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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-03-05 · 176 added, 179 removed, 158 unchanged (69% of the section changed)

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Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Unless the context otherwise requires or otherwise expressly states, all references in this Annual Report on Form 10-K to “Zymeworks,” the “Company,” “we,” “us” and “our” (i) for periods until completion of the Redomicile Transactions, refer to Zymeworks BC and its subsidiaries and (ii) for periods after completion of the Redomicile Transactions, refer to Zymeworks Inc.

and its subsidiaries.

Zymeworks is a clinical-stage biotechnology company developing a diverse pipeline of novel, multifunctional biotherapeutics to improve the standard of care for difficult-to-treat diseases such as cancer, and AIID.

Our complementary therapeutic platforms and fully integrated drug development engine provide the flexibility and compatibility to precisely engineer and develop highly differentiated antibody-based therapeutic candidates from preclinical candidate screening through to registrational clinical trials.

Zymeworks is a global biotechnology company managing a portfolio of licensed healthcare assets and developing a diverse pipeline of novel, multifunctional biotherapeutics to improve the standard of care for difficult-to-treat conditions, including cancer, inflammation, and autoimmune disease.

We believe our asset and royalty aggregation strategy differentiates us from other biotechnology companies because it provides us with an opportunity to optimize future milestone and royalty cash flows and selectively invest in high quality assets while retaining the flexibility to return capital to stockholders.

We commenced operations in 2003 and have since devoted substantially all of our resources to research and development activities including developing our therapeutic platforms, identifying and developing potential product candidates and undertaking preclinical studies and clinical trials.

Additionally, we have supported our research and development activities with general and administrative support, as well as by raising capital, conducting business planning and protecting our intellectual property.

We have not generated any revenue from the sale of approved products as of December 31, 2024, and, other than the anticipated receipt of royalties relating to sales of zanidatamab, we do not expect to do so until such time as we obtain regulatory approval and commercialize one or more of our product candidates.

Other than the receipt of royalties on sales of zanidatamab and regulatory milestone payments relating to the regulatory approval of zanidatamab, we have not generated any revenue related to product approvals or the sale of approved products as of December 31, 2025, and, other than the anticipated receipt of additional royalties and potential regulatory milestone payments relating to future regulatory decisions and sales of zanidatamab, we do not expect to do so until such time as we or our strategic partners’ obtain regulatory approval and commercialize one or more of our product candidates.

We cannot be certain of the timing or success of approval of our product candidates.

Since our initial public offering (“IPO”) in 2017, we have funded our operations primarily through follow-on public offerings, including the issuance of pre-funded warrants, and payments received under our license and collaboration agreements.

Since our initial public offering (“IPO”) in 2017, we have funded our operations primarily through follow-on public offerings, and private placements including the issuance of pre-funded warrants, and payments received under our license and collaboration agreements.

Payments received or receivables from our license and collaboration agreements include upfront fees, milestone and royalty payments, as well as research support and reimbursement payments.

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We reported a net loss of $81.1 million for the year ended December 31, 2025, and through December 31, 2025, we had an accumulated deficit of $953.2 million.

Over the next several years, we expect to continue to incur losses as we increase our research and development expenditures in connection with the ongoing development of our product candidates and other clinical, preclinical and regulatory activities.

We expect to continue to incur operating losses in the near to medium term as we execute our strategic plan announced in 2025 (as discussed further in the section titled “Recent Developments” below), which emphasizes disciplined capital allocation, focused research and development investment, advancement of partnered programs, and active management of our royalty and asset portfolio.

Our operating expense outlook reflects a multi-year planning framework designed to align spending with defined strategic priorities, including pipeline progression, technology platform advancement, and value-enhancing business development activities.

We are prioritizing investments where we believe risk-adjusted returns are most attractive and expect operating expenses to be managed within this structured framework.

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Recent Developments

Wholly-Owned Programs

In November 2024, we announced that the first patient has been dosed in our first-in-human Phase 1 trial (NCT06555744) to evaluate the safety and tolerability of the investigational therapy ZW191 in the treatment of advanced FR⍺-expressing solid tumors including ovarian, endometrial, and NSCLC cancers.

The Phase 1 trial is a two-part, multi-center, global study that aims to enroll 145 adult patients with advanced FR⍺-expressing cancers.

We are currently enrolling patients at investigator sites in North America, Europe, and the Asia-Pacific region.

Recruitment in the dose escalation portion of the study remains ongoing to evaluate the safety and tolerability of ZW191 in patients with advanced ovarian, endometrial, and NSCLC cancers, with secondary endpoints assessing pharmacokinetics and confirmed objective response rate.

In November 2024, at the annual Society for Immunotherapy of Cancer (“SITC”) Conference we shared a poster presentation titled “Mechanistic QSP modeling and translational strategy for determining a First-In-Human dose for ZW171, a bispecific 2+1 TCE molecule targeting mesothelin and CD3” (Abstract #:

1062), which demonstrates how a Quantitative System Pharmacology (“QSP”) model was developed for ZW171 using in vitro data, pharmacokinetics (“PK”) data from cynomolgus monkey, and literature data (e.g., CD3 receptors per T cells, number of T cells in central and peripheral compartments, and clinical PK data of MSLN-targeting TCE) to facilitate the selection of the ZW171 starting dose for our Phase 1 clinical study.

Recruitment in the dose escalation portion of the clinical study remains ongoing in patients with advanced ovarian and NSCLC cancers.

In December 2024, we hosted an R&D day highlighting continued clinical progress on our solid tumor programs in oncology and expansion into AIID.

Key highlights from the event included:

• Nomination of ZW209, a novel TriTCE, as fifth development candidate in our “5 by 5” solid tumor portfolio.

We expect to submit an IND to commence Phase 1 clinical studies for ZW209 in 1H-2026, with equivalent non-U.S.

applications submitted thereafter.

• Expansion into AIID and hematology oncology leverages our clinically validated Azymetric technology platform and expertise in multispecific therapeutics.

• Nomination of ZW1528, our first development candidate in AIID, demonstrates dual blockade of two complementary pathways of respiratory inflammation and offers potential benefit in mixed-type COPD.

We expect to submit an IND to commence Phase 1 clinical studies for ZW1528 in 2H-2026, with equivalent non-U.S.

applications submitted thereafter.

In March 2025, we announced that, based on our encouraging preclinical results and the unique potential opportunity to help hepatocellular carcinoma patients, we have decided to reprioritize resources for the advancement of ZW251, for which an IND submission is now planned for mid-2025.

As a result, we have paused preparations for the commencement of Phase 1 studies of ZW220 at this time.

However, we believe ZW220 remains a highly differentiated, IND-ready ADC with encouraging preclinical data and strong commercial rationale with partnership potential.

We remain on track to deliver five IND applications as part of our “5 by 5” solid tumor strategy, including ZW220, which remains IND-ready.

Zanidatamab Clinical Program

In November 2024, the FDA granted U.S.

Approval of Ziihera® (zanidatamab-hrii) for the treatment of adults with previously treated, unresectable or metastatic HER2+ (IHC 3+) BTC.

Under the terms of the Jazz license and collaboration agreement, we have earned a milestone payment of $25.0 million based on the FDA approval in BTC.

We are also eligible to receive up to a further $500 million in regulatory milestone payments and up to $862.5 million in commercial milestone payments, as well as tiered royalties between 10% to 20% of net sales by Jazz.

Ziihera® net product sales by Jazz were $1.1 million in 2024 and 4Q-2024 after the initial product launch and availability in December 2024 following FDA approval in November 2024.

Our royalties from net sales by Jazz have been reflected in our income statement in 4Q-2024.

The Phase 3 HERIZON-BTC-302 confirmatory trial is ongoing to evaluate zanidatamab in combination with standard-of-care therapy versus standard-of-care therapy alone in the first-line setting for patients with HER2+ BTC.

Zanidatamab is also being investigated in a number of additional tumor types, including Phase 3 trials in GEA and metastatic breast cancer (“mBC”).

The HERIZON-GEA-01 trial is evaluating the potential of zanidatamab plus chemotherapy with or without tislelizumab as first-line treatment for patients with advanced/metastatic HER2+ GEA and top-line progression-free survival data from this study is expected to be available in 2H-2025.

The EmpowHER-303 trial is evaluating the potential of zanidatamab in combination with

physician’s choice chemotherapy for the treatment of HER2+ mBC for patients who have progressed on, or are intolerant to, previous trastuzumab deruxtecan treatment.

Oth er Matters

On February 18, 2025, we announced the appointment of Mr.

Oleg Nodelman to our board of directors effective February 17, 2025.

In January 2025, we achieved a $14.0 million cash research milestone associated with a clinical milestone under our 2016 platform technology transfer and license agreement with GSK.

Under the terms of this agreement, we previously received an upfront technology access fee payment and we remain eligible to receive research, development, and commercial milestone payments of up to $1.1 billion.

In addition, we are eligible to receive tiered royalties on worldwide sales.

In January 2026, we announced our R&D priorities for 2026 and beyond, including our intention to continue conducting Phase 1 clinical studies for ZW191 and ZW251 in 2026.

Advancement of other ADC programs, including potential clinical development of ZW220, ZW327, and ZW418, will be contingent on the availability of partnerships, collaborations, and/or external funding.

We also announced that beyond 2026, we expect to focus our ADVANCE research efforts on multispecific antibody and engineered-cytokine platforms, funded partially with early-stage partnerships and collaborations.

INDs for multispecific programs, ZW209 and ZW1528, remain on track for submission in 2026.

We anticipate that development of wholly-owned preclinical candidates from our multispecific antibody portfolio should provide for one planned IND filing per annum commencing in 2028.

Partnered Programs

In November 2025, together with our partners Jazz and BeOne, we announced positive topline results from the Phase 3 HERIZON-GEA-01 trial supporting Ziihera as the potential HER2-targeted agent-of-choice and new standard of care in first-line HER2+ locally advanced or metastatic GEA regardless of PD-L1 status.

The full results were subsequently presented at the American Society of Clinical Oncology’s Gastrointestinal Cancers Symposium in January 2026, where:

• Ziihera plus tislelizumab and chemotherapy and Ziihera plus chemotherapy showed a clinically meaningful and statistically significant prolongation of progression-free survival (PFS) with approximately 35% reduction in the risk of disease progression or death versus trastuzumab and chemotherapy;

• Ziihera plus tislelizumab and chemotherapy demonstrated a statistically significant and clinically meaningful overall survival (OS) benefit with a median OS of more than two years (26.4 months);

• At this first interim analysis, Ziihera plus chemotherapy showed a median OS of more than two years, with a strong trend toward statistical significance, favoring Ziihera plus chemotherapy versus trastuzumab plus chemotherapy.

An additional planned OS interim analysis for Ziihera plus chemotherapy is currently expected in mid-2026.

Based on these data, our partner Jazz expects to complete the sBLA submission for zanidatamab in the first quarter of 2026 for the treatment of first-line HER2+ locally advanced or metastatic GEA under the real-time oncology review program in the United States where zanidatamab has been granted Breakthrough Therapy Designation for patients with HER2+ GEA.

Jazz has also submitted these data for inclusion in the National Comprehensive Cancer Network Guidelines (NCCN Guidelines).

Upon regulatory review, Jazz expects a potential commercial launch for zanidatamab in 1L HER2+ GEA to take place in the second half of 2026.

In January 2026, Jazz updated enrollment guidance for EmpowHER-303 in which they expect to complete enrollment in the first half of 2027, with a top-line data readout later in 2027 or in early 2028.

The EmpowHER-BC-303 study is a randomized clinical trial comparing zanidatamab plus physician’s choice of chemotherapy against trastuzumab plus physician’s choice of chemotherapy for the treatment of patients with metastatic HER+ breast cancer .

Jazz is also pursuing collaborations with partners to combine zanidatamab with novel therapies.

For example, the Phase 1 Beamion-BCGC1 trial (NCT06324357) in combination with Boehringer Ingelheim’s zongertinib was recently initiated to explore the combination in metastatic HER2+ breast cancer, along with other potential tumor types.

In January 2026, the New Drug Submission (“NDS”) for Ziihera was approved by Health Canada for the treatment of adults with previously treated, unresectable locally advanced or metastatic HER2-positive (IHC 3+) biliary tract cancer, as monotherapy.

Ziihera’s market authorization has been issued with conditions, pending the results of trials to verify its clinical benefit.

Subsequently, in February 2026 zanidatamab (Ziihera) was approved by the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) for the treatment of biliary tract cancer.

In addition to $53.0 million already received for Ziihera (zanidatamab) in biliary tract cancer, Zymeworks is entitled to receive up to $440.0 million in milestone payments from Jazz and BeOne related to approvals of Ziihera in GEA in United States, Europe, Japan and China.

Zymeworks also has the potential to receive milestone payments related to future regulatory approvals in a third indication totaling $89.0 million, collectively, from Jazz and BeOne.

For Jazz this includes a $50.0 million milestone payment upon regulatory approval of zanidatamab from the FDA in a third indication and a $25.0 million milestone payment upon regulatory approval of zanidatamab from the European Commission in a third indication.

For BeOne, this

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includes $4.0 million payable upon first patient dosed with zanidatamab in a third registrational study in the territory and $10.0 million upon approval of zanidatamab by a regulatory authority for the third indication in the territory.

Our royalty revenue from Jazz and BeOne was $1.0 million and $2.8 million in the three months and the year ended December 31, 2025, respectively, driven primarily by net product sales of Ziihera by Jazz.

In 2025, our partner J&J initiated two Phase 3 trials studying pasritamig as monotherapy in late-line metastatic castration-resistant prostate cancer (mCRPC) and pasritamig in combination with docetaxel in participants with metastatic castration-resistant prostate cancer (KLK2-PASenger).

In February 2026, J&J presented new clinical data on pasritamig at the 2026 American Society of Clinical Oncology Genitourinary annual meeting as follows:

• Poster - 171:

Safety and efficacy of pasritamig (PAS) + docetaxel (DOCE) in participants with metastatic castration-resistant prostate cancer (mcrPc):

Initial results of a phase 1b study.

• Poster - 172:

Phase 1 safety, efficacy, pharmacokinetics (PK) and pharmacodynamics (PD) of pasritamig in Asian population with metastatic castration-resistant prostate cancer (mCRPC).

Other Matters

As of November 10, 2025, we completed the remaining $30.0 million of our previously approved repurchase program approved in 2024 for 1,856,907 shares of our common stock at an average price per share of $16.15 (exclusive of commission expense and estimated excise tax).

In November 2025, our board of directors authorized a new share repurchase program providing the ability to repurchase up to $125.0 million in shares of our common stock.

Through February 26, 2026, we have utilized approximately $62.5 million of this approved repurchase program to acquire 2,580,415 shares of our common stock at an average price per share of $24.22 (exclusive of commission expense and estimated excise tax).

Also in November 2025, we announced the evolution of our business strategy as a global biotechnology company managing a portfolio of licensed healthcare assets and developing a diverse pipeline of novel, multifunctional biotherapeutics to improve the standard of care for difficult-to-treat diseases, including cancer, inflammation, and autoimmune disease.

In January 2026, we announced leadership appointments and transitions to align with the evolution of our corporate strategy, including the following changes:

Cherry appointed to our board of directors.

• Mark Hollywood promoted to Executive Vice President and Chief Operating Officer.

Jeffrey Smith, Executive Vice President and Chief Medical Officer, retired and Dr.

Sabeen Mekan promoted to Senior Vice President and Chief Medical Officer.

• Leone Patterson, Chief Financial and Business Officer, and Daniel Dex, General Counsel, departed during the first quarter of 2026.

The Company has commenced searches for a permanent Chief Financial Officer and for a General Counsel.

Kenneth Galbraith has assumed the role of interim Chief Financial Officer on an interim basis.

In March 2026, we entered into a $250.0 million loan arrangement with Royalty Pharma.

For additional information regarding this arrangement, see the section titled “Liquidity and Capital Resources” below.

Financial Operations Overview

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We expect that collaboration revenue from our strategic partnerships will be our primary source of revenue for the foreseeable future.

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Operating Expenses

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It is difficult to determine with certainty the duration and completion costs of our current or future clinical trials and preclinical programs of our product candidates, or if, when or to what extent we will generate revenue other than zanidatamab royalties from the commercialization and sale of any of our product candidates that obtain regulatory approval.

We may never succeed in achieving regulatory approval for any of our current or future product candidates.

We or our strategic partners may never succeed in achieving regulatory approval for any of our current or future product candidates.

The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including the uncertainties of clinical trials and preclinical studies, uncertainties in clinical trial enrollment rates and significant and changing government regulation.

In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability.

We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each product candidate, as well as an assessment of each product

candidate’s commercial potential.

We expect our research and development expenses to increase in the future, subject to periodic fluctuations, as we continue to advance, expand and complete the clinical development of our product candidates, support our ongoing collaborations, and conduct our ongoing preclinical research activities.

We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each product candidate, as well as an assessment of each product candidate’s commercial potential.

As part of our recently announced strategy, we will continue to seek out partnerships and collaborations.

If we are successful, over the next several years, we anticipate that our annual research and development expenses, excluding stock-based compensation expense, will trend lower.

General and Administrative Expense

General and administrative expenses consist of salaries, benefits and stock-based compensation costs for employees in our executive, finance, legal, intellectual property, business development, human resources and other support functions, as well as legal and professional fees, business insurance, facilities and information technology costs and other expenses.

Our general and administrative expenses may increase in the future as we expand or modify our infrastructure to support our ongoing research and development activities.

We anticipate over the next several years that our annual general and administrative expenses, other than stock-based compensation expense, will trend lower as we continue to pursue our strategic plan.

Other Income (Expense)

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Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S.

The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that are inherently uncertain that affect the amounts reported in the consolidated financial statements and accompanying notes.

The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that are inherently uncertain that affect the amounts

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reported in the consolidated financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable.

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Revenue Recognition

Our revenue consists of amounts earned under research and development license and collaboration agreements with our strategic partners.

Promised deliverables within these agreements may include grants of licenses, or options to obtain licenses, to our intellectual property, research and development services, drug product manufacturing, and participation on joint research and/or development committees.

In accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606 ” ), we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

For collaborative arrangements that fall within the scope of ASC 808, Collaborative Arrangements (“ASC 808 ” ), we apply the revenue recognition model under ASC 606 to part or all of the arrangements, when deemed appropriate.

For collaboration arrangements within the scope of ASC 808 that contain multiple elements, we determine which elements of the arrangement are within the scope of ASC 808 and which elements are within the scope of ASC 606, which may require application of judgment.

To determine revenue recognition for arrangements that we determine are within the scope of Topic 606, we perform the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when or as we satisfy a performance obligation and when collectability is probable.

If the expectation at contract inception is such that the period between payment by the licensee and the completion of related performance obligations will be one year or less, we assume that the contract does not have a significant financing component.

When applying the revenue recognition criteria of ASC 606 to license and collaboration agreements, management may be required to apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations including understanding the nature and significance of the contractual obligations and their standalone selling prices, determining when performance obligations have been met, assessing the recognition and future reversal of variable

consideration, and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time.

The accounting for the modification to existing contracts with customers arising from licensing and collaboration arrangements requires management to apply significant judgment when evaluating whether the modification to financial terms is related to distinct performance obligations remaining in the amended collaboration agreement.

These judgments are discussed in more detail in the following paragraphs for each type of payment received by us under the terms of the license and collaborations agreements.

Licenses of intellectual property including platform technology access:

If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.

For licenses that are not distinct from other promises, we apply judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees.

We evaluate the measure of progress each reporting period and, if necessary, adjust the related revenue recognition accordingly.

Milestone payments:

At the inception of each arrangement that includes research, development or regulatory milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

Milestone payments that are not within our control or that of the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.

The transaction price is then allocated to each performance obligation on a relative stand- alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied.

At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such development milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in the period of adjustment.

The process of successfully achieving the criteria for the milestone payments is highly uncertain.

Consequently, there is a significant risk that we may not earn all of the milestone payments from each of our strategic partners.

We apply significant judgment when assessing the likelihood of whether milestones are considered probable of being achieved and when allocating the transaction price to each performance obligation for revenue recognition purposes.

Supply of clinical trial drugs and comparator drugs:

Amounts receivable by the Company for the provision of drugs to licensee or to clinical trials on behalf of licensee are recognized in revenue at a point in time when title to drugs has transferred to the licensee, which generally occurs upon shipment or delivery, depending on contractual terms.

Royalties and commercial milestones:

For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified level of sales, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Achievement of these royalties and commercial milestones may solely depend upon performance of the licensee.

Since inception to date, we have not recognized any royalty revenue or commercial milestones from any of our out-licensing arrangements, other than zanidatamab royalties from Jazz.

Research support and other payments:

Payments by the licensees in exchange for research activities performed by us on behalf of the licensee are recognized as revenue upon performance of such activities at rates consistent with prevailing market rates.

Payments for research supplies provided are recognized as revenue upon delivery of the supplies.

Contract assets and liabilities

Contract assets are mainly comprised of accrued revenue for which one or more performance obligations has been completed but not yet billed, which includes amounts billed and currently due from customers.

Contract liabilities are mainly comprised of deferred revenues.

Amounts received prior to satisfying all revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated financial statements.

Amounts not expected to be recognized as revenue within the next twelve months of the consolidated balance sheet date are classified as long-term deferred revenue.

Modifications of contracts with customers

We account for a modification to a contract with a customer as a separate contract if both the scope of the contract increases because of the addition of promised goods or services that are distinct, and the price of the contract increases by an amount of consideration that reflects the stand-alone selling price of the additional promised goods or services.

A modification that does not meet this criteria is accounted for as an adjustment to the existing contract, either prospectively or through a cumulative catch-up adjustment.

We account for a contract modification prospectively if the remaining goods or services are distinct from the goods or services transferred before the modification, but the consideration for those goods or services does not reflect their stand-alone selling prices.

Any changes in the transaction price that arise as a result of a contract modification that are not allocated to remaining goods or services are recognized as a cumulative catch-up adjustment

Our revenue arrangements with partners often include multiple components – such as licenses, milestones, development activities, and drug supply – that require significant judgment to evaluate under Accounting Standards Codification (“ASC”) Topic 606.

The most subjective areas involve:

• Determining distinct performance obligations in complex collaboration agreements;

• Estimating variable consideration, including the probability of achieving development and regulatory milestones;

• Assessing contract modifications, which may change performance obligations or transaction consideration.

These judgments affect the timing and amount of revenue recognized, and changes in assumptions (e.g., milestone probability, development timelines, or partner plans) could materially impact results.

Additional detail about our revenue accounting policies is provided in Note 2 - Revenue Recognition of our consolidated financial statements.

Research and Development Costs and Related Accrued Expenses

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When making these estimates, we use operational and contractual information from third party service providers and operational data from internal personnel.

Impairment of Long-Lived Assets

Goodwill and IPR&D assets classified as indefinite-lived are not amortized, but are evaluated for impairment annually or more frequently if impairment indicators arise.

IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts.

For definite-lived intangible assets, if there is a major event indicating that the carrying value may be impaired, then management will perform an impairment test.

Impairment tests for goodwill and intangibles assets involve considerable use of judgment and require management to make estimates and assumptions.

The fair values of reporting units are derived from valuation models, which consider various factors such as discount rates, future earnings and growth rates.

Changes in estimates and assumptions can affect the reported value of goodwill and intangible assets.

As at December 31, 2024, we performed a qualitative assessment for our annual impairment test of goodwill after concluding that it was not more likely than not that the fair value of the reporting unit was less than its carrying value.

Consequently, the quantitative impairment test was not required.

We concluded that there were no impairment indicators related to goodwill or other intangible assets as of December 31, 2024.

Stock-Based Compensation

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The Black-Scholes option pricing model requires assumptions for various inputs to measure fair value, including expected term of the awards, underlying share price volatility, forfeiture rates, risk-free interest rate and expected dividend yields of our common stock.

Management uses judgement to determine the inputs to the Black-Scholes option pricing model and changes in these assumptions could have a material impact to the fair value calculations and the amount and timing of stock-based compensation expense recognized in earnings.

Management uses judgment to determine the inputs to the Black-Scholes option pricing model and changes in these assumptions could have a material impact to the fair value calculations and the amount and timing of stock-based compensation expense recognized in earnings.

Further details on valuation methodologies are presented in Note 2 - Stock-Based Compensation and Note 10 Shareholders’ Equity of our consolidated financial statements.

Recent Accounting Pronouncements

A summary of recent accounting pronouncements is presented in Note 3 of our Annual Consolidated Financial Statements for the year ended December 31, 2024 within this Annual Report on Form 10-K.

A summary of recent accounting pronouncements is presented in Note 3 - Recent Accounting Pronouncements of our Annual Consolidated Financial Statements for the year ended December 31, 2025 within this Annual Report on Form 10-K.

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Results of Operations for the Years Ended December 31, 2025, 2024 and 2023

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Our revenue relates primarily to non-recurring upfront fees, expansion payments or milestone payments from our licensing and collaboration agreements.

Total revenue increased by $0.3 million in 2024 compared to 2023.

Revenue for 2024 included $25.0 million of milestone revenue from Jazz in relation to the FDA approval of Ziihera® (zanidatamab-hrii) for the treatment of HER2+ BTC, $37.5 million for development support and drug supply revenue from Jazz, $8.0 million of milestone revenue from BeiGene in relation to the acceptance by the CDE of the NMPA in China of the BLA for zanidatamab for second-line treatment of HER2+ BTC, $2.5 million of milestone revenue from GSK in relation to the sequence pair nomination under the 2016 licensing agreement, $3.0 million from BeiGene for drug supply and other research support payments and $0.2 million from our other partners for research support and other payments.

Revenue for 2023 included $91.6 million for development support and drug supply revenue from Jazz, which was partially offset by a $20.1 million credit issued to Jazz for contractual amendments to our collaboration arrangement, $1.6 million from BeiGene for drug supply and other research support payments and $2.9 million from our other partners for research support and other payments.

The decrease in revenue from Jazz in 2023 and 2024 compared to 2022 reflects the transfer of responsibility for certain clinical trials regarding zanidatamab to Jazz pursuant to the Transfer Agreement and the Amended Jazz Collaboration Agreement, with such future costs to be borne by Jazz i nstead of being incurred by us and reimbursed by Jazz.

We expect that revenue in future periods for development support from Jazz will continue to decrease, although we remain eligible for reimbursement of certain costs for activities where we maintain responsibility under the Amended Jazz Collaboration Agreement.

We expect that royalty revenue in future periods for sales of Ziihera® by Jazz will increase as Jazz’s commercialization efforts continue, though we cannot predict the magnitude or timing of such royalty revenue.

Total revenue increased by $29.7 million in 2025 compared to 2024, due to higher revenue recognized across multiple partnered programs.

The increase was driven mainly by achievement of significant clinical and regulatory milestones and exercise of an option under our collaborations with J&J, BeOne, GSK, Daiichi Sankyo, and BMS, which collectively contributed the majority of the year‑over‑year growth.

This growth was partially offset by a decline in development‑support and drug‑supply revenue from Jazz, reflecting the transition of responsibility for certain zanidatamab clinical activities to Jazz under our amended agreements.

As Jazz continues to assume these activities, we expect development‑support revenue from Jazz to continue decreasing, while royalty revenue from Jazz and BeOne is expected to grow over time as commercial sales of Ziihera increase.

Research and Development Expense

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$ 137.0 $ 134.6 $ 143.6 $ 2.4 2 %

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(1) Excluding zanidatamab and zanidatamab zovodotin, we expect research and development expenditures to increase over time, subject to

periodic fluctuations, in line with the advancement, expansion and completion of the clinical development of our product candidates, support of our ongoing collaborations, and our ongoing preclinical research activities .

Research and development expense decreased by $9.0 million in 2024 compared to 2023.

The decrease in research and development expense was primarily due to a decrease in expenses for zanidatamab, as a result of transfer of responsibility for this program to Jazz per our Transfer Agreement and the Amended Jazz Collaboration Agreement, and a decrease in expenses for ZW171 and ZW191 as the majority of manufacturing and IND enabling studies were completed in 2023 prior to filing of IND applications in 2024.

This decrease was partially offset by an increase in manufacturing and IND enabling supporting activities for ZW220 and ZW251, along with other preclinical and research activities.

Stock-based compensation expense increased primarily due to new grants during 2024 and a lower expense in 2023 as a result of the cancellation and modification of awards in respect of employees transferred to Jazz per the Transfer Agreement.

Our research and development expenses relating to zanidatamab, following the May 2023 transfer of responsibility for the zanidatamab development program to Jazz, have decreased compared to the years ended December 31, 2023 and 2022.

We expect to continue incurring research and development expenses for activities over which we maintain responsibility under the Amended Jazz Collaboration Agreement.

We are eligible for reimbursement of these expenses from Jazz and expect to recognize these reimbursements as revenue from research and collaborations.

We similarly expect that research and development expenses relating to zanidatamab zovodotin will continue to decrease in future periods following our decision to discontinue the zanidatamab zovodotin clinical development program.

Research and development expense increased by $2.4 million in 2025 compared to 2024.

The year‑over‑year change primarily reflects a shift in program mix as lower spending on late‑stage and discontinued programs was offset by higher investment in early‑stage clinical studies and preclinical pipeline activities.

R&D costs for zanidatamab declined following reduced clinical support provided to Jazz after BLA approval in 2024 and a change in estimate related to historical clinical trial accruals for studies transferred to Jazz, which were finalized upon receipt of CRO confirmations.

Expenses for zanidatamab zovodotin also decreased as the program was discontinued.

Spending for ZW220 decreased as a majority of preclinical development activities were completed and we paused further development of this program.

These decreases were partially offset by increased investment in our earlier‑stage programs and research platform.

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R&D expenses increased for ZW251, ZW191, and ZW171 (through the date of discontinuation), reflecting clinical trial progress, clinical drug supply costs, and study start‑up activities.

Other preclinical and research program expenses increased primarily due to IND‑enabling toxicology and GMP manufacturing activities for ZW209 and ZW1528.

These programs are included within “Other preclinical and research programs” in the table above.

Unallocated departmental expenses also increased year over year.

Stock‑based compensation rose primarily due to higher grant‑date fair values in 2025 resulting from an increase in our stock price.

Other unallocated expenses increased due to the absence of a prior‑year benefit related to the reversal of a contingent liability provision recognized in 2024 after the discontinuation of the zanidatamab zovodotin program, as well as higher consulting and rent costs.

Following the May 2023 transfer of development responsibility for zanidatamab to Jazz, we expect R&D expenses associated with this program to remain lower than prior periods.

We will continue to incur costs for activities for which we retain responsibility under the Amended Jazz Collaboration Agreement, and we expect to recognize reimbursements from Jazz for these activities as revenue from research and collaborations.

General and Administrative Expense

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General and administrative expense $ 61.5 $ 61.5 $ 70.4 $ — — %

General and administrative expense decreased by $8.9 million in 2024 compared to 2023.

The decrease in general and administrative expense was primarily due to a decrease in external consulting expenses for information technology, legal fees, and other expenses for advisory services, insurance and depreciation and amortization expenses compared to 2023.

This was partially offset by costs incurred due to the termination of our long-term facility lease in Seattle in 2024 and an increase in stock-based compensation expense over 2023, primarily due to new grants during 2024 and reversal of compensation expense for options cancellations and modifications in 2023.

Impairment on Acquired IPR&D

General and administrative expenses were consistent year-over-year at $61.5 million in both 2025 and 2024, as increases in certain components were offset by decreases in others.

The largest driver of the year‑over‑year increases was stock‑based compensation expense, which increased primarily due to higher grant‑date fair values in 2025 resulting from an increase in our stock price.

We also incurred higher amortization expense related to additional information technology systems implemented.

These increases were offset by lower salaries and benefits due to reduced headcount, reduced consulting fees and a reduction of other general and administrative expenses, including a decrease in rent expense following the termination of our long‑term Seattle facility lease in 2024, a decrease in depreciation and amortization expenses, and lower software subscription costs and other information technology‑related expenses.

Impairment on Acquired In-Process Research and Development (IPR&D)

Year Ended December 31,

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During the year ended December 31, 2024, we recorded an impairment charge of $17.3 million as a result of our decision to discontinue the zanidatamab zovodotin clinical development program which utilized the technology represented by acquired IPR&D assets.

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Other Income, net

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Other income, net $ 12.8 $ 20.5 $ 18.8 $ (7.7) (38) %

Other income, net increased by $1.7 million in 2024 compared to 2023.

Other income, net decreased by $7.7 million in 2025 compared to 2024.

Other income, net for 2025 included $13.4 million of interest income and $0.6 million of foreign exchange loss.

Other income, net for 2024 included $19.9 million of interest income and $0.8 million of foreign exchange gains, partially offset by other miscellaneous charges.

Other income, net for 2023 included $19.7 million of interest income and $0.3 million of miscellaneous income, partially offset by $1.2 million of foreign exchange losses.

The year-over-year decrease in interest income was primarily due to a reduction in cash, cash equivalents and marketable securities during the period.

Year Ended December 31,

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$ (1.4) $ (6.1) $ 0.6 $ 4.7 77 %

Income tax expense increased by $6.7 million in 2024 compared to 2023, primarily due to an increase in U.S.

taxes under the Subpart F income rules and due to an increase in deferred income tax expense due to changes in net deferred tax assets and liabilities and the valuation allowance in respect of these.

Income tax expense decreased by $4.7 million in 2025 compared to 2024, primarily due to a decrease in U.S.

taxes under the Subpart F income rules partially offset by an increase in deferred income tax expense due to changes in net deferred tax assets and liabilities and the valuation allowance in respect of these.

Liquidity and Capital Resources

Sources of Liquidity

Since our IPO in 2017, we have funded our operations primarily through follow-on public offerings, including the issuance of pre-funded warrants, as well as from upfront fees, milestone payments, and research support payments generated from our strategic collaborations and licensing agreements.

In January 2022, we completed a public offering pursuant to which we sold (i) 11,035,000 common shares (including the sale of 1,875,000 common shares to the underwriters upon their full exercise of their over-allotment option) at $8.00 per common share and (ii) 3,340,000 pre-funded warrants in lieu of common shares at $7.9999 per pre-funded warrant.

We received gross proceeds of $115.0 million and net proceeds were $107.6 million, after underwriting discounts, commissions and estimated offering expenses.

In November 2022, we entered into a sales agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.

(“Cantor”) to sell shares of our common stock subject to a maximum aggregate dollar amount registered pursuant to an applicable prospectus supplement, from time to time, through an “at-the-market” equity offering program under which Cantor would act as our sales agent.

In June 2023, we sold an aggregate of 3,350,000 shares of common stock at $8.12 per share under the Sales Agreement.

We received gross proceeds of $27.2 million and net cash proceeds of $26.2 million, after underwriting commissions and offering expenses.

In July 2024, we notified Cantor of our decision to terminate the Sales Agreement effective July 31, 2024.

Since our IPO in 2017, we have funded our operations primarily through follow-on public offerings and private placements (including the issuance of pre-funded warrants), loans, as well as from upfront fees, milestone payments, and research support payments generated from our strategic collaborations and licensing agreements.

As part of our recently announced asset and royalty aggregation strategy, we anticipate that funds used in operations will increasingly be derived from royalty and milestone payments that we receive through our strategic collaboration and licensing agreements.

We also evaluate other sources of capital to finance our operations, including through debt financings, asset monetization, strategic partnerships, grant funding, and public and private equity offerings.

In August 2024, we entered into a sales agreement (the “Cowen Sales Agreement”) with TD Securities (USA) LLC.

(“TD Cowen”) to sell shares of our common stock subject to a maximum aggregate dollar amount registered pursuant to an applicable prospectus supplement, from time to time, through an “at-the-market” equity offering program under which TD Cowen will act as our sales agent.

Sales of shares of common stock through TD Cowen, if any, will be made by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act.

As of the date of this report, no shares of our common stock have been sold under the Cowen Sales Agreement.

As part of the ongoing management of our operations and related funding needs, we evaluate various financing vehicles, including “at-the-market” equity offering programs, and may enter into similar “at-the-market” equity offering programs in the future, as well as other financing transactions.

In December 2023, we completed a private placement pursuant to which we sold 5,086,521 pre-funded warrants at a price of $9.8299 per pre-funded warrant.

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Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $0.0001 per share, subject to adjustments as provided under the terms of the pre-funded warrants.

In June 2025, these pre-funded warrants were fully exercised on a net exercise basis resulting in the issuance of 5,086,480 shares of common stock.

Royalty Pharma Loan Arrangement

On March 2, 2026, Zymeworks BC entered into the Sale Agreement with the Subsidiary, pursuant to which Zymeworks BC sold to the Subsidiary 30% of future royalty payments (not to exceed 120% of the maximum amount payable by the Subsidiary

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under the Loan Agreement (excluding indemnification and other similar obligations) related to Ziihera (zanidatamab-hrii) receivable under the Covered Agreements at a purchase price of $250.0 million.

Under the Sale Agreement, Zymeworks BC is restricted from taking certain actions with respect to the Covered Agreements, including (i) entering into any contracts, or amending, modifying or waiving provisions of any contracts, relating to the royalties receivable under the Covered Agreements that would undermine the Royalty Interest or reasonably be expected to result in a material adverse effect, (ii) taking actions that would, or would give the right to an applicable counterparty to, terminate a Covered Agreement or certain material in-license agreements covering Ziihera, or amending, modifying, waiving any provision, providing any consent or taking any action under any Covered Agreement that would reduce any Royalty Interest payments or reasonably be expected to result in a material adverse effect, without the prior written consent of the Subsidiary and Royalty Pharma, (iii) selling, transferring, disposing of or encumbering its interests in applicable Ziihera-specific intellectual property, Ziihera, a Covered Agreement or certain material in-license agreements covering Ziihera, or entering into monetization or similar transactions with respect to Zymeworks BC’s retained royalty interests under any Covered Agreement, except, in each case, without certain assumption and other arrangements protective to Royalty Pharma’s interests, and (iv) permitting Covered Agreement counterparties to acquire more than 50% of Zymeworks BC’s retained royalty interests under any Covered Agreement without certain assumption and other arrangements protective to Royalty Pharma’s interests, in addition to being subject to other customary covenants.

The Sale Agreement also includes customary indemnification obligations by us and Zymeworks BC in favor of the Subsidiary and Royalty Pharma.

The obligations of the parties under the Sale Agreement terminate automatically upon the payment in full of the Loan and the other obligations under the Loan Agreement.

Following the sale and transfer of the Royalty Interest, the Subsidiary entered into the Loan Agreement with Royalty Pharma as administrative agent and lender (in the capacity as lender under the Loan Agreement, the “Lender” and together with such other lenders party to the Loan Agreement from time to time the “Lenders”), pursuant to which the Lenders made a term loan to the Subsidiary in an aggregate principal amount of $250.0 million, that bears interest at a fixed rate and matures on December 31, 2042.

Under the terms of the Loan Agreement, the amount payable to the Lenders no later than the Maturity Date is approximately $481.3 million, provided that if the Loan is repaid in full on or before December 31, 2033, the amount payable to the Lenders is $412.5 million, in each case inclusive of all applicable interest, yield protection premiums, early redemption fees, exit fees and other amounts payable under the Loan Agreement (excluding indemnification and similar obligations).

Any amount borrowed and repaid by Subsidiary may not be reborrowed.

We will retain 70% of royalties on Ziihera annual net sales, with full royalty rights reverting to us once the Loan and other amounts payable under the Loan Agreement to Royalty Pharma have been repaid in full.

All earned regulatory and commercial milestone payments under the Covered Agreements will be retained by us.

Under our collaboration agreement with Jazz, we are eligible to receive tiered royalties of ten to high teens percentages on global (outside of Asia (other than Japan), Australia and New Zealand) annual net sales of Ziihera up to $2.0 billion and 20% on annual net sales above $2.0 billion.

Under the collaboration agreement with BeOne, we are eligible to receive tiered royalties of mid-single to mid-double digit percentages on annual net sales of Ziihera in Asia (other than Japan), Australia and New Zealand up to $1.0 billion and 19.5% on annual net sales above $1.0 billion (with royalty rates increasing by 0.5% when cumulative amounts forgone as a result of a royalty reduction of 0.5% reaches a cap in the low double-digit millions of dollars).

In connection with entering into the Loan Agreement, (i) the Subsidiary entered into a security agreement with Royalty Pharma, whereby the Subsidiary granted a security interest in all of its assets (the “Collateral”) in favor of Royalty Pharma, and (ii) Zymeworks BC and Zymeworks GP entered into a pledge and security agreement with Royalty Pharma, whereby Zymeworks BC and Zymeworks GP pledged their respective equity interests in the Subsidiary, with Zymeworks BC also pledging its equity in Zymeworks GP.

If certain events of default occur, including the termination of the Jazz Agreement or the BeOne Agreement and a change of control of the Company, as well as other customary events of default, the administrative agent may terminate the Loan Agreement and demand immediate payment of an amount equal to the outstanding principal amount of the Loan plus all applicable fees, premiums and accrued and unpaid interest thereon and exercise all rights and remedies available under or pursuant to the Loan Agreement.

The Loan Agreement includes certain customary affirmative and negative covenants applicable to the Subsidiary, including restrictions on the incurrence of additional indebtedness, creation of liens, asset transfers, mergers, dividends and certain transactions with affiliates.

In addition, the Subsidiary is subject to covenants designed to limit its activities primarily to holding and administering its rights and obligations under certain transaction agreements including the Loan Agreement and the Sale Agreement, and the Subsidiary may not amend or terminate the Sale Agreement without the Lenders’ consent.

The Loan Agreement also contains other customary terms and conditions, including representations and warranties, as well as indemnification obligations in favor of Royalty Pharma.

The payment obligations under the Loan Agreement are limited to the Subsidiary, and the Lenders have no recourse under the Loan Agreement against the Company or Zymeworks BC or any assets other than the Collateral and Zymeworks BC’s equity interest in Zymeworks GP and the Subsidiary, and Zymeworks GP’s equity interests in the Subsidiary

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We intend to use the net cash received from this arrangement to support our ongoing stock repurchase program and fund potential strategic acquisitions, as well as for working capital and other general corporate purposes.

As of December 31, 2025, we had $270.6 million of cash, cash equivalents, and marketable securities, comprised of $41.2 million in cash and cash equivalents and $229.4 million in marketable securities.

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Operating Activities

In 2024, cash used in operating activities was $110.0 million as opposed to $118.3 million cash provided by operating activities in 2023.

The decrease in net cash used in operating activities was primarily due to a decrease in cash expenditures for operations as a result of transfer of responsibility over the zanidatamab program to Jazz and a reduction in general and administration costs compared to 2023, partially offset by an increase in research and development costs for other programs.

The reduction in the net cash used in operating activities was partly offset by an overall negative movement in working capital compared to 2023, primarily due to an increase in our accounts receivable position as at December 31, 2024.

In 2025, cash used in operating activities was $33.0 million as opposed to $110.1 million cash used in operating activities in 2024.

The reduction in net cash used in operating activities was primarily due to milestone revenues received during 2025 and positive changes in working capital accounts compared to 2024.

Financing Activities

Net cash used in financing activities in 2024 included $30.1 million used for the Repurchase Program partially offset by net proceeds of $8.9 million from stock option exercises and $0.9 million from the issuance of shares of common stock under our employee stock purchase plan.

Net cash provided by financing activities in 2023 included net proceeds of $49.9 million from issuance of pre-funded warrants pursuant to a private placement, $26.2 million from our share issuance pursuant to the Sales Agreement, $5.0 million from stock option exercises and $0.8 million from the issuance of shares of common stock in relation to our employee stock purchase plan.

Net cash used in financing activities in 2025 included $41.7 million used for our repurchase programs, partially offset by net proceeds of $16.9 million from stock option exercises, $5.0 million from a private placement, and $1.4 million from the issuance of shares of common stock under our employee stock purchase plan.

Net cash used in financing activities in 2024 included $30.1 million used for our repurchase program, partially offset by net proceeds of $8.9 million from stock option exercises and $0.9 million from the issuance of shares of common stock under our employee stock purchase plan.

Investing Activities

Net cash provided by investing activities in 2025 was primarily related to redemptions, net of purchases, of investments in marketable securities of $29.0 million partially offset by cash outflows of $2.4 million for the acquisition of property and equipment in our office and laboratory spaces in Canada and the United States and software implementation.

Net cash used in investing activities in 2023 is primarily related to purchases, net of redemptions of marketable securities of $203.2 million and cash outflows of $4.1 million for the acquisition of property and equipment for our office and lab spaces and for software implementation.

Net cash provided by investing activities in 2024 was primarily related to redemptions, net of purchases, of investments in marketable securities of $41.8 million partially offset by cash outflows of $3.1 million for the acquisition of property and equipment in our office and laboratory spaces in Canada and the United States and software implementation.

Funding Requirements

In the quarter ended December 31, 2024, we began recognizing royalty revenue from sales of zanidatamab by our partner Jazz.

However, we have not generated revenue from sales of any of our wholly-owned product candidates as of December 31, 2024 and we do not expect to do so until such time as we obtain regulatory approval and commercialize one or more of our current or future product candidates.

As we are currently in the clinical and preclinical stages of development, it will be some time before we expect to achieve this, and it is uncertain that we ever will.

We expect that we will continue to increase our operating

expenses, subject to periodic fluctuations, in connection with ongoing clinical trials and preclinical activities and the development of product candidates in our pipeline.

In addition, inflation generally may affect us by increasing our cost of labor, outside services, manufacturing and clinical trial expenses.

Our funding requirements in the short-term and long-term will consist of the operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations including future minimum lease payments under non-cancelable operating leases as presented in note 14 and other commitments and contingencies as presented in note 15 to the annual consolidated financial statements.

Because of the inherent risks and uncertainties associated with the development and commercialization of our drug candidates, it is difficult to predict the amounts of capital outflows and operating expenditures associated with our current and anticipated clinical trials and preclinical studies.

Our revenue through December 31, 2025 has been primarily revenue from the license of our proprietary therapeutic platforms for the development of product candidates.

We anticipate that at least over the short-term we will not be net income positive on a regular basis as we continue our research and development of our product candidates and implement our recently announced strategy.

In addition, inflationary pressure could adversely impact our financial results.

Our funding requirements in the short-term and long-term will consist of the operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations including future minimum lease payments under non-cancelable operating leases as presented in Note 14 - Leases and other commitments and contingencies as presented in Note 15 - Commitments and Contingencies to the annual consolidated financial statements.

Because of the inherent risks and uncertainties associated with the development of our product candidates and the successful implementation of our recently announced strategy, it is difficult to predict the amounts of capital outflows and operating expenditures associated with our current and anticipated clinical trials and preclinical studies.

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Although it is difficult to predict our funding requirements, based on our current operating plan, we anticipate that our existing cash and cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months from the date this Annual Report on Form 10-K is filed with the SEC.

We have based these estimates on assumptions and plans which may change and which could impact the magnitude and/or timing of operating expenses, capital expenditures and our cash runway.

The successful development of our product candidates and the achievement of milestones by our strategic partners is uncertain, and therefore it is difficult to predict the actual funds we will require to complete the research, development and commercialization of product candidates.

See Item 1A, “Risk Factors - Risks Related to Our Business and the Development and Commercialization of Our Product Candidates” and “Risk Factors - Risks Related to Our Dependence on Third Parties.”

Additionally, on August 1, 2024, our board of directors authorized the Repurchase Program, under which we may repurchase up to $60.0 million of our common stock.

As of the date of this report, there is $30.0 million of remaining capacity under the Repurchase Program.

This anticipated runway excludes the impact of any regulatory milestone payments we are entitled to receive in connection with additional regulatory approvals for zanidatamab, as well as the proceeds from our recently announced loan arrangement with Royalty Pharma.

We have based our cash runway estimates on assumptions and plans which may change and which could impact the magnitude and/or timing of operating expenses, capital expenditures and our cash runway.

The successful development of our product candidates and the achievement of milestones by our strategic partners is uncertain.

In addition, as part of our recently announced strategy, we intend to evaluate and potentially consummate various acquisitions and other strategic transactions, the magnitude and timing of which are uncertain.

As a result of the foregoing, it is difficult to predict the actual funds we will require to fund our planned operations.

See Item 1A, “Risk Factors – Risks Relating to Our Business,” “Risk Factors – Risks Relating to Development of our Product Candidates,” and “Risk Factors –Risks Related to Our Financial Position and Need for Additional Capital.”

Additionally, on August 1, 2024, our board of directors authorized the 2024 Repurchase Program, under which we were authorized to repurchase up to $60.0 million of our common stock.

As of November 10, 2025, we completed the entire $60.0 million of the 2024 Repurchase Program.

On November 16, 2025, our board of directors authorized the 2025 Repurchase Program, whereby we were authorized to repurchase up to $125.0 million of our outstanding common stock.

As of December 31, 2025, we repurchased 431,217 shares of our common stock under the 2025 Repurchase Program.

As of February 26, 2026, we have repurchased 2,580,415 shares of our common stock under the 2025 Repurchase Program, and there is $62.5 million of remaining capacity under the 2025 Repurchase Program.

The shares may be repurchased from time to time in open market transactions, or other means in accordance with Rule 10b5-1 of the Exchange Act and Rule 10b-18 of the Exchange Act.

As of December 31, 2024, we have repurchased 2,545,402 shares of our common stock under the Repurchase Program.

The timing, number of shares repurchased, and prices paid for any additional shares of the stock repurchased under this program will depend on general business and market conditions as well as corporate and regulatory limitations, prevailing stock prices, and other considerations.

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Accordingly, our future funding requirements will depend on many factors, including but not limited to:

• the scope, rate of progress, results and costs of our clinical trials, preclinical studies and other related activities;

• our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements as well as our ability to enter into new arrangements;

• the timing and the costs of obtaining regulatory approvals for any of our current or future drug candidates;

• the cost of commercialization activities if any of our current or future drug candidates are approved for sale, including marketing, sales and distribution costs;

• the amount of royalties and sales-based milestones, if any, received from our collaboration partners for commercial sales of drug candidates, for any such drug candidates that receive marketing approval;

• the amount of revenue, if any, received from commercial sales of our drug candidates, should any of our drug candidates receive marketing approval.

If adequate funds are not available at favorable terms, we may be required to reduce operating expenses, delay or reduce the scope of our product development and commercial expansion programs, obtain funds through arrangements with others that may require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize ourselves or cease operations.

• the number and characteristics of other product candidates that we pursue;

• the scope, progress, timing, cost and results of research, preclinical development, and clinical trials;

• the magnitude and frequency of any strategic transactions we engage in to build out our pipeline or enhance our royalty aggregation strategy;

• our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights;

• our ability to hire when needed additional management, scientific and medical personnel;

• our need to implement additional internal systems and infrastructure, including financial and reporting systems;

• the economic and other terms, timing of and success of our existing strategic partnerships, and any collaboration, asset monetization, licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements.

If adequate funds are not available at favorable terms, we may be required to reduce operating expenses, delay or reduce the scope of our product development and strategic transactions, obtain funds through arrangements with others that may require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize, either alone or with our strategic partners, or cease operations.

If we do raise additional capital through public or private equity or convertible debt offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights.

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A deterioration in the equity or credit markets may make any necessary debt or equity financing more difficult, more costly and more dilutive.

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Segment Reporting

We view our operations and manage our business in one segment, which is the development of next-generation multifunctional biotherapeutics.

We view our operations and manage our business in one segment, which is the Management of a portfolio of licensed healthcare assets and development of novel multifunctional biotherapeutics.

Outstanding Share Data

Our authorized share capital consists of 1,000,000,000 shares of stock, consisting of 900,000,000 shares of common stock, par value $0.00001 per share, and 100,000,000 shares of preferred stock, par value 0.00001 per share.

As of March 3, 2025, 69,576,883 shares of common stock were issued and outstanding.

In addition, as of March 3, 2025, we had 5,086,521 shares of common stock issuable pursuant to 5,086,521 pre-funded warrants, 4,669,479 shares of common stock issuable pursuant to 4,669,479 exercisable outstanding stock options, 5,108,359 shares of common stock issuable pursuant to 5,108,359 outstanding options that were not exercisable at that date, and 1,979,321 shares of common stock issuable upon vesting of outstanding restricted stock units.

In connection with the Plan of Arrangement (as defined in note 1 of our annual consolidated financial statements as of and for the year ended December 31, 2024 within this Annual Report on Form 10-K), we issued to Computershare Trust Company of Canada, a trust company existing under the laws of Canada (the “Share Trustee”), one share of our preferred stock, par value $0.00001 per share, which has certain variable voting rights in proportion to the number of Exchangeable Shares outstanding, enabling the Share Trustee to exercise voting rights for the benefit of the holders of Exchangeable Shares.

As of February 26, 2026, 73,749,607 shares of common stock were issued and outstanding.

In addition, as of February 26, 2026, we had 4,348,106 shares of common stock issuable pursuant to 4,348,106 exercisable outstanding stock options, 4,745,976 shares of common stock issuable pursuant to 4,745,976 outstanding options that were not exercisable at that date, and 2,269,795 shares of common stock issuable upon vesting of outstanding time-based restricted stock units and performance stock units.

In connection with the Plan of Arrangement (as defined in Note 1 - Nature of Operations of our annual consolidated financial statements as of and for the year ended December 31, 2025 within this Annual Report on Form 10-K), we issued to Computershare Trust Company of Canada, a trust company existing under the laws of Canada (the “Share Trustee”), one share of our preferred stock, par value $0.00001 per share, which has certain variable voting rights in proportion to the number of Exchangeable Shares outstanding, enabling the Share Trustee to exercise voting rights for the benefit of the holders of Exchangeable Shares.

In connection with the consummation of the Plan of Arrangement, 1,424,533 Exchangeable Shares were issued to former Zymeworks BC shareholders.

We will issue shares of our common stock as consideration when a holder of Exchangeable Shares calls for Exchangeable Shares to be retracted by ExchangeCo, when ExchangeCo redeems Exchangeable Shares from the holder, or when Zymeworks CallCo ULC (“CallCo”) purchases Exchangeable Shares from the holder of Exchangeable Shares under CallCo’s overriding call rights.

As of March 3, 2025, 854,126 Exchangeable Shares have been exchanged on a one-to-one basis for 854,126 shares of our common stock and 570,407 Exchangeable Shares are held by former Zymeworks BC shareholders and are exchangeable on a one-to-one basis, subject to adjustment, for up to 570,407 shares of our common stock.

Unless redeemed earlier in accordance with their terms, any Exchangeable Shares that remain outstanding on the seventh anniversary of the effectiveness of our Redomicile Transactions will be redeemed on such seventh anniversary, subject to any extension approved by the directors of ExchangeCo.

For additional information and the meaning of defined terms referenced in this paragraph, please see Note 1 - Nature of Operations and Note 10b - Authorized Share Capital and Preferred Stock of our consolidated financial statements as of and for the year ended December 31, 2025, within this Annual Report on Form 10-K.

As of February 26, 2026, 873,649 Exchangeable Shares have been exchanged on a one-to-one basis for 873,649 shares of our common stock and 550,884 Exchangeable Shares are held by former Zymeworks BC shareholders and are exchangeable on a one-to-one basis, subject to adjustment, for up to 550,884 shares of our common stock.

Quantitative and Qualitative Disclosure About Market Risk

As a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, and pursuant to Item 305 of Regulation S-K, we are not required to provide quantitative and qualitative disclosures about market risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis