Zymeworks Inc. (Nasdaq:ZYME) is getting a boost from an American bio-tech focused firm, EcoR1 Capital, in the form of a $50 million private placement.
“We are grateful for the ongoing commitment and additional financial support from our largest stockholder, EcoR1 Capital, as we work towards making a meaningful difference for people impacted by difficult-to-treat cancers and other serious diseases,” Zymeworks CEO Kenneth Galbraith said in a press release on Dec. 26, 2023. “The proceeds from this transaction allow us to further strengthen our financial position and extend our cash runway ahead of key milestones and events expected in 2024 and 2025."
The news gave Zymeworks' share price a boost, from US$9.32 on Dec. 21, 2023, to US$10.70 on Dec. 28.
A clinical stage biotech focused on protein therapeutics for treating cancer and autoimmune diseases, Zymeworks is one of the darlings of Vancouver’s biotech industry, but has been through a couple of rough years.
In January 2022, its stock tanked, falling from nearly US$17 per share at the start of the year to less than US$5 per share in mid-September, 2022, following a shakeup that saw former CEO and founder Ali Tehrani replaced by Kenneth Galbraith and a quarter of the company’s staff laid off.
Since October, 2023, the company’s stock has been ticking back up, and is now above US$10 per share.
In a press release, Zymeworks said the proceeds of the private placement will be used to “broaden and potentially accelerate the company’s ‘5 by 5’ research and development strategy.”
This involves investigational new drug application filings for its ZW171 and ZW191 drug candidates in 2024.
“Based on the company’s current operating plan, Zymeworks anticipates that the proceeds from this transaction will now extend its current cash runway into H2 2027,” the company said.
The placement gives EcoR1 Capital the right – up until January 1, 2026 -- to nominate one of its partners as a member of Zymeworks’ board of directors.
