United States securities and exchange commission logo
August 8, 2022
Kenneth Galbraith
Chair, President and Chief Executive Officer
Zymeworks Delaware Inc.
108 Patriot Drive, Suite A
Middletown, Delaware 19709
Re: Zymeworks Delaware
Inc.
Registration
Statement on Form S-4
Filed July 15, 2022
File No. 333-266160
Dear Mr. Galbraith:
We have limited our review of your registration statement to
those issues we have
addressed in our comments. In some of our comments, we may ask you to
provide us with
information so we may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed July 15, 2022
Comparison of Shareholder Rights, page 28
1. Please revise this
section to note that, in addition to differences between what a
stockholder s rights
will be under Delaware law and what they currently are under the
BCBCA, there will also
be differences between the rights of an Exchangeable Shareholder
and the rights of a
stockholder under Delaware law.
Risks Relating to the Exchangeable Shares, page 36
2. Please expand upon your
discussion of the risks relating to the Exchangeable Shares to
discuss any material
risks associated with the economic, governance or legal rights of the
Exchangeable
Shareholders as compared to the holders of existing Zymeworks Common
Shares or the new
Delaware Common Stock. This disclosure should, without limitation:
Kenneth Galbraith
FirstName
ZymeworksLastNameKenneth Galbraith
Delaware Inc.
Comapany
August NameZymeworks Delaware Inc.
8, 2022
August
Page 2 8, 2022 Page 2
FirstName LastName
include any material risks associated with the fact that,
unless and until their
Exchangeable Shares are converted into shares of Delaware Common
Stock, the
Exchangeable Shareholders will not directly hold equity
securities in Zymeworks Inc.
and will be reliant upon the contractual arrangements under the
Trust Agreement and
Support Agreement in order to exercise voting rights as
beneficiaries and receive
equivalent economic rights as holders of Delaware Common Stock.
In this regard, we
note for example that under the terms of the Support Agreement
the ExchangeCo
board has discretion to determine economic equivalence in
connection with certain
corporate events such as dividends or stock splits and ExchangeCo
may adjust
the Exchangeable Share Exchange Ratio instead of paying an
Equivalent Dividend
if the ExchangeCo board determines that ExchangeCo would be
liable for any
unrecoverable tax in connection with the payment of an Equivalent
Dividend;
discuss the fact that under the terms of the Exchangeable Share
Provisions, if an
Exchangeable Shareholder submits a Retraction Request, CallCo has
the overriding
right to purchase the Exchangeable Shares for cash rather than
delivering shares of
Delaware Common Stock and that an Exchangeable Shareholder may
not be able to
purchase shares of Delaware Common Stock at an equivalent price;
and
address any material differences in the legal rights of holders
of Exchangeable Shares
compared to holders of Delaware Common Stock. For example, please
discuss any
material limitations on a shareholder's ability to bring suit
against Zymeworks in their
capacity as shareholders, the applicability or enforceability of
the Zymeworks
bylaws and charter with respect to Exchangeable Shareholders, and
potential
difficulties with enforcing rights in Canada or the United
States.
3. Please discuss whether you expect the Zymeworks board will owe
fiduciary duties to the
holders of Exchangeable Shares under either Delaware law or the BCBCA
and whether
the existence of the Exchangeable Shares could lead to any potential
conflicts of interest.
In this regard, we note that Mr. Galbraith serves as the Chair,
President and Chief
Executive Officer of Zymeworks and is also the sole director of both
CallCo and
ExchangeCo.
Support Agreement
Economic Equivalence, page 70
4. It appears that the economic equivalence protections included in the
Support Agreement
do not apply to dividends or distributions pursuant to a Preferred
Stock Rights Agreement.
Please discuss whether the holders of Exchangeable Shares will have
the the right to
participate in any Preferred Stock Rights Agreement either directly or
indirectly through
the Special Voting Stock. To the extent holders of Exchangeable Shares
will not have the
right to participate in any such agreement, please include risk factor
disclosure on this
point.
5. We note your disclosure that Parent may not, without the prior
approval of the holders of
the Exchangeable Shares, reduce, combine, consolidate or change the
then outstanding
Kenneth Galbraith
Zymeworks Delaware Inc.
August 8, 2022
Page 3
Delaware Common Stock into a lesser number of Delaware Common Stock,
unless there
is an economically equivalent change with respect to the Exchangeable
Shares. Please
explain whether this provision would impact Parent's ability to engage in
share
repurchases.
Comparison of Rights of Zymeworks Shareholders and Parent Stockholders, page
112
6. Please expand this section to include a comparison of the rights of
existing Zymeworks
shareholders and holders of the Exchangeable Shares. Please also ensure
that it is clear
how the existence of the Exchangeable Shares impacts the rights of Parent
Stockholders.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Please contact Conlon Danberg at 202-551-4466 or Suzanne Hayes at
202-551-3675 with
any other questions.
Sincerely,
FirstName LastNameKenneth Galbraith
Division of
Corporation Finance
Comapany NameZymeworks Delaware Inc.
Office of Life
Sciences
August 8, 2022 Page 3
cc: Tony Jeffries, Esq.
FirstName LastName