides and the accompanying oral commentary. Forward-looking Statements are based upon our current expectations and various assumptions and are subject to the risks and uncertainties including those associated with companies in our industry and at our stage of development. For a discussion of these risks and certainties we'll refer you to our SEC filings as found on our website and as filed with the SEC. I'll now pass the call over to Adam. Thanks, Chanel, and thank you all for joining us today. Following a busy weekend at ESMO, we're pleased to have the opportunity to share several updates across our portfolio. I'd like to begin by stepping back for a moment and giving an overview of how we think the different components of our business model work together to create multiple pathways for long-term value creation. Our recurring cash flows from commercial products like Zahira, UPelry, and Bybative provide greater flexibility to invest selectively in our R&D engine, while our business development opportunities create additional opportunities to generate upfront payments, milestones, royalties, and licensing proceeds. This allows us to pursue attractive science without assuming that every program needs to be developed entirely on our own balance sheet. An important part of our strategy is to build a sustainable R&D organization, one that can contribute to the long-term net asset value and to shareholder return while still balancing capital deployment. The partnering model that we're executing on today is central to that ambition. By working with our external partners to advance promising programs, we can access additional funding, expertise, share in development risks, retain meaningful participation in future milestones and royalties. This R&B life cycle creates an opportunity to fund and to replenish our pipeline in a more capital-efficient way while continuing to invest in novel science and generate the next wave of value-creating partnerships and opportunities. Our capital allocation approach reflects that philosophy. We intend to continue to invest în our internal R&D capabilities, to selectively pursue acquisitions and royalty opportunities where we see strong strategic and scientific fit, and to continue to return capital to shareholders through our share repurchase program when we believe it's appropriate. Over time, our goal is to build this diversified royalty portfolio, creating a more durable financial foundation that supports continued innovation while giving us multiple opportunities to participate in long-term success of the medicines that we help to develop. This strategy builds on a long history of successful partnerships at ZymeWorks, and we believe the recent transaction just further demonstrates the potential of our model. With the recent acquisition of Theravance and the new partnership announced last Friday with Roche, of course pending completion of HSR clearance, we continue to build on that track record. Across our partnering activities, we have generated almost $1 billion in payments to date, with the potential for substantial additional value over the coming years. Those future opportunities are linked to continued clinical development, regulatory milestones, and ultimately the commercialization of additional candidates by our partners. Several partner programs have already advanced into the commercialization or phase three development, illustrating how our partners' development capabilities and resources can help move Zynework's originated science forward. We believe that this is an important differentiator for us. Our partnerships do more than provide capital at a particular point in time. time they enable our programs to progress across development stages and geographies while allowing us to retain meaningful participation in their future success through milestones and royalties without the requirement for capital intensive contributions at risk we see this as a repeatable model originate differentiated science identify the right partner and structure and retain attractive economics as the program advances what excites us most about our platform and partnering model is the opportunity to repeat this approach across the differentiated pipeline of multifunctional therapeutics. Our proprietary engineering capabilities have enabled us to generate innovative candidates that can be developed alongside leading pharmaceutical companies. These partnerships combine our scientific innovation with the development expertise, resources, and commercial reach of our partners. For today's update, we'll start to focus most of our time on the two programs highlighted in this slide, including the latest clinical findings that you what they mean and what they mean for future development with that context i'd like to turn our partnerships to our partnerships with Roche and explain how the economics and the division of responsibilities illustrate our broader strategy the Roche partnership is a great example of how we can combine our discovery capabilities with partners resources development expertise and still retain meaningful participation in the program's future economics under the agreement and of course subject to successful completion of hsr waiting period zymworks will receive an upfront payment of 55 million with a further 40 million dollars payable upon initiation of the phase 1b beyond those payments the agreement includes up to 718 million dollars in additional potential development regulatory and commercial milestones together with tiered royalties the royalty structure ranges from high single digits to mid-teens with the potential to extend into the 2040s subject to the contractual royalty terms taken together these economics create the potential multiples on invested capital based on upfront fee and early clinical milestones alone of course the ultimate return will depend upon the program's clinical progress achievement of applicable milestones and ultimately success of commercialization of zw209 by roche another important aspect of this agreement is how the the development responsibilities are funded and structured. Roche is expected to fund the program's research and development, including the phase 1A study, while ZymeWorks will leverage its own development capabilities to conduct that initial global study. Roche will then assume responsibility for subsequent development and commercialization in accordance with the agreement. We believe that this structure allows us to advance our science, to limit the long-term capital burden our own balance sheet and to retain meaningful upside if the program succeeds. The slide illustrates why we believe the collaboration, once HSR clearance is obtained, is strategically attractive for both Roche and for Zymworks. ZW209 builds on Zymwork's proprietary and clinically validated asymmetric platform, which has generated multiple partner assets with a significant commercial potential. Our Our capabilities reflect years of work in antibody engineering, including extensive exploration of binding regions, molecular formats to identify and optimize our COSTIM trispecific T-cell engagers. With the IND clearance from the US FDA complete, Zymorx will conduct a global phase 1A study with the first patient dose expected in 2026. This allows us to apply our established development capabilities and move efficiently into the clinic without the need for an immediate operational handover. It also reflects the trust that Roche places in our ability to execute early clinical development, while the funding structure allows the program to benefit from Roche's broader resource and capabilities as it advances. Looking beyond the initial study, Roche can bring global clinical development capabilities and commercial experience in first-in-line extensive small-cell lung cancer. It's established relationships with prescribers, with payers, and clinical trial networks may help accelerate development and broaden the program's reach across potential lines of therapy. The opportunity is also worth highlighting that Roche has additional programs that may create future combination opportunities, potentially expanding the development options for the asset over time. By partnering with Roche before the commencement of the Phase 1A study following HSR clearance, Roche can help us shape the early clinical development programs and help us utilize, and with us, utilize our ability to execute the Phase 1A Study, which means the program will not lose any time in a very competitive environment where combination regimens may need to optimize for patient benefit. We are also able to reallocate capital derived from the upfront payments and from the phase one R&D costs that will be funded by Roche to drive additional value-adding investments to our business. We believe this is a strong example of how we can advance innovative programs, how we can share risk, preserve and thoughtfully reallocated capital while participating in the potential long-term value created by our R&d innovation. that, I'll hand the call over to Paul, who will provide more background on the ZW209 program and our COSTIM platform. Paul? Thanks, Adam. So, one of the key challenges with T-cell engagers, particularly in solid tumors, is that even when we successfully redirect T-cells to recognize and attack cancer cells, the tumor microenvironment can limit the effectiveness and durability of the response. In many solid tumors there may be relatively few T- cells infiltrating the tumor, and the T cells that are present may be functionally exhausted. So this can limit the depth and durability of the anti-tumor response. There's therefore been significant interest in how we can build additional functionality into T cell engagers to address these limitations. One attractive approach is to take inspiration from natural T cell biology. Effective T cell activation generally requires not just the initial signal that recognizes the target, but also a second costimetry signal that helps support T cell activation, proliferation, and survival. We have seen the importance of this principle in CAR-T therapies, where incorporating co-stimulatory domains has helped improve their activity. The question is whether we can apply the same underlying biology to T-cell engagers in a way that is effective, controllable, and safe. One pathway that has attracted considerable interest is CD28, which provides an important co-simulatory signal. There's been substantial exploration of CD28-directed approaches, including bispecific antibodies evaluated alone, alongside checkpoint inhibition, or in combination with conventional CD3 T cell engagers. However, translating co-stimulation into an antibody-based approach has proven challenging. The key is not simply to increase T cell activation, it is to ensure that activation occurs in the right context while avoiding unwanted activation elsewhere. Tri-specific approaches offer an opportunity to integrate tumor recognition, CD3-mediated T-cell engagement, and co-stimulation into a single molecule. Early approaches, however, have highlighted the importance of carefully balancing binding affinity, molecular format, and conditional activity. This is where we believe our engineering capabilities can make a difference. Rather than simply adding a high-affinity CD28 binder to a T-cel engager, our approach has been to explore how the different components can be engineered together so that co-stimulation is conditional on the appropriate cellular context. The objective is to support a stronger and potentially more durable antitumor response by maintaining control over how and where T-cells are activated. That is the rationale underpinning our tri-TCE co-stem platform. Achieving this balance requires considerably more than selecting the right three targets. The geometry of the molecule, the relative binding affinities, and the way its individual components interact can all influence both activity and safety. To address this, we undertook a broad screening and optimization campaign that combined computational and AI-guided paratope engineering with our asymmetric platform, high-throughput format engineering and production, in vitro functional assessment, and early-developability testing. We evaluated hundreds of variants across different molecular formats, valencies, geometries and binding affinities. This allowed us to assess not just whether a molecule can engage its target but how effectively it could generate the desired biological response and how differentiated that response was from alternative approaches. The strength of this approach is the integration of biology and engineering. We can examine multiple design variables in parallel and assess the trade-offs between functional activity, conditional activation, safety related characteristics and the developability rather than optimizing any one property in isolation through this work we have identified a differentiated design approach that we believe achieves the balances of features we were seeking we are showing a representative format on this slide to illustrate the underlying design principles our preclinical work supports the potential of conditional co-stimulation to improve t cell function and anti-anti-tumor activity compared with conventional T-cell engager approaches. Importantly, design is intended to enable CD28 binding and co-stimulation on the same T-cel that has already been engaged by the CD3 binding moiety of the molecule, rather than providing unrestricted co-simulation. Furthermore, as with traditional bispecific T- cell engagers, primary T-celle activation through this TCR remains contingent on binding to the tumor antigen. What is important is that the work has allowed us to move beyond a theoretical concept and establish an engineering approach that we can now evaluate across different target and indication settings. Looking ahead, we remain very interested in selected solid tumor indications where improving T-cell activity and the durability of response could make a meaningful difference for patients. Our initial areas of interest include thoracic and digestive system tumors, colorectal cancer, and prostate cancer, alongside the potential to address multiple solid tumor types where the underlying biology and target expression support the approach. We're also interested in the opportunity to extend the platform into hematological malignancies, including multiple myeloma and acute myelomar, acute myeloid leukemia, or AML. In AML, one of the challenges is heterogeneity, not just across the tumor cell population, but also between the bulk leukemia cells and the leukemic stem cells that can contribute to disease persistence and relapse. We believe it is worth exploring whether carefully engineered conditional T-cell engagement could help address some of these challenges. That remains an opportunity to investigate rather than a demonstrated clinical benefit. More broadly, we see potential for our multi-specific engineering capabilities to inform additional areas of medicine, including other heme malignancies and over time selected autoimmune and inflammatory diseases. These applications require their own target biology molecular design and evidence of differentiation they are longer term opportunities rather than an assumption that the same construct will translate directly across disease areas our focus will be on selecting those opportunities for the biology the differentiated design and the potential therapeutic benefit come together most compellingly we will continue continue to evaluate these opportunities against clear scientific safety and development criteria and consider the most appropriate development and partnering strategy for each program. Ultimately, we believe our platform gives us a way to apply ZynWorks antibody engineering expertise to difficult-to-treat diseases, while retaining the flexibility to develop, partner, or otherwise advance individual opportunities in a capital-efficient way. Our next-generation DLL3 Tri-TCE CoStim program is designed to address an important unmet need in small cell lung cancer or other endocrine tumors dll3 is expressed at the surface of these tumor cells but is rarely found in normal cells making it an attractive target small cell lung cancer accounts for approximately 15 percent of lung cancer diagnosis in the us each year and while there has been pro progress including the validation of dll-3 as a t-cell engager with the approval of tarlanumab there remains a significant need for treatments that can deliver more effective and durable responses our approach combines simultaneous engagement of cd3 and cd28 on t cells with dll3 targeting bringing tumor recognition t cell engagement and conditional co-stimulation together in a single molecule using our asymmetric and effect platforms we have optimized binding affinities and molecular geometry to enable coordinated target dependence activity the design leverages obligate cis t cell binding and conditional cd-28 engagement with the aim of supporting tumor-directed killing while limiting unintended T-cell activation and fructosite. In preclinical studies, 209 has demonstrated a differentiated pharmacology relative to DLL3-directED CD3 bispecifics, including terlatumab. The integrated COSTEM signal enhances target-dependent T-cel proliferation, survival, and antitumor activity. Importantly, we observed no T- cell activation, cytokine activation, or T-celle fructoseite in the absence of DLL3-expressing cells, and 209 was also well-tolerated high doses in non-human primates and demonstrated antibody-like pharmacogenetics. Taken together, these findings support the potential of our conditional co-stimulation approach to improve the activity of DLL3-directed T-cell engagers. While these results remain preclinical, we believe this differentiated design provides a compelling foundation for further development in small cell lung cancer and other DLL3 expressing tubers. A key feature of our design is the obligate nature of CD28 engagement. CD28 binding by 209 occurs only in the presence of simultaneous CD3 binding. This is clearly shown in the top left panel where control molecules with either CD3 or CD28 binding knocked out demonstrate that CD28's contribution is conditional on CD3 engagement. This obligate co-stimulation limits potential for unwanted T-cell cross-linking or fractricide, an important safety and specificity advantage of our platform. Furthermore, the obligate nature of tumor engagement via DLL3 ensures that 209's activity is precisely focused where it is needed. Additional data presented at AACR in 2025 further supported this dual specificity. What's particularly encouraging is the strength and durability of the responses we are seeing in preclinical models. As shown in the middle top panel, the addition of the CD28 arm enhances T-cell fitness and robustness in the presence of DLL-3 positive tumor cells. Compared to control molecules lacking CD20 engagement and versus the clinical benchmark AMG757 or Tarladimab, 209 provides more sustained tumor cytotoxicity across repeated rounds of stimulation, which is accompanied by expansion of T-cels with memory phenotype. Under the more stringent conditions of low effective-to-target ratios, the biological impact of 209's mediated T-cell activation and co-stimulation is reflected in the enhanced tumor site of toxicity across a range of DLL3-expressing model cell lines, as shown in the bottom left panel. Here, 209 outperformed benchmark controls, including terlarumab, BI's T-cel bispecific engager, and the Roche-Chugai DLL-3-CD3-Cd137 tri-specific. efficacy studies in xenograft models of DLL3-positive tumors bearing either engrafted with human PBMCs or admixed with naive T-cells, 209 exhibits antitumor activity with evidence of enhanced activity relative to terlatamab. Beyond the data shown here, our AACR poster presented in 2005 further criticized the safety profile of 209, incorporating results from a dedicated mouse model of cytokine release syndrome, complementary in vitro cytokines release assays, and studies conducted in non-human primates. In those studies, repeat dosing of 10 megs per kg was well tolerated, and 209 demonstrated an antibody-like pharmacokinetic profile, a characteristic that can be associated with more predictable behavior in clinical settings. Taken together, these data reinforce the significance of the CD28 arm in driving deeper and more durable T cell responses while maintaining stringent control and safety through obligate engagement of both T-cells and DLFB-expressing tumor cells. I'll now hand over to Sabine to talk through the updated data for 191 that's presented at ESMO this weekend. Thank you, Paul, and good morning, everyone. ZW191-101 is an ongoing study for a folate receptor alpha antibody drug conjugate, which involves participants regardless of folate recepta alpha expression and no limit on the number of prior lines of therapies. Part one of the study was dose escalation, and part two was dose optimization, where participants were randomized one is to one of ZW191 at 6.4 or 9.6 milligrams per kilogram, given intravenously every three weeks. Today, I will present the efficacy and safety results for both dosers and patients with platinum-resistant ovarian cancer with a median follow-up of seven months. Among the 80 patients, 37 received 6.4 milligrams per kilogram, and 43 received 9.6 milligrams per kilogram. The vast majority of patients, 89% had high-grade serous carcinoma, while 11%, nine, had clear cell carcinomas. Patients were heavily pre-treated and had received a median of four prior lines of therapy and had a wide range of folic receptor alpha expression ranging from 0 to 100 percent. All patients had received prior platinum and taxane, 84 percent had received bevacizumab, 56 percent had receive the PARP inhibitor, and 5 percent had recieved marvituximab. ZW191 achieved a confirmed overall response rate of 65 percent at 6.4 milligrams per kilogram and 55% at 9.6 mg per kg doses in high-grade serous platinum-resistant ovarian cancer. Disease control was notable. It was 100% at 6.4 mg per kilogram and 92% at 9.5 mg per kilogram. As shown in the waterfall plot, responses were observed across folate receptor alpha expression. Patients with high-rate serous ovaria cancer with of FR high expression achieved a confirmed ORR of 69%, while those with intermediate and low negative groups showed ORRs of 50% and 55% respectively. Among the four patients previously treated with marvitexamab, three had shown impressive responses, including one patient who experienced 100% reduction of all target lesions. Among patients with clear cell carcinoma, confirmed ORR was 20% at 6.4 milligrams per kilogram and disease control rate was 80 and 100 percent at the doses of 6. 4 and 9.6 milligrams per kilogram respectively. The responses to ZW191 were deep and durable. The median duration of response was not reached at this data cutoff at the median of seven months and 45% of paid participants were continuing on treatment at this time. The The six-month PFS rate was 65% at both doses in high-grade seroseverine cancer, and median PFS in the 6.4 mg per kg was 7.9 months. Please note that at this point, the event rate was only 44%, and the majority of patients were remaining on treatment at this dose. Median PFS is immature, and it's expected to evolve over time. Overall, 191 has encouraging PFS outcomes at both doses with PFS at 9.6 mg per kg median at 9,8 months and pending further maturation of 6.4 mg per kilogram estimate as the follow-up matures. For safety, CW191 was well tolerated. Grade 3 or higher adverse events occurred in 54% in 6.4 mg per kg and 74% in 9.5 mg per kg. A large number of these events were non-treatment related. As shown in the figure, nausea, neutropenia, and anemia were the most common events. There were no unexpected toxicities. Grade 3 hematological toxicities were manageable at both doses. Notably, at 6.4 milligrams per kilogram, the safety profile was very favorable with less grade 3 or higher hematological toxicities. And the rates of neutropenia were 11% for grade 3, 8% grade 3 anemia, and no grade 3 thrombocytopenia. Dose modifications and discontinuations were less at 6.4 mg per kg dose, as shown in the table, and TEEs leading to dose reductions were 5 versus 33%, and the discontinuations noted 14 versus 19%, and there was no treatment-related study depth. In conclusion, ZW191 demonstrated impressive antitumor activity at both doses and heavily pre-treated platinum-resistant ovarian cancer, regardless of folate receptor alpha expression. As next steps, we will continue to allow this data to mature with additional follow-up and look for future opportunities to share additional clinical data. In addition, we continue to evaluate strategic options with our advisors, MTS, to fund further development of external capital from partnerships and collaborations. Before passing with a call back to Adam, I want to highlight the broader body of work presented at ESMO in addition to ZW191. Presentations from our partners, Chiaz Pharmaceuticals and B1 highlighted new and updated data from the final analysis of the Horizon GEA01 study. With the presentation of this data at ESMo, Horizon GEa01 has now met all primary endpoints and demonstrated sustained survival at three-year follow-up with Zaheerah-containing regimens as first-line treatment for HER2-positive advanced GEK. With 35.3 months of median follow-ups, Zaheeerah plus Tisley and chemotherapy achieved median OS of 27 months, the longest reported in a Phase III trial in this setting, and reduced the risk of death by 35% versus trastuzumab with chemotherapy. therapy. Nearly 40% of patients receiving Zahira plus Tisley in chemo were alive at three years compared with 22.9% of cases receiving trastuzumab plus chemotherapy. Safety and tolerability data demonstrated that diarrhea and treatment-related A.E. incidents generally decreased over successive treatment cycles. Together, these results cement Zahara as a new HER2-targeted backbone therapy and first-line HER2-positive advanced GEA. Adam, I will now pass the call back to you. Thanks, Sabine. Thanks, Paul. To wrap up, we hope we've demonstrated on the call today tangible progress on our strategy and how we see this as a platform for future growth. We've made meaningful progress in building a stronger, more diversified business, combining durable financial foundation with the ability to continue advancing innovative science through our own research, through partnerships, and through disciplined business development. The partnership with Roche on ZW209, which remains subject to HSR clearance, is only one form of how we can integrate partnerships and collaborations into our diverse wholly-owned portfolio. We'll continue to consider other opportunities, including R&D spinoffs and carve-outs that may provide an opportunity to partner with biotech investors in a dedicated vehicle with specific R&B portfolio assets. Alongside advancing our current pipeline of partner programs, we continue to explore new opportunities to apply our R&D capabilities to novel therapeutic approaches and areas of significant unmet need. There's exciting work underway at the preclinical stage. We look forward to providing further visibility into some of these emerging opportunities before the year end and at an R&B day in the first quarter of 2027 as well. Ultimately, our objective remains constant, to build a durable, diversified business that can generate recurring cash flows, maintain discipline in how we deploy capital, and create additional value through innovation, through partnerships, and selective business development. With that, I'll ask Ken to join us for a Q&A. That's great. Thanks, Adam and Sabine and Paul. Operator, we're now ready to open for questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Yigal Nakamovitz of CIDI. Your line is now open. Yigel Nakamowicz, CID I'm Yigle Nakamowitz, thanks for taking your question. Is RENA-S now generating a positive phase 3 data set in platinum-resistant ovarian cancer? How does that impact how you approach partnering strategies for ZW191? What other considerations does that trigger regarding differentiation, for example? Thanks. That's great. Maybe, Adam, do you want to take that question with respect to our partnering progress? Sure. Yeah, happy to. Thanks. Appreciate the question. Well, very encouraging to see that the data from RENA S were also equally as encouraged by the data from 191 that we walked you through and from ESMO. I think always, as we said earlier, we will take a very disciplined approach to capital allocation and make sure that further investment in the portfolio is justified based upon the partnerability and the interest. I think you've also heard us say that we're working with MTS in terms of partnering that program and also looking to partner it actively and probably wouldn't be moving forward without a partner into registration programs. So the data is encouraging. We think we have a very a competitive molecule, certainly differentiated on a number of aspects, and we'll work to actively partner that as we move forward as well. Thanks for the question. Thank you. Thank you, our next question comes from the line of Rennie Benjamin of Citizens. Your line is now open. Hey, guys. Sorry. Can you hear me okay? Yeah, we can hear you, Rennie. Go ahead. Great. Thanks. So just going back to that same question with 191, is there anything that you could see in the follow-up data that could show up that suddenly you decide, you know what, we're definitely going to take this independently. We no longer need to partner this. And just a follow-ups or a second question for Paul, is there further tweaking of the tri-specific backbone construct, you know, continuing with the company? Is this, you Know, are you looking at other post-stimulatory molecules, or is it all about swapping out targets? And if it is the latter, does the success of one program kind of significantly de-risk other target programs, or should we really kind of do that independently? Yeah, thanks for the question. I'll take the first one, and I'll pass the one back on to the second one to Paul after I'm finished. But I think Adam's statement for the last question was very clear. I think we really like what we built with ZW191. We think it's very competitive in the ovarian cancer space. It's obviously becoming increasingly competitive, and I think ESMO disclosures have continued to show that, just not with performance of different molecules, but moving to earlier lines of therapy and moving to combination regimens. And for us, I think that means to us that in order to move this forward, we would look to a partner to be able to provide the types of resources that would be necessary to compete with the other molecules and necessary to be able to put together the different combination regimens, which are probably going to be likely to move forward into earlier patient settings. So I thinkthat's why we've been very clear all year that we think that beyond the study we have right now, which can continue to mature and could be the subject of additional data disclosures, that we think a partner at this time would be the appropriate strategy to be able to compete for market share in this space. I think we try to be very clear for that. So highly unlikely that we would be moving forward with any of our own capital to push this into multiple phase three trials to try to compete with the other molecules that you've seen at ESMO make progress. And it's increasingly competitive and increasingly looking like combination regimens and early line settings are going to be relevant for that competition. So hopefully we're clear on that between Adam's answer and my answer. I think we have lots of available capital that there are other places that we can put it that we think will drive an appropriate return for us with the appropriate amount of risk that we want to take on behalf of our shareholders. And I'll pass the second one over to Paul. Thanks, Ken. Rennie, regarding your question about where we see going next with T-cell engagers and with our platform technologies. So we do really feel that the CD3-CD28 platform can really open up a lot of opportunities in and of itself. And that's by then attacking different tumors through different targets, as you alluded to, and that is what we showed in one of the slides. We like CD28 a lot because of the biology, but also the temporal expression with cd3 so we think for the strategy that we wanted to deploy here we had conditional activation of acoustic conditional co-stimulation simultaneous with c3 that cd28 was the perfect target to go after because they're co-expressed temporarily on the same on the same t cell that's not to say we're not interested in other approaches to to enhance t-cell engagers either through other mechanisms, through cytokines, through other co-stimulation. But this platform, we think the way we've built it, is very available to actually target different tumor types because of its sort of universal strategy of targeting both CD3 and CD28 simultaneously. So that's the thinking there. And you'll see more work coming from us in different areas, but for sure we think we've got a lot of exciting opportunity with this platform. Great. Thanks, guys. Thanks. Thank you. Our next question comes from the line of Charles Zhu of LifeSide Capital. Your line is now open. Good morning. Thanks for taking the questions. I had a couple on ZW2. What kind of early clinical signal would you or Rush need to observe in order to not only gain conviction that you referred to the person is differentiated beyond or other DLF3 T cell engagers in the space, might those early clinical signals help decisions at various stages in development? Thank you. Well, it's great. I'll ask Adam if he wants to answer that, and I'm sure Sabine can add to that as well. Yeah, happy to, Ken. So, Charles, just so I'm clear, was the early signals that we'll see in 209 that would differentiate a cost? Tim, that was your question? It was a little hard to hear you. Yes, yes. Yeah. So, yeah. Yeah, so look, I mean, if you, much like any phase one, you know, phase 1A, phase 1B study, you can appreciate that it's dose escalation, right? So I think predominantly when you talk about early, let's, you know, kind of frame up what the time frame is associated with that. The first handful of patients in this trial is really going to be safety-based, right? And then, you know, we'll be looking at early, early signals of ORR. I think that, you know, when you talk about early signals of efficacy, you're really getting into the phase 1B, 1B population in terms of differentiation, you you know, response rate, tolerability, and combination are going to be the two that we're going to look at. I think they're pretty obvious in this patient population, but appreciating that the early signs of this are going be a bit away, right? Like it's going to well into the phase 1A and then into the face 1B before we start seeing these signs of activity. Sabine, I'm not sure if anything you want to add to that. I mean, Adam, you've been very, very comprehensive. So I would say that since this is a validated target in cell-cell lung cancer in addition to very early efficacy signals and safety signals, I think they're going to be also looking at some translational early exploratory data to try to understand the mechanism as it translates from the preclinical to the clinical setting and to set the base forward for potential future combinations to take this into earlier lines of therapy. But having said that, usually, phase one trials are generally looking at baseline safety and seeing if there was any early efficacy signals that would show that this was going to be better than Tarlantamab in terms of efficacy. Great. Thanks for taking the questions, and good luck. Thanks, Charles. Thank you. Our next question comes from the line of Yaron Werber of TD Securities. Your line is now open. Good morning, management. This is Steven on for Yaron. Congratulations on the data at ESMO. A couple from us on 191. The discussant at ESMA noted that it might be interesting to see data for the 8 mg per kg dose, given that the 6.4 performed better than the 9.6. plans to test that eight mc dose in the future it sounds like that might depend on what a potential partner might do but some color on that would be great and then more in general why do you think lower dose perform better than the higher dose uh then a follow-up on that would be just why you think the safety with kind of the limited heat talks and ocular talks that you see with 191 looks better than other uh fr alpha target adcs thanks so much Thanks. Sabine, do you want to start on those? And Adam can add anything on top of that if you'd like. Sure. So I think for CW191, from a safety perspective, starting with the dose perspective, it is pretty clear that we've seen at least as good efficacy with 6.4 milligram per kilogram dose as compared to 9.6, and definitely a better safety profile. Although we are pending further follow-up to see maturity of duration of response and PFS as well. I would say that when we selected doses, we were very careful in the two doses that we moved forward with according to the project-optimized guidelines. The reasons for that was we saw that 9.6 was a very active dose and the safety was manageable at that. And the lower dose, 6.4 milligrams per kilogram that we chose from a clinical pharmacological perspective, that was around 30 to 31 percent lower PK compared to 9.6 dose. If we chose 9.68, we wouldn't have probably seen enough of a difference. This is less than 20 percent, which is considered equipoise. So we're relatively comfortable with the doses that we selected and moving forward with those optimization. Whether or not we would like to test another dose would depend upon who we partner with and if they are interested, particularly in relation to combinations and further maturation of the efficacy data at 6.4 milligram per kilogram. But as of now, we're relatively very comfortable that we're seeing a really good efficacy at 6 from 4 with a very manageable and actually a very favorable safety profile. So with that, what was the second part of your question? The safety perspective with why are we seeing better efficacy at 6.4? We've chosen our ADCs due to higher internalization of the antibodies that we select at a moderately toxic payload. So that's given us a very much wider therapeutic windows compared to many other ADCs which have used toxic, more toxic payloads and off-the-shelf antibodies. So as you saw in our dose escalation, we started to see activity at 3.2 and continued to see activities all the way at 9.6, which was manageable safety profile. So this gives us more leverage to choose the right dose with the best balance of efficacy and safety. And one of the reasons we're thinking about why we saw slightly better efficacy could be limitations in sample size. The other thing that we are seeing is that the safety profile at 6.4 is better, which allowed patients to be less dose reduced and can continue on treatment. And also, it could be target saturation at higher doses. Those are all things that we are continuing to evaluate and look at. Sabine, maybe the only other thing I'll just add is that if you look at the ORR and the PFS from the data, I think it just reflects also a slightly immature data set, right? Like, I hear you that the ORRR is better in the 6.4 MIG versus the 9.6, but if you Look at that other slide, the PFF is actually slightly greater in the 9. 6 dose, right. So I think that there's some maturity in the data set that will evolve as this goes up, that that may help that align a little bit better. But, you know, we're definitely in right spot from a dose optimization perspective. It makes sense. Thanks so much. Thank you. Our next question comes from the line of Gregory Renza of Truist Securities. Your line is now open. Hi, guys. It's Anish for Greg. Congrats on all the developments and for taking our questions. Just a couple from us. Just reflecting on ESMO, with the longer-term Horizon GEA-01 data reinforcing both doublet and triplet regimens. How do you see these each shaping the treatment duration royalty opportunity and also bigger picture across UPelvery cash flows, ZHERO royalties, and new partnerships like Roche? How are you balancing further asset allocations with internal R&D and what would move capital towards one opportunity over another? Thanks. No, good questions. Let me try and take both of those, and I can ask the team to add to that. You know, I think in Horizon Geo 1, you know, certainly great data with internal analysis number two, as you've seen in an update maybe on the OS, the median OS for the triplet. You know? So we'll have to see how in the real world practitioners decide to prescribe Xani regimens, whether the triplete or the doublet, and what circumstance they do, and that will tell us a lot. Obviously, from the data, you can see a slightly longer, at this stage in the data duration of treatments on the triplet than the doublet. But we'll just have to wait until the data matures a little bit. But I think we'll have to Wait to see some real-world experience before we can understand the impact on royalties of patients on a triplet or doublet regimen. You know, at this point, we're just looking for a conversion for newly diagnosed patients to have a Zani regimen as opposed to a Pembro-Trastuzumab or a Trastuzumib regimen. So we'll just have to wait to see some world experience about that over the next course of the next year, likely. And on the second one, I think, you know, we try to practice very thoughtful capital allocation, whether that's continuing to buy back our own shares because we still think they're undervalued. We can generate returns for our shareholders in the future by reducing share count. We're still doing that today, as you're aware. We obviously put some capital to work in the TheraVent acquisition, which drove some additional long-term durable revenues to add to Zanadatamab and hopefully eventually Pazritamig. We're still funding a very interesting R&D portfolio. Yes, our R&B spend this year is, we have guided about 20% less than last year. Obviously, partnering ZW209 relieves some additional R&P spend of the clinical studies, which now Roche will fund, as well as providing the Roche upfront fee. I think the way we look at it, we've got three different areas of the business that we can invest in. And we look into those opportunities individually and we look to the collective mix of how we drive both continuing R&D, being innovative inside of Paul's laboratories in Vancouver, how we think about future M&A that might affect the company positively, whether that's royalties or R&B or multi-component as we've talked about. And from a share purchase perspective, we'll continue to invest in additional share repurchase in the current program and likely in the future until such time as we think that shares are better appreciated. Obviously, one of the tricky parts to looking at R&D investment versus thoughtful capital allocation is timing of partnering. So obviously, we're really excited about ZW191, but we think for competitive reasons, now is the right time to find a partner to provide the capital to move that one forward. given the additional competition we see in ovarian cancer and endometrial cancer ADCs. You've seen, you know, for ZW209, we obviously made that same decision. We love ZW 209. Obviously, Roche does as well, and they've joined us. We felt it was appropriate to find a partner prior to commencement of clinical studies, and Roche provided the terms to allow us to consider doing that. And we think given the competition you also see in small cell lung cancer as you see the possibility for future combination regimens, as we saw with Tarlatamab and PD-1, as you think about others who are testing, you know, T-cell linkages and ADCs together. And I think Roche provides not only additional capital to explore that, but obviously has these other elements that might be used in combination regimen. So, you know we think carefully about that with Zanidatamib. We, you we took that into phase studies ourselves before bringing in Zannie to join B1, who was our partner in Asia Pacific. So I think one part of the capital allocation decision for us is just deciding if we bring in partners to help fund R&D, when we do that. And we've talked about the ability to bring in multiple partnerships and collaborations, the potential for carve-outs or spin-outs with investors. So trying to find ways to move a pretty diverse R&B portfolio forward and just not off of all of our P&L right now. So I think we're trying to be disciplined about the way we manage the financial part of our business at the same time as trying to find ways to exploit all the innovative science that comes out of our laboratories and move it forward to be eventually approved new medicines. So, I think you'll still continue to see a mix. I think it'll be opportunistic. We don't pre-define capital allocation into the business. We pursue the opportunities that have the best ability to drive returns for shareholders over the long term. And the extent that we can fund, you know, a mix of those that working together could provide some really interesting risk return for showers over the long term. That's what we're trying to accomplish. And as we do more partnerships going forward or spin out their carve-outs or make these decisions about partnering, I think you'll see that continue to play true. Thanks so much. Thank you. our next question comes from the line of un un he of evercore your line is now open uh hey guys this is actually john miller on here uh congrats on all your data at esmo and on the recent partnership um i uh one on 191 first um you know ken you've mentioned the desire to go into a partner to get to earlier stages in combination setting that'll make sense When I look at the data that you gave us this weekend, you know, obviously there's some maturity things we're still waiting for, but I'm not sure what I'm focused on in terms of dose response, in terms of what the big drivers are going to be heading into those early stage combinations, you know, in earlier lines of therapy. So what do you view as the most important levers on the ability to put this molecule into the right partnership? What do you think is going to be the most important thing that a potential partner will be looking at from this data set? And then secondly, on DLL-3, I noticed a couple of interesting, I mean, obviously great preclinical data here, but I'm curious, when you compare your molecule to more traditional DLL3 TCEs, you seem to see both deeper responses and longer duration responses in the preclINICAL models. Can you talk a little bit about mechanisms of resistance in DLL-3 treatment and to what extent stronger T-cell stimulation with the addition of the CD28 is going to improve durability? As I understand it, tarlatumab does see loss of DLL3 expression, at least in some cases of resistance. So can you talk me through how you expect that could play out as you make the translation into the clinical? No, two great questions, John. Thanks very much. Maybe I'll get Paul to answer the first one on DLL3, and then he'll turn it over to Adam and Sabine to talk a little bit more about 191 and the treatment settings. I think they were at ESMO covering all additional data, which was disclosed, and some of the thoughts of others around earlier line settings and combination regimens as well. So maybe, Paul, do you want to start first and then pass it over to Adam Sabine for the second question? Yep, sure. Very good question, John. I think we've thought about that a lot. I think you're right that in the context of complete loss of antigen, that would be challenging then to resurrect that. I don't think that's the case. I think our feeling is that that may be in some situations, but that won't be universally the case, I think in a lot of cases. And you see that the actual level of response that you can get with terlatumab is very good, but it can be enhanced. So, for instance, with adding in PD-L1, you can getting enhancement. So there's definitely something there. There's room for improvement that's been proven in the clinic. And I think by adding in this co-stimulation, that is another way to get that, to sort of raise the bar on the level of T-cell activation and T-cell stimulation that you can get, in this case through CD28. We still feel that on top of that, you can still then get the additional benefit of having checkpoint inhibition on top of that. So they are mutually separate pathways, but it does show you that there's more to be gained, even in patients, than you can get with terlatumab by adding in additional mechanisms. And we've done some experiments in vitro. I can't say too much about those, but we do have evidence to suggest that there are T-cel states that our molecule that would be representative of the T-cells that you would have in the tumor, you know, even post-tarlatumab, that we can actually mobilize that type of T- cell better than tarlatumib can itself. So, that's maybe the best way I can answer your question. And then maybe I'll jump in on the 191 side in terms of the ability to partner and what to focus on. Look, I mean, the cross-trial comparisons are always difficult and challenging, and you know everybody says you shouldn't do them and then of course we all do them to understand how the molecule compares um i i think when you just look at the orr and you look at the pfs um from a response rate perspective at you know at the 6.4 meg per dose i mean you know numerically perhaps the most meaningful response rate or numerically superior response rate across the programs right like really really meaningful meaningful data set um and real clear signals of efficacy and activity and that's in both the folate receptor alpha high as well as the all-comer population um i think the other thing that comes down to the the the combine ability and the desire to get into the front line is the ae profile um when you look at some of the the grade three incidents of neutropenia if we look at somebody other heme related toxicities numerically you know one of the cleanest safety profiles um compared to compared to some of the other studies there's there's lots of caveats of course that have to go into that so i think it's important to to be thoughtful in making those comparisons but you know we do believe that this molecule is differentiated on on both efficacy and intolerability and we in you know, we're optimistic that that will resonate with with future partners. Yeah I don't have anything to add on top of what Adam said. I do think I believe that we are still potentially best in class from a both efficacy and safety perspective, obviously with the caveat that it's a phase one data set, and ultimately future, the thoughtfulness of the development plans and the combinations are going to drive where the best benefit, and that's why we have to be very thoughtful in terms of the partner we choose and the ones we choose up in taking this role. Makes sense. Thanks so much. Yeah, I hope that answers your question. Thanks, John. Thank you. Before we continue, we have several questions in the queue. To allow as many participants as possible to ask their questions, we kindly ask that each caller limit themselves to one question. Thank you for your cooperation. Our next question comes from the line of Azteka Goonwardeen of Learink. Your line is now open. Hi. Good morning, everyone. Good morning, everyone. This is Carvey on for Ask the Data from Leary. There's a couple of questions. On 191, have you seen any differences in efficacy or tolerability between Asian and Western patients? And on 209, when could phase 1B begin and what needs to happen before that transition? Thank you so much. That's great. Thanks for the two questions, which will answer both for you. So maybe I'll let Sabine think about both of those questions, and Adam can add to that as well. Sure. So for 191, the answer is pretty straightforward. We have not seen an efficacy difference or a safety difference between Asian and Western patients. So you have to realize that this is the caveat that this was a small study with our data set of 80 patients, and the majority of our patients come from Asia, but we still have a sizable Western population, but currently we do not see any difference. For 209, coming to that, when we plan to enroll a first patient very quickly over the next, before the end of this year, and the plan would be to go over for dose escalation, as you would do in a typical phase one, to achieve maximum tolerated dose. As you're very well aware, in T-cell engagers, we may have to go through multiple doses to achieve the maximum tolerrated dose. And once we determine the RDE and want to move forward, either as monotherapy or in combinations, the plan would be to transfer this to Roche at that point in time. We haven't disclosed the time point yet. Okay, got it. Thank you so much. Thanks, Harvey. Thank you. Our next question comes from the line of Steven Willie of Stifel. Your line is now open. Hey, good morning. This is Josh on for Steve. Congrats on all the data at Ezmo, and thanks for taking the question. Maybe just a quick one on CW251. I think we saw some pretty interesting data from B1s by specific program, And I was just hoping you could provide some color on maybe when we can see initial data here and whether these data from B1, you know, give you any confidence as to a path forward. Thank you. Yeah, thanks for only having one question, and I'll let Adam answer that for you. Thanks, Josh. Look, as you guys know, the 251 study was started end of last year, early this year, got up and running. We haven't put out any guidance as to when exactly you're going to see that data. So it's an ongoing data set. You know, as it matures, we will figure out what the right time is to appropriately publish that. Always a balance, right, between data maturity and, you know, being able to tell a complete story, but wanting to get that, you Know, the exciting information out to the world as quickly as we can. Certainly aware of the competitive landscape, you Now, as you mentioned from, You Know, from B1 and from others. And, You Now, I think this is, GPC3 is a really interesting target. HCC represents a really meaningful unmet need if you look at that second line patient population the the response rates are in the in the single digits based upon the standards of care like low to mid single digits uh and uh I think there's a real opportunity to have a meaningful meaningful impact for patients you know and being able to change that landscape so we're excited uh and uh you can have to kind of wait and wait and see as the data matures and we'll figure out when we uh when we put it out there to the world no more no more details unfortunately at this point Thanks, Josh. Thank you. As a reminder, we kindly ask that each caller limit themselves to one question. As we approach the end of the Q&A session, please note that if we are unable to address all questions during today's call, ZymeWorks' Investor Relations team will follow up to arrange time to address any remaining questions. Thank you, we'll now take our next question. Our next question comes from the line of Mayank Mamthani of B. Riley. Your line is now open. Good morning. Mike on for Mayank, and congrats on the Roche deal and the ZW191 data. On ZHERA, do you and JAS see a Category 1 upgrade for both regiments ahead of routine cycle, and what would that mean for 2027 uptake and ex-U.S. muscles timing? And finally, on Pandras. Where does the spin route stand ahead of 2027 INDs, and what should we expect at the February R&D day? Thank you. Yeah, thanks for your two questions, Mike. We'll answer them both. On the first one with Zaheer, we won't comment on that. Obviously, that is a question for Jazz to address, and they do have their earnings call coming up soon, so I'm sure they'll provide some guidance on that, or you'll be able to ask a question when they've made their earnings call, and on the PAN-RAS, I'll turn it over to Adam to address that question. Yeah, thanks, Ken. As we've said publicly before, right, we're in the process of looking to partner that program out through, you know, multiple modalities via partnership or new co-creation, kind of carve out spin co. Haven't given any guidance or any details on the IND timing, I don't believe, and we continue to move forward with those programs at full speed, but I do think you could expect to see them be partnered via spin code card out or other, you know, sometime soon. Great. Thank you. Thanks, Mike. Thank you, Mike, for your time today. Thank you for your attention. This does conclude the question and answer session. I would now like to turn it back to Ken Galbraith for closing remarks. That's great. Thank You, Operator. So thank you, everyone. I know it's been a busy weekend for those of you that have been in Madrid following lots of data disclosures. So we appreciate you spending some time with us. And we had the opportunity to hopefully give you an update on three important things for us this weekend. One is the Horizon GEA-01 Interim Analysis No. 2 Data Disclosure by our partners JAZ and B1, which I think was really, hopefully, very interesting for Zaheer establishing itself as a standard of care in first-line GEA in the HER2 overexpressing population. Two, some additional clinical update on ZW191, which I think positions ZW191 still at the front of the pack for the potential of an ADC to address ovarian cancer. And three, our exciting new partnership with Roche, which will allow us to move ZW209 with Roache into clinical studies before the end of this year. We're so happy to be able to have all three of those things be ableto be discussed on this call. As we've previously indicated for quarterly earnings calls, we do have our third quarter earnings call coming up. We're not going to hold or webcast conference calls. We'll do webcast conference calls with investors around important clinical data or scientific announcements and business transactions, which we're doing today and doing three of them all in the same call. So except for our annual financial results, which мы expect to release in late February, early March, then we will have an investor conference call around that. But don't expect one around the Q3 earnings call, Q3 Earnings Release. But also to say that, you know, we have a little over two months left in the remainder of 2026. We still have some, hopefully some important events and milestones to go for Zyme before the year is done. So please stay tuned for further developments from us. And thank you again for your time and attention on today's call. Thank you. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.