Jazz Pharmaceuticals has exercised its option to buy the rights for a HER2-targeting drug developed by biotechnology company Zymeworks after a mid-stage trial of patients with biliary tract cancer delivered positive results.
The drug, known as zanidatamab, is a bispecific antibody that works in a new way to block HER2, a target of renewed interest among drugmakers after the success of AstraZeneca and Daiichi Sankyo with their treatment Enhertu.
Jazz will pay Zymeworks $325 million for the rights to develop and commercialize the drug, the companies said in a statement Wednesday, exercising an option it acquired in October for $50 million upfront to establish a partnership with the biotech ahead of the trial results.
Those results, announced on Monday, showed treatment led to a 41% response rate among previously treated patients with HER2-expressing biliary tract cancer, which includes tumors of the gallbladder and bile duct. Responses lasted a median of 12.9 months. Zymeworks said it planned to release full results from the study, which enrolled 100 patients, at a medical meeting next year.
"The compelling top-line clinical data from the pivotal trial in patients with BTC highlight zanidatamab's potential to transform the current standard of care," said Rob Iannone, Jazz’s head of research and development, in a statement Wednesday.
Zymeworks is also testing the drug as a first-line treatment for HER2-positive gastroesophageal adenocarcinoma.
Jazz’s agreement covers all countries except some in the Asia Pacific region that are already licensed to BeiGene. The Jazz deal could pay Zymeworks up to $1.76 billion based on regulatory and commercial milestones.
Zymeworks shares traded up by nearly 18% to $8.33 apiece in morning trading, off the highs above $9 on Monday when the trial results were announced.
Further upside for Zymeworks investors remains “in limbo” until its early pipeline matures, SVB Securities analyst Andrew Berens wrote in a Monday note to clients, before Jazz exercised its option.
The company is “essentially a royalty based company” with commercial rights to much of its pipeline sold off, Berens added. Its only remaining fully owned assets includes HER2-targeted drug candidates ZW-49 that “has languished in early development for ~2 years” and is not expected to enter clinical studies until 2024, he wrote.