There’s nothing like a billion-plus dollar deal to make investors happy on a Monday.
There’s nothing like a billion-plus dollar deal to make investors happy on a Monday. This morning, shares of Zymeworks have shot up more than 33 percent after it announced a licensing agreement with Janssen Biotech to develop six bispecific antibodies.
The companies will use Zymeworks’ Azymetric and Effect platforms to develop the therapies. The bispecific antibodies will be developed for undeclared targets. Janssen will be responsible for all research and development, as well as any potential commercial activities from the agreement. Under terms of the deal, Zymeworks will receive $50 million in upfront payment. Additionally, the tiny Canadian company will be able to receive $282 million in developmental milestone payments and up to $1.12 billion in commercial milestones. Janssen also has the option to develop two additional bispecific programs under the agreement subject to a future option payment.
Ali Tehrani, president and chief executive officer of Zymeworks, said the funding from the deal with Janssen will be used to develop the company’s wholly-owned bispecific product candidate ZW25. The company’s lead candidate, ZW25 is currently in a Phase I trial. Tehrani said the company continues to see impressive single agent anti-tumor activity, including a partial response at each weekly dosing cohort.
ZW25 is a novel Azymetric bispecific antibody targeting two distinct domains of the HER2 receptor. In preclinical models, the experimental drug demonstrated anti-tumor activity in gastric cancer. The therapy was created for the treatment of certain HER2-expressing cancers. The HER2–mediated signaling pathway is believed to contribute to tumor growth in a number of different cancers.
“We are very pleased to be partnering with Janssen and their world-class scientists,” Tehrani said in a statement.
Tehrani added that the deal with Janssen, a subsidiary of Johnson & Johnson, marks the sixth partnership with large pharmaceutical companies. Zymeworks has partnerships with Merck, Eli Lilly, Celgene, GlaxoSmithKline and Daiichi Sankyo.
In September, Zymeworks’ partner Merck announced it was advancing a bispecific drug candidate into preclinical development. The preclinical product uses Zymeworks proprietary Azymetric and EFECT platforms. In July, Daiichi-Sankyo said it achieved a research milestone for an immuno-oncology bispecific antibody therapeutic candidate as part of its collaboration with Zymeworks. That partnership also uses the company’s Azymetric and EFECT platforms. In June, Eli Lilly said it was moving two bispecific immuno-oncology drug candidates from its partnership with Zymeworks into preclinical development.
As of the end of September, Zymeworks reported it had $49.1 million in cash and cash equivalents on hand. Zymeworks said it expects to continue receiving revenue from its existing collaborations, as well as potential future corporate collaborations – which includes multiple fees and milestone payments. However, the company said its ability to receive these payments is “dependent upon either Zymeworks or its collaborators successfully completing specified research and development activities.”
