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Zymeworks Inc. (ZYME)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $27.1M, up 171% year over year, and above consensus; diluted EPS was -$0.30, better than consensus, aided by $17.1M in partner milestones and steady collaboration revenues .
  • Revenue beat Wall Street consensus of ~$20.65M* and EPS beat consensus of -$0.70*; the variance was driven by a $14.0M GSK milestone and $3.1M Daiichi Sankyo milestone in the quarter .
  • Cash resources ended at $321.6M; management reiterated a cash runway into 2H-2027, contingent on anticipated regulatory milestones .
  • Pipeline and partner catalysts intensified: EMA CHMP issued a positive opinion on zanidatamab in April, and China’s NMPA granted conditional approval on May 30 (triggering a $20M milestone), expanding royalty and milestone visibility .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue inflected on partner milestones and collaboration activity: $27.1M vs. $10.0M YoY, with $14.0M from GSK and $3.1M from Daiichi Sankyo .
    • Management emphasized disciplined execution and cash burn control; cash of $321.6M and runway guided into 2H-2027 .
    • Strategic momentum on R&D: six AACR posters across ADCs and TCEs; IND for ZW251 targeted mid-2025, with encouraging DLL3 TriTCE (ZW209) preclinical data (IND 1H-2026). “We remain financially disciplined, and well-capitalized to support our wholly-owned product pipeline” — CEO Kenneth Galbraith .

  • What Went Wrong

    • Operating expenses rose 10% YoY to $52.7M, with R&D at $35.7M driven by IND-enabling work (ZW251) and preclinical activities (ZW209), partly offset by reductions in zanidatamab support and discontinued zovodotin program .
    • Other income declined to $3.5M from $6.2M YoY on lower average yields and smaller cash balances; net loss still sizable at $22.6M .
    • Royalty contribution remains nascent: Ziihera net sales by Jazz were $2.0M, generating only $0.2M in ZYME royalties in Q1 as commercialization ramps .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$16.00 $31.03 $27.11
Total Operating Expenses ($USD Millions)$50.21 $53.25 $52.72
Loss from Operations ($USD Millions)$(34.21) $(22.22) $(25.61)
Other Income, net ($USD Millions)$4.58 $4.43 $3.47
Net Loss ($USD Millions)$(29.85) $(23.51) $(22.64)
Basic EPS ($USD)$(0.39) $(0.31) $(0.30)

Revenue composition (Q1 2025):

ComponentQ1 2025 ($USD Millions)
GSK milestone$14.0
Daiichi Sankyo milestone$3.1
Development support & drug supply$9.6
Jazz royalties$0.2
BeiGene drug supply$0.2

KPIs and balance sheet highlights:

KPIQ1 2025
Ziihera net product sales by Jazz ($USD Millions)$2.0
ZYME royalty from Jazz ($USD Millions)$0.2
Cash resources ($USD Millions)$321.6
Cash, cash equivalents ($USD Millions)$76.2
Marketable securities ($USD Millions)$245.4

Consensus vs. actual (Q1 2025):

MetricConsensus*Actual
Revenue ($USD Millions)$20.65*$27.11
Primary EPS ($USD)-$0.70*-$0.30
# of EPS estimates7*—
# of Revenue estimates7*—

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayThroughInto 2H-2027 (as of Dec 31, 2024) Into 2H-2027 (as of Mar 31, 2025) Maintained
ZW251 IND filingTimingAccelerated to mid-2025 Planned mid-2025 Maintained
ZW209 IND filingTimingNot previously datedIND submission expected 1H-2026 New/Set
Zanidatamab EUTimingPending EU reviewCHMP positive opinion; final decision “in coming months” Advanced toward approval
Zanidatamab ChinaRegulatoryUnder NMPA reviewNMPA conditional approval; $20M milestone due Approved (post-Q1 event)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
R&D execution (ADC/TCE pipeline)First patient dosed for ZW171; portfolio expansion ZW171/ZW191 in first-in-human; ZW251 accelerated Six AACR posters; ZW251 mid-2025; ZW209 TriTCE momentum Strengthening
Partner programs & milestonesJazz ESMO updates on zanidatamab FDA approval; $25M milestone; EU/China reviews CHMP positive opinion; China NMPA approval; royalties beginning Improving commercial visibility
Capital discipline/cash runwayCash $374.9M and buybacks Cash $324.2M; runway into 2H-2027 Cash $321.6M; runway reiterated to 2H-2027 Stable discipline
Regulatory/legalMultiple filings underway (EU/China) Priority reviews and confirmatory trials EU positive opinion; China conditional approval Advancing approvals
R&D communication cadencePlan for peer-reviewed disclosures R&D Day insights on next-gen programs Maintain peer-review first; TiP posters schedule (ASCO, ESMO) Consistent, methodical

Management Commentary

  • “Our productive R&D organization continues to demonstrate Zymeworks’ ability to generate high-value therapeutic candidates... Importantly, we remain financially disciplined, and well-capitalized to support our wholly-owned product pipeline...” — Kenneth Galbraith, CEO .
  • “Our expertise in developing both innovative multispecific antibodies and ADCs continues to allow our teams to target diverse cancer antigens such as Ly6E, PTK7 and DLL3 with customized modalities.” — Paul Moore, CSO .
  • “Financially, we remain well capitalized with $321.6 million in cash and equivalents... projected runway into the second half of 2027...” — Kenneth Galbraith (prepared remarks) .

Q&A Highlights

  • Capital allocation and partner-driven milestones: management reiterated disciplined capital deployment and the financial relevance of partner programs (Jazz, BeiGene, J&J) to support R&D priorities .
  • DLL3 TriTCE (ZW209) cytokine considerations: design limits CD28 engagement to co-occur with CD3 binding, aiming for localized activation and improved therapeutic index versus broader CD28 activation approaches .
  • HERIZON-GEA ethnic sub-analyses: management does not expect material efficacy differences by ethnicity; CHMP positive opinion and global site diversity cited for robustness .
  • J&J KLK2 bispecific: expectations for ASCO update; Zymeworks entitled to development milestones and mid-single-digit royalties on eventual sales .
  • Early-stage disclosure cadence for ZW171/ZW191: company will prioritize peer-reviewed forums and TiP posters; dose-escalation updates will follow clinicaltrials.gov changes .
  • FRα ADC potency vs. Enhertu: preclinical benchmarking suggests comparable efficacy profile with favorable tolerability supporting higher starting doses in Phase 1 .

Estimates Context

  • Q1 2025 revenue of $27.11M beat consensus of ~$20.65M*, driven by $17.1M partner milestones and collaboration revenues; diluted EPS of -$0.30 beat consensus of -$0.70* on higher revenue and controlled operating costs .
  • Estimate counts indicate reasonable coverage: 7 EPS and 7 revenue estimates for Q1 2025*, suggesting model updates will need to incorporate new milestone trajectories, royalty ramp, and timing of EU/China decisions.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Revenue and EPS materially beat consensus in Q1 on partner milestones; continued collaboration execution and early Ziihera royalties underpin nearer-term income visibility .
  • EU approval decision and China’s conditional approval (with a $20M milestone) expand ex-U.S. optionality and should prompt upward revisions to royalty trajectories and milestone timing assumptions .
  • R&D momentum is tangible: ZW251 IND mid-2025, ZW209 IND 1H-2026, and ongoing ZW171/ZW191 enrollment with peer-reviewed disclosure cadence (ASCO/ESMO TiP) .
  • Expense discipline remains a focus; however, R&D and G&A were higher YoY reflecting new grants and program progress—expect opex to track pipeline execution; monitor partnership revenues as offsets .
  • Cash runway into 2H-2027 provides multi-year investment horizon through pivotal partner readouts (HERIZON-GEA-01 top-line expected 2H-2025) and early clinical data milestones for wholly-owned assets .
  • Near-term stock catalysts: EU zanidatamab decision, ASCO/ESMO disclosures, pipeline IND filings; trajectory of Ziihera sales and royalty flow-through will shape sentiment .