Zymeworks Inc. 10-K

Item 8. Financial Statements and Supplementary Data Zymeworks Inc. Index to Consolidated Financial Statements Year ended December 31, 2025 Page Report of Independent Registered Public Accounting Firm (PCAOB ID 85 ) 88 Consolidated Balance Sheets as at December 31, 202 5 and 202 4 90 Consolidated Statements of Loss and Comprehensive Loss for the years ended December 31, 2025, 2024 and 202 3 91 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 92 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 93 Notes to the Consolidated Financial Statements 94 87 Table o f Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Zymeworks Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Zymeworks Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of loss and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue recognition from drug supply for ongoing studies from Jazz Pharmaceuticals Ireland Limited (Jazz) As discussed in Note 11 to the consolidated financial statements, the Company recognized revenue from Jazz related to drug supply for ongoing studies of $6,548 thousand for the year ended December 31, 2025. As discussed in Note 2, amounts receivable by the Company for the provision of drugs to clinical trials on behalf of the customer are recognized in revenue at a point in time when title to drugs has transferred to the customer, which generally occurs upon shipment or delivery, depending on contractual terms. 88 Table o f Contents We identified the sufficiency of audit evidence relating to revenue recognition from drug supply for ongoing studies with Jazz as a critical audit matter. Subjective auditor judgment was required to evaluate the sufficiency of audit evidence obtained related to the Company’s revenue from drug supply for ongoing studies because of the involvement of clinical research support organizations in tracking and fulfilment of the drugs provided across multiple locations. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and implementation of internal controls over the Company’s revenue recognition process. We obtained a confirmation from the customer of the total invoices billed by the Company related to goods and services, including drug supply for ongoing studies, for the year ended December 31, 2025 and agreed the amount confirmed for drug supply for ongoing studies to the Company’s records of the quantity and amount of drugs invoiced to the customer. We assessed the recorded revenue by selecting a sample of revenue transactions and comparing the amounts recognized for consistency with relevant underlying proof of delivery. We evaluated the sufficiency of audit evidence obtained over revenue by assessing the results of the procedures performed, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP Chartered Professional Accountants We have served as the Company’s auditor since 2015. Vancouver, Canada March 2, 2026 89 Table o f Contents ZYMEWORKS INC. Consolidated Balance Sheets (Expressed in thousands of U.S. dollars except share data) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 41,157 $ 66,103 Short-term marketable securities (note 5) 187,640 159,673 Accounts receivable 4,638 55,815 Prepaid expenses and other current assets 15,332 18,860 Total current assets 248,767 300,451 Long-term marketable securities (note 5) 41,787 98,428 Long-term prepaids and other assets 6,674 8,919 Deferred tax asset (note 13) 4,707 4,385 Property and equipment, net (note 7) 15,502 17,650 Operating lease right-of-use assets (note 14) 15,724 16,666 Intangible assets, net (note 8) 1,350 4,576 Goodwill (note 6) 12,016 12,016 Total assets $ 346,527 $ 463,091 Liabilities and stockholders’ equity Current liabilities: Accounts payable and accrued liabilities (note 9) $ 36,346 $ 59,838 Income tax payable (note 13) 83 128 Current portion of operating lease liability (note 14) 3,471 2,740 Deferred revenue and other consideration (note 11) 2,418 25,588 Total current liabilities 42,318 88,294 Long-term portion of operating lease liability (note 14) 14,796 15,738 Deferred revenue (note 11) 14,606 14,607 Other long-term liabilities (note 9) 278 923 Deferred tax liability (note 13) 6,028 4,761 Total liabilities 78,026 124,323 Stockholders’ equity: Common shares, $ 0.00001 par value; 900,000,000 authorized shares of common stock at December 31, 2025 and December 31, 2024 ( 74,638,413 and 68,964,319 shares issued and outstanding at December 31, 2025 and 2024, respectively (note 10b). 1,105,176 1,015,618 Preferred shares, $ 0.00001 par value; 100,000,000 authorized shares of preferred stock, out of which, one share of preferred stock is a share of Special Voting Preferred Stock and outstanding as of December 31, 2025 and December 31, 2024 (note 10b). — — Exchangeable shares, no par value, 553,184 issued and outstanding shares at December 31, 2025 (December 31, 2024: 570,637 ) (note 10b). 7,938 8,188 Additional paid-in capital 114,626 152,249 Accumulated other comprehensive loss ( 6,079 ) ( 6,952 ) Accumulated deficit ( 953,160 ) ( 830,335 ) Total stockholders’ equity 268,501 338,768 Total liabilities and stockholders’ equity $ 346,527 $ 463,091 Related party transactions (note 10a and 10d) Research collaboration and licensing agreements (note 11) Commitments and contingencies (note 15) Subsequent event (note 17) The accompanying notes are an integral part of these financial statements 90 Table o f Contents ZYMEWORKS INC. Consolidated Statements of Loss and Comprehensive Loss (Expressed in thousands of U.S. dollars except share and per share data) Year Ended December 31, 2025 2024 2023 Revenue: Research and development collaborations (note 11) $ 105,965 $ 76,304 $ 76,012 Operating expenses: Research and development 137,000 134,621 143,619 General and administrative 61,514 61,506 70,446 Impairment on IPR&D (note 6) — 17,287 — Total operating expenses 198,514 213,414 214,065 Loss from operations ( 92,549 ) ( 137,110 ) ( 138,053 ) Other income: Interest income 13,354 19,941 19,705 Other (expense) income, net (note 12) ( 559 ) 558 ( 894 ) Total other income, net 12,795 20,499 18,811 Loss before income taxes ( 79,754 ) ( 116,611 ) ( 119,242 ) Income tax (expense) recovery (note 13) ( 1,376 ) ( 6,084 ) 568 Net loss $ ( 81,130 ) $ ( 122,695 ) $ ( 118,674 ) Other comprehensive income (loss): Unrealized income (loss) on available for sale securities, net of tax of nil (note 5) 873 ( 349 ) 56 Total other comprehensive income (loss) 873 ( 349 ) 56 Comprehensive loss $ ( 80,257 ) $ ( 123,044 ) $ ( 118,618 ) Net loss per common share (note 4): Basic $ ( 1.08 ) $ ( 1.62 ) $ ( 1.72 ) Diluted $ ( 1.08 ) $ ( 1.62 ) $ ( 1.72 ) Weighted-average common stock outstanding (note 4): Basic 75,404,897 75,846,681 68,863,010 Diluted 75,413,396 75,878,738 68,863,010 The accompanying notes are an integral part of these financial statements 91 Table o f Contents ZYMEWORKS INC. Consolidated Statements of Changes in Stockholders’ Equity (Note 1) (Expressed in thousands of U.S. dollars except share data) Preferred stock Exchangeable shares Common stock Accumulated deficit Accumulated other comprehensive loss Additional paid-in capital Total stockholders' equity Shares Amount Shares Amount Shares Amount Balance at December 31, 2022 1 $ — 1,424,533 $ 20,442 63,059,501 $ 886,322 $ ( 558,763 ) $ ( 6,659 ) $ 151,614 $ 492,956 Issuance of common stock on exercise of stock options (note 10e) — — — — 641,129 6,958 — — ( 1,736 ) 5,222 Issuance of common stock through employee stock purchase plan (note 10f) — — — — 111,911 955 — — — 955 Issuance of common stock upon vesting of restricted stock units ("RSUs") (note 10e) — — — — 100,949 1,887 — — ( 1,887 ) — Issuance of common stock upon exercise of pre-funded warrants (note 10d) — — — — 2,079,193 63,775 — — ( 63,775 ) — Issuance of common stock for retracted exchangeable shares — — ( 773,314 ) ( 11,097 ) 773,314 11,097 — — — — Issuance of common stock in connection with At-The-Market ("ATM") sale (note 10a) — — — — 3,350,000 26,233 — — — 26,233 Private placement (note 10a and 10d) — — — — — — — — 49,862 49,862 Stock-based compensation — — — — — — — — 8,196 8,196 Net loss — — — — — — ( 118,674 ) — — ( 118,674 ) Other comprehensive income — — — — — — — 56 — 56 Balance at December 31, 2023 1 $ — 651,219 $ 9,345 70,115,997 $ 997,227 $ ( 677,437 ) $ ( 6,603 ) $ 142,274 $ 464,806 Issuance of common stock on exercise stock options (note 10e) — — — — 959,906 13,952 — — ( 4,770 ) 9,182 Issuance of common stock through employee stock purchase plan (note 10f) — — — — 128,232 1,311 — — — 1,311 Issuance of common stock upon vesting of RSUs (note 10e) — — — — 225,004 1,971 — — ( 1,971 ) — Issuance of common stock for retracted exchangeable shares — — ( 80,582 ) ( 1,157 ) 80,582 1,157 — — — — Stock-based compensation — — — — — — — — 16,716 16,716 Purchase and retirement of common stock (10c) — — — — ( 2,545,402 ) — ( 30,051 ) — — ( 30,051 ) Excise tax on repurchase of common stock — — — — — — ( 152 ) — — ( 152 ) Net income — — — — — — ( 122,695 ) — — ( 122,695 ) Other comprehensive loss — — — — — — — ( 349 ) — ( 349 ) Balance at December 31, 2024 1 $ — 570,637 $ 8,188 68,964,319 $ 1,015,618 $ ( 830,335 ) $ ( 6,952 ) $ 152,249 $ 338,768 Issuance of common stock on exercise of stock options (note 10e) — — — — 1,742,689 27,308 — — ( 9,561 ) 17,747 Issuance of common stock through employee share purchase plan (note 10f) — — — — 139,976 1,881 — — — 1,881 Issuance of common stock upon vesting of RSUs (note 10e) — — — — 560,620 5,269 — — ( 5,269 ) — Issuance of common stock upon exercise of pre-funded warrants (note 10d) — — — — 5,086,480 49,862 — — ( 49,862 ) — Issuance of common stock for retracted exchangeable shares — — ( 17,453 ) ( 250 ) 17,453 250 — — — — Private placement for issuance of common stock (note 10a) — — — — 415,000 4,988 — — — 4,988 Stock-based compensation — — — — — — — — 27,069 27,069 Purchase and retirement of common stock (10c) — — — — ( 2,288,124 ) — ( 41,695 ) — — ( 41,695 ) Net loss — — — — — — ( 81,130 ) — — ( 81,130 ) Other comprehensive income — — — — — — — 873 — 873 Balance at December 31, 2025 1 $ — 553,184 $ 7,938 74,638,413 $ 1,105,176 $ ( 953,160 ) $ ( 6,079 ) $ 114,626 $ 268,501 The accompanying notes are an integral part of these financial statements 92 Table o f Contents ZYMEWORKS INC. Consolidated Statements of Cash Flows (Expressed in thousands of U.S. dollars) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 81,130 ) $ ( 122,695 ) $ ( 118,674 ) Items not involving cash: Depreciation of property and equipment (note 7) 3,669 4,188 7,462 Amortization of intangible assets (note 8) 4,056 4,496 2,702 Stock-based compensation (note 10e) 28,034 17,792 8,102 Amortization and impairment of operating lease right-of-use assets 3,385 2,509 7,141 Impairment of acquired IPR&D (note 6) — 17,287 — Deferred income tax expense (recovery) (note 13) 945 691 ( 757 ) Change in fair value of contingent consideration liability (note 15) — ( 1,878 ) 630 Change in fair value of investments in equity instruments — — 667 Unrealized foreign exchange loss (gain) 532 ( 1,481 ) ( 31 ) Changes in non-cash operating working capital: Accounts receivable 51,200 ( 36,359 ) 13,922 Prepaid expenses and other current assets 6,509 ( 2,489 ) 4,295 Accounts payable and accrued liabilities ( 23,648 ) 14,321 ( 44,789 ) Operating lease liabilities ( 3,342 ) ( 8,313 ) ( 3,663 ) Deferred revenue and other consideration ( 23,170 ) 3,555 3,699 Income taxes payable ( 45 ) ( 1,682 ) 970 Net cash used in operating activities $ ( 33,005 ) $ ( 110,058 ) $ ( 118,324 ) Cash flows from financing activities: Proceeds from issuance of common stock under at-the-market program and from public offerings, net of issuance costs (notes 10a) — — 26,233 Private placement (note 10a) 4,988 — 49,862 Issuance of common stock on exercise of stock options (note 10e) 16,904 8,857 5,006 Issuance of common stock through employee stock purchase plan (note 10f) 1,425 930 820 Purchases of common stock for retirement (note 10c) ( 41,695 ) ( 30,051 ) — Deferred financing fees ( 181 ) ( 174 ) ( 53 ) Net cash (used in) / provided by financing activities $ ( 18,559 ) $ ( 20,438 ) $ 81,868 Cash flows from investing activities: Purchases of marketable securities ( 196,061 ) ( 283,743 ) ( 553,249 ) Proceeds from marketable securities 225,076 325,565 350,073 Acquisition of property and equipment ( 1,521 ) ( 1,991 ) ( 2,474 ) Acquisition of intangible assets ( 831 ) ( 1,075 ) ( 1,603 ) Net cash provided by / (used in) investing activities $ 26,663 $ 38,756 $ ( 207,253 ) Effect of exchange rate changes on cash and cash equivalents ( 45 ) 286 354 Net change in cash and cash equivalents ( 24,946 ) ( 91,454 ) ( 243,355 ) Cash and cash equivalents, beginning of year 66,103 157,557 400,912 Cash and cash equivalents, end of year $ 41,157 $ 66,103 $ 157,557 Supplemental cash flow information: Net cash paid during the year for income taxes $ 1,350 $ 3,179 $ 165 Supplemental disclosure of non-cash investing and finance items: Leased assets obtained in exchange for operating lease liabilities $ 2,443 $ 644 $ 1,900 Issuance of common stock upon exercise of pre-funded warrants (note 10d) 49,862 — — Purchases of common stock not settled 464 — — Acquisition of property and equipment and intangible assets in accounts payable and accrued liabilities — — 122 The accompanying notes are an integral part of these financial statements 93 Table o f Contents ZYMEWORKS INC. Notes to the Consolidated Financial Statements (Expressed in thousands of U.S. dollars except share and per share data) 1. Nature of Operations Zymeworks Inc. together with its subsidiaries (collectively the “Company” or “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 diseases, including cancer, inflammation, and autoimmune disease. Zymeworks BC Inc. (“Zymeworks BC”), (previously known as “Zymeworks Inc.”) was incorporated on September 8, 2003 under the laws of the Canada Business Corporations Act. On October 22, 2003, the Company was registered as an extra-provincial company under the Company Act (British Columbia). On May 2, 2017, the Company continued under the Business Corporations Act (British Columbia). Since its inception, the Company has devoted substantially all of its resources to research and development activities, including developing its therapeutic platforms and identifying and developing potential product candidates by undertaking preclinical studies and clinical trials. The Company supports these activities through general and administrative support, as well as by raising capital, conducting business planning and protecting its intellectual property. On October 13, 2022, the Company completed an internal reorganization transaction resulting in a Delaware incorporated entity becoming the listed company (the “Redomicile Transactions”). Prior to the Redomicile Transactions, the shares of Zymeworks BC Inc. (formerly known as Zymeworks Inc.) were publicly listed. To effect the Redomicile Transactions, the Company conducted a share exchange, pursuant to which holders of the Company’s common shares exchanged their common shares in the Company for shares of common stock of Zymeworks Inc. (formerly known as Zymeworks Delaware Inc.) or, at their election with respect to all or a portion of their common shares in the Company and subject to applicable eligibility criteria and an overall cap, exchangeable shares (the “Exchangeable Shares”) in the capital of a newly formed indirect subsidiary of Zymeworks Inc. A special meeting of Company security holders was held on October 7, 2022 to approve the Redomicile Transactions. The Redomicile Transactions were governed by a transaction agreement dated July 14, 2022, as restated and amended on August 18, 2022 (the “Restated and Amended Transaction Agreement”), by and among the Company and its direct or indirect subsidiaries Zymeworks Inc., Zymeworks CallCo ULC (“CallCo”) and Zymeworks ExchangeCo Ltd., (“ExchangeCo”) including a plan of arrangement included as Exhibit A to the Restated and Amended Transaction Agreement (the “Plan of Arrangement”). 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of Zymeworks Inc. and its wholly owned subsidiaries, Zymeworks BC Inc., Zymeworks Biopharmaceuticals Inc., Zymeworks Pharmaceuticals Limited (Ireland), Zymeworks Lifesciences Pte. Ltd. (Singapore), Zymeworks CallCo ULC, Zymeworks ExchangeCo Ltd., Zymeworks Managemen t Inc. (including this entity's branch in the United Kingdom) and Zymeworks Zanidatamab Inc. (refer to note 11). All inter-company accounts and transactions have been eliminated on consolidation. All amounts expressed in the consolidated financial statements of the Company and the accompanying notes thereto are expressed in thousands of U.S. dollars, except for share and per share data and where otherwise indicated. References to “$” are to U.S. dollars and references to “C$” are to Canadian dollars. Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Foreign Currency The functional currency of the Company is the U.S. dollar. Transactions denominated in foreign currencies are remeasured at the approximate exchange rate prevailing on the date of the transaction. At period end, monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars using exchange rates in effect at the balance sheet date. Resulting foreign exchange gains and losses are reflected in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income. 94 Table o f Contents Use of Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires the Company to make estimates and judgments in certain circumstances that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, most notably those related to revenue recognition including estimated timing of completion of performance obligations required to meet revenue recognition criteria, accrual of expenses including clinical and preclinical study expense accruals, stock-based compensation, valuation allowance for deferred taxes, measurement of contingent consideration liabilities, and other contingencies. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from these estimates. Revenue Recognition Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. In accordance with ASC 606, the Company recognizes revenue when the Company’s customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applied ASC 606 to all revenue arrangements to date. For collaborative arrangements that fall within the scope of ASC 808, Collaborative Arrangements (“ASC 808”), the Company applies 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, the Company determines 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. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations including whether they are distinct; (iii) determine the transaction price, including uncertainties related to variable consideration; (iv) allocate the transaction price to the performance obligations based on the stand-alone selling prices; and (v) recognize revenue when or as the Company satisfies each performance obligation and when collectability is probable. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration that it is entitled to in exchange for the goods and services transferred to the customer. At contract inception, the Company assesses the goods or services promised within each contract that falls under the scope of Topic 606, to identify distinct performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. The Company has entered into a number of collaboration and licensing agreements. Promised deliverables within these agreements may include: (i) grants of licenses, or options to obtain licenses, to the Company’s intellectual property, (ii) research and development services, (iii) drug product manufacturing, and (iv) participation on joint research and/or development committees. The terms of these agreements typically include one or more of the following types of payments to the Company: • non-refundable, upfront license and platform technology access fees; • research, development and regulatory milestone payments; • research support, development and other payments; and • royalties and commercial milestone payments. 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, the Company assumes that the contract does not have a significant financing component. When applying the revenue recognition criteria of ASC 606 to license and collaboration agreements, the Company 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 95 Table o f Contents 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 the Company under the terms of the license and collaborations agreements. Non-refundable, upfront license and platform technology access fees If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue 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, the Company uses 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. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the related revenue recognition accordingly. Research, development and regulatory milestone payments At the inception of each arrangement that includes research, development or regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. When 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 the control of the Company or 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 the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its 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 probability of successfully achieving the criteria for the milestone payments is highly uncertain. Consequently, there is a significant risk that the Company may not earn all of the milestone payments from each of its strategic partners. Research and development milestones in the Company’s collaboration agreements may include some, but not necessarily all, of the following types of events: • completion of preclinical research and development work leading to selection of product candidates; • initiation of Phase 1, Phase 2 and Phase 3 clinical trials; and • achievement of certain other technical, scientific or development criteria. Regulatory milestone payments may include the following types of events: • filing of regulatory applications for marketing approval in the United States, Europe or Japan, including Investigational New Drug (“IND”) applications and Biologics License Application (“BLA”); and • marketing approval in major markets, such as the United States, Europe, Japan or China. Research support, development and other payments Payments by the licensees in exchange for research and development activities performed by the Company on behalf of the licensee are recognized as revenue upon performance of such activities at rates consistent with prevailing market rates. Payments for research and development supplies provided are recognized as revenue upon delivery of the supplies. 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 milestone payments For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified level of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to 96 Table o f Contents 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. The Company started recognizing royalty income during the year ended December 31, 2024. The Company's commercial partner is obligated to report its net product sales and resulting royalty due to the Company within 60 days from the end of each quarter. The Company accrues royalty revenue based on historic product sales, royalty receipts and other relevant information as available and recognizes any adjustment when it receives royalty reports from its commercial partner in the subsequent period. Contract assets and liabilities Contract assets are mainly comprised of accrued revenue for which one of 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 The Company accounts 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 Company’s 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. The Company accounts 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. Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents include guaranteed investment certificates (“GICs”) acquired from financial institutions and money market funds which are recorded at cost plus accrued interest, which approximates their fair value. Investments Marketable Securities The Company's investments include high credit quality investment grade debt securities which comprise investments in U.S. Treasury notes and corporate debt securities. The Company classifies all of its investment grade debt securities as available-for-sale (note 5). Marketable securities also include GICs with original maturities of greater than 90 days. These investments are recorded at cost plus accrued interest, which approximates their fair value. Unrealized fair value gains and losses for investments classified as available-for-sale are recorded through other comprehensive income (loss) in stockholders' equity. When the fair value of an available-for-sale security falls below the amortized cost basis it is evaluated to determine if any of the decline in value is attributable to credit loss. Decreases in fair value attributable to credit loss are recorded directly to the consolidated statement of (loss) income with a corresponding allowance for credit losses, limited to the amount that the fair value is below the amortized cost basis. If the credit quality subsequently improves the allowance is reversed up to a maximum of the previously recorded credit losses. When the Company intends to sell an impaired available-for-sale security, or if it is more likely than not that the Company will be required to sell the security prior to recovering the amortized cost basis, the entire fair value adjustment will immediately be recognized in the consolidated statement of (loss) income with no corresponding allowance for credit losses. Realized gains and losses and credit losses, if any, on available-for-sale securities are included in interest income (expense), based on the specific identification method. Available-for-sale securities are also adjusted for amortization of premiums and accretion of discounts to maturity, with such amortization and accretion included within interest income. Marketable securities with remaining maturities of less than one year from the balance sheet date are classified as short-term investments and greater than one year from the balance sheet date are classified as long-term investments. 97 Table o f Contents Accounts Receivable and Expected Credit Losses Accounts receivable are recorded at invoiced amounts, net of any allowance for expected credit losses. The allowance for expected credit losses is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company evaluates the collectability of accounts receivable on a regular basis based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts and economic factors or events expected to affect future collections experience. Expected credit losses on our accounts receivable were immaterial as at December 31, 2025 and 2024. Financial Instruments The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the fair value hierarchy. Fair Value Measurements The Company measures certain financial instruments and other items at fair value. To determine fair value, the Company uses a fair value hierarchy that prioritizes the inputs, assumptions and valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: • Level 1 inputs are unadjusted quoted market prices for identical instruments available in active markets. • Level 2 inputs are inputs other than Level 1 prices, such as prices for a similar asset or liability that are observable either directly or indirectly. If the asset or liability has a contractual term, the input must be observable for substantially the full term. An example includes quoted market prices for similar assets or liabilities in active markets. • Level 3 inputs are unobservable inputs for the asset or liability and will reflect management’s assessment about market assumptions that would be used to price the asset or liability. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s financial instruments consist of cash and cash equivalents, short-term and long-term investments in marketable and other securities, accounts receivable, accounts payable and accrued liabilities, contingent consideration, finance and operating lease obligations, and other long-term liabilities. The carrying values of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the near-term maturities of these financial instruments. All marketable securities are classified as available-for-sale and are recorded at fair value. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, short-term and long-term marketable securities and accounts receivable. Cash and cash equivalents and investments in marketable securities are invested in accordance with the Company’s cash investment policy with the primary objective being the preservation of capital and maintenance of liquidity. The cash investment policy includes guidelines on the quality of financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentration of credit risk. The Company limits its exposure to credit loss by placing its cash and cash equivalents and investments with high credit quality financial institutions. At December 31, 2025, the maximum exposure to credit risk for accounts receivable was $ 4,638 , 37 % of which was from Jazz Pharmaceuticals Ireland Limited or Jazz Pharmaceuticals, Inc. (subsidiaries of Jazz Pharmaceuticals plc, collectively referred to as “Jazz”) (December 31, 2024: $ 55,815 , 95 % of which was from Jazz Pharmaceuticals Ireland Limited) and all accounts receivable are due within the next 12 months. As at December 31, 2025 and December 31, 2024, the Company has recognized nominal amounts of provision for expected credit losses in relation to accounts receivable. 98 Table o f Contents Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s short-term cash requirements are primarily to settle its financial liabilities, which consist primarily of accounts payable and accrued liabilities falling due within 45 days and current portion of lease obligations falling due within the next 12 months, with medium term requirements to invest in property and equipment and research and development. The Company’s principal sources of liquidity to settle its financial liabilities are cash, cash equivalents, short-term and long-term investments, collection of accounts receivable relating to research collaboration and license agreements and additional public and private equity offerings as required. The Company believes that these principal sources of liquidity are sufficient to fund its operations for at least the next 12 months. Foreign Currency Risk The Company incurs certain operating expenses in currencies other than the U.S. dollar and accordingly is subject to foreign exchange risk due to fluctuations in exchange rates. The Company does not use derivative instruments to hedge exposure to foreign exchange risk and therefore assumes the risk of future gains or losses in its consolidated statements of (loss) income. At December 31, 2025, the Company’s net monetary assets denominated in Canadian dollars were $ 4,337 (C$ 5,946 ) (December 31, 2024: $ 3,464 (C$ 4,982 ) net monetary liabilities). The operating results and financial position of the Company are reported in U.S. dollars in the Company’s consolidated financial statements. The fluctuation of the U.S. dollar relative to the Canadian dollar and other foreign currencies will have an impact on the reported balances for net assets, net loss and stockholders’ equity in the Company’s consolidated financial statements. Segment Information The Company operates and manages its business in one segment, which is the Management of a portfolio of licensed healthcare assets and development of next-generation multifunctional biotherapeutics. Operating segments are defined as components of an enterprise about which separate discrete information is available for the chief operating decision maker (“CODM”), in deciding how to allocate resources and assessing performance. Property and Equipment Property and equipment are recorded at cost net of accumulated depreciation. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in earnings. Repairs and maintenance costs are expensed as incurred. The Company records depreciation using the straight-line method over the estimated useful lives of the property and equipment as follows: Asset Class Rate Computer hardware 3 years Office equipment 3 years Furniture and fixtures 5 years Laboratory equipment 7 years Leasehold improvements Shorter of the lease term or useful life Property and equipment acquired or disposed of during the year are depreciated proportionately for the period they are in use. Leases The Company accounts for leases in accordance with ASC 842 Leases ( “ ASC 842 ” ). The Company determines if an arrangement contains a lease at inception. Right-of-use ( “ ROU ” ) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from that lease. For leases with a term greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The lease term includes the option to extend the lease when it is reasonably certain the Company will exercise that option. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. In the case the implicit rate is not available, the Company uses its incremental borrowing rate based on information available at the lease commencement date, to determine the present value of lease payments. 99 Table o f Contents Patents and Intellectual Property Costs Costs incurred to acquire patents and to prosecute and maintain intellectual property rights are expensed as incurred to general and administrative expense due to the uncertainty surrounding the drug development process and the uncertainty of future benefits. Patents and intellectual property acquired from third parties are capitalized and amortized over the remaining life of the patent, if related to approved products or if there are alternative future uses for the underlying technology. No patent or intellectual property costs have been capitalized to date. Government Grants and Credits Government grants are recognized where there is reasonable assurance that the grant will be received and all associated conditions will be complied with. Reimbursements of eligible research and development expenditures pursuant to government assistance programs are recorded as reductions of research and development costs when the related costs have been incurred and there is reasonable assurance regarding collection of the claim. Grant claims not settled by the balance sheet date are recorded as receivables, provided their receipt is probable. The determination of the amount of the claim, and hence the receivable amount, requires management to make calculations based on its interpretation of eligible expenditures in accordance with the terms of the programs. The reimbursement claims submitted by the Company are subject to review by the relevant government agencies. The Company has used its best judgment and understanding of the related program agreements in determining the receivable amount. The Company participates in SR&ED and Research Tax Credit Programs, two federal tax incentive programs that encourage Canadian and U.S. businesses to conduct research and development in Canada and in United States, respectively. The benefits of investment tax credits for scientific research and development expenditures are recognized in the year the qualifying expenditure is made provided there is reasonable assurance of recoverability. The refundable portion of investment tax credits are recorded as reductions to research and development expenditures. Research and Development Costs Research and development costs are expensed as incurred and include costs that the Company incurs for its own and for the Company’s strategic partners’ research and development activities. These costs primarily consist of expenses incurred under agreements with contract research organizations on the Company’s behalf, investigative sites and consultants that conduct the Company’s clinical trials, the cost of acquiring and manufacturing clinical trial materials and other allocated expenses, the cost of acquired research patents and intellectual property that do not meet the requirements for capitalization, employee related expenses, including salaries and benefits, stock-based compensation expense, and costs associated with nonclinical activities and regulatory approvals. Clinical Trial Expense Accruals Clinical trial expenses represent a significant component of research and development expenses and the Company outsources a significant portion of these activities to third party contract research organizations. Third-party clinical trial expenses include investigator fees, site costs, clinical research organization costs and other trial-related vendor costs. As part of preparing the consolidated financial statements, the Company estimates accrued liabilities for services that have been performed by clinical research organizations or investigator sites but have not yet been invoiced to the Company. When making these estimates, the Company uses operational and contractual information from third party service providers and operational data from internal personnel. For the year ended December 31, 2025, the Company recorded a change in estimate of $ 6,676 related to historical zanidatamab clinical trial accruals associated with studies that were transferred to Jazz (note 11). These clinical trial accruals reflected management's estimate of costs incurred prior to the Zymeworks BC collaboration agreement with Jazz. As the underlying studies were substantially completed by 2025 and clinical research organizations (“CRO”) confirmations were obtained in the fourth quarter of 2025, the Company determined that these accrual amounts are no longer expected to be invoiced. This adjustment resulted in a reduction of research and development expenses for the year. Income Taxes The Company accounts for income taxes using an asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the extent of a valuation allowance. The recognition of uncertain tax positions is evaluated based on whether it is considered more likely than not that the position taken, or expected to be taken, on a tax return will be sustained upon examination through 100 Table o f Contents litigation or appeal. For those positions that meet the recognition criteria, they are measured as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Stock-Based Compensation The Company recognizes stock-based compensation expense on equity and liability classified stock-based awards granted to employees, directors, and certain consultants. The Company measures the cost of such awards based on the fair value of the award, net of estimated forfeitures, and recognizes stock-based compensation expense in the consolidated statements of (loss) income and comprehensive (loss) income on a straight-line basis over the requisite service period. The requisite service period generally equals the vesting period of the awards. The fair values of stock option awards are estimated using the Black-Scholes option pricing model which uses various inputs including estimated fair value of the Company’s underlying common stock at the grant date, expected term, estimated volatility, risk-free interest rate and expected dividend yields of the Company’s common stock. The Company applies an estimated forfeiture rate derived from historical employee termination behavior. If the actual number of forfeitures differs from those estimated by management, adjustments to compensation expense may be required in future periods. The fair value of restricted stock units (“RSU”) is measured using the per share fair value of the Company’s common stock on the dates of grant. Equity classified awards are measured using their grant date fair value. Liability classified awards are initially measured using their grant date fair value and are subsequently remeasured at fair value at each balance sheet date until exercised or cancelled, with changes in fair value recognized as compensation cost (ASC 718 awards) or other (expense) income (ASC 815 awards) for the period, while fair value changes below the grant date fair value of the original awards are recorded in additional paid-in capital. Under ASC 718 Compensation—Stock Options (“ASC 718”), warrants or stock options with exercise price which is not denominated in: (a) the currency of a market in which a substantial portion of the Company’s equity securities trades, (b) the currency in which the individual’s pay is denominated, or (c) the Company’s functional currency, are required to be classified as liabilities. For awards accounted for under ASC 815 Derivatives and Hedging (“ASC 815”), any warrant or option that provides for an exercise price which is not denominated in the Company’s functional currency is required to be classified as a liability. The Company has an employee stock purchase plan which is considered compensatory. Accordingly, the Company recognizes compensation expense on these awards based on their estimated grant date fair value using the Black-Scholes option pricing model. The Company recognizes compensation expense in the consolidated statements of loss and comprehensive loss on a straight-line basis over the requisite service period. Stock Repurchases As part of its stock repurchase programs, the Company adopted an accounting policy whereby the par value of each share is deducted from common stock and the remainder of the repurchase price is debited to accumulated deficit. Business Combinations and Goodwill Business combinations are accounted for using the acquisition method. The fair value of total purchase consideration is allocated to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount being classified as goodwill. All assets, liabilities and contingent liabilities acquired or assumed in a business combination are recorded at their fair values at the date of acquisition. If the Company’s interest in the fair value of the acquiree’s net identifiable assets exceeds the cost of the acquisition, the excess is recognized in earnings or loss immediately. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. Goodwill is evaluated for impairment on an annual basis or more frequently if an indicator of impairment is present (note 6). As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit that includes the goodwill is less than its carrying value, then a quantitative impairment test would be prepared to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. 101 Table o f Contents Acquired In-Process Research and Development (IPR&D) and Definite-lived Intangible Assets Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. IPR&D is classified as an indefinite-lived intangible asset and is not amortized. IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts. All research and development costs incurred subsequent to the acquisition of IPR&D are expensed as incurred. Indefinite-lived intangible assets are reviewed for impairment on an annual basis or more frequently if an indicator of impairment is present. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test. Definite-lived intangible assets include computer software and a research license and are amortized on a basis which reflects the pattern in which the economic benefits are consumed. Amortization begins when the assets are put into use. If there is an event indicating that the carrying value of a definite-lived intangible asset may be impaired, then the Company will perform an impairment test. When an impairment test is performed, if the carrying value exceeds the recoverable value, based on the sum of undiscounted future cash flows, then such asset is written down to its fair value. The Company records amortization using the straight-line method over the estimated useful lives of the definite-lived intangible assets as follows: Asset Class Rate Software 3 years Licensing agreements Shorter of the licensing term or useful life Net income (loss) per share Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the year, including the treatment of Exchangeable Shares and pre-funded warrants. Diluted net income (loss) per share attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding stock options and warrants. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the year, including potential dilutive shares of common stock assuming the dilutive effect of outstanding instruments. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants and warrants. ASC 260 Earnings Per Share requires an adjustment to the numerator for any income or loss related to liability classified warrants and stock options, if dilutive, if they are presumed to be share settled. 3. Recent Accounting Pronouncements Recent accounting pronouncements adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be applied on a prospective basis, with the option for retrospective application. The Company has adopted this accounting pronouncement on the accompanying financial statements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See note 13 Income Taxes in the accompanying notes to the consolidated financial statements for further detail. Recent accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting – Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adoption of the standard update on its consolidated financial statements. 102 Table o f Contents 4. Net Loss per Share Net loss per share for the years ended December 31, 2025, 2024 and 2023 was as follows: Year Ended December 31, 2025 2024 2023 Numerator : Net loss attributable to common stockholders: Basic $ ( 81,130 ) $ ( 122,695 ) $ ( 118,674 ) Adjustment for change in fair value of liability classified stock options ( 196 ) 140 — Diluted $ ( 81,326 ) $ ( 122,555 ) $ ( 118,674 ) Denominator: Weighted-average common stock outstanding: Basic 75,404,897 75,846,681 68,863,010 Adjustment for dilutive effect of liability classified stock options 8,499 32,057 — Diluted 75,413,396 75,878,738 68,863,010 Net loss per common share – basic $ ( 1.08 ) $ ( 1.62 ) $ ( 1.72 ) Net loss per common share – diluted $ ( 1.08 ) $ ( 1.62 ) $ ( 1.72 ) Weighted average number of shares of common stock used in the basic and diluted earnings per share calculations include Exchangeable Shares and the pre-funded warrants issued in connection with the Company’s offerings and private placements as the warrants were exercisable at any time for nominal cash consideration. The Company’s potentially dilutive securities, which include stock options and RSUs, have been excluded from the computation of diluted net loss per share for the years ended December 31, 2025, 2024 and 2023 as the effect would be antidilutive. 5. Cash, Cash Equivalents and Marketable Securities The following table summarizes the Company's marketable securities as of December 31, 2025: December 31, 2025 Amortized Cost Unrealized Gain (Loss) Fair Value Short-term marketable securities: Contractual maturity of one year or less: Guaranteed investment certificates (“GICs”) and mutual funds $ 21,920 $ — $ 21,920 U.S. Treasury notes 41,263 36 41,299 Corporate debt securities 124,272 149 124,421 187,455 185 187,640 Long-term marketable securities: Contractual maturity of one to three years: Corporate debt securities 41,388 399 41,787 41,388 399 41,787 $ 228,843 $ 584 $ 229,427 103 Table o f Contents The following table summarizes the Company's marketable securities as of December 31, 2024: December 31, 2024 Amortized Cost Unrealized Gain (Loss) Fair Value Short-term marketable securities: Contractual maturity of one year or less: GICs $ 37,166 $ — $ 37,166 U.S. Treasury notes 71,500 72 71,572 Corporate debt securities 50,993 ( 58 ) 50,935 159,659 14 159,673 Long-term marketable securities: Contractual maturity of one to three years: Corporate debt securities 65,461 ( 153 ) 65,308 Contractual maturity of three to four years: Corporate debt securities 18,295 ( 156 ) 18,139 98,735 ( 307 ) 98,428 $ 258,394 $ ( 293 ) $ 258,101 The unrealized losses on the Company’s available-for-sale securities as of December 31, 2025 and 2024 were not material and were caused by fluctuations in market values and interest rates as a result of the economic environment. The Company concluded that an allowance for credit losses was unnecessary as of December 31, 2025 and 2024 because the decline in the market value was attributable to changes in market conditions and not credit quality, and that it is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. There was no material realized gain or loss on available-for-sale securities in the periods presented. The following tables present information about the Company’s assets that are measured at fair value on a recurring basis, and indicate the fair value hierarchy of the valuation techniques used to determine such fair value: December 31, 2025 December 31, 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 8,968 $ 34,620 Cash equivalents: Money market funds $ 32,189 $ — $ — $ 32,189 $ 16,398 $ — $ — $ 16,398 GICs — — — — 15,085 — — 15,085 32,189 — — 41,157 31,483 — — 66,103 Marketable securities: GICs and mutual funds 21,920 — — 21,920 37,166 — — 37,166 U.S. Treasury notes 41,299 — — 41,299 86,553 — — 86,553 Corporate debt securities — 166,208 — 166,208 — 134,382 — 134,382 63,219 166,208 — 229,427 123,719 134,382 — 258,101 $ 95,408 $ 166,208 $ — $ 270,584 $ 155,202 $ 134,382 $ — $ 324,204 104 Table o f Contents 6. IPR&D and Goodwill Acquired IPR&D In-process research and development assets (“IPR&D”) acquired in the 2016 Kairos Therapeutics Inc. (“Kairos”) business combination were classified as indefinite-lived intangible assets and were not amortized until their classification as definite-lived assets. During the year ended December 31, 2024, the Company determined that the fair value of IPR&D, which was estimated using an income approach, was less than its carrying value. Accordingly, the Company recorded an impairment charge of $ 17,287 . The impairment was a result of the Company's decision to discontinue the zanidatamab zovodotin clinical development program which utilized the acquired technology represented by the IPR&D assets. As of July 1, 2024, the Company classified the remaining assets as definite-lived and commenced amortization, which was fully amortized as of December 31, 2024. The following table summarizes the carrying value of IPR&D, net of impairment: Acquired IPR&D Accumulated Impairment Accumulated Amortization Net Balance at December 31, 2022 $ 20,700 $ ( 3,072 ) $ — $ 17,628 Change during the period — — — — Balance at December 31, 2023 $ 20,700 $ ( 3,072 ) $ — $ 17,628 Change during the period — ( 17,287 ) ( 341 ) ( 17,628 ) Balance at December 31, 2024 $ 20,700 $ ( 20,359 ) $ ( 341 ) $ — Goodwill The Company performed its annual impairment test of goodwill as of December 31, 2025 and concluded that no impairment existed. As part of the evaluation of the recoverability of goodwill, the Company identified only one reporting unit to which the total carrying amount of goodwill has been assigned. As at December 31, 2025, the Company performed a qualitative assessment for its 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, a quantitative impairment test was not required. 7. Property and Equipment Property and equipment consist of the following: December 31, 2025 2024 Computer hardware $ 3,233 $ 2,815 Furniture and fixtures 1,850 2,408 Office equipment 1,674 1,736 Laboratory equipment 13,838 13,331 Leasehold improvements 15,243 15,190 Construction in progress 540 — Property and equipment $ 36,378 $ 35,480 Less accumulated depreciation ( 20,876 ) ( 17,830 ) Property and equipment, net $ 15,502 $ 17,650 Depreciation expense on property and equipment for the years ended December 31, 2025, 2024 and 2023 was $ 3,669 , $ 4,188 and $ 7,462 , respectively. 105 Table o f Contents 8. Intangible Assets Intangible assets consist of the following: December 31, 2025 2024 Research licenses $ 14,936 $ 14,936 Computer software 11,501 10,670 Intangible assets 26,437 25,606 Less accumulated amortization ( 25,087 ) ( 21,030 ) Intangible assets, net $ 1,350 $ 4,576 Amortization expense on intangible assets for the years ended December 31, 2025, 2024 and 2023 was $ 4,056 , $ 4,496 and $ 2,702 , respectively. At December 31, 2025, amortization expense on capitalized intangible assets is estimated to be as follows for the next five years: Amortization expense 2026 $ 703 2027 490 2028 157 Thereafter — $ 1,350 9. Liabilities Accounts payable and accrued liabilities consisted of the following: December 31, 2025 2024 Trade payables $ 4,403 $ 3,903 Accrued research and development expenses 19,225 43,114 Goods and services tax payable 425 1,250 Employee compensation and related accruals 8,828 6,222 Fair value of liability classified stock options 844 1,264 Accrued legal, professional fees and other 2,621 4,085 Total $ 36,346 $ 59,838 Other long-term liabilities consisted of the following: December 31, 2025 2024 Liability from in-licensing agreements $ 278 $ 447 Finance lease liability (note 14) — 28 Other — 448 Total $ 278 $ 923 106 Table o f Contents 10. Stockholders’ Equity a. Equity Offerings 2025 Private Placement On August 10, 2025, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) for a private placement with Mr. Gregory A. Ciongoli following his appointment as a director of the Company. Pursuant to the Stock Purchase Agreement, Mr. Ciongoli agreed to purchase 415,000 shares of common stock, $ 0.00001 par value per share, of the Company for an aggregate purchase price of $ 4,988 . 2023 Private Placement On December 28, 2023, the Company completed a private placement pursuant to which the Company sold 5,086,521 pre-funded warrants to purchase 5,086,521 shares of common stock at $ 9.8299 per pre-funded warrant. The Company received gross proceeds of $ 50,000 and net proceeds were $ 49,862 , after expenses. 2023 ATM financing On June 16, 2023, the Company sold 3,350,000 shares of common stock pursuant to the Company's at-the-market sale program, at $ 8.12 per common share. Net proceeds were $ 26,233 after underwriting commissions and offering expenses. b. Authorized Share Capital and Preferred Stock The Company’s authorized share capital consists of 1,000,000,000 shares of stock, consisting of (i) 900,000,000 shares of common stock, par value $ 0.00001 per share, and (ii) 100,000,000 shares of preferred stock, par value $ 0.00001 per share. In connection with the Plan of Arrangement, the Company issued to Computershare Trust Company of Canada, a trust company existing under the laws of Canada (the “Share Trustee”), one share of the Company’s preferred stock, par value $ 0.00001 per share, which has certain variable voting rights in proportion to the number of Exchangeable Shares outstanding (the “Special Voting Preferred Stock”), enabling the Share Trustee to exercise voting rights for the benefit of the Exchangeable Shareholders. Immediately prior to the completion of the Redomicile Transactions, there were 61,699,387 Zymeworks BC common shares issued and outstanding. In connection with the consummation of the Plan of Arrangement, 60,274,854 shares of Common Stock and 1,424,533 Exchangeable Shares were issued to former Zymeworks BC shareholders. As of December 31, 2025, there were 553,184 Exchangeable Shares held by former Zymeworks BC shareholders (December 31, 2024: 570,637 ). The Company will issue shares of its 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 CallCo purchases Exchangeable Shares from the Exchangeable Shareholder under CallCo’s overriding call rights. These Exchangeable Shares and the Special Voting Preferred Stock, when taken together, are simil ar in substance to the Company’s common stock and are treated as such in calculation of basic net (loss) income per share. c. Stock Repurchase Programs 2024 Repurchase Program On August 1, 2024, the board of directors of the Company authorized a stock repurchase program (the “2024 Repurchase Program”), whereby the Company may repurchase up to $ 60,000 of the Company’s outstanding common stock, par value $ 0.00001 per share. During the year ended December 31, 2024, the Company repurchased 2,545,402 shares of its common stock for a cost of $ 30,000 , and incurred commission expense of $ 51 , under the 2024 Repurchase Program, which have been recorded against accumulated deficit. The Company’s share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of $ 152 . During the year ended December 31, 2024, the Company retired all 2,545,402 shares repurchased. These shares were returned to the status of authorized and unissued shares. During the year ended December 31, 2025, the Company completed the 2024 Repurchase Program by repurchasing 1,856,907 shares of its common stock for a cost of $ 29,997 and incurred commission expense of $ 37 , which have been recorded against 107 Table o f Contents accumulated deficit. Excise tax was estimated as nil . The Company retired all 1,856,907 shares repurchased. These shares were returned to the status of authorized and unissued shares. The following table presents the Company’s 2024 Repurchase Program activity: Total number of shares purchased Average price paid per share Approximate value of shares purchased Year Ended December 31, 2024 2,545,402 $ 11.79 $ 30,000 Year Ended December 31, 2025 1,856,907 $ 16.15 $ 29,997 2025 Repurchase Program On November 16, 2025, the board of directors of the Company authorized a new stock repurchase program (the “2025 Repurchase Program”), whereby the Company may repurchase up to $ 125,000 of the Company’s outstanding common stock, par value $ 0.00001 per share. During the year ended December 31, 2025, the Company repurchased 431,217 shares of its common stock for a cost of $ 11,188 , incurred an obligation to purchase common stock for a cost of $ 464 which had not been settled by December 31, 2025, and incurred commission expense of $ 9 , under the 2025 Repurchase Program, which have been recorded against accumulated deficit. Excise tax was estimated as nil . The Company retired all 431,217 shares repurchased. These shares were returned to the status of authorized and unissued shares. The following table presents the Company’s 2025 Repurchase Program activity: Total number of shares purchased Average price paid per share Approximate value of shares purchased Year Ended December 31, 2025 431,217 $ 25.94 $ 11,188 d. Pre-Funded Common Share Warrants In connection with the public offerings completed on June 24, 2019, January 27, 2020, January 31, 2022 and private placement completed on December 28, 2023 (note 10a), the Company issued a total of 13,668,482 pre-funded warrants which granted holders of warrants the right to purchase up to 13,668,482 common shares or shares of the Company, at an exercise price of $ 0.0001 per share. The pre-funded warrants are exercisable by the holders at any time on or after the original issue date. The pre-funded warrants do not expire unless they are exercised or settled in accordance with the pre-funded warrant agreement. As the pre-funded warrants meet the condition for equity classification, proceeds from issuance of the pre-funded warrants, net of any transaction costs, are recorded in additional paid-in capital. Upon exercise of the pre-funded warrants, the historical costs recorded in additional paid-in capital along with exercise price collected from holders will be recorded in common shares. As the amounts required to exercise the warrants are nominal, these instruments are considered in the calculation of basic net (loss) income per share. On August 23, 2022, October 25, 2022, October 27, 2022 and October 19, 2023, a total of 8,581,961 pre-funded warrants were exercised in exchange for issuance of 8,581,868 common shares. On June 26, 2025, 5,086,521 pre-funded warrants were exercised in full in exchange for 5,086,480 shares of common stock by EcoR1, which is a related party due to its beneficial ownership of the Company’s outstanding shares of common stock, and as of December 31, 2025 there were no pre-funded warrants outstanding (December 31, 2024: 5,086,521 ). e. Stock-Based Compensation In connection with Redomicile Transactions in 2022, Zymeworks BC. assigned to the Company, and the Company assumed, all of Zymeworks BC’s rights and obligations under each of the stock-based compensation plans, as described below, and such plans became the Company’s stock-based compensation plans, with each outstanding award assumed by the Company and 108 Table o f Contents deemed exchanged for equivalent awards of the Company, except that the security issuable upon exercise or settlement, as applicable, will be shares of common stock of the Company rather than common shares of Zymeworks BC. Original Stock Option Plan On July 14, 2006, the shareholders of the Company approved an employee stock option plan (the “Original Plan”). The total number of options outstanding is not to exceed 20 % of the issued common shares of the Company. Options granted under the Original Plan are exercisable at various dates over their 10 -year life. The exercise prices of the Company’s stock options under the Original Plan are denominated in Canadian dollars. Upon the effectiveness of the Company’s New Plan described below, no further options were issuable under the Original Plan. However, all outstanding options granted under the Original Plan remain outstanding, subject to the terms of the Original Plan and the applicable grant documents, until such outstanding options are exercised or they terminate or expire by their terms. New Plan and Inducement Plan On April 10, 2017, the Company’s shareholders approved a new stock option plan, which became effective immediately prior to the consummation of the Company’s initial public offering (“IPO”). This plan allows for the grant of options, and also permitted the Company to grant incentive stock options (“ISOs”), within the meaning of Section 422 of the Internal Revenue Code, to its employees, until the shares reserved for issuance of ISOs were depleted. On June 7, 2018, the Company’s shareholders approved an amendment and restatement of this plan (this plan, as amended and restated, the “New Plan”), which includes an article that allows the Company to grant restricted shares, RSU and other share-based awards, in addition to stock options. As of December 31, 2025, 5,023,809 shares of common stock were available for future award grants under the New Plan (December 31, 2024: 5,196,630 shares of common stock). On January 5, 2022, the board of directors approved the Zymeworks Inc. Inducement Stock Option and Equity Compensation Plan (the “Inducement Plan”) and reserved 750,000 of the Company’s common shares for issuance pursuant to equity awards granted thereunder. On July 19, 2024, the board of directors approved an amendment and restatement of the Inducement Plan, which increased the number of shares of the Company’s common stock available for future issuance pursuant to equity awards granted under the Inducement Plan by 700,000 shares. As a result of this increase, a total of 1,450,000 shares will have been available for issuance pursuant to equity awards granted under the Inducement Plan since the inception of the Inducement Plan in January 2022. As of December 31, 2025, 390,000 shares of common stock were available for future award grants under this plan (December 31, 2024: 390,000 ). RSUs The following table summarizes the Company’s RSU activity under the New Plan: Number of RSUs Weighted- average grant date fair value ($) Outstanding, December 31, 2023 771,413 8.63 Granted 957,750 10.56 Vested and settled ( 225,004 ) 8.76 Forfeited ( 210,189 ) 10.75 Outstanding, December 31, 2024 1,293,970 9.69 Granted 1,398,697 14.29 Vested and settled ( 560,620 ) 9.40 Forfeited ( 184,463 ) 11.59 Outstanding, December 31, 2025 1,947,584 12.90 As of December 31, 2025, there was $ 7,512 of unamortized RSU expense that will be recognized over a weighted average period of 1.52 years. 109 Table o f Contents Stock Options The following table summarizes the Company’s stock options granted in Canadian dollars under the Original Plan and the New Plan: Number of Options Weighted- Average Exercise Price (C$) Weighted- Average Exercise Price ($) Weighted- Average Contractual Term (years) Aggregate intrinsic value (C$) Aggregate intrinsic value ($) Outstanding, December 31, 2023 1,489,478 19.59 14.39 5.50 2,987 2,255 Granted — — — Expired ( 58,902 ) 32.37 23.46 Exercised ( 224,042 ) 11.23 8.20 Forfeited ( 123,699 ) 21.85 16.11 Outstanding, December 31, 2024 1,082,835 20.36 14.15 4.73 6,485 4,509 Granted — — — Expired ( 28,707 ) 39.94 28.75 Exercised ( 444,397 ) 13.43 9.69 Forfeited ( 37,619 ) 18.32 13.31 Outstanding, December 31, 2025 572,112 24.89 18.17 4.31 8,327 6,081 December 31, 2025 Exercisable 553,766 25.45 18.58 4.25 7,811 5,701 Vested and expected to vest 570,277 24.95 18.21 4.31 8,276 6,040 The following table summarizes the Company’s stock options granted in U.S. dollars under the New Plan and the Inducement Plan: Number of Options Weighted- Average Exercise Price ($) Weighted- Average Contractual Term (years) Aggregate intrinsic value ($) Outstanding, December 31, 2023 6,069,242 12.97 7.67 9,213 Granted 3,135,500 11.15 Expired — — Exercised ( 735,864 ) 9.57 Forfeited ( 1,137,794 ) 16.34 Outstanding, December 31, 2024 7,331,084 12.01 7.97 30,459 Granted 2,467,225 14.21 Expired ( 63,994 ) 30.59 Exercised ( 1,298,292 ) 9.63 Forfeited ( 619,746 ) 14.99 Outstanding, December 31, 2025 7,816,277 12.71 7.47 109,157 December 31, 2025 Exercisable 3,763,060 12.78 6.29 53,695 Vested and expected to vest 7,078,461 12.68 7.34 99,302 During the year ended December 31, 2025, the Company received cash proceeds of $ 16,904 (2024: $ 8,857 and 2023: $ 5,006 ) from stock options exercised. The stock options outstanding at December 31, 2025 expire at various dates from November 9, 2026 to December 9, 2035. 110 Table o f Contents A summary of the non-vested stock option activity and related information of the Company’s stock options granted in Canadian dollars is as follows: Number of options Weighted-average grant date fair value (C$) Weighted- average grant date fair value (US$) Non-vested, December 31, 2024 100,967 7.31 5.08 Options granted — — — Options vested ( 72,760 ) 8.02 5.85 Options forfeited and cancelled ( 9,861 ) 5.64 4.12 Non-vested, December 31, 2025 18,346 5.42 3.95 A summary of the non-vested stock option activity and related information of the Company’s stock options granted in U.S. dollars is as follows: Number of options Weighted- average grant date fair value (US$) Non-vested, December 31, 2024 4,147,288 6.65 Options granted 2,467,225 8.76 Options vested ( 2,086,563 ) 6.72 Options forfeited and cancelled ( 474,733 ) 6.36 Non-vested, December 31, 2025 4,053,217 7.84 The estimated fair values of options granted to officers, directors, employees and consultants are amortized over the relevant vesting periods. Stock-based compensation expense for equity classified instruments, as well as the financial statement impact of the amortization and periodic revaluation of liability classified instruments (note 2), are recorded in research and development expense and general and administration expense as follows: Year Ended December 31, 2025 2024 2023 Research and development expense $ 12,849 $ 8,382 $ 2,404 General and administrative expense $ 14,687 $ 9,041 $ 5,316 Amounts for equity classified instruments above include stock-based compensation expense relating to RSUs of $ 10,727 for the year ended December 31, 2025 (2024: $ 5,813 and 2023: $ 3,369 ). For the year ended December 31, 2025, stock-based compensation expense of $ 27,069 was recorded in additional paid-in capital and $ 887 was recorded in the liability classified stock options and ESPP liability accounts (2024: $ 16,716 in additional paid-in capital and recovery of $ 211 in liability classified stock options and ESPP liability accounts, 2023: $ 8,196 in additional paid-in capital and recovery of $ 630 in liability classified stock options and ESPP liability accounts). The estimated fair value of stock options granted under the New Plan was determined using the Black-Scholes option pricing model with the following weighted-average assumptions: Year ended December 31, 2025 2024 2023 Dividend yield 0 % 0 % 0 % Expected volatility 63.1 % 64.5 % 68.1 % Risk-free interest rate 4.32 % 4.04 % 3.94 % Expected average life of options 6.05 years 6.00 years 5.89 years Expected Volatility — Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company has calculated the expected volatility using the volatility of its own stock. 111 Table o f Contents Risk-Free Interest Rate — This rate is from the Government of Canada and U.S. Federal Reserve marketable bonds for the month prior to each option grant during the year, having a term that most closely resembles the expected life of the option. Expected Term — This is the period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of ten years . The Company uses the simplified method to calculate the average expected term, which represents the average of the vesting period and the contractual term. The weighted-average Black-Scholes option pricing assumptions for liability classified stock options outstanding at December 31, 2025 and 2024 are as follows: December 31, 2025 December 31, 2024 Dividend yield 0 % 0 % Expected volatility 55.3 % 45.8 % Risk-free interest rate 2.56 % 2.90 % Expected average option term 0.90 years 0.85 years Number of liability classified stock options outstanding 64,402 272,330 The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 14,152 , $ 2,242 and $ 758 respectively. At December 31, 2025, the unamortized compensation expense related to unvested options was $ 13,051 . The remaining unamortized compensation expense as of December 31, 2025 will be recognized over a weighted-average period of 1.8 years. f. Employee Stock Purchase Plan (“ESPP”) The ESPP, as amended, allows eligible employees to acquire common shares at a discounted purchase price of the lesser of (i) 85 % of the market price of a common share on the first day of the applicable purchase period and (ii) 85 % of the market price of a common share on the purchase date. The ESPP qualifies as an “employee stock purchase plan” within the meaning of Section 423 of the Code for employees who are U.S. taxpayers. As this plan is considered compensatory, the Company recognizes compensation expense on these awards based on their estimated grant date fair value using the Black-Scholes option pricing model. The Company recognizes compensation expense in the consolidated statements of (loss) income and comprehensive (loss) income on a straight-line basis over the requisite service period. For the year ended December 31, 2025, the Company recorded compensation expense of $ 498 (2024: $ 370 , 2023: $ 387 ) in research and development expense and general and administrative expense accounts. As of December 31, 2025, the total amount contributed by ESPP participants and not yet settled is $ 670 (December 31, 2024: $ 577 ). 112 Table o f Contents 11. Research, Collaboration and Licensing Agreements Revenue recognized from the Company’s strategic partnerships is summarized as follows: Year ended December 31, 2025 2024 2023 Jazz: Milestone revenue $ — $ 25,000 $ — Development support payments 5,616 2,835 52,619 Drug supply for ongoing studies 6,548 19,228 25,662 Credit note for amendment of program — — ( 20,100 ) Other drug supply 2,103 15,464 13,350 Royalties 2,481 100 — BeOne Medicines Ltd. (previously known as BeiGene, Ltd.) (“BeOne”): Milestone revenue 20,000 8,000 — Recognition of deferred revenue 18,334 — — Drug supply 762 3,009 1,080 Development support payments — — 537 Royalties 271 — — Johnson & Johnson Innovative Medicine (previously known as Janssen Biotech, Inc.) (“J&J”): Milestone revenue 25,000 — — GlaxoSmithKline Intellectual Property Development Ltd. (“GSK”): Milestone revenue 14,000 2,500 — Bristol-Myers Squibb (“BMS”): Option exercise fee 7,500 — — Daiichi Sankyo, Co., Ltd. (“Daiichi Sankyo”): Milestone revenue 3,100 — — Merck Sharp & Dohme LLC (“Merck”) Research period extension fee 250 — — Research and development support and other payments — 168 2,864 $ 105,965 $ 76,304 $ 76,012 Contract Assets and Liabilities As at December 31, 2025, contract assets from research, collaboration and licensing agreements were $ 2.8 million, which is presented within accounts receivable (December 31, 2024: $ 0.1 million which is presented within accounts receivable) and contract liabilities were $ 17.0 million (December 31, 2024: $ 40.2 million). As at December 31, 2025 and 2024, $ 2.4 million and $ 25.6 million respectively, of the contract liabilities is classified as short term. Contract liabilities relate to deferred revenue from the BeOne and Jazz agreements described below. 113 Table o f Contents Jazz Collaboration Agreement Original Jazz Collaboration Agreement: On October 18, 2022, the Zymeworks BC entered into a License and Collaboration Agreement (the "Jazz Collaboration Agreement") with Jazz Pharmaceuticals Ireland Limited ("Jazz"), under which Jazz will have development and commercialization rights of zanidatamab throughout the world, but excluding the People’s Republic of China, Australia, New Zealand, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Hong Kong, Taiwan, Macau, Mongolia, South Korea, Brunei Darussalam, Cambodia, Indonesia, Papua New Guinea, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Vietnam. Under the Jazz Collaboration Agreement, the Company received a $ 50.0 million upfront payment upon delivery of licenses and technology transfer to Jazz as well as the receipt of United States Hart-Scott Rodino Antitrust Improvements Act of 1976 (“HSR”) Clearance (“Initial Technology Transfer”). A further payment of $ 325.0 million was received following Jazz's decision to continue the collaboration after readout of the top-line clinical data from HERIZON-BTC-01 (“BTC Data Transfer”). The Company considered the fair value of performance obligations based on the Company’s best estimate of their relative stand-alone selling prices, and allocated $ 375.0 million of the transaction price to the Company’s performance obligations in relation to the delivery of licenses, the Initial Technology Transfer and BTC Data Transfer under the Jazz Collaboration Agreement. Development and commercial licenses, the Initial Technology and BTC Data Transfers were considered to be a single performance obligation. The consideration of $ 50.0 million allocated to this performance obligation was recognized as revenue in November 2022, upon delivery of these performance obligations and receipt of the HSR Clearance. Remaining consideration of $ 325.0 million was recognized as revenue upon completion of BTC Data Transfer to Jazz and Jazz’s decision to continue the Jazz Collaboration agreement, in December 2022. Deliverables of development work performed by the Company, continuing technology transfer, participation in the Joint Steering Committee (“JSC”), and transfer of first BLA together were considered to be a single performance obligation and the consideration allocated to this performance obligation will be recognized as revenue over time as these activities are completed. Remaining deliverables of Manufacturing Technology Transfer, Development Drug Supply, Commercial Drug Supply were considered individually distinct and the revenue related to these deliveries are to be recognized upon completion of future deliveries to Jazz. Amendment of Jazz Collaboration Agreement: On April 25, 2023, Zymeworks BC, a subsidiary of the Company, Zymeworks Biopharmaceuticals Inc. (“ZBI”), a subsidiary of Zymeworks BC, Zymeworks Zanidatamab Inc. (“ZZI”), a subsidiary of ZBI formed in December 2022 focused on the Company’s development program for zanidatamab, and Jazz Pharmaceuticals, Inc. (“Jazz Inc.”), entered into a Stock and Asset Purchase Agreement (the “Transfer Agreement”). Under the Transfer Agreement, (i) Jazz Inc. acquired from ZBI 100 % of the issued and outstanding capital stock of ZZI, (ii) Jazz Inc. engaged certain Zymeworks BC and ZZI employees associated with the development of zanidatamab, and (iii) Zymeworks BC and ZBI transferred to Jazz Inc. or one of its affiliates contracts with respect to the engagement of certain independent contractors of Zymeworks BC and ZBI that work on the Program (as defined below). In addition, Jazz Inc. acquired from Zymeworks BC and ZBI certain contracts related to the Program, organizational documents and other records of ZZI, certain regulatory filings related to the Program, certain other books, records and other files, documents and information related to the Program, and certain employment records of service providers to be employed by Jazz Inc. and its affiliates following the Closing (as defined below). Subject to the terms and conditions of the Transfer Agreement, Jazz Inc. assumed certain liabilities that arise following the Closing related to the acquired assets and the Program, including with respect to transferred service providers. Zymeworks BC and Jazz Pharmaceuticals Ireland Limited (an affiliate of Jazz Inc.) (a subsidiary of Jazz Pharmaceuticals plc, collectively referred to as “Jazz”) amended and restated the license and collaboration agreement dated October 18, 2022 by and between Zymeworks BC and Jazz (the “Original Jazz Collaboration Agreement”) (as amended the “Amended Jazz Collaboration Agreement”) to reflect the transfer of responsibility for the Program. Under the Amended Jazz Collaboration Agreement, the financial terms of the Original Jazz Collaboration Agreement, as previously disclosed, was unchanged, except that the costs of the Program (including ongoing costs related to the transferred service providers) incurred following the Closing was directly borne by Jazz instead of being incurred by Zymeworks BC and charged back to Jazz for reimbursement, though Zymeworks BC will remain eligible for reimbursement of certain costs for activities where Zymeworks BC maintains responsibility under the Amended Jazz Collaboration Agreement. As part of the amendments to the Amended Collaboration Agreement, the Company agreed to provide a credit note to Jazz of $ 20.1 million, which has been recognized as a reduction to 114 Table o f Contents revenue for the year ended December 31, 2023. “Program” refers to (i) ongoing clinical trials in certain sites in South Korea that are the responsibility of Zymeworks BC under the Original Jazz Collaboration Agreement and (ii) clinical trials for zanidatamab, other than the studies referenced in (i), initiated by Zymeworks BC in the Territory (as defined in the Original Jazz Collaboration Agreement) prior to the execution of the Original Jazz Collaboration Agreement. The consummation of the transactions contemplated by the Transfer Agreement, including the execution of the Amended Jazz Collaboration Agreement, occurred in May 2023 (the “Closing”). In connection with the Closing, the parties entered into a transition services agreement pursuant to which Zymeworks BC and ZBI provide to Jazz Inc. and Jazz Inc. provides to Zymeworks BC and ZBI certain services to support the transfer of the acquired assets and the Program on a transitional basis. In November 2024, the Company recognized milestone revenue of $ 25.0 million from Jazz in relation to the FDA approval of Ziihera (zanidatamab-hrii) for the treatment of HER2+ BTC. As at December 31, 2025, the Company is eligible to receive up to $ 500.0 million in certain regulatory milestone payments and up to $ 862.5 million in potential commercial milestone payments. The Company is eligible to receive tiered royalties between 10 % and 20 % on Jazz’s annual net sales, with customary reductions in specified circumstances. No commercial milestone payments have been recognized to date. As at December 31, 2025, contract liabilities under the Amended Jazz Collaboration Agreement include $ 2.4 million received in relation to drug supply provided to Jazz. Collaboration and License Agreements with BeOne, Ltd. (“BeOne”) On November 26, 2018, the Company entered into three concurrent agreements with BeOne whereby the Company granted BeOne royalty-bearing exclusive licenses for the research, development and commercialization of its bispecific therapeutic candidates, zanidatamab (formerly known as “ZW25”) ( as amended on March 29, 2021 and August 10, 2021 and as otherwise modified, collectively “Zanidatamab Agreement”) and zanidatamab zovodotin (formerly known as “ZW49”) ( as amended on May 25, 2020 and June 2, 2021, collectively “Zanidatamab Zovodotin Agreement”) in Asia (excluding Japan but including the People’s Republic of China, South Korea and other countries), Australia and New Zealand. In addition, the Company also granted BeOne a worldwide, royalty-bearing, antibody sequence pair-specific license to research, develop and commercialize globally three bispecific antibodies generated through the use of the Company’s Azymetric and EFECT platforms, which agreement expired in November 2023. Pursuant to these agreements, the Company received an upfront payment of $ 60.0 million for the totality of the rights described. The Company considered the fair value of performance obligations based on the Company’s best estimate of their relative stand-alone selling prices, and allocated $ 40.0 million of the transaction price to the license and collaboration agreements for zanidatamab and zanidatamab zovodotin and $ 20.0 million to the Company’s performance obligations under the research and licensing agreement for Azymetric and EFECT platforms. Original License and Collaboration Agreements for Zanidatamab and Zanidatamab Zovodotin In relation to the Zanidatamab Agreement, the Company identified the following promised goods and services at the inception of the BeOne agreement that are material: development and commercial licenses, initial transfer of the Company’s technologies and relevant know-how, continuing technology transfer, participation in the Joint Steering Committee (“JSC”) and other sub-committees, manufacturing technology transfer, provision of development supply, provision of commercial supply, and transfer of future rights related to the development and commercial license. The Company concluded that the licenses and initial technology transfer are distinct together and the continuing technology transfer and the Company’s participation to the JSC and other sub-committees’ activities are also distinct together. Remaining deliverables were individually determined to be distinct. Development and commercial licenses as well as initial transfer of technologies and relevant know-how were considered to be a single performance obligation. The consideration of $ 7.1 million allocated to this performance obligation was recognized as revenue over a two-month period during which the delivery of the license and transfer of the relevant technology occurred. Deliverables of continuing technology transfer and participation in the JSC and other sub-committees together were considered to be a single performance obligation and the consideration allocated to this performance obligation will be recognized as revenue over time as these activities are completed. Remaining deliverables are considered individually distinct and the revenue will be recognized as delivery or transfer of future rights to BeOne occurs. In March 2020, BeOne dosed the first patient in a two-arm Phase 1b/2 trial evaluating zanidatamab in combination with chemotherapy as a first-line treatment for patients with metastatic HER2+ breast cancer and in combination with chemotherapy and BeOne’s PD-1-targeted antibody tislelizumab as a first-line treatment for patients with metastatic HER2+ GEA. The Company recognized revenue of $ 5.0 million in relation to this milestone. In November 2020, BeOne dosed the first patient in 115 Table o f Contents South Korea in the pivotal HERIZON-BTC-01 study . The Company recognized revenue of $ 10.0 million in relation to this milestone. In December 2021, BeOne dosed the first patient in South Korea in the pivotal HERIZON-GEA-01 study and the Company recognized revenue of $ 8.0 million in relation to this milestone. In relation to the Zanidatamab Zovodotin Agreement, the Company identified the following promised goods and services at the inception of the BeOne agreement that are material: development and commercial licenses, initial transfer of the Company’s technologies and relevant know-how, continuing technology transfer, participation in the JSC and other sub-committees, manufacturing technology transfer, provision of development supply, provision of commercial supply, and transfer of future rights related to the development and commercial license. The Company concluded that the licenses and initial technology transfer together were distinct together and the continuing technology transfer and the Company’s participation to the JSC and other sub-committees’ activities were also distinct together. Manufacturing technology transfer, provision of development supply and provision of commercial supply were individually determined to be distinct. Development and commercial licenses as well as initial transfer of technologies and relevant know-how were considered to be a single performance obligation while continuing technology transfer and participation in the JSC and other sub-committees together were considered as a single performance obligation. Remaining deliverables were considered individually distinct. Termination of BeOne License and Collaboration Agreement Regarding Zanidatamab Zovodotin and Amendment of BeOne License and Collaboration Agreement Regarding Zanidatamab: On September 18, 2023, Zymeworks BC and BeOne entered into a Termination Agreement (the “Termination Agreement”) relating to the Zanidatamab Zovodotin Agreement . The Termination Agreement does not terminate the Zanidatamab Agreement (as defined below). Pursuant to the Termination Agreement, the Zanidatamab Zovodotin Agreement is terminated, effective as of September 18, 2023, and is no longer in effect, except that the termination does not relieve the parties from obligations under the Zanidatamab Zovodotin Agreement that accrued prior to the termination and certain other provisions expressly indicated to survive the termination, including certain licenses to BeOne intellectual property with respect to zanidatamab zovodotin. Under the Zanidatamab Zovodotin Agreement, no performance obligations were completed by the Company as the initial transfer of technologies and relevant know-how was not going to start until the earlier of completion of the Company’s Phase-1 clinical studies for zanidatamab zovodotin or completion of dose escalation studies. Accordingly, no revenue was recognized from the Zanidatamab Zovodotin Agreement to date. In connection with the entry into the Termination Agreement, on September 18, 2023, Zymeworks BC and BeOne also entered into the Third Amendment to License and Collaboration Agreement (the “Amendment”) relating to the Zanidatamab Agreement. Pursuant to the Amendment, Zymeworks BC is eligible to receive development and commercial milestone payments of up to $ 144.0 million, together with tiered royalties up to 19.5 % of annual net sales in BeOne territories increasing up to 20 % 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. Pursuant to the Amendment, the remaining provisions of the Zanidatamab Agreement remain unchanged. The Termination Agreement and the Amendment did not have any financial impact on the Company's financial statements , other than allocation of consideration and performance obligations under the Zanidatamab Zovodotin Agreement to Zanidatamab Agreement. As of December 31, 2025, $ 14.6 million of the upfront fees is recorded as long-term deferred revenue on the Company’s consolidated balance sheet (December 31, 2024: $ 18.3 million as deferred revenue in current liabilities and $ 14.6 million as deferred revenue in long-term deferred revenue). 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. In June 2024, the Company recognized $ 8.0 million of milestone revenue from BeOne 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. In May 2025, the Company recognized $ 20.0 million in non-refundable milestone revenue from BeOne upon approval of the BLA for zanidatamab for second-line treatment of HER2+ BTC by the NMPA in China. The Company also recognized $ 18.3 million of deferred revenue in relation to achievement of this milestone. 2020 Research and License Agreement with Merck In July 2020, the Company entered into a new licensing agreement with Merck granting Merck a worldwide, royalty-bearing license to research, develop and commercialize up to three new multispecific antibodies toward Merck’s therapeutic targets in the human health field and up to three new multispecific antibodies toward Merck’s therapeutic targets in the animal health field using the Company’s Azymetric and EFECT platforms. The Company is eligible to receive up to $ 419.3 million in option exercise fees and clinical development and regulatory approval milestone payments and up to $ 502.5 million in commercial milestone payments, as well as tiered royalties on worldwide sales. 116 Table o f Contents Licensing and Collaboration Agreement with Celgene Corporation & Celgene Alpine Investment Co. LLC (formerly “Celgene” and now a Bristol- Myers Squibb company, “BMS”) On December 23, 2014, the Company entered into an agreement with Celgene (now “BMS”) to research, develop and commercialize bispecific antibodies generated through the use of the Company’s Azymetric platform. The Company will apply its Azymetric platform in combination with BMS’s proprietary targets to create novel bispecific antibodies for which BMS has an option to develop and commercialize a certain number of products (“Commercial License Option”). Upon the execution of the Agreement, the Company received an upfront payment of $ 8.0 million. This agreement was expanded in 2018 to increase the number of programs from eight to ten and to extend BMS’s research period and the Company received an expansion fee of $ 4.0 million. In June 2020, the Company’s existing collaboration agreement with BMS was amended to expand the license grant to include the use of the Company’s EFECT platform for the development of therapeutic candidates and to extend the research term. The amendment included an upfront expansion fee of $ 12.0 million paid to the Company and all other financial terms were unchanged. The Company’s performance obligations in relation to the upfront fee were met on the date of amendment. Accordingly, the upfront payment was recognized as revenue during the year ended December 31, 2020. As of December 31, 2025, BMS had exercised two commercial license options and the Company received $ 15.0 million of option payments in total, but in 2023 BMS stopped development of one of these programs. BMS’s right to exercise options on eight programs expired in 2024 after the conclusion of BMS’s research period. As at December 31, 2025, the Company remains eligible to receive up to $ 313.0 million for the two remaining programs (or $ 156.5 million not including the one program for which BMS stopped development in 2023), comprised of development milestone payments of up to $ 101.5 million per program, and commercial milestone payments of up to $ 55.0 million per program. In addition, the Company is eligible to receive tiered royalties calculated upon the global net sales of the resulting products. BMS will have exclusive worldwide commercialization rights to products derived from the agreement for those product candidates that BMS elected to exercise its commercial license option. As BMS’s research period has concluded, BMS is solely responsible for the research, development, manufacturing and commercialization of the products. 2015 Collaboration and License Agreement with GlaxoSmithKline Intellectual Property Development Ltd. (“GSK”) On December 1, 2015, the Company entered into a collaboration and license agreement with GSK for the research, development, and commercialization of up to ten Fc-engineered monoclonal and bispecific antibodies generated through the use of the Company’s EFECT and Azymetric platforms. The Company and GSK will collaborate to further develop the Company’s EFECT platform through the design, engineering, and testing of novel engineered Fc domains tailored to induce specific antibody-mediated immune responses. At the conclusion of the research collaboration, both GSK and the Company will have the right to develop and commercialize monoclonal and bispecific antibody candidates that incorporate the Company’s optimized immune-modulating Fc domains. Under the terms of the agreement, GSK will have the right to develop a minimum of four products across multiple disease areas, and the Company will be eligible to receive up to $ 1.1 billion, including research, development, and commercial milestones of up to $ 110.0 million for each product. In addition, the Company is eligible to receive tiered sales royalties in the low single digits on net sales of products. Under this agreement, the Company is sharing certain research and development responsibilities with GSK to generate new Fc-engineered antibodies. Each party will bear its own costs for the responsibilities assigned to it during the research period. Furthermore, the Company will have the right to develop up to four products, free of royalties, using the new intellectual property arising from the collaboration and after a period of time, to grant licenses to such intellectual property for development of additional products by third parties without any royalty or milestone payment to GSK. The Company determined that, the events and conditions resulting in payments for research, development and commercial milestones solely depend on GSK’s performance. No development or commercial milestone payments or royalties have been received to date. 2016 Platform Technology Transfer and License Agreement with GSK On April 21, 2016, the Company entered into a platform technology transfer and license agreement with GSK for the research, development, and commercialization of up to six bispecific antibodies enabled using the Company’s Azymetric platform. Each of the two agreements with GSK were negotiated independently and the deliverables covered by the respective contracts utilize different therapeutic platforms and are unrelated to one another. Accordingly, the Platform Technology and License Agreement with GSK has been accounted for as a new arrangement. In May 2019, this agreement was expanded to provide GSK access to the Company’s unique heavy-light chain pairing technology under the Azymetric platform. This may include bispecific antibodies incorporating new engineered Fc regions generated under the 2015 GSK agreement. 117 Table o f Contents The Company is eligible to receive up to $ 1.1 billion in milestone and other payments. From contract inception to December 31, 2025, the Company has received an upfront technology access fee payment of $ 6.0 million. In July 2024, the Company recognized $ 2.5 million of milestone revenue from GSK in relation to the sequence pair nomination by GSK under the 2016 agreement between the Company and GSK. Furthermore, in January 2025, the Company recognized $ 14.0 million of milestone revenue associated with a clinical milestone. As of December 31, 2025, the Company is also eligible to receive research milestone payments of up to $ 35.0 million, development milestone payments of up to $ 168.5 million and commercial milestone payments of up to $ 867.0 million. In addition, the Company is entitled to receive tiered royalties in the low to mid-single digits on product sales. The Company determined that, the events and conditions resulting in payments for research, development and commercial milestones solely depend on GSK’s performance. No commercial milestone payments or royalties have been received to date. 2016 Collaboration Agreement with Daiichi Sankyo, Co., Ltd. (“Daiichi Sankyo”) On September 26, 2016, the Company and Daiichi Sankyo entered into a collaboration and cross license agreement which was amended on September 25, 2018, July 2, 2021, and June 6, 2022 (collectively, the “2016 Daiichi Collaboration Agreement”) for the research, development, and commercialization of one bispecific antibody enabled using the Company’s Azymetric and EFECT platforms. Additionally, the Company was able to license immuno-oncology antibodies from Daiichi Sankyo, with the right to research, develop and commercialize multiple products globally in exchange for royalties on product sales. Under the agreement, Daiichi Sankyo had the option to develop and commercialize a single bispecific immuno-oncology therapeutic. From contract inception to the termination of 2016 Daiichi Collaboration agreement as defined below, the Company has received an upfront technology access fee payment of $ 2.0 million and research and commercial option related payments totaling $ 4.5 million. Termination of the 2016 Daiichi Sankyo Collaboration Agreement In March 2023, Zymeworks BC and Daiichi Sankyo terminated the 2016 Daiichi Collaboration Agreement and is no longer in effect, except that the termination does not relieve the parties from obligations under the 2016 Daiichi Collaboration Agreement that have accrued prior to the termination or provisions of the 2016 Daiichi Collaboration Agreement expressly indicated in the 2016 Daiichi Collaboration Agreement or the Termination and License Agreement to survive the termination. The termination of the 2016 Daiichi Collaboration Agreement did not have any financial impact during the year ended December 31, 2023. 2018 Licensing Agreement with Daiichi Sankyo In May 2018, the Company entered into a second license agreement with Daiichi Sankyo to research, develop and commercialize two bispecific antibodies generated through the use of the Company’s Azymetric and EFECT platforms. Under the terms of the agreement, the Company granted Daiichi Sankyo a worldwide, royalty-bearing, antibody sequence pair-specific, exclusive license to research, develop and commercialize certain products. Under the agreement, Daiichi Sankyo will be solely responsible for the research, development, manufacturing and commercialization of the products. Under the terms of the agreement, the Company was eligible to receive up to $ 484.7 million in various milestone and other payments. At inception, the Company received an upfront technology access fee payment of $ 18.0 million. In March 2025, the Company recognized $ 3.1 million of milestone revenue from Daiichi Sankyo following the first patient dosed in a clinical trial related to the 2018 license agreement between the Company and Daiichi Sankyo. As of December 31, 2025, the Company remains eligible to receive development milestone payments totaling up to $ 60.3 million and commercial milestone payments of up to $ 170.0 million. In addition, the Company is eligible to receive tiered royalties ranging from the low single digits up to 10 % on product sales, with the royalty term being, on a product-by-product and country-by-country basis, either (i) for as long as there is Zymeworks platform patent coverage on products, or (ii) for 10 years beginning from the first commercial sale, whichever period is longer. If there is no Zymeworks patent coverage on products, royalty rates may be reduced. No development or commercial milestone payments or royalties have been received to date. Collaboration and License Agreement with Janssen Biotech, Inc. (“Janssen”) On November 13, 2017, the Company entered into a collaboration and license agreement with Janssen to research, develop and commercialize up to six bispecific antibodies generated through the use of the Company’s Azymetric and EFECT platforms. Under the terms of the agreement, the Company granted Janssen a worldwide, royalty-bearing, antibody group-specific 118 Table o f Contents exclusive license to research, develop and commercialize certain products. Janssen also has the option to develop two additional bispecific antibodies under this agreement subject to a future option payment. Under the agreement, Janssen will be solely responsible for the research, development, manufacturing and commercialization of the products. The Company was originally eligible to receive up to $ 1.45 billion in various license and milestone payments. From contract inception to December 31, 2025, the Company has received an upfront payment of $ 50.0 million and development milestones totaling $ 33.0 million which included $ 8.0 million in connection with the initiation of clinical trials of two bispecific antibodies and $ 25.0 million related to clinical progress of pasritamig entering into a Phase 3 trial in metastatic castration-resistant prostate cancer. Pasritamig is a first-in-class, bispecific T-cell engager targeting human kallikrein 2 (KLK2), engineered using Zymeworks’ Azymetric platform. Janssen has deprioritized the development of one of those two bispecific antibodies, and in 2023 the research program term under the agreement ended with respect to the remaining four bispecific antibodies. As a result, the Company remains eligible to receive development milestone payments of up to $ 61.0 million and commercial milestone payments of up to $ 373.0 million ($ 18.0 million and $ 186.5 million, respectively, not including the bispecific antibody that Janssen has deprioritized). In addition, the Company is eligible to receive tiered royalties in the mid-single digits on product sales, with the royalty term bein g, on a product-by-product and country-by-country basis, either (i) for as long as there is Zymeworks platform patent coverage on products, or (ii) for 10 years, beginning from the first commercial sale, whichever period is longer. If there is no Zymeworks patent coverage on products, royalty rates may be potentially reduced. Janssen has the right, prior to the first dosing of a patient in a Phase 3 clinical trial for a product, to buy down the royalty relating to such product by one percentage point with a payment of $ 10.0 million. The Company determined that, the events and conditions resulting in payments for research, development and commercial milestones solely depend on Janssen’s performance. No commercial milestone payments or royalties have been received to date. Research and License Agreement with LEO Pharma A/S (“LEO”) On October 23, 2018, the Company entered into a research and license agreement with LEO. The Company granted LEO a worldwide, royalty-bearing, antibody sequence pair-specific exclusive license to research, develop and commercialize two bispecific antibodies, generated through the use of the Company’s Azymetric and EFECT platforms, for dermatologic indications. The Company will retain rights to develop antibodies resulting from this collaboration in all other therapeutic areas. The Company and LEO are jointly responsible for certain research activities, with the Company’s cost to be fully reimbursed by LEO. Each party is solely responsible for the development, manufacturing, and commercialization of their own products. Pursuant to this agreement, the Company received an upfront payment of $ 5.0 million. No development or commercial milestone payments or royalties have been received to date. Termination of LEO Research and License Agreement On October 27, 2023, Zymeworks BC received written notice from LEO Pharma A/S (“LEO”), stating that LEO elected to terminate, in its entirety, the Research and License Agreement. In accordance with the terms of the Research and License Agreement, the termination of such agreement was effective on January 25, 2024. The termination of the LEO Research and License Agreement did not have any financial impact during the year ended December 31, 2023. 12. Other Income (Expense), net Other income (expense), net consists of the following: Year ended December 31, 2025 2024 2023 Foreign exchange (loss) gain $ ( 610 ) $ 776 $ ( 1,185 ) Other 51 ( 218 ) 291 $ ( 559 ) $ 558 $ ( 894 ) 119 Table o f Contents 13. Income Taxes Loss before provision for income taxes was as follows: Year Ended December 31, 2025 United States $ ( 16,809 ) Foreign ( 62,945 ) Loss before income taxes $ ( 79,754 ) Income tax expense is comprised of the following: Year Ended December 31, 2025 Current tax provision: Federal 482 State ( 15 ) Foreign ( 898 ) Total current tax expense ( 431 ) Deferred tax provision: Federal ( 845 ) State — Foreign ( 100 ) Total deferred tax expense ( 945 ) Provision for income taxes $ ( 1,376 ) Year Ended December 31, 2024 2023 Current income tax expense $ ( 5,393 ) $ ( 189 ) Deferred income tax (expense) recovery ( 691 ) 757 Income tax (expense) recovery $ ( 6,084 ) $ 568 Current income tax expense for the years ended December 31, 2025, 2024 and 2023 arose from the operations of the Company and its wholly owned subsidiaries in Canada, in the United States, in Ireland and in Singapore, as well as withholding taxes paid by the Company abroad in 2025, 2024 and 2023. A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: 120 Table o f Contents Year Ended December 31, 2025 $ Percent U.S. Federal statutory income tax rate 16,748 21.0 % State & local income tax, net of federal income tax effect (1) ( 15 ) — % Foreign tax effects Canada Tax rate differential ( 3,980 ) ( 5.0 ) % Provincial tax rate differential 7,642 9.6 % Changes in valuation allowance ( 15,682 ) ( 19.7 ) % Effect of cross-border laws ( 1,921 ) ( 2.4 ) % SR&ED Tax Credits 2,971 3.7 % Stock Based Compensation ( 4,065 ) ( 5.1 ) % Other 91 0.1 % United Kingdom Stock Based Compensation 1,047 1.3 % Other ( 16 ) — % Other foreign jurisdictions ( 208 ) ( 0.2 ) % Enactment of new tax laws — — % Effect of cross-border laws Foreign Base Company Income ( 2,006 ) ( 2.5 ) % Other — — % Tax Credits 635 0.8 % Changes in valuation allowance ( 3,237 ) ( 4.1 ) % Non-taxable or non-deductible items ( 122 ) ( 0.2 ) % Changes in unrecognized tax benefits ( 97 ) ( 0.1 ) % Other 839 1.1 % Effective Income Tax Rate ( 1,376 ) ( 1.7 ) % (1) State taxes in New York, New Jersey, and Texas made up the majority of the tax effect in this category for the year ended December, 31 2025. A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows: Year Ended December 31, 2024 2023 Computed taxes at United States statutory income tax rate $ 24,466 $ 25,041 Non-deductible expenses ( 10,508 ) ( 2,696 ) Difference between domestic and foreign tax rate 5,360 5,976 Adjustments to prior year 524 48,724 Change in valuation allowance ( 28,882 ) ( 78,668 ) Change in recognition and measurement of tax positions ( 38 ) ( 14 ) Changes due to SR&ED and research credits 3,102 2,661 Other ( 108 ) ( 456 ) Income tax (expense) recovery $ ( 6,084 ) $ 568 121 Table o f Contents Deferred income tax assets and liabilities result from the temporary differences between the amounts of assets and liabilities recognized for financial statement and income tax purposes. The significant components of the deferred income tax assets and liabilities are as follows: December 31, 2025 December 31, 2024 Deferred tax assets: Non-capital losses carried forward $ 199,946 $ 177,660 Deferred revenue 4,596 10,852 Share issuance costs 666 1,360 Property and equipment — 71 Intangible assets 5,271 4,539 Research and development deductions and credits 57,097 50,415 Stock options 7,724 8,388 Operating lease liability 4,657 4,761 Other 42 202 $ 279,999 $ 258,248 Deferred tax liabilities: Property and equipment ( 243 ) ( 174 ) Operating lease right-of-use assets ( 4,024 ) ( 4,294 ) Outside basis difference in foreign subsidiary ( 2,414 ) ( 2,429 ) Stock options — ( 2,333 ) Other ( 182 ) ( 176 ) $ ( 6,863 ) $ ( 9,406 ) 273,136 248,842 Less: valuation allowance ( 274,457 ) ( 249,218 ) Net deferred tax (liabilities) assets $ ( 1,321 ) $ ( 376 ) Deferred tax assets $ 4,707 $ 4,385 Deferred tax liabilities ( 6,028 ) ( 4,761 ) Net deferred tax (liabilities) assets $ ( 1,321 ) $ ( 376 ) In evaluating the ability to realize the net deferred tax assets, all available positive and negative evidence was considered, including the Company's past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. The change in the valuation allowance from December 31, 2024 to December 31, 2025 primarily relates to loss carryforward attributes sustained in the current reporting period that are not more-likely-than-not to be realized. At December 31, 2025, the Company has net operating losses carried forward for tax purposes in Canada, which are available to reduce taxable income of future years of approximately $ 737.0 million (December 31, 2024: $ 658.0 million) expiring commencing 2035 through 2045. At December 31, 2025, the Company also has unclaimed tax deductions for scientific research and experimental development expenditures of approximately $ 121.0 million (December 31, 2024: $ 108.6 million) available to reduce taxable income of future years in Canada, with no expiry. At December 31, 2025, the Company has approximately $ 28.0 million (December 31, 2024: $ 25.0 million) of investment tax credits available to offset Canadian federal and provincial taxes payable expiring commencing in 2039 through 2045, and has approximately $ 1.1 million (December 31, 2024: $ 0.9 million) of research tax credits available to offset U.S. federal taxes payable expiring commencing in 2042 through 2045. 122 Table o f Contents A reconciliation of total unrecognized tax benefits for the years ended December 31, 2025, 2024, and 2023 are as follows: Year Ended December 31, 2025 2024 2023 Balance, beginning of year $ 3,115 $ 3,077 $ 3,063 Gross increases related to prior year tax positions 2,364 — — Gross decreases to tax positions in prior periods — — — Gross increases to current period tax positions 97 38 14 Gross decreases due to settlements with taxing authorities — — — Gross decreases due to statute of limitations lapse — — — Balance, end of year $ 5,576 $ 3,115 $ 3,077 Included in the balance of unrecognized tax benefits at December 31, 2025, 2024 and 2023 are potential benefits of nil that, if recognized, would affect the effective tax rate on income from continuing operations. Recognition of these potential benefits would result in a deferred tax asset in the form of net operating loss carry-forward, which would be subject to a valuation allowance based on conditions existing at the reporting date. The Company recognizes interest expense and penalties related to unrecognized tax benefits within the provision for income tax expense on the consolidated statements of loss and comprehensive loss. The Company currently files income tax returns in Canada, the United States, the United Kingdom, Ireland and Singapore, the jurisdictions in which the Company believes that it is subject to tax. Further, while the statute of limitations in each jurisdiction where an income tax return has been filed generally limits the examination period, as a result of loss carry-forwards, the limitation period for examination generally does not expire until several years after the loss carry-forwards are utilized. Other than routine audits by tax authorities for tax credits and tax refunds that the Company has claimed, management is not aware of any other material income tax examination currently in progress by any taxing jurisdiction. Tax years ranging from 2006 to 2025 remain subject to Canadian income tax examinations. Tax years ranging from 2022 to 2025 remain subject to U.S. income tax examinations. Tax years ranging from 2022 to 2025 remain subject to United Kingdom income tax examinations. Tax years 2023 to 2025 remains subject to Ireland and Singapore income tax examinations. The amounts of cash income taxes paid by the Company were as follows: Year Ended December 31, 2025 Federal $ 213 State 17 Foreign Ireland 72 United Kingdom 1,030 All other foreign 18 Income taxes, net of amounts refunded $ 1,350 14. Leases The lease for the Company’s office and laboratory spaces in Vancouver, British Columbia, which was entered into in January 2019, has an initial term expiring in February 2032, with two five-year extension options. In addition, the Company leases office spaces in Bellevue, Washington and in Redwood City, California with lease terms expiring between August 2027 and July 2029. None of the optional extension periods have been included in the determination of the right-of-use assets or the lease liabilities for operating leases as the Company did not consider it reasonably certain that the Company would exercise any such options. 123 Table o f Contents The Company also leases office equipment under capital lease agreements. The balance sheet classification of the Company’s lease liabilities was as follows: December 31, 2025 December 31, 2024 Operating lease liabilities: Current portion $ 3,471 $ 2,740 Long-term portion 14,796 15,738 Total operating lease liabilities $ 18,267 $ 18,478 Finance lease liabilities: Current portion included in other current liabilities — 28 Long-term portion included in other long-term liabilities — 28 Total finance lease liabilities — 56 Total lease liabilities $ 18,267 $ 18,534 Weighted average remaining lease term: Operating leases 5.2 years 6.4 years Weighted average discount rate: Operating leases in U.S. dollars 5.9 % 5.4 % Operating leases in Canadian dollars 4.8 % 4.8 % Cash paid for amounts included in the measurement of operating lease liabilities for fixed lease payments for the year ended December 31, 2025 was $ 4,270 (2024: $ 4,152 ) and was included in net cash used in operating activities in the consolidated statement of cash flows. In addition, on April 4, 2024, the Company terminated its long-term facility lease in Seattle, pursuant to which the Company paid $ 6,075 as a termination fee. As of December 31, 2025, the maturities of the Company’s operating lease liabilities were as follows: Operating leases Within 1 year $ 4,285 1 to 2 years 4,015 2 to 3 years 3,658 3 to 4 years 5,362 4 to 5 years 2,709 Thereafter 2,935 Total operating lease payments 22,964 Less: Imputed interest ( 4,697 ) Operating lease liabilities $ 18,267 124 Table o f Contents The cost components of the operating leases were as follows: Year Ended December 31, 2025 2024 2023 Lease expenses: Operating lease expense $ 3,355 $ 2,447 $ 7,292 Variable lease expense 2,257 1,969 1,637 Termination of long-term facility lease in Seattle, net — 1,033 — $ 5,612 $ 5,449 $ 8,929 During the year ended December 31, 2025, the Company recognized $ 316 of impairment losses on its right-of-use assets (2024: nil and 2023: nil ). 15. Commitments and Contingencies Commitments The Company has entered into research collaboration agreements with strategic partners in the ordinary course of operations that may include contractual milestone payments related to the achievement of pre-specified research, development, regulatory and commercialization events and indemnification provisions, which are common in such agreements. Pursuant to the agreements, the Company is obligated to make research and development and regulatory milestone payments upon the occurrence of certain events and royalty payments based on net sales. The maximum amount of potential future indemnification is unlimited, however, the Company currently holds commercial and product liability insurance that limits the Company’s liability and may enable it to recover a portion of any future amounts paid. Historically, the Company has not made any indemnification payments under such agreements and believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to indemnification obligations for any period presented in the consolidated financial statements. In connection with the Company’s 2016 Kairos acquisition, the Company may be required to make future payments of up to an aggregate of C$ 8,500 , consisting of (i) a C$ 2,500 payment when the first patient is dosed in the first Phase 2 trial and (ii) a C$ 6,000 payment when the first patient is dosed in the first Phase 3 trial, to CDRD Ventures Inc. (“CVI”) upon the direct achievement of certain development milestones for products incorporating certain Kairos intellectual property (such as zanidatamab zovodotin or other product candidates using our ZymeLink technology). In addition, CVI is eligible to receive low single-digit royalty payments from the Company on the net sales of such products. For out-licensed products and technologies incorporating certain Kairos intellectual property, the Company may also be required to pay CVI a mid-single digit percentage of certain future revenue. As of December 31, 2025, the contingent consideration had an estimated fair value of nil , (December 31, 2024: nil ) (note 9). The following table presents the changes in fair value of the Company’s liability for contingent consideration: Liability at the beginning of the period Increase (decrease) in fair value of liability for contingent consideration Amounts paid or transferred to payables Liability at end of the period Year ended December 31, 2025 $ — — — $ — Year ended December 31, 2024 $ 1,878 ( 1,878 ) — $ — Contingencies From time to time, the Company may be subject to various legal proceedings and claims related to matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred. 125 Table o f Contents 16. Business Segments The Company operates and manages its business in a single reportable segment, which is the Management of a portfolio of licensed healthcare assets and development of novel multifunctional biotherapeutics (the “biotherapeutics segment”). The biotherapeutics segment revenue consists of collaboration revenue, including amounts recognized relating to upfront non-refundable payments for licenses or options to obtain future licenses, research and development funding, milestone payments and royalties earned under collaboration and license agreements and is managed on a consolidated basis. The accounting policies of the biotherapeutics segment are the same as those described in the summary of significant accounting policies. The Company’s Chief Operating Decision Maker ("CODM”) is the Chair of the Board of Directors and Chief Executive Officer. The CODM assesses performance for the biotherapeutics segment and decides how to allocate resources based on the results of our strategic planning, with segment (loss) income being used to monitor performance against the budgeted costs of that strategy. The measure of segment assets is reported on the balance sheet as total consolidated assets. Revenue and net income for the Company's biotherapeutics segment are shown below: Year Ended December 31, 2025 2024 2023 Revenue from research and development collaborations $ 105,965 $ 76,304 $ 76,012 Segment expenses: Zanidatamab ( 1,828 ) 11,939 44,751 ZW171 9,672 7,151 10,686 ZW191 12,129 8,379 11,714 ZW220 2,922 13,824 1,585 ZW251 11,304 8,103 686 Zanidatamab zovodotin 364 6,595 8,046 Expense for other preclinical and research programs 31,114 17,389 7,819 Salaries and benefits 51,023 50,678 49,931 Other research and development expense 20,581 17,949 19,128 Other general and administrative expense 25,474 29,522 40,823 Total segment expenses 162,755 171,529 195,169 Segment loss ( 56,790 ) ( 95,225 ) ( 119,157 ) Reconciling items: Depreciation and amortization ( 7,725 ) ( 8,684 ) ( 10,164 ) Stock-based compensation expense ( 28,034 ) ( 17,792 ) ( 8,102 ) Change in contingent consideration — 1,878 ( 630 ) Impairment — ( 17,287 ) — Interest income 13,354 19,941 19,705 Other income (expense), net ( 559 ) 558 ( 894 ) Income tax (expense) recovery, net ( 1,376 ) ( 6,084 ) 568 Net (loss) income $ ( 81,130 ) $ ( 122,695 ) $ ( 118,674 ) 126 Table o f Contents 17. Subsequent even t On March 2, 2026, Zymeworks BC entered into a sale agreement (the “Sale Agreement”) with Zymeworks Royalty Limited Partnership (the “Subsidiary”) a special purpose entity newly formed by Zymeworks BC and by its general partner Zymeworks General Partner ULC (“Zymeworks GP”). Under the Sale Agreement, Zymeworks BC sold to the Subsidiary a 30 % interest in future royalties from the license agreements with Jazz Pharmaceuticals Ireland Limited (“Jazz”) and BeOne Medicines Ltd. (“BeOne”) relating to Ziihera (zanidatamab‑hrii), not to exceed 120 % of the maximum amount payable (excluding indemnification and other similar obligations) by the Subsidiary under the Loan Agreement (defined below) (such 30 % interest, the “Transferred Royalty Interest”). Following the transfer, the Subsidiary entered into a loan agreement (the “Loan Agreement”) with Royalty Pharma Development Funding, LLC (“Royalty Pharma”), acting as administrative agent and lender, pursuant to which the Subsidiary borrowed $ 250.0 million in a non‑recourse, secured term loan (the “Loan”). The loan bears fixed interest and matures on December 31, 2042. Under the terms of the Loan Agreement, the amount payable to Royalty Pharma 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). Amounts repaid may not be reborrowed. The Loan Agreement is fully non‑recourse to Zymeworks BC and Zymeworks Inc. and is secured solely by the Subsidiary’s assets, including the Transferred Royalty Interest, related rights under the Sale Agreement, and the deposit account used to receive royalty payments. The Sale Agreement and Loan Agreement contain customary covenants and restrictions, including certain transfers, additional indebtedness, and related matters. In the event of certain defaults, such as termination of either Covered Agreement, specified breaches, or a change of control of the Company, Royalty Pharma may declare all outstanding principal, accrued interest, and applicable fees immediately due and enforce its rights against the collateral securing the loan. 127 Table o f Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.