Zymeworks Pivots to Royalty-Driven Model After Strong Ziihera Data in Gastric Cancer

Zymeworks has announced a strategic shift to a royalty-focused business model, moving away from traditional drug development to rely on licensing, milestone payments, and royalties from its partnered drug portfolio, particularly Ziihera and Pasritamig1 3 7 9 10.

The decision follows highly positive Phase 3 results for Ziihera (zanidatamab hrii), an HER2-targeted bispecific antibody, in combination with chemotherapy—with or without Tevimbra—in first-line treatment for HER2-positive gastric, gastroesophageal junction, and esophageal adenocarcinoma1 4 8 9.

Ziihera combinations showed statistically significant and clinically meaningful improvements in progression-free and overall survival compared with the standard trastuzumab plus chemotherapy regimen1 4 8.

Regulatory filings:
Jazz Pharmaceuticals, Zymeworks' partner (with rights in the US and Europe), plans to submit a supplemental Biologics License Application for Ziihera in the first half of 20261 4.

Financial impact:
Zymeworks could receive up to $440 million in milestone payments if Ziihera is approved in the US, EU, Japan, and China2 3. Tiered royalties on net sales will provide ongoing revenue8.

Stock impact:
Zymeworks shares surged nearly 30% following the announcement, and are up over 60% year-to-date1 3.

Zymeworks' new business model also includes a $125 million share repurchase program as a means to return capital directly to shareholders1.

The company expects its existing cash and anticipated milestone payments to fund operations beyond 20281.

Analysts predict that Ziihera could generate peak annual revenues of up to $2.9 billion as it potentially replaces Herceptin as the standard of care in this cancer setting3 4.

This pivot is seen as creating more predictable and stable value for shareholders by minimizing typical biotech volatility and capital intensity, and by focusing on asset acquisition, partnerships, and in-house innovation3 5 9.