aibioZymeworks issues 5,086,480 shares as EcoR1 funds exercise pre-funded warrants
Tickers ZYME
The warrant holders net exercised in full after Zymeworks removed a 19.99% ownership cap. Shares outstanding rose to 74,844,505.
Key facts
- Company
- Zymeworks Inc. (NASDAQ: ZYME)
- News type
- Financings
- Primary source
- Zymeworks Inc. 8-K (2025-06-27)
Zymeworks Inc. (Nasdaq: ZYME) issued 5,086,480 shares of common stock on June 27, 2025, after EcoR1 Capital Fund, L.P. and EcoR1 Capital Fund Qualified, L.P. exercised their pre-funded warrants in full through a net exercise. The company reported the issue in an 8-K. Under a net exercise, the holders give up part of the shares to cover the exercise price, rather than paying cash for them. The 8-K names no placement agent, underwriter or adviser for the transaction.
The warrants and what they cost
The two EcoR1 funds bought 5,086,521 pre-funded warrants under a Securities Purchase Agreement dated December 23, 2023. The warrants were issued on December 28, 2023 at a per-share purchase price of $9.8299, for an aggregate purchase price of approximately $50 million. The exercise price on June 26, 2025 was $0.0001 per share.
The purchasers paid for the warrants when they were issued in late 2023, and the 8-K reports no cash proceeds from the June exercise. The funds acquired 5,086,521 shares through the net exercise, and the company issued 5,086,480 shares. After the issue, the company had 74,844,505 shares of common stock outstanding as of June 27, 2025.
The cap that was removed
On June 26, 2025, the company and the purchasers signed Amendment No. 1 to the pre-funded warrants. The amendment removed a limit in Section 12 of the warrants. That limit had barred exercise if the purchaser, together with its affiliates and any persons whose holdings were aggregated with it for purposes of Section 13(d) of the Securities Exchange Act of 1934, would beneficially own more than 19.99% of the company's outstanding shares or voting power after the exercise.
The 8-K dates both the amendment and the exercise to June 26, 2025.
The holders and the board
The 8-K says the purchasers beneficially own more than 5% of the company's outstanding common stock. Oleg Nodelman, the manager of EcoR1 Capital LLC, and Scott Platshon, a partner at EcoR1 Capital, are members of the company's board of directors. The 8-K identifies both as tied to the purchasers.
Two directors are tied to a holder of more than 5 percent that signed an amendment removing its limit on exercise. The 8-K does not say whether either director recused himself from the amendment or from the exercise.
The exemption
The new shares were issued without registration under Section 3(a)(9) of the Securities Act of 1933, which the 8-K describes as an exchange with existing holders where no commissions or other remuneration was paid for soliciting it.
The company behind the warrants
The company's most recent annual report on Form 10-K describes Zymeworks as a clinical-stage biotechnology company developing a diverse pipeline of biotherapeutics for difficult-to-treat diseases such as cancer and autoimmune and inflammatory diseases. The report says the company's development strategy centers on target selection, therapeutic modality and patient needs.
The report describes candidates that may take the form of antibody drug conjugates, bispecific T cell engagers or trispecific T cell engagers.
Its first internally developed candidate, zanidatamab, is a bispecific antibody aimed at HER2. The report says Zymeworks has granted BeiGene, Ltd. and Jazz Pharmaceuticals Ireland Limited exclusive rights to develop and commercialize zanidatamab in different territories. It says the FDA granted accelerated approval of Ziihera (zanidatamab-hrii) for adults with previously treated, unresectable or metastatic HER2-positive second-line biliary tract cancer. The company's wholly owned programs include antibody drug conjugates and multispecific antibodies.
What the 8-K leaves out
The 8-K covers the warrant amendment, the exercise and the share issue. It does not explain why the purchasers exercised in June 2025, or whether any warrants or purchase rights remain outstanding.
The transaction is simple to state. A holder that paid about $50 million in late 2023 has converted its warrants into common stock at a nominal price, after a limit on its ownership was removed. The company has issued 5,086,480 shares, and its share count stands at 74,844,505 as of June 27, 2025. The 8-K reports no cash received in the transaction.