Zymeworks

Bull case

• Zymeworks is attractive because its lead asset zanidatamab has been de-risked by FDA approval in first-line HER2-positive GEA, backed by strong efficacy with median PFS of 12.4 months and median OS of 26.4 months in the triplet regimen, while Jazz has lifted peak sales guidance to $3–5 billion and Zymeworks earns tiered royalties that rise to 20% above $2 billion in annual net sales.
• The outlook is further strengthened by near-term cash catalysts, including a $250 million milestone from Jazz, a $100 million sales-based milestone in 1Q27 tied to Royalty Pharma, and acquisition of Theravance for $929 million, which adds YUPELRI royalty cash flow that could exceed $100 million annually at peak.
• Beyond zanidatamab, the company has multiple optionality drivers from a deep pipeline and partnered programs, including breast cancer data expected in 2H26, a 3Q26 interim OS readout in GEA, and JNJ’s expanded pasritamig Phase 3 trial across 172 global sites with primary completion anticipated in December 2027.

Bear case

Zymeworks is viewed negatively because its value is highly dependent on high-risk clinical assets, especially zanidatamab, while the bear case assumes an underwhelming commercial launch and only a 10% probability of success in global royalties and milestones for BTC and GEA. The company also faces meaningful competitive and regulatory uncertainty, with the majority of drugs entering clinical development failing before market approval and no guarantee that its pipeline can outperform existing or emerging therapies. Although a DCF framework still implies about $3.8B in total firm value, that estimate relies on uncertain probabilities of approval, manufacturing scale-up, partner execution, and the risk of long-term dilution from future financing.