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Zymeworks (Pending:ZYME) filed an F-1 with the Securities and Exchange Commission.

The company plans to sell 4.5 million shares at a marketed price range of $13 to $16 in both the U.S. and Canada. The company has an additional 675,000 shares as an overallotment option for its underwriters. The joint book-running managers for the offering are Citigroup Global Markets Inc., Barclays Capital Inc. and Wells Fargo Securities LLC. The lead manager is Canaccord Genuity and the co-manager is Cormark Securities.

For our premium subscribers we previewed the deal here.

Business overview

Zymeworks Inc. is a biopharmaceutical company that is based in Vancouver, British Columbia. The company is in clinical stage and focused on developing biotherapeutics for the treatment of cancer. It was founded in 2003 and is venture-capital backed. Recently, Zymeworks completed a $61.5 million funding round and is backed by $150 million from multiple venture capital firms.


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Executive management

Ali Tehrani is the chief executive officer, president and a co-founder of Zymeworks. He has played a central role in obtaining angel financing for Zymeworks. Tehrani holds a Ph.D. in microbiology and immunology from the University of British Columbia. He also holds a Master of Science and Bachelor of Science in biochemistry from the University of Massachusetts.

Neil Klompas is the chief financial officer of Zymeworks and has served in that role since joining the company in March 2007. Previously, Klompas worked for KPMG LLP in both the U.S. and Canada from 2000 until 2007 in a variety of different executive roles. Klompas has more than 20 years of experience in the biotechnology and healthcare industries. Klompas has an undergraduate degree in microbiology and immunology from the University of British Columbia and is a chartered public accountant.

Financial highlights and risks

Zymeworks reported total revenues of $11,009,000 for the year that ended on Dec. 31, 2016. It also reported a net loss of $33,809,000 for that year. For the year that ended on Dec. 31, 2015, the company reported total revenues of $9,660,000 and a net loss of $19,170,000.

Zymeworks reports that one of its risk factors is that its key product candidates are either in the pre-clinical stage or are in the early clinical stages of development. It reports that if it doesn’t receive regulatory approval for its candidates, then its business will be adversely impacted. The company plans to use its proceeds to fund clinical development of its primary product candidates, to develop additional product candidates and for general corporate purposes.

Competitors

The company reports that the biotechnology and pharmaceutical industries are rapidly evolving. It states that it faces many competitors, including large biopharmaceutical companies (Novartis, Merck), academic institutions and governmental agencies.

Conclusion: Consider Buying In

Zymeworks has attracted the interest of some major players within the pharmaceutical industry with its product candidates and has been able to raise $150 million in funding in several rounds.

While the company has not yet been profitable, if its product candidates receive regulatory approval, it may lead to the increase of its share price.

We recommend that investors consider making modest allocations of this IPO.

Don Dion’s IPO Insights provides up-to-date information and analysis on the major IPOs each week, along with additional opportunities to invest and short these stocks at their quiet period and lockup period expirations, respectively. Consider following us at the link above. We will continue our PRO offerings on Seeking Alpha alongside our more exclusive research.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ZYME over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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