Zymeworks Guides FY26 Total Sales, Including Collaboration Revenue From YUPELRI, Of $278M-$292M And Adjusted EBITDA Of $114M-$128M

Zymeworks Inc. (NASDAQ:ZYME), a biotechnology company managing a portfolio of licensed healthcare assets while developing a diverse pipeline of novel, multifunctional biotherapeutics, today announced the final transaction details and updated financial guidance following the completion of its acquisition of Theravance Biopharma.The acquisition adds YUPELRI® (revefenacin) to Zymeworks’ portfolio, providing a durable, recurring source of cash flow to fund the Company’s long-term growth strategy. Through Theravance Biopharma’s collaboration with Viatris, Zymeworks is entitled to a 35% share of net U.S. profits from YUPELRI and royalties on net sales outside the United States. In the first half of 2026, total YUPELRI sales of $133.1 million resulted in collaboration revenue to Theravance Biopharma of $38.4 million."Zymeworks is uniquely positioned to create value from the acquisition through our existing R&D and operational infrastructure, including the ability to leverage the acquired Irish tax attributes alongside our ongoing R&D activities in Ireland, opportunities that are not readily available to traditional royalty-focused buyers," said Scott Platshon, Chief Business Officer at Zymeworks. "We are pleased to welcome the Theravance Biopharma team to Zymeworks and bring together differentiated assets that add meaningful sources of cash flow to our business. We look forward to building on the combined organizations’ strengths as we continue to build a durable, diversified business and work to develop innovative medicines for patients with serious diseases."Commercial Organization and IntegrationZymeworks intends to retain the current commercial organization responsible for YUPELRI sales through the hospital channel. The team brings established commercial capabilities and relationships that Zymeworks believes can support continued growth of the product within the combined organization. The Company plans to hire a seasoned pharmaceutical executive with experience building and leading commercial pharmaceutical organizations to lead the commercial operations of Theravance Biopharma.In addition, Stuart Knight will become Executive Vice President and Chief Information Officer of Zymeworks, where Stuart will guide the Company’s future technology strategy, including continued investment in the Company’s existing AI, machine learning, and data science capabilities. Stuart brings substantial experience in biotech and pharmaceutical companies operating in both the United States and Europe. Stuart will also be joined by Jesse Fecker, Ph.D., J.D., who joins Zymeworks as Vice President, Intellectual Property."We are very pleased to have Stuart and Jesse join Zymeworks’ leadership team as they both bring additional experience and capabilities that will be helpful as we execute against our long-term strategic objectives," said Kenneth Galbraith, Chair and Chief Executive Officer of Zymeworks.Zymeworks also retains ownership of Theravance Biopharma’s research and development assets, which will be evaluated in the context of the Company’s broader pipeline, strategic priorities, and disciplined capital allocation framework. The Company will continue to pursue opportunities to maximize the value of its combined R&D engine through partnerships, collaborations and other strategic structures, including the potential externalization of selected programs where appropriate.Financial Impact of Theravance Biopharma AcquisitionThe acquisition is expected to provide Zymeworks with meaningful and immediate incremental revenue and operating cash flow following closing, including:Mid-teens base-case IRR, supported primarily by growth in YUPELRI revenues and a smaller contribution from VIBATIV®. This base case does not include potential upside contributions from utilization of tax attributes or future R&D or business development opportunities.25% growth in YUPELRI hospital sales in the second quarter of 2026, supporting continued margin expansion and increasing operating leverage as net sales continue to scale. Hospital channel growth remains a key driver of the product’s continued expansion in the community setting.Acquisition and restructuring-related costs, excluding capitalized costs attributed to the OMERS Life Sciences (OMERS) non-recourse financing, of approximately $25-30 million$2.5 billion of Irish tax attributes, which may provide additional flexibility to generate value from future Irish revenues, IP structuring and potential acquisitions or investments through the Company’s existing Irish R&D operations. No value has been assigned to the utilization of these tax attributes in the transaction valuation or base case IRR, and any future utilization would therefore represent additional upside.Potential $100 million TRELEGY ELLIPTA® milestone payment expected in the first quarter of 2027, assuming milestone conditions met, offsetting cash outlay for the purchase price.Transaction DetailsUnder the terms of the merger agreement announced on June 29, 2026, Theravance Biopharma shareholders received $17.00 in cash at closing for each share of Theravance Biopharma common stock.The acquisition was financed through a $350 million non-dilutive, non-recourse note from OMERS, in which 75% of the YUPELRI profit-share cash flows are contractually assigned to OMERS to service the associated debt obligations. In addition, approximately $217.5 million of existing cash resources of Zymeworks was used to finance the remaining purchase price, after utilizing the available cash acquired from Theravance Biopharma. The Company expects this net investment to be reduced upon receipt of a potential milestone payment related to TRELEGY ELLIPTA of $100 million expected in the first quarter of 2027.During the one-year period from closing of this transaction, a designee of Theravance Biopharma will seek to potentially license, divest or otherwise monetize ampreloxetine, with no additional resources expected from Zymeworks. The economics of any such transaction will be shared 20/80 between Zymeworks and Theravance Biopharma shareholders.Following completion of the transaction, Theravance Biopharma’s common stock is no longer listed for trading on the Nasdaq Global Select Market.Accounting TreatmentThe transaction is expected to be accounted for as a business combination. The purchase price will be allocated to the fair value of the net assets acquired and primarily includes rights related to YUPELRI, with any remaining amount recorded as goodwill. YUPELRI is expected to represent the principal identifiable intangible asset and will be amortized over its estimated useful life, generally through the expected loss-of-exclusivity period.The right to receive a potential milestone payment based on global net sales of TRELEGY ELLIPTA is expected to be recognized as a financial asset at fair value as of the closing date. Assuming the applicable commercial sales milestone is achieved by December 31, 2026, the related milestone payment of $100 million is expected to be collected in the first quarter of 2027.The Company also expects to recognize a tax liability due to an uncertain tax position as part of the accounting for the business combination. Upon expiration of the applicable audit period in October 2026, the liability may be reversed, resulting in the recognition of a non-cash income tax benefit in the fourth quarter of 2026.The Company expects to account for the $350 million non-recourse note issued to OMERS as debt using the prospective effective interest rate method. Until the note is repaid, 75% of the YUPELRI profit-share cash flows will be applied to the payment of principal and interest, with the Company retaining the remaining 25%. Following repayment of the note, the Company will retain 100% of the YUPELRI profit-share cash flows.The preliminary accounting for the transaction will be reflected in the Company’s consolidated financial statements in its Form 10-Q for the quarter ending September 30, 2026, which is expected to be filed in November 2026.Updated Financial Guidance for 2026With the completion of the Theravance Biopharma acquisition and the receipt of the U.S. Food and Drug Administration approval of Ziihera® (zanidatamab-hrii) for first-line HER2-positive advanced gastroesophageal adenocarcinoma on August 25, 2026, the Company has provided updated financial guidance utilizing relevant financial metrics that it believes provide a more suitable framework for evaluating operating performance of the business."The Company expects total revenue for 2026 to be between $278 million and $292 million and 2026 Adjusted EBITDA to be between $114 million and $128 million, excluding the impact of any future transactions," stated Kristin Stafford, Chief Financial Officer of Zymeworks. "During 2026, we have been able to access a total of $600 million in non-dilutive financing in the form of non-recourse notes at an attractive cost of capital, with proceeds being utilized to fund both the Theravance Biopharma acquisition and continued share repurchases. Our financing strategy and the share repurchase program have focused on minimizing equity dilution to our shareholders. We completed our last public equity offering in January 2022 and have no current plans for additional equity issuances."Adjusted EBITDA is a non-GAAP financial measure. See "Note Regarding Use of Non-GAAP Financial Measures" below for an explanation of these measures. A reconciliation between GAAP reported and non-GAAP financial information for historical results is provided at the end of this earnings release.Zymeworks 2026 Share Repurchase ProgramIn May 2026, the Board of Directors authorized a 2026 share repurchase program under which the Company may repurchase up to $125.0 million of its outstanding common stock, par value $0.00001 per share. As of September 28, 2026, the Company has utilized approximately $49.3 million of this current approved repurchase program to acquire 1,971,454 shares at an average price of $25.04 per share (exclusive of commission expense and estimated excise tax).Since initiating its share repurchase program in August 2024, the Company has cumulatively utilized $211.6 million to reacquire 10,571,316 shares at an average price of $20.02 per share (exclusive of commission expense and estimated excise tax). As of September 14, 2026, the Company had approximately 71.2 million common shares outstanding.