Zymeworks (ZYME) on Tuesday announced plans to focus on a royalty-driven growth model backed by its internal R&D engine and licensing arrangements with companies such as Johnson & Johnson (JNJ).
The move came hours after the Delaware-based biotech released encouraging Phase 3 topline data for Ziihera, a cancer medicine it is advancing with BeOne Medicines (ONC) (OTCPK:BEIGF) and Jazz Pharma (JAZZ) for gastroesophageal adenocarcinoma (GEA) and other solid tumors.
“With Ziihera as our foundational licensed product, we have made the strategic decision to evolve from a traditional biotechnology company into a royalty-driven organization differentiated by in-house R&D capabilities,” CEO Kenneth Galbraith said.
The company added that if the Ziihera label is expanded in GEA, it can receive near-term milestones worth up to $440M, and, subject to the drug’s success in additional indications, it is entitled to future milestones as well as increased royalties.
As for J&J (JNJ)-partnered pasritamig, Zymeworks (ZYME) remains on track to receive up to $434.0M in additional milestone payments and mid-single-digit royalties as the New Jersey-based pharma giant advances the bispecific antibody through the clinic.
Concurrently, the company announced a new share buyback program to repurchase up to $125.0M of its outstanding common stock. ZYME said its cash, cash equivalents, and investments of $299.4M as of Sept. 30 will be adequate to fund its operations beyond 2028 when milestone payments linked to Ziihera’s approvals in GEA are also added.