| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On January 19, 2022, Zymeworks Inc. (the “Company”) announced certain information relating to the Company’s financial condition as of December 31, 2021, including its preliminary and unaudited estimate of cash, cash equivalents and short-term investments of approximately $250.0 million and its expectations that such cash, cash equivalents and short-term investments are anticipated to fund the Company’s current operations through at least late 2022 (such information, the “Financial Condition Information”). The Financial Condition Information is set forth in a press release issued by the Company on January 19, 2022 as the first paragraph under the caption “Updated Financial Position”, a copy of which press release is attached hereto as Exhibit 99.1. The press release is incorporated herein by reference, except for the Financial Condition Information, which information is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange act, except as expressly set forth by specific reference in such filing.
On January 19, 2022, the Company filed this press release with the Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.
| ITEM 2.05 | COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES. |
On January 15, 2022, the Company authorized a restructuring of the Company’s workforce (the “Restructuring”), with a target of reducing employee headcount by at least 25% across the organization by the end of 2022. The Company took these steps as part of its renewed focus on achieving its key strategic priorities and to help create a more cost-efficient organization in order to execute on its strategic priorities. The Company expects to substantially complete the Restructuring by December 31, 2022. At this time, the Company is unable to make a good faith determination of an estimate or a range of estimates as required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to the Restructuring. The Company will file an amendment to this Current Report on Form 8-K promptly after it makes such a determination.
| ITEM 5.02 | DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. |
Departure of Executive Officers
In connection with the Restructuring, effective January 19, 2022, the Company terminated the employment of Dr. Anthony Polverino, Executive Vice President, Early Development & Chief Scientific Officer. Pursuant to the terms of Dr. Polverino’s employment agreement with the Company, effective September 17, 2018 (the “Polverino Employment Agreement”), subject to Dr. Polverino’s execution and non-revocation of a release of claims in a form acceptable to the Company, Dr. Polverino is entitled to certain post-termination benefits, consisting of payment of 12 months of his current annual base salary ($440,800) and continuation of benefits for 12 months.
Also in connection with the Restructuring, effective January 19, 2022, the Company terminated the employment of Ms. Kathryn O’Driscoll, Chief People Officer. Pursuant to the terms of Ms. O’Driscoll’s employment agreement with the Company, effective October 14, 2019 (the “O’Driscoll Employment Agreement”), subject to Ms. O’Driscoll’s execution and non-revocation of a release of claims in a form acceptable to the Company, Ms. O’Driscoll is entitled to certain post-termination benefits, consisting of payment of 12 months of her current annual base salary ($360,500) and continuation of benefits for 12 months.
Completion of Chief Executive Officer Transition
As previously reported on the Company’s Current Report on Form 8-K filed on January 5, 2022, the board of directors (the “Board”) appointed Mr. Kenneth Galbraith, age 59, as President, Chief Executive Officer and Chair of the Board of the Company, effective upon his commencement of employment with the Company. Mr. Galbraith’s employment with the Company commenced on January 15, 2022 (the “Start Date”). Effective as of the Start Date and in connection with Mr. Galbraith’s appointment, Dr. Ali Tehrani resigned from the positions of President and Chief Executive Officer and as a member of the Board. Also effective as of the Start Date, Ms. Lota Zoth, the previous Chair of the Board, was appointed as the Board’s lead independent director. For additional information regarding Mr. Galbraith’s and Ms. Zoth’s appointments and Dr. Tehrani’s resignation and the compensatory arrangements related thereto, please refer to the Company’s Current Report on Form 8-K and the exhibits thereto, filed with the Securities and Exchange Commission on January 5, 2022.
