Zymeworks (ZYME) investor relations material

Deal rationale and strategic fit

• Acquisition brings YUPELRI, a once-daily nebulized LAMA for COPD, and a robust R&D portfolio, aligning with the strategy to diversify revenue streams and leverage underappreciated assets.

• Advances strategy to build a diversified, revenue-generating biotechnology company combining innovative R&D with commercial and royalty-based cash flows.

• Enables access to embedded royalty streams and R&D assets not available to traditional royalty investors, expanding opportunities for R&D, partnerships, and asset monetization.

• Provides greater flexibility for reinvestment, acquisitions, and returning capital to shareholders.

• Integration of Theravance Biopharma expands the portfolio with commercial and near-commercial assets, enhancing value creation through internal innovation and partnerships.

Financial terms and conditions

• Acquisition financed via a $350 million non-recourse royalty-backed note with OMERS, secured solely by YUPELRI cash flows, with an 8.25% coupon and maturity in 2036.

• OMERS receives 75% of YUPELRI profit share cash flows during the note period; remaining economics revert to the acquirer after repayment.

• Total revenue for 2026 is expected between $278 million and $292 million, with adjusted EBITDA between $114 million and $128 million, and $25–30 million in acquisition/restructuring costs.

• Approximately $2.5 billion of Irish tax attributes acquired, viewed as optional upside and not included in base case IRR.

• Transaction completion includes anticipated milestone payments and contingent payments from the sale of royalty interests.

Synergies and expected cost savings

• Integration of a lean, skilled commercial and medical team is expected to drive continued hospital channel growth and leverage both commercial and development assets.

• R&D expenses were reduced by 20% year-over-year, consistent with a planned reduction and disciplined capital allocation.

• Combined entity leverages proprietary platforms and expertise in antibody technologies to develop differentiated therapeutics.

• Asset and royalty aggregation strategy aims to generate durable cash flows and support future growth.

• Retention of a high-performing commercial team and expansion of leadership in technology, AI, and IP.