Zymeworks and Daiichi Sankyo terminate agreement

Shares of Canadian biotech Zymeworks (NYSE/TSX: ZYME) dipped 5.5% to $7.90 in after-hours trading on Friday, as the company revealed that its collaboration with Japan’s Daiichi Sankyo (TYO: 4568) has been terminated.

Under the terms of the collaboration agreement signed in 2016 and amended in 2018, 2021 and June 2022, Zymeworks granted Daiichi Sankyo a worldwide, royalty-bearing antibody sequence pair-specific exclusive license to research, develop and commercialize certain licensed products, relating to Zymeworks’ Azymetric and EFECT platforms.

Zymeworks was eligible to receive up to $149.9 million in milestone and other payments under the terms of the accord. Through March 17, 2023, Zymeworks said it had received an upfront technology access fee payment of $2.0 million and research and commercial option related payments totaling $4.5 million. Zymeworks was also eligible for additional development milestone payments of up to $63.4 million, and commercial milestone payments of up to $80.0 million. In addition, Zymeworks BC was due to receive tiered royalties ranging from the low single digits up to 10% on product sales.