Q4 2023 Zymeworks Inc Earnings Call

Participants

Shrinal Inamdar; Director, Investor Relations; Zymeworks BC Inc

Chris Astle; Chief Financial Officer & Senior Vice President; Zymeworks BC Inc

Paul Moore; Chief Scientific Officer; Zymeworks BC Inc

Ken Galbraith; Chairman of the Board, President & CEO; Zymeworks BC Inc

Stephen Willey; Analyst; Stifel Nicolaus and Company, Incorporated

Yigal Nochomovitz; Analyst; Citi

Akash Tewari; Analyst; Jefferies

Brian Cheng; Analyst; JPMorgan

Jon Miller; Analyst; Evercore ISI

Presentation

Operator

Thank you for standing by. This is the conference operator. Welcome to Zymeworks' fourth quarter and year-end 2023 results conference call and webcast. As a reminder, all participants are in a listen only mode and the conference is being recorded. (Operator Instructions)
I would now like to turn the conference over to Shrinal Inamdar, Director of Investor Relations. Shrinal, please go ahead.

Shrinal Inamdar

Thank you, operator. Good afternoon. I'd like to welcome you all to our fourth quarter and year-end 2023 results conference call.
Before we begin, I'd like to remind you that we'll be making a number of forward-looking statements during this call, including without limitation, those forward-looking statements identified in our presentation slides and the accompanying oral commentary. These forward-looking statements are based upon our current expectations and various assumptions and are subject to the usual risks and uncertainties associated with companies in our industry and at our stage of development. For discussion of these risks and uncertainties, we refer you to our latest SEC filings as found on our website and as filed with the SEC.
In a moment, I'll hand over to Dr. Chris Astle, our Senior Vice President and Chief Financial Officer, who will be discussing recent scientific and corporate updates, along with our financial results for the fourth-quarter 2023, including certain non GAAP measures. A description of our non-GAAP measures and a reconciliation to the most directly comparable financial measures as determined in accordance with GAAP are described in our press release, which is available on our website at www.zymeworks.com under the Investor Relations tab.
Following this, Paul Moore, our Chief Scientific Officer, will talk about key expected milestones that underpin another potentially transformative year for Zymeworks, both the expected upcoming regulatory approvals and launches and more broadly to executing on our development strategy for early-stage product candidates. At the end of the call, Chris and Paul will be joined by our Chair and Chief Executive Officer, Ken Galbraith for Q&A. As a reminder, the audio and slides from this call will also be available on the Zymeworks' website later today.
I now turn the call over to Chris, our Senior Vice President and Chief Financial Officer. Over to you, Chris.

Chris Astle

Thanks, Shrinal, and thank you, everyone, for joining us today for our fourth quarter and full-year 2023 earnings call. With that, I will begin today's call with an overview of key achievements from our development programs over the course of 2023, as well as our financial results.
Throughout 2023, we successfully positioned Zymeworks as a thought leader in the development of antibody drug conjugates, or ADCs, a multi-specific antibody therapeutics. We have done so through multiple data catalysts from our Phase 2 clinical trials of zanidatamab in both gastroesophageal adenocarcinoma, or GEA, and biliary tract cancers, or BTC, which validate our protein engineering expertise and antibody screening capabilities.
We're very pleased to see positive results for these patient populations and look forward to further advancements of zanidatamab's development in multiple indications led by our partners, Jazz Pharmaceuticals and BeiGene. These developments, coupled with our work on demystifying the ADC dogma by reviewing 40 years of clinical data and taking these learnings to redefine our own approach to develop the next generation of ADCs, are key differentiators for ZymeWorks, as we aim to develop practice changing therapeutics and indications with high unmet medical needs.
We have significantly accelerated the development timeline for our early-stage 5x5 programs, with the majority of our product candidates having now been nominated. Most recently, ZW251, our GPC3 targeting ADC being developed for the treatment of hepatocellular carcinomas. We remain on track to accomplish our goal of submitting two INDs or foreign equivalent submissions in 2024 for ZW191 and ZW171 and to nominate our fifth candidate, with a planned IND submission in the first half of 2026.
We also remain on track for two further IND or foreign equivalent submissions in 2025 for ZW220 and ZW251.
We have strategically expanded the global footprint of our early-stage development team by establishing a presence in the key locations of Ireland, California, and Singapore in preparation for our clinical development plans. This has allowed us to retain top talent and establish fit-for-purpose facilities, which will enable us to accelerate pipeline development as we move forward with our 5x5 program.
Execution on our strategy throughout 2023 has allowed us, together with our partners, to target late 2024 for the pivotal Phase 3 top-line readout from HERIZON-GEA-01, where we will see progression-free survival data. Our partners Jazz and BeiGene also remain on track to complete the biologics license application, or BLA submission, for zanidatamab in second-line BTC by the first half of 2024 in the United States and in the second half of 2024 in China, with the goal of potentially launching zanidatamab in the United States in China and 2025 or sooner.
We would also like to highlight that as per recent guidance provided by our partner Jazz, the Phase 3 confirmatory trial to evaluate zanidatamab as first-line treatment for patients with metastatic BTC has now been initiated. We see the anticipated commercialization of zanidatamab as a near-term opportunity with more than $2 billion in revenue potential, starting with potential approval in BTC, which remains an area of particular unmet patient need.
We agree with the thoughtful approach taken by our partners to seek to take zanidatamab to market, initially in BTC, as it may enable a faster go-to-market strategy and potentially expedite the regulatory review process for other indications where zanidatamab can leverage sBLA filings. GEA would be the second indication, which has a much larger patient population estimated to be 63,000 HER2 positive cases annually in the United States, Europe, and Japan.
Jazz has expanded their clinical efforts for zanidatamab in breast cancer, where there remain many opportunities in both the early stages and late stages of disease. We're also very excited about the potential for zanidatamab to provide a chemo-free regimen, which we know would be of great value to patients. And we look forward to data from the I-SPY program and Jazz's collaboration with MD Anderson.
As you can see from this slide, there are many opportunities beyond these indications and other HER2-expressing tumors, which makes zanidatamab a potentially very rewarding financial investment, both for our partners and for shareholders of Zymeworks, while also supporting our goal to improve the standard of care for difficult-to-treat diseases for patients with high unmet need.
Beyond zanidatamab, we are pleased to be starting the year having nominated four of the five product candidates that we set out to define a year ago. Today, we have a broad and differentiated pipeline, with novel candidates focused on validated targets in areas of significant interest, which continue to provide multiple opportunities for business development and collaborations.
We remain committed to advancing the development strategy for our pipeline of unencumbered product candidates, all of which have the potential to increase the standard of care for patients in disease areas with high unmet need and with commercially attractive targets. We believe the next 6 to 18 months are set to be transformational for Zymeworks as our partners approach potential regulatory approvals and launches and more broadly to the advancement of our differentiated early-stage product candidates.
Our Chief Scientific Officer, Dr. Paul Moore, will talk more about the future of our pipeline. But first, I would like to spend some time on our financial results.
This afternoon, Zymeworks reported financial results for the fourth quarter and year ended December 31, 2023. Zymeworks' net loss for the year ended December 31, 2023 was $118.7 million, a $1.72 loss per diluted share, compared to a net income of $124.3 million for the year ended December 31, 2022. Net loss in 2023 as opposed to net income in 2022 was primarily due to non-recurring upfront fee revenue from our collaboration agreement with Jazz in 2022, which was partially offset by higher collaboration revenue, lower operating expenses, higher interest income, and lower income tax expenses in 2023.
As reported, our revenue for 2023 was $76 million compared to $412.5 million in 2022. 2023 revenues included $71.5 million for development support and drug supply revenue from Jazz, and 4.5 million from our other partners for research support and other payments. Revenue for 2022 included $375 million in upfront fees from Jazz, $24.3 million in development support payments from Jazz, and a $5 million upfront fee from Atreca, as well as an $8.2 million in research support and other payments from our other partners.
Research and development expense was $143.6 million in 2023 compared to $208.6 million in 2022. The decrease was primarily due to a decrease in expenses for zanidatamab at our transfer agreement and amended and restated collaboration agreement with Jazz. This was partially offset by an increase in preclinical expenses, primarily with respect to preclinical product candidate, ZW171 and ZW19, and higher zanidatamab zovodotin program costs.
Salaries and benefit expenses decreased due to lower headcount in 2023 and non-recurring severance expenses.
General and administrative expenses were $70.4 million compared to $73.4 million in 2022. The decrease was primarily due to a decrease in salaries and benefits expenses due to lower headcount, lower non-recurring severance expenses in 2023, and a decrease in expenses for professional services. This was partially offset by an increase in other expenses related to higher depreciation on facilities and higher technology spend in 2023.
Other income, net, increased by $14.1 million in 2023 compared to 2022 due to income earned on higher cash resources and higher rates of return in 2022.
Income tax expense decreased by $11.5 million in 2023 compared to 2022, primarily due to a reduction in United States taxes under the global intangible low-taxed income rules in 2023. In 2023, we incurred a net loss compared to a net income in 2022, primarily due to the income from the Jazz partnership in 2022.
As of March 4, 2024, we have approximately 70.6 million shares of common stock outstanding and 5.1 million pre-funded warrants issued in December 2023. As of December 31, 2023, we had $456.3 million of cash resources consisting of cash, cash equivalents, and marketable securities comprised of $157.6 million in cash and cash equivalents and $298.7 million in marketable securities.Based on current operating plans, we expect our existing cash resources as of December 31, 2023, when combined with receipt of certain anticipated regulatory milestone payments, will enable us to fund planned operations into the second half of 2027.
For additional details on our quarterly and year-ended results, and for a description of our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, I encourage you to review our earnings release and other SEC filings as available on our website at www.zymeworks.com.
Our strategy of refocusing the business and building a diverse clinical-stage product pipeline of ADCs and multi-specific antibody therapeutics continues to provide a solid foundation, helping to achieve our long-term goal of identifying additional product candidates and seeking valuable partnership options with a strong financial position of $456.3 million as at the end of December 31, 2023. And this, together with certain anticipated regulatory milestones, gives us an expected runway into the second half of 2027.
We may also be able to extend this runway through potential additional regulatory and commercial milestone payments in connection with our partnerships with Jazz and BeiGene. And in addition, pending regulatory approval, we are eligible to receive tiered royalties between 10% and 20% from Jazz's annual net sales of zanidatamab and between 10% and 19.5% on BeiGene's sales. No development or commercial milestone payments or royalties have been received today.
With that, I'd like to hand over to our Chief Scientific Officer, and Dr. Paul Moore, who will talk about our novel topoisomerase inhibitor, or TOPO1 payload, which is the foundation of three of our ADC candidates and speak more broadly about the key milestones for our early-stage pipeline. Over to you, Paul.

Paul Moore

Thank you, Chris. As you said, I want to start by focusing on our TOPO1 inhibitor platform for which we recently published a manuscript in Molecular Cancer Therapeutics. First of all, it's important to recognize there are significant challenges with repurposing older toxins not originally developed for ADCs. Limitations in their biophysical properties, pharmacokinetic, and pharmacodynamic profiles often result in heightened toxicity levels diminishing their suitability for ADC applications. As such, our team has sought to design novel compounds specifically with characteristics amenable to bioconjugation to an antibody and that behave like small molecule chemotherapeutics after they are released from the antibody to optimize the full therapeutic potential of this treatment modality. As many on this call will know, in recent years, the field of ADCs has seen a resurgence, largely driven by the clinical benefit observed in patients treated with ADCs, incorporating camptothecin-based TOPO1 inhibitor payloads. Advances in the design and engineering of ADCs as mechanisms for targeted drug delivery have widened therapeutic application of this modality and the difference it could make in patients' lives. With this in mind, we would like to highlight our novel camptothecin ZD06519, specifically designed for its application on an ADC payload.
A commonly held notion in ADC development is that increasing payload potency and bystander activity hold the potential advantage of effectively targeting tumor cells with lower antigen expression. However, it's important to consider that more potent and more permeable payloads may also lead to increased toxicities, potentially requiring a reduction in the antibody dose, a challenge we have seen for many prior assets in the clinic.
We believe that higher antibody dose with a moderately potent topoisomerase inhibitor payload could be a preferred strategy to overcome antigen sink effects and enhanced tissue penetration, ultimately leading to increased payload delivery into tumor cells.
In addition to linker design and payload potency, intrinsic table properties such as metabolic stability, susceptibility to transporters, play a crucial role in ultimately determining the efficacy and safety profile for patients. New molecular entities such as camptothecin payloads can be selected to address these factors and optimize the overall therapeutic profile of ADCs based on the antibody targets and indications.
Striking the right balance between ADC efficacy and tolerability remains an ongoing challenge, making a critical factor in designing a new DTC platform, ultimately enhancing the likelihood of clinical success. To identify this novel camptothecin payload with optimal properties, we leveraged insights gain from 60 years of camptothecin structure activity relationship, data to generate a library of approximately 100 compounds featuring different substituents at the C7 and C10 positions. A panel of camptothecin catalogs with different substituents at the C7 and C10 positions of the camptothecin core were then prepared and tested in vitro.
Selected compounds spanning a range of potency and hydrophobicity were elaborated into drug linkers, conjugated to trastuzumab and evaluated in vitro and in vivo. ZD06519 was selected based on stable properties as a free molecule and as an antibody conjugate, which include moderate free payload potency of approximately 1 nanomolar, low hydrophobicity, strong bystander activity, robust plasma stability, and high monomeric ADC content. When conjugated to different tumor-targeting antibodies via clinically validated MC-GGFG-based linker, ZD06519 demonstrated impressive efficacy in multiple xenograft models and noteworthy tolerability in healthy mice, rats, and non-human primates.
In the context of addressing poor outcomes often associated with intratumor and intratumor heterogeneity, our focus has been on designing an ADC with a payload characterized by moderate potency with bystander properties. Our hypothesis revolves around the notion that our payload heightened membrane permeability facilitates its infiltration into neighboring tumor cells, as illustrated in preclinical studies.
This strategic design aims to enhance response rates across diverse expression profiles without compromising safety due to toxicities. This slide flashes out these two characteristics. One is target dependency, which is shown in the left graph, with the desire to have enhanced activity on target expressing cell lines indicated in, blue relative to target negative cell lines indicated in orange. Something you see nicely achieved with our selected payload indicated within the box.
On the right, you see data evaluating bystander activity, another important feature we wanted to incorporate. In these assays, what we are looking for is a decrease in the viability of tumor-target antigen negative cells when co-cultured with target antigen positive cells shown in brown, but limited impact on the viability of tumor antigen negative cells when cultured alone, shown in red.
Again, as indicated within the box, we chose a table demonstrating these features to make sure that when the payload is the least, it is able to also enter and inhibit nearby cancer cells regardless of target antigen expression and hence maximize anti-tumor activity.
Our TOPO1 inhibitor platform is one of several proprietary Zymeworks linker payload platforms. TOP01 inhibitor-based technologies show meaningful clinical benefit in a wide range of solid tumors, including hard-to-treat solid tumors. They have been validated across many targets.
Based on empirical findings and our own preclinical data, we believe our novel payload could provide us with improved efficacy and tolerability and have utilized ZD06519 in three of our ADC product candidates.
ZW191, an ADC that targets folate receptor alpha-expressing tumors, including ovarian, other gynecological and non-small cell lung cancer, is built using our drug conjugate platforms, including our novel TOPO1-based payload technology. A drug antibody ratio of 8 was selected to balance tolerability and efficacy.
The folate receptor alpha monoclonal antibody incorporated in ZW191 was generated in-house, selected based on enhanced internalization characteristics to enable targeting of high, mid, and low levels of folate receptor alpha expression. Folate receptor alpha is a clinically validated target, and data supports its expression in approximately 75% of ovarian carcinomas and in 70% of non-small cell lung cancer.
Our preclinical data is encouraging, with strong anti-tumor activity demonstrated across a range of patient-derived non-small cell lung cancer with ovarian xenograft models.
ZW220, an ADC that targets sodium-dependent phosphate transporter 2b, or NaPi2b, expressing non-small cell lung cancer or ovarian cancer, is like ZW191, built using our proprietary TOPO1 inhibitor-based payload technology. A DAR of 4 was selected to balance tolerability and efficacy. The NaPi2b targeting monospecific antibody incorporated in ZW220 was generated in-house and selected based on favorable binding profile and enhanced internalization properties to enable targeting of both high- and low-expressing NaPi2b-expressing tumors.
NaPi2b is found in approximately 95% ovarian and 85% of non-small cell lung cancer. With anti-tumor activity being demonstrated, the patient derived cell lines and growth inhibition in DD, spheroid, non-small cell lung cancer. The bystander effect of the TOPO1 payload may help address NaPi2b heterogeneity across different cancers. The overall different design of ZW220 featuring our TOPO1-based payload with moderate potency and mid-range DAR, we believe will overcome issues associated with prior ADCs targeting NaPi2b.
ZW251, a potential first-in-class ADC molecule designed for the treatment of Glypican-3 expressing hepatocellular carcinoma, which incorporates the same Zymeworks proprietary bystander active TOPO1 payload utilizing 191 and 220. With a DAR of 4, we selected balance tolerability and efficacy.
With ZW251, anti-tumor activity observed in multiple patient-derived xenograph models of HCC, reflecting a range of GPC3 overexpression. GPC3, a GPI-anchored cell surface oncopetal antigen, is overexpressed in most the paracellular carcinoma patients and displays minimal normal adult tumor expression, making it an appealing ADC target. We are encouraged by published research demonstrating the potential of GPC3 targeting antibody in HCC patients as evidence by tumor localization of iodine radiolabeled [chondrotuzumab] for prior clinical-stage anti-GPC3 map and believe that antibody drug conjugate-based target of GPC3 could enable a novel and effective approach to treatment of hepatocellular carcinoma.
Our ADC design holds strong promise for clinical efficacy, leveraging a payload derived from a validated class of toxins, specifically camptothecin, incorporating a known linker, the MC-GGFG-based linker. This strategic approach capitalizes on the established efficacy associated with the chosen toxin class, ensuring a solid foundation for potential therapeutic success.
Furthermore, the utilization of a known linker enhances predictability and reliability of our ADC's performance, providing confidence in its potential clinical utility. Combining these elements in 191, 220, and 251, we believe we are poised to deliver a robust therapeutic solution to address unmet medical needs across various tumor types.
These three candidates, along with our 2+1 mesothelin-targeting dispecific T-cell engager, ZW171 featuring a novel anti-CD3 specificity, provide us with multiple data catalysts in the next 24 months to showcase our innovative and differentiated approach. We look forward to sharing insights from our preclinical and clinical development at medical conferences throughout the year, including AACR, where five abstracts have been accepted for presentation.
Abstracts accepted from our multi-specific antibody therapeutics team include two presentations focusing on our TriTCE Co-Stim platform, a next generation trispecific T-cell engager platform with integrated CD28 costimulation, for which we will present data both on the platform itself and in the context of two tumor-targeting antigens, CLDN18.2 and DLL3, highlighting enhanced mechanistic and antitumor activity over clinical benchmark CD3 bispecifics, targeting the same antigens and also showcasing the versatility of the platform.
From our ADC team, abstracts include updated data on ZW191, our folate receptor alpha targeting antibody drug conjugate, showcasing strong preclinical activity across multiple folate receptor alpha expressing indications. We will also be sharing progress we have made on designing and functionally screening panels of bispecific ADCs to identify those optimally formatted to overcome challenges associated with individual tumor target heterogeneity.
Lastly, for our ADC abstracts at AACR, we will also be presenting data on the development of DD cancer cell line [spera] models for the in vitro functional characterization of cytotoxic antibody drug conjugates to enable lead molecule selection.
In addition, zanidatamab zovodotin remains ready for a Phase 2 clinical trial in combination with pembrolizumab at a RP2D of 2.5 mgs per kg every three weeks based on data from the Phase 1 clinical trial. However, the initiation of the planned Phase 2 study has been deprioritized, pending more clarity from the evolving clinical landscape. We continue to explore potential development and commercial collaborations for zanidatamab zovodotin.
We look forward to continuing to share our progress at additional conferences, as well as nominating our final product candidate in our 5x5 portfolio this year.
Looking ahead for 2024, as Chris touched on earlier in the call, we view zanidatamab as a near-term derisk value driver for the company, with BLA for BTC expected to be completed in the first half of the year by our partners Jazz. Following on from this, we look forward to the continued development of zanidatamab for first-line treatment of BTC with the confirmatory trial initiated by Jazz.
Behind us, our partners BeiGene, are also expected to submit their BLA with the NPA in China for treatment of HER2-amplified inoperable and advanced or metastatic BTC in the second half of the year. Outside of BTC, we also expect to share the pivotal Phase 3 data readout for BeiGene in GEA for the HERIZON-GEA-01 study targeted for late 2024.
Our partners Jazz are hosting an R&D Day focused entirely on zanidatamab on March 19, where you can hear more about their development plans for zanidatamab. Ahead of a potential launch for zanidatamab is second-line BTC in the USA during 2025 or earlier.
On our earlier stage programs, we're on track to advance our development plans for our unique and differentiated product pipeline, with two INDs for our mesothelin targeting bispecific antibody, ZW171 and our folate receptor alpha targeting TOPO1-inhibitor-based ADC, ZW191. We are also on scheduled to nominate our fifth IND candidate later this year, which we anticipate being a trispecific T-cell engager.
Beyond these near-term milestones, we are continuing our IND-enabling work for our NaPi2b TOPO1-based ADC, or ZW251, our GPC3 targeting TOPO1, both on track for anticipated IND submission in 2025.
We are very fortunate at Zymeworks to have a wealth of experience and proprietary technology, which provide the foundation for continuous innovation for our next generation of candidates for ADCs, multi-specific antibody therapeutics and beyond. We look forward to talking more about how we can leverage our clinically validated technologies that harness the flexibility of our proprietary platforms as a foundation to solve biological challenges with new mechanisms of action at our R&D Day plan for the second half of this year.
Despite the accelerated development of our pipeline, we've maintained our strong financial position and remain financially disciplined with projected cash resources to support operations into the second half of 2027. We feel very comfortable with this cash runway we have to be able to support our R&D initiatives. We'll continue to evaluate opportunities to broaden or accelerate our development efforts through the formation of strategic partnerships and collaborations.
We're excited for what comes next, both with zanidatamab as top-line data becomes available, and as it moves through the process of potential regulatory approvals initiated by our partners Jazz and BeiGene, and for our early-stage assets as we head into the clinic.
With that, I'd like to thank everyone for listening, and I'll turn the call over to the operator to begin the question-and-answer session. Operator?

Question and Answer Session

Operator

(Operator Instructions) Stephen Willey, Stifel.

Stephen Willey

Yeah, good afternoon. Thanks for taking the questions. I guess maybe just to start, can you just perhaps expand a little bit on the deprioritization of zanidatamab? And then I guess what specific clarity are you looking to gain here from the clinical landscape before you make a firm no-go decision on whether to move forward with the Phase 2? Then I just have a follow up.

Chris Astle

Yeah, let me take that, Stephen. So I think -- look, I think two years ago we didn't have an R&D portfolio to manage, and now we do, which is now comprised of the 5x5 programs and zanizo. And we need to get good and disciplined about being able to manage priorities within the portfolio, as well as the individual programs. And I think there's two reasons we need that skill.
One is we need to be able to take advantage of opportunities to accelerate individual programs within the pipeline where we can. And as of right now, we have no higher priority than to try and accelerate our next two programs into clinical studies this year and get momentum in the dose escalation stage of those programs.
So if we have an opportunity to potentially move up and accelerate ZW191, our folate receptor alpha ADC; and ZW171, our mesothelin 2+1 T-cell engager, then -- and if that takes a little bit more time and focus and attention to do that, then we need to be able to shift to take advantage of those opportunities. And we definitely see the potential for that. So that's the one thing we will do now.
In addition to this, we're definitely committed to the targeted therapy space in non-small cell lung cancer. That's why we have three or four programs in that area. But specifically, in the HER2 targeted space, there has been a couple of external developments that we need to reflect on.
One is, as you're aware, there is a competitive program that's now in front of FDA for review, which could have the potential to get a label on a part of the clinical population we were hoping to study with our planned Phase 2 study. So I think we do want to see if we can get clarity on that, with a regulatory action from FDA, which likely isn't that far away.
In addition to that, there was some recent reported data on an ADC against a different target, which claimed to have some benefit in the HER2-low population in non-small cell lung cancer, which is an important part of the future commercial opportunity. So I think when we have internal data, or in this case, external events happen, I think it's a good discipline for us to pause to get clarity and just to make sure that we can both execute the clinical development plan that we had outlined for this specific program and also to make sure that the commercial opportunity at the end of that clinical development program is still intact.
And so I think this is a situation where we see both at the same time there's an opportunity to potentially accelerate two of our programs. We should see if we can do that, and at the same time, pause to get some clarity on some external events, which is not a long time period away. And I think that's a discipline that the company has to have. It has to have the ability to exercise that.
On an ongoing basis, as this portfolio advances and grows with more compounds, and this is really the first time we're doing it, but I think we need to make sure that we're disciplined at this. And I think given both of those things, we will look forward to reporting as soon as we can on the outcomes for both of those resetting priorities, both the potential to accelerate certain programs and pause new clarity on another program.
It's a skill we need to be good at and exercise as often as we think is necessary with either internal data or with external events. And I think hopefully, it's the responsible way to manage a portfolio, and we'll continue to do this as we go forward.

Stephen Willey

Okay, that's helpful. And then just with respect to ZW171, can you just talk a little bit about the pace of dose escalation you'll be pursuing in the clinic? I guess the level of confidence that you have in the step-up dosing regimens that you'll presumably be implementing in the protocol, and then just how you're thinking about the incidence rate of Grade 3 CRS that you're willing to tolerate? Thanks.

Chris Astle

Okay, thanks. I'll let Paul decide how much of that he'd like to answer. So go ahead, Paul. Good question.

Paul Moore

Yeah, sure, no, for sure. Great question, Steve. And right now, we're developing a clinical protocol. I can't really get into too much specifics on that. But what we've really -- we've spent a lot of time thinking about the design, or the team has spent a lot of time thinking about the design of this molecule to essentially overcome the limitations or the challenges that you mentioned.
So first of all, we are using low affinity CD3 that hasn't that is a novel proprietary CD3 that we feel from its properties that we've looked at in pre-clinical studies, balances the level of activity with cytokine release. We've also -- the structure of the molecule such that they're really trying to target the higher-expression tumor cell population than the sort of low-level mesothelin expression that could be on normal tissue using the 2+1 design.
And that, we really screened empirically for that particular 2+1 design. So I think we've done everything we can preclinically to derisk the program and the design. And then as we move into the clinic, for sure, we have -- we can take advantage of a lot of prior programs of T-cell engagers, wire that into our design, and be ready for -- that we do see cytokine release, we'll be ready for it.
But again, we're hopeful that through the design that we will limit that and allow us to be able to dose this molecule to a dose where we can get anti-tumor activity and efficacy that's not really been seen so far with mesothelin-targeted T-cell engagers.

Stephen Willey

Okay, that's helpful. Thanks for taking the question.

Operator

Akash Tewari, Jefferies.

Hi, this is Jamie on for Akash. I have a couple of questions. So first, from the AACR abstracts, we noticed that you were going into a DLL3 targeting trispecific T-cell engager and small cell lung cancer. So just first, why are you interested in this target? And can you talk about how you think this will hold up versus other competitors like Harpoon, which showed ORR of 48% in relapse refactory?
And then also, we've seen significant safety concerns for other CD28 assets. How much confidence do you have that yours can avoid or mitigate these AEs? And lastly, what sort of PFS signal do you want to see at the end of the year with HERIZON-GEA-01 so that you feel comfortable that you'll hit on OS? Thank you.

Chris Astle

Thank you. I think for the third part of your question, I think this physical design is publicly available for the PFS endpoints. You're welcome to look at that. I think based on what we saw in keynote 811 from the tras plus chemo arm, we feel very comfortable with the design with respect to PFS. Obviously, earlier this year, you saw the announcement from Jazz guiding that they were adding 200-odd patients to the OSM point, but not to the PFSM point. So that shows that we feel reasonably confident in the design of the study right there.
And I think beyond waiting until we get the data later this year and release that data, we won't be able to comment on your last question. And I think for the first two parts of your question, I'll pass it over to Paul and he can decide how much of that he would like to answer.

Paul Moore

Yeah. Thanks, [Ken], and thanks for the question. So yeah, so what we'll be presenting is data using our CD3, CD28 trispecifics. So it's one arm CD3, one arm CD28, and then one arm's a tumor antigen. And as you correctly pointed out, one of those molecules is targeted at the DLL3, and we'll be sharing data on that.
The traction of that target for us is that obviously had clinical benefit with bispecifics, but we feel that gives us a nice benchmark in which to compare our program to. So there are the bispecifics, what additional benefit you get from adding in CD28. And I think what we'll show is that preclinically we do see the benefit of adding the co-stimulation, and we can enhance efficacy while balancing what was very important for us in the design of this molecule was balancing the potential for any sort of T-cell activation independent of engagement with the tumor antigen.
And our engineering team spent a lot of time working on that, working on the position of the CD3, CD28, so that we only get CD28 activation when we get engagement with the tumor antigen and engagement with CD3. So that really, we think, kind of overcomes some challenges that you see with CD28 bispecifics where that sort of dependence of the first engagement of CD3 is not there.
So that, we really are excited about that. We feel that we've got the right balance there. And now we will test against DLL3 with the idea being that we can then benchmark that, at least at this point pre-clinically against clinical-stage bispecifics, and we'll share some of that data at AACR.

Operator

Yigal Nochomovitz, Citigroup.

Yigal Nochomovitz

Yeah, hi. Thanks. Hi, Ken and team. Just a question on the five new INDs. Obviously, heavy focus on the TOPO1, and you haven't yet disclosed the fifth one, the IND in 2026. Any broad thoughts there in terms of whether that's going to lean more towards another TOPO1 ADC or you go in the CD3 direction or potentially something else? Thanks.

Chris Astle

Yeah, good question. I think we have three ADCs going in the clinic the next years that are all with our proprietary 519 payload and our philosophy of great antibodies and design and stability in the linker. So I think in those folate receptor, alpha, the NaPi2b, and GPC3, we feel comfortable that that proves our ADC engineering capabilities against those targets of that payload. And I think we do like the diversity of being both companies who can engineer next-generation ADCs, but also take bispecifics further, which we do in a format which is trispecific.
And so I think we like the 2+1 mesothelin-targeted TCE, and I think we'd like the earmark for the fifth one, although we've not nominated that yet, but we'll do so during the course of this year to reserve that for the potential to show the tri-TCE capabilities that Paul has described. So I think that's what we'd like to do.
So we would expect that that 5x5 program ends up being three ADCs and two C-cell engagers, so that we can show the capabilities of the companies on both sides of the R&D lab that we work in and will all be good individual agents on their own interesting targets. Still remain very therapeutically focused in the three areas that we seem to be concentrating on which is thoracic, which can be non-small cell lung cancer or small cell or eventually [HNCC] in gynecological cancer where we tend to focus on ovarian and endometrial cancer at the same time.
And then the third area, GI, which uses our GI experience from zani, which obviously you can see we're adding HCC to that with 251 and eventually hope to add other opportunities in pancreatic and colorectal. So it'll be strictly in those therapeutic areas, likely a tri-TCE, but we have not named it yet and we'll do so later this year.

Akash Tewari

Okay, thanks. And then just more from a strategy perspective. As you embark on these five INDs, how are you thinking about the development here? Will you take each of these forward to a certain point independently and then consider external opportunities? Or are you going to take them all forward full force in late-stage development yourself?
Obviously, it's early, and a lot of questions aren't answered, but is there a high-level view as to how you might plan forward with this portfolio of five new INDs in terms of maintaining the rights versus partnering? Thanks.

Chris Astle

Yeah, I think the capital plan we put together post the Jazz deal provided the bandwidth to take five new agents as we're doing into clinical studies and to get Phase 1 data to understand clinical validation of what we had thought was a good scientific thesis and developed preclinically. So we definitely have the bandwidth and the capital plan to do that ourselves.
And I think we've constructed a very good global, early-stage development group, which allows us to focus on doing that in a very nimble way with all five of those programs, with a high percentage of the patients being recruited outside the US, which we think makes it quicker and it is less expensive in the capital plan to do that.
So I think we have the bandwidth to do that, but it's obvious to everyone that the interest in novel antibody drug conjugates, especially with the proprietary payload we have and the philosophy we have is of keen interest to potential partners looking to expand in that area. And I would say T-cell engagers that are novel, like the ones that we have with both the 2+1 format and the CD28 Co-Stim factor are both of interest as well, a growing interest among potential partners.
So we need to move forward on our own because we have the ability to do that and get clinical data on all five of those. But I think there are opportunities and will continue to be opportunities for us to see the value in potentially partnering on one or more of those programs earlier than clinical data being available. And we continue to have those discussions and understand how that interest can help us broaden out our programs, accelerate them, monetize a good value for some of the work we've done, share risk with partners.
And so we'll continue to do that while we execute this clinical development program that we've set out with the five new INDs over the next period of time.

Akash Tewari

Thank you.

Operator

Brian Cheng, JPMorgan.

Brian Cheng

Hey, guys, thanks for taking our question. On CW191, can you talk about your latest thinking about the Phase 1 trial design, specifically -- specially around the folate receptor alpha expression? How wide ranging could we expect in terms of the expression in the first study? And then I have a quick follow up. Thank you.

Chris Astle

Yeah, I think for that program, we'll wait a little bit until it's up on clinical trials. And I think once you see it there, we'll be happy to maybe explain a bit more around that.
Obviously, our approach with ZW-191 and the folate receptor alpha space was to try and find a way to explore that biomarker to its fullest in terms of the breadth of potential indication, targeted patient populations that were available, and also to try and find a way to find activity and efficacy regardless of expression level in all of those targeted tumor types.
So that was the design that we had in mind. It's why we optimized the antibody in a certain way. It's why we applied the payload we did, and it's why we took the linker strategy we did. So obviously, in a clinical setting, we would like to explore the breadth of that molecule and its applicability in folate receptor alpha to the fullest extent, which means multiple tumor types, regardless of expression level.
Eventually, in the Phase 1 program, we'll work our way to allow us to do that in the dose expansion stage that we have in mind with the cohorts that we have planned. And I think we've fortunately set up a large enough clinical infrastructure globally to be able to explore that fully in a quick, nimble, cost-effective manner in multiple countries and many, many sites, which we can expand also to follow that.
But beyond outlining the specific cohorts, I think we'll wait until there's public information available on some trials and then revisit that once we're recruiting patients.

Brian Cheng

Okay. And then on partnerships, how should we think about the potential collaboration revenues coming from, say, any collaboration that you are potentially eligible for over the course of 2024 and 2025? And then on -- we noticed that you have a J&J partnership here on the bispecific in part prostate. Can you give us an update on where you are in the Phase 1? Thank you.

Chris Astle

So I think in the second part of the question, that's something that J&J is responsible for, and that's not something that we would comment on. I think for the first part of the question, you're aware from the deal that we announced with Jazz that we have -- we're entitled to up to $525 million of milestone payments based on successful approval of zanidatamab in the major territories, Japan, US, and Europe.
We've not specifically guided on the magnitude of each of those, associated with each of those related to BCC or GEA or a third indication or geography. So you'll have to wait until those start to be received and paid to get guidance on those. But obviously, with the current plan that we understand from Jazz, they're -- with a successful Phase 3 readout in GEA and a successful approval in BTC and a confirmatory study underway now in BTC, which might be followable on more of a global basis as opposed to US.
We see the potential to earn almost all of those within a pretty reasonable time period. And I think once we start to report those, I think that will fill in a little bit more and more. We can't guide beyond that. So as I think about it, with respect to the legacy deals, we've always received some lumpy revenue out of those deals because we're not really in control of them.
So we would expect that over the next period of time as some of those programs advance in the clinic, especially the important ones like the Exelixis and J&J, as well as some of the other ones which are going to advance from preclinical into clinical, which is not in our control of timing, but you'll see additional amounts being paid as milestones against those legacy deals.
And we still have interest from others in accessing the asymmetric program or expanding their current deals. And we'll always consider that as not the focus of the company today. Those additional capital infusions for us could be helpful to continuing to develop our R&D portfolio. So as we receive them, then we'll report them, and we don't really guide on them ahead of time.

Brian Cheng

Okay, got it. Thanks again.

Chris Astle

You're welcome.

Operator

Jon Miller, Evercore ISI.

Jon Miller

Hey guys, thanks for taking the question. Just to build a little bit on the last bit, can you confirm which of the zani milestones, or at least maybe not which, but how much of that aggregate zani milestone is included in the current runway guidance, and maybe confirm that there aren't any sales royalties in that runway?
And then secondly, I'd love to ask about the trispecific candidate you talked about for the end of this year. Fair to assume, based on the fact that you're not announcing what it is and that you've got DLL3 at AACR, that it's not in fact a DLL3 trispecific coming at the end of the year?

Chris Astle

Yeah, I would just say that we have a number of potential programs that we could nominate. So I wouldn't rule out DLL3. But until we formally nominate a program, we would just not provide the guidance. We do like the idea of a tri-TCE going to the clinic as a part of the 5x5 and be able to show that in the clinic. It'll be on target with the therapeutic areas that we've tended to concentrate on right now, which is in thoracic or GI or in gynecological cancer.
I think when you have the chance to see the DLL3 data at AACR on the poster around the tri-TCE, it's a pretty interesting and compelling mechanism. And we do see something very different with that structure than we've seen with other agents of clinical development. But we're going to continue to reflect on that data, additional data, and other opportunities to find what we hope is a good opportunity to prove our tri-TCE technology with a clinical agent in clinical studies. And we'll nominate that before the end of this year, but I would not rule out DLL3 from a perspective of -- it's really interesting what we see preclinically from that mechanism in that target.
And second part of your question, again, there's no -- the cash runway is always a funny thing to calculate. There's no commercial piece of royalties or commercial milestones in any part of that from the BeiGene deal or Jazz deal or new partnerships. We do as a part of the cash runway risk adjust and include certain regulatory milestones as we expect that they are more likely to be received than not. So there is a portion in that, which is risk adjusted.
But we feel comfortable with the cash runway guidance in getting to second half of 2027 on that basis. And I don't think there's anything -- any concern that we can't run the business to get there with the discipline and the programming that we have around the R&D spend and to the extent that there's any milestone that is in that cash runway.
But there's a lot of upside; there's no commercial piece in there. And there's a lot of upside in the potential impact of regulatory milestones when they're realized in full and the timing that's in the cash runway.

Jon Miller

Got it. That makes sense. One more, I would just wanted to clarify your body language a little bit because I feel like I'm getting sort of both directions here in the deck and a couple of times in the call, you talked about the potential for other BD opportunities versus runway extension as a potential opportunity to drive the platform forward.
You've also spoken about having a lot of optionality in terms of the preclinical assets that you haven't yet nominated, but it also seems like you're focused on finding good internal pipeline focused there more than on those legacy deals where you were doing discovery work for other folks.
So I just wanted to get a sense for your willingness and plans on advancing those other preclinical things that you don't take to move forward internally and out-licensing them or finding partners for them more rapidly than your guidance on the internal pipeline would seem to suggest. Is that something that's on your radar or not as much a priority?

Chris Astle

Yeah, it's very much on our radar. So I think we've tended to be pretty active on partnering discussions up and down the portfolio. And whether that's with zanizo, whether it's with the 5x5, whether with the earlier-stage pipeline opportunities beyond the 5x5, and a combination of all of those. And I think we like to have discussions just to understand what the optionality is.
We definitely have the capital plan to continue to finance pretty good R&D portfolio on our own as we go forward. So I'm very cognizant of the fact that I think with respect to zani, if you go back in history, I think that the company could have accelerated some of those zani developments, broaden the clinical applications, and been more competitive if they had partnered sooner than we than we did with Jazz.
And obviously, we're quite happy with the Jazz partnership. It's a good part in the terms, where, I think, in excess of expectations. But I think the company had an opportunity back in 2020 and 2021 to partner sooner, which I think would has helped competitiveness, especially in a world where Daiichi partnered with AZ and created a much bigger competitor in the HER2-targeted space.
And so I think we're always in the position of wanting to move forward on ourselves because we can, realizing there's interest from a number of parties to work with us on specific assets or a broader collaboration and just understanding how that partnership could allow us to create more value than we could ourselves, and sometimes in accelerating or broadening or picking up some timing.
I'm also aware of -- a year ago in the ADC space, if you asked who we compete with, that would be CGEN, ImmunoGen, Ambrx. Quickly a year later, those have almost turned into Pfizer, AbbVie, and J&J. So we just need to be cognizant of -- I think something we could have done with zani to put it in a better position didn't, and I think we've made a nice recovery of that, with our relationship with Jazz. But I think we just always think about how a partner can help us move our development forward in a broader and more accelerated way that might be something we can't do on our own.
And quite frankly, what the interest there is now in ADCs and T-cell engagers broadly and our platforms to create other agents beyond that. There's some interesting optionality for us to make those decisions, to go alone ourselves longer, to partner specific assets, to partner some assets, and keep US rights and partner next US bases, do something broader around a series of ADCs as Daiichi did with both AstraZeneca and Merck.
And I think it's our duty as management to make sure that we're actively understanding what those options are and inviting partners to let us know how they could work with us to make us -- put us in a better position from a competitive standpoint. And we'll continue to have those discussions, and as with Jazz, only make the right deal at the right time with what we think is the right partner, and make sure we exceed our own expectations of what that transaction looks like and helps us if I can give that guidance.

Jon Miller

That makes sense. Thank you.

Operator

Derek Archila, Wells Fargo.

Great. Hey guys. Thanks for taking our questions. This is Adam on for Derek today. So maybe just on the rolling BLA submission for zani in second-line BTC, can you walk us through what has already been submitted, what remains to be submitted, and the timing around those steps? And then with the accelerated approval path, would this potentially put approval sometime in late 3Q, early 4Q of this year? If so, is there an opportunity to launch in the US before 2025? Thanks.

Chris Astle

Yeah, thanks for the question. I could provide the guidance that Jazz has provided. So they started the rolling submission before the end of last year. They haven't been specific about which modules were started with. One of the obligations prior to completing the submission was to get the confirmatory study in BTC up and running. And if you go on clin trials, you'll see it was there starting last week.
So you can see the nature of the confirmatory study. You can see that they're starting to actively recruit at sites. So we -- and we continue to see more sites filled with that. They've guided that they will complete the rolling submission during the first half of this year. And when they've done that, we'll let them announce that they've done that.
Obviously, we would need to wait for the submission to get accepted to understand if it qualifies prior to review, which we would expect it would, but that's something we need to wait for determination, and that would obviously determine the PDUFA date. As you've seen with some recent submissions, some of those happen on a more accelerated basis well in advance of the PDUFA date, and this is clearly an area where in this patient population second line.
Biliary tract cancer, there is no HER2 targeted therapy, and we expect the data set, while small, was very compelling. And so we would hope that would be a subject of a timely review, but that's obviously up to Jazz to provide the guidance as to when the submission's complete and for FDA to provide guidance on the nature of the review and the PDUFA date and then undertake the review. So we're quite comfortable with Jazz's execution on this and their speed, and I think they're prosecuting this in the right way in the US.
And with respect to China, BeiGene has guided that they will complete their submission in the second half of this year. And then obviously, we have the Phase 3 readout from the first-line GEA study with zani, which top-line data will be available this year in a positive subject to supplemental BLAs and more global filings for zani around the world beyond BTC.

Great. And then, maybe just one on the HERIZON readout in late 2024, just for clarity, will this include data from all 914 patients? Or will this only be data from the original 714-patient target enrollment? Thanks.

Chris Astle

Yeah, so the PFS endpoint is still based on the original patient population, which was 714 patients. And there was a predefined number of events to look at the PFS endpoint, and that has not changed from the original design that was made available some time ago. We just did add 200 patients to the patient population for the OS endpoint readout only, and the requirement there is to ensure that those patients are fully enrolled before the PFS endpoint is unblinded.
So the PFS number of events will be based on the 714 patients and the events. If there are -- obviously, the safety will include all the patients, efficacy will be based on the 714 patients and number of events for PFS, and the other 200 patients will be important only for the OS endpoint.

Okay, great, thank you.

Operator

Thank you. (Operator Instructions) And there appears to be no further questions in queue. I'd like to turn the conference back over to Ken for closing remarks.

Ken Galbraith

That's great. Thank you. Thank you for your time and attention, everyone. I think we're making really good progress in 2024, and we expect a really exciting rest of 2024 year. We really invite you to join us at AACR and have a look at our posters as we get some high-quality science through a number of areas, and we're really excited to be able to report that to you at AACR.
I look forward to seeing you all at, again, future medical meetings or investment conferences. As required, I'm providing more progress at our next quarterly earnings update or before then. So thank you for your time and attention and look forward to talking to you again.

Operator

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.