The chief executive officer of one of Canada’s most prominent and valuable drug developers, Zymeworks Inc., ZYME-N is leaving the company he founded 18 years ago, which is now in the midst of a sector-wide stock market slump.
Vancouver-based Zymeworks said Wednesday that Ali Tehrani will leave the positions of CEO and president by Feb. 1, and biotech industry veteran Kenneth Galbraith, who previously served as a director from 2009 to 2013, will become chair and CEO.
Mr. Galbraith was senior vice-president and chief financial officer of Vancouver biotech pioneer QLT Inc. from 1988 until 2001. In the past two years, he has served brief stints as CEO of biotech companies Prometic Life Sciences Inc. and Liminal BioSciences Inc. He’s also served stints on several other company boards in the sector and as a venture capitalist, including six years as general partner with Ventures West from 2007 to 2013.
The change happens as 450-person Zymeworks takes two of its cancer- and tumour-fighting antibody treatments, known as zanidatamab and ZW49, into human efficacy trials. Most of the company’s implied valuation is tied up in those two programs, according to a recent report by Raymond James analyst David Novak.
But it also comes following a challenging year for stocks of early-stage drug developers in Canada and elsewhere. Zymeworks shares closed at US$15.10 on the New York Stock Exchange Wednesday – down 71 per cent in the past 12 months – giving the company a market capitalization of about US$700-million.
The 49-year-old Mr. Tehrani, who is also leaving the board, said in an interview his departure has nothing to do with the stock price. “It’s really about what’s doing best for the company in the long haul,” he said.
Mr. Tehrani said he had considered whether he would be the best person to lead the company “going into two [late-stage human efficacy] trials, getting ready for commercialization. Though I am pretty sure I can learn it on the fly and do it again, it’s not something you do want to learn on the fly. You’re better off serving your shareholders and your patients and team by having people who’ve done it, who understand the complexity and who have to get it right the first time.”
He added that Mr. Galbraith “has my full support and my full blessing in taking Zymeworks through its next few chapters.” The outgoing CEO said he had instigated efforts to find a successor last year, and the decision was a mutual one with other directors. “The board and I are on really good terms, we’re going to be friends for a long time.”
Zymeworks’s current chair, Lota Zoth, said in a statement the board “unanimously believes that Ken is the ideal leader to implement our next phase of development.” Ms. Zoth also thanked Mr. Tehrani “for outstanding service in creating a solid foundation and advancing Zymeworks to a late-stage clinical company.”
The Iranian-born Mr. Tehrani set out two decades ago to use computer modelling to help drug developers identify promising therapies faster and cheaper than conventional methods. The PhD graduate in microbiology from University of British Columbia raised tens of millions of dollars from angels and venture capitalists, then signed deals with nine pharmaceutical companies including Eli Lilly, Merck, and Johnson & Johnson to help them identify drug candidates in areas such as oncology, dermatology and infectious diseases.
They paid Zymeworks US$200-million up front and the deals could be worth billions more if the drugs pass a series of development milestones, plus further royalties if any drugs make it to market. Six drugs to date have entered into clinical development. Zymeworks, which went public in 2017, is developing its own drugs as well.
Zymeworks also said Wednesday that chief financial officer Neil Klompas will take on a second role as chief operating officer, effective immediately.
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