EcoR1 Exercises Warrants, Expands Stake in Zymeworks by 5M Shares

Rhea-AI Filing Summary

Zymeworks (Nasdaq: ZYME) filed an 8-K announcing two material events.

• Amendment: The company removed the 19.99 % ownership cap from 5,086,521 pre-funded warrants originally sold to EcoR1 in December 2023.
• Exercise: On June 26 2025 the warrants were net-exercised at $0.0001; 5,086,480 common shares were issued on June 27 2025.

The exercise lifted the warrant overhang but adds ≈6.8 % to the basic share count, which now totals 74,844,505. Because the warrants were already deeply in-the-money, cash proceeds were immaterial (≈$509) and no additional capital was raised. EcoR1—already a >5 % holder with board representation—can now exceed the prior 19.99 % limit, increasing ownership concentration and voting power.

No financial statements or guidance were provided.

Positive

• Warrant overhang eliminated, simplifying the capital structure and removing a derivative security from the balance sheet.
• EcoR1's enlarged equity stake may further align a knowledgeable biotech investor with long-term shareholder value.

Negative

• Issuance of 5,086,480 new shares represents ≈6.8 % dilution with no significant cash inflow to the company.
• Removal of the 19.99 % ownership cap concentrates voting power in EcoR1, raising governance and minority-protection concerns.

Insights

Capital Markets Analyst

TL;DR: 5.1M-share conversion removes warrant overhang; ~7 % dilution with negligible cash, net effect largely equity-structure neutral.

The amendment enabled a full net exercise of 5,086,521 pre-funded warrants at $0.0001, converting a derivative security into common equity. From a capital-markets perspective, the move simplifies Zymeworks’ cap table and may reduce warrant-related EPS adjustments. However, the transaction adds roughly 6.8 % to the basic share count without meaningful new capital, diluting per-share value. Because the warrants were already deeply in-the-money and often counted in diluted share tallies, the true economic impact is modest. Investors should review historical share-count disclosures to quantify any incremental EPS effect.

Corporate Governance Expert

TL;DR: Ownership cap removal strengthens EcoR1’s voting block, heightening governance concentration risk.

Deleting Section 12’s 19.99 % ceiling allows EcoR1 funds—whose principals occupy two board seats—to hold the full warrant stake post-exercise. EcoR1’s position grows by ~5 M shares, potentially lifting its ownership well above prior thresholds and intensifying influence over strategic decisions. While larger equity exposure can align incentives, the shift elevates minority-shareholder disenfranchisement risk and could complicate future financings or contested votes. Watch forthcoming proxy materials for any defensive governance measures or related-party transaction disclosures.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 26, 2025

Zymeworks Inc.

(Exact name of registrant as specified in its charter)

Delaware		001-41535		88-3099146
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

108 Patriot Drive, Suite A Middletown, Delaware		19709
(Address of principal executive offices)		(Zip Code)

(302) 274-8744

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.00001 per share		ZYME		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

Amendment to Pre-Funded Warrants

On June 26, 2025, Zymeworks Inc. (the “Company”) entered into an amendment (the “Amendment”) to the outstanding Pre-Funded Warrants to Purchase Shares of Common Stock (the “Pre-Funded Warrants”), issued on December 28, 2023 to EcoR1 Capital Fund, L.P. (“EcoR1”) and EcoR1 Capital Fund Qualified, L.P. (together with EcoR1, the “Purchasers”) pursuant to the Securities Purchase Agreement, dated December 23, 2023, by and between the Company and the Purchasers (the “Purchase Agreement”). The Purchasers beneficially own in the aggregate more than 5% of the Company’s outstanding shares of common stock, $0.00001 par value per share (“Common Stock”). Oleg Nodelman, the manager of EcoR1 Capital LLC (“EcoR1 Capital”) (an affiliate of the Purchasers), and Scott Platshon, a partner at EcoR1 Capital, are members of the Company’s board of directors.

The Amendment removed the limitation on exercise contained in Section 12 of the Pre-Funded Warrants, which prohibited the exercise of the Pre-Funded Warrants if, after giving effect or immediately prior to such exercise, a Purchaser, together with its affiliates and any other persons whose beneficial ownership of shares of Common Stock would be aggregated with such Purchaser for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, would beneficially own more than 19.99% of the total number of issued and outstanding shares of Common Stock or voting power of the Company following such exercise.

The foregoing description of the material terms of the Amendment is qualified in its entirety by reference to the Amendment attached hereto as Exhibit 10.1, which is incorporated by reference herein.

Item 3.02 Unregistered Sales of Equity Securities.

As previously disclosed in a Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) on December 26, 2023, the Company entered into the Purchase Agreement with the Purchasers, pursuant to which the Purchasers purchased 5,086,521 Pre-Funded Warrants to purchase 5,086,521 shares of Common Stock. The per share purchase price for the Pre-Funded Warrants was $9.8299, for an aggregate purchase price of approximately $50 million.

On June 26, 2025, the Purchasers net exercised the Pre-Funded Warrants in full to acquire 5,086,521 shares of the Company’s Common Stock at an exercise price of $0.0001 per share. In connection with the net exercise, on June 27, 2025, the Company issued an aggregate of 5,086,480 shares of Common Stock (the “Pre-Funded Warrant Shares”). Following the issuance of the Pre-Funded Warrant Shares, the total number of shares of the Company’s Common Stock outstanding as of June 27, 2025 is 74,844,505.

The issuance of the Pre-Funded Warrant Shares was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) thereof, as a transaction involving the exchange of securities by the Company with existing holders of the Company’s securities where no commissions or other remuneration was paid or given, directly or indirectly, to any party for soliciting such exchange.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
10.1		Amendment No. 1 to Pre-Funded Warrants to Purchase Shares of Common Stock, dated June 26, 2025 by and among the Company and the Purchasers.
104		Cover Page Interactive Data File (embedded as Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				ZYMEWORKS INC.
				(Registrant)
Date: June 27, 2025				By:		/s/ Kenneth Galbraith
				Name:		Kenneth Galbraith
				Title:		Chair, Chief Executive Officer and President

FAQ

How many ZYME shares were issued through the June 2025 warrant exercise?

Zymeworks issued 5,086,480 common shares upon net exercise of the pre-funded warrants.

What is Zymeworks (ZYME)'s total shares outstanding after the transaction?

Shares outstanding increased to 74,844,505 as of June 27 2025.

Did Zymeworks receive significant cash from EcoR1’s warrant exercise?

No. The exercise price was $0.0001 per share, yielding only about $509 in proceeds.

What key change did the June 2025 amendment make to the pre-funded warrants?

The amendment removed the 19.99 % beneficial-ownership limit, permitting full exercise regardless of resulting stake.

Who were the counterparties in ZYME's warrant amendment and exercise?

The purchasers were EcoR1 Capital Fund, L.P. and EcoR1 Capital Fund Qualified, L.P., whose affiliates sit on Zymeworks’ board.