Zymeworks Inc.

Theravance’s results of operations have been included in the Company’s condensed consolidated financial statements beginning on the Closing Date and were not material through September 30, 2026.

Post-Combination Severance Costs

In connection with the Merger, the Company evaluated the workforce requirements of the combined organization and communicated termination decisions to certain former Theravance employees. Theravance employees are owed a change in control severance payment resulting from the employment agreements acquired by the Company. The payments are contingent on the employees providing service through the communicated and agreed upon termination date. As a result, the Company recognized $8,252 of selling, general and administrative expense and $741 of research and development expenses during the three and nine months ended September 30, 2026. These severance arrangements were determined to represent post-combination obligations because the related termination decisions were initiated by the Company following the Merger and were undertaken primarily for the benefit of the combined organization.

Transaction Costs

The Company incurred acquisition-related transaction costs of $3,915 and $6,927 during the three and nine months ended September 30, 2026, respectively. These costs primarily consisted of legal, accounting, advisory and other professional fees and were recognized as selling, general and administrative expense in the condensed consolidated statements of income (loss) and comprehensive income (loss).

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations of the Company and Theravance as if the Merger had been completed on January 1, 2025:

The unaudited pro forma financial information was prepared for comparative purposes only and is not necessarily indicative of the results that would have occurred had the Merger been completed on January 1, 2025, nor is it indicative of future operating results.

The unaudited pro forma financial information includes, where applicable, adjustments for (i) additional amortization expense associated with the fair value adjustments to acquired intangible assets, (ii) acquisition-related transaction costs and other nonrecurring costs such as stock-based compensation for the settlement of Theravance equity awards and severance expense for Theravance employees, (iii) incremental interest expense and other effects associated with financing the Merger, and (iv) the related income tax effects of the pro forma adjustments.

The pro forma net income for the three and nine months ended September 30, 2026, was adjusted to exclude $55,075 and $64,176, respectively, of acquisition-related transaction costs and other nonrecurring expenses incurred during 2026. The pro forma net loss for the nine months period ended September 30, 2025 was adjusted to include such costs as if they had been incurred on January 1, 2025.

The pro forma adjustments are based on information available as of the date of these condensed consolidated financial statements and assumptions that management believes are reasonable. The pro forma financial information does not reflect the effects of any anticipated synergies, operating efficiencies, cost savings or integration costs that may result from the Merger.

5. Net Income (Loss) Per Share

Net income (loss) per share for the three and nine months ended September 30, 2026 and 2025 was as follows:

The weighted average number of shares of common stock used in the basic and diluted earnings per share calculations include (i) Exchangeable Shares for all the periods presented and (ii) for the three and nine months ended September 30, 2025, the pre-funded warrants issued in connection with the Company’s December 2023 private placement as the warrants were exercisable at any time for nominal cash consideration until their exercise on June 25, 2025. The Company’s potentially dilutive securities, which include equity classified stock options, RSUs, PSUs, and ESPP purchases, have been excluded from the computation of diluted net loss per share for the three and nine months ended September 30, 2025.

6. Cash, Cash Equivalents and Marketable Securities

The Company did not have any short-term or long-term marketable securities as of September 30, 2026. The following table summarizes the Company’s marketable securities as of December 31, 2025:

The unrealized losses on the Company’s available-for-sale securities as of December 31, 2025 were not material and were caused by fluctuations in market values and interest rates as a result of the economic environment. The Company concluded that an allowance for credit losses was unnecessary as of December 31, 2025 because the decline in the market value was attributable to changes in market conditions and not credit quality, and that it is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. There was no material realized gain or loss on available-for-sale securities in the periods presented.

The following tables present information about the Company’s cash, cash equivalents and marketable securities that are measured at fair value on a recurring basis, and indicate the fair value hierarchy of the valuation techniques used to determine such fair value:

7. Goodwill

Prior to the Company's acquisition of Theravance (note 4), total goodwill was $12,016, for which the Company performed its most recent annual impairment test of goodwill as of December 31, 2025. As part of the evaluation of the recoverability of goodwill, the Company identified onlyone reporting unit to which the total carrying amount of goodwill has been assigned. As of December 31, 2025, the Company performed a qualitative assessment for its annual impairment test of goodwill after concluding that it was not more likely than not that the fair value of the reporting unit was less than its carrying value. Consequently, a quantitative impairment test was not required. The Company concluded that there wereno impairment indicators related to goodwill as of September 30, 2026.

8. Liability Related to the Sale of Future Revenue

The Company has entered intotwo financing arrangements that are accounted for as liabilities related to the sale of future revenue: (i) a royalty monetization arrangement with Royalty Pharma secured by a portion of future royalties from Ziihera (zanidatamab-hrii) and (ii) a financing arrangement with OMERS secured by a portion of future YUPELRI profit-share cash flows. Both arrangements are included within Liability related to the sale of future revenue in the condensed consolidated balance sheet. Interest expense associated with these arrangements is recognized using the effective interest method and is presented within Interest expense related to sale of future revenue in the condensed consolidated statements of operations. The sections below provide additional information regarding each arrangement.

Royalty Revenue Monetization

On March 2, 2026, Zymeworks BC entered into a sale agreement (the “Sale Agreement”) with Zymeworks Royalty Limited Partnership (the “Subsidiary”) a special purpose entity newly formed by Zymeworks BC and by its general partner Zymeworks General Partner ULC (“Zymeworks GP”). Under the Sale Agreement, Zymeworks BC sold to the Subsidiary a 30% interest in future royalties from the license agreements (the “Covered Agreements") with Jazz Pharmaceuticals Ireland Limited and BeOne Medicines Ltd. (“BeOne”) relating to Ziihera (zanidatamab‑hrii), not to exceed 120% of the maximum amount payable (excluding indemnification and other similar obligations) by the Subsidiary under the Loan Agreement (defined below) (such 30% interest, the “Transferred Royalty Interest”).

Following the transfer, the Subsidiary entered into a loan agreement (the “Loan Agreement”) with Royalty Pharma, acting as administrative agent and lender, pursuant to which the Subsidiary borrowed $250,000 in a non‑recourse, secured term loan (the “Loan”). The Loan bears fixed interest and matures on December 31, 2042 (the “Maturity Date”). Under the terms of the Loan Agreement, the amount payable to Royalty Pharma no later than the Maturity Date is approximately $481,300, provided that if the Loan is repaid in full on or before December 31, 2033, the amount payable is $412,500, in each case inclusive of all applicable interest, yield protection premiums, early redemption fees, exit fees and other amounts payable under the Loan Agreement (excluding indemnification and similar obligations). Amounts repaid may not be reborrowed.

Zymeworks BC will retain 70% of royalties on Ziihera annual net sales throughout the term of the Loan, with full royalty rights reverting to Zymeworks BC once the Loan and other amounts payable under the Loan Agreement to Royalty Pharma have been repaid in full. All earned regulatory and commercial milestone payments under the Covered Agreements will be retained by Zymeworks BC.

The Loan Agreement is fully non‑recourse to Zymeworks BC and Zymeworks Inc. and is secured solely by the Subsidiary’s assets, including the Transferred Royalty Interest, related rights under the Sale Agreement, and the deposit account used to receive royalty payments.

The Sale Agreement and Loan Agreement contain customary covenants and restrictions, including certain transfers, additional indebtedness, and related matters. In the event of certain defaults, such as termination of either Covered Agreement, specified breaches, or a change of control of the Company, Royalty Pharma may declare all outstanding principal, accrued interest, and applicable fees immediately due and enforce its rights against the collateral securing the loan.

The Company recorded the upfront payment of $250,000 as a liability related to the sale of future royalties, net of transaction costs of $5,563, which are being amortized over the estimated life of the arrangement using the effective interest rate method. The

Company recognizes royalty revenue in the period in which the commercial partner sells the related product and recognizes the related revenue. The Company records royalty payments made to Royalty Pharma as a reduction of the liability.

The Company determines the effective interest rate used to record interest expense under this agreement based on an estimate of future royalty payments to Royalty Pharma. As of September 30, 2026, the estimated effective interest rate under the agreement was 9.7%.

The following is a summary of the Company's liability related to sale of future royalties for the nine months ended September 30, 2026:

There are numerous factors, most of which are not within our control, that could materially impact the amount and timing of royalty payments from Jazz Pharmaceuticals Ireland Limited and BeOne, and result in changes to our estimate of future royalty payments to Royalty Pharma. Such factors include, but are not limited to, the regulatory approval and commercial sales of Ziihera, competing products or other significant events.

OMERS Financing Arrangement

On September 23, 2026, in connection with the Company’s acquisition of Theravance, two special-purpose entities ("Issuers") issued $350.0 million aggregate principal amount of senior secured notes to OMERS (the "Notes"). A portion of the proceeds was used to finance the Merger and related transaction steps. The Company consolidates thetwo special purpose entities.

The Notes bear interest at a fixed rate of 8.25% per annum, were issued at 99% of par, and mature on December 31, 2036, unless repaid earlier. Interest is payable quarterly in arrears on the last Business Day of March, June, September, and December of each year, beginning in December 2026. Interest is computed on the basis of a 360-day year of twelve 30-day months based on actual days elapsed.

75% of the YUPELRI profit-share cash flows are contractually assigned to OMERS to service the associated debt obligation and payments are first applied to interest payments with the remaining going to the principal. The Company retains the remaining 25% of cash flows.

The Notes may be redeemed at the Issuers’ option and are subject to redemption upon specified triggering events, in each case at the applicable Prepayment Price, which includes the outstanding principal, accrued and unpaid interest, applicable Yield Maintenance Premium, and other amounts then due. Certain Events of Default may result in acceleration.

The Notes are secured by substantially all of the assets of the Issuers, including the YUPELRI-related assets and the Collection Account, and are guaranteed by certain subsidiaries of Theravance that became indirect subsidiaries of Zymeworks in connection with the Merger. The Notes are generally non-recourse to Zymeworks Inc. and its subsidiaries other than the Issuers and specified guarantors, subject to the terms and limitations of the financing documents.

The financing documents contain covenants and restrictions relating to, among other matters, additional indebtedness, asset dispositions, and modifications of specified transaction agreements. As of September 30, 2026, the Company was in compliance with all applicable covenants.

Amounts held in the collection account are contractually restricted for application in accordance with the payment provisions of the Notes and are not available for the Company's general corporate purposes.

The Company recognizes collaboration revenue in the period in which the product is sold and revenue is recognized. The Company records collaboration payments made to OMERS as a reduction of the liability.

The Company determines the effective interest rate used to record interest expense under this agreement based on an estimate of future collaboration payments to OMERS. As of September 30, 2026, the estimated effective interest rate under the agreement was 9.4%.

As of September 30, 2026, the carrying amount of the Notes was as follows:

Interest expense recognized on the Notes from September 23, 2026, through September 30, 2026, was approximately $591, including approximately $31 of amortization of the original issue discount and debt issuance costs.

The Notes do not require fixed periodic principal installments; the amount and timing of principal repaid before maturity depend on cash generated by the underlying YUPELRI arrangements and are not contractually determinable at the reporting date. Because no principal repayments are contractually due or determinable as payable within twelve months of the balance sheet date, the entire carrying amount of the Notes is classified as noncurrent.

There are numerous factors, most of which are not within the Company's control, that could materially impact the amount and timing of collaboration payments from Viatris (defined below), and result in changes to the Company's estimate of future collaboration payments to OMERS. Such factors include, but are not limited to, the commercial sales of YUPELRI, competing products or other significant events.

9. Stockholders’ Equity

Authorized Share Capital and Preferred Stock

The Company’s authorized share capital consists of 1,000,000,000 shares of stock, consisting of (i)900,000,000 shares of common stock, par value $0.00001 per share, and (ii)100,000,000 shares of preferred stock, par value $0.00001 per share.

On October 13, 2022, the Company completed an internal reorganization transaction resulting in a Delaware incorporated entity becoming the listed company (the “Redomicile Transactions”). Prior to the Redomicile Transactions, the shares of Zymeworks BC Inc. (formerly known as Zymeworks Inc.) were publicly listed. To effect the Redomicile Transactions, the Company conducted a share exchange, pursuant to which holders of the Company’s common shares exchanged their common shares in the Company for shares of common stock of Zymeworks Inc. (formerly known as Zymeworks Delaware Inc.) or, at their election with respect to all or a portion of their common shares in the Company and subject to applicable eligibility criteria and an overall cap, exchangeable shares (the “Exchangeable Shares”) in the capital of a newly formed indirect subsidiary of Zymeworks Inc. A special meeting of Company security holders was held on October 7, 2022 to approve the Redomicile Transactions. The Redomicile Transactions were governed by a transaction agreement dated July 14, 2022, as restated and amended on August 18, 2022 (the “Restated and Amended Transaction Agreement”), by and among the Company and its direct or indirect subsidiaries Zymeworks Inc., Zymeworks CallCo ULC (“CallCo”) and Zymeworks ExchangeCo Ltd., (“ExchangeCo”) including a plan of arrangement included as Exhibit A to the Restated and Amended Transaction Agreement (the “Plan of Arrangement”).

In connection with the Plan of Arrangement, the Company issued to Computershare Trust Company of Canada, a trust company existing under the laws of Canada (the “Share Trustee”), one share of the Company’s preferred stock, par value $0.00001 per share, which has certain variable voting rights in proportion to the number of Exchangeable Shares outstanding (the “Special Voting Preferred Stock”), enabling the Share Trustee to exercise voting rights for the benefit of the holders of the Exchangeable Shares.

Immediately prior to the completion of the Redomicile Transactions, there were 61,699,387 Zymeworks BC common shares issued and outstanding. In connection with the consummation of the Plan of Arrangement,60,274,854 shares of common stock and 1,424,533 Exchangeable Shares were issued to former Zymeworks BC shareholders. As of September 30, 2026, there were

538,890 Exchangeable Shares held by former Zymeworks BC shareholders (December 31, 2025:553,184). The Company will issue shares of its common stock as consideration when a holder of Exchangeable Shares calls for Exchangeable Shares to be retracted by ExchangeCo, when ExchangeCo redeems Exchangeable Shares from the holder, or when CallCo purchases Exchangeable Shares from the Exchangeable Shareholder under CallCo’s overriding call rights. These Exchangeable Shares and the Special Voting Preferred Stock, when taken together, are similar in substance to the Company’s common stock and are treated as such in calculation of basic net income (loss) per share.

2024 Repurchase Program

On August 1, 2024, the board of directors of the Company authorized a stock repurchase program (the “2024 Repurchase Program”), whereby the Company may repurchase up to $60,000 of the Company’s outstanding common stock, par value $0.00001 per share.

During the year ended December 31, 2024, the Company repurchased 2,545,402 shares of its common stock for a cost of $30,000, and incurred commission expense of $51, under the 2024 Repurchase Program, which have been recorded against accumulated deficit. The Company’s share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of $152. During the year ended December 31, 2024, the Company retired all 2,545,402 shares repurchased. These shares were returned to the status of authorized and unissued shares. During the year ended December 31, 2025, the Company completed the 2024 Repurchase Program by repurchasing 1,856,907 shares of its common stock for a cost of $29,997 and incurred commission expense of $37, which have been recorded against accumulated deficit. Excise tax was estimated asnil. The Company retired all 1,856,907 shares repurchased. These shares were returned to the status of authorized and unissued shares.

The following table presents the Company’s 2024 Repurchase Program activity:

2025 Repurchase Program and 2026 Repurchase Program

On November 16, 2025, the board of directors of the Company authorized a new stock repurchase program (the “2025 Repurchase Program”), whereby the Company may repurchase up to $125,000 of the Company’s outstanding common stock, par value $0.00001 per share.

During the year ended December 31, 2025, the Company repurchased 431,217 shares of its common stock for a cost of $11,188, incurred an obligation to purchase common stock for a cost of $464 which had not been settled by December 31, 2025, and incurred commission expense of $9, under the 2025 Repurchase Program, which have been recorded against accumulated deficit. Excise tax was estimated asnil. The Company retired all 431,217 shares repurchased. These shares were returned to the status of authorized and unissued shares.

During the nine months ended September 30, 2026, the Company repurchased 3,766,336 shares of its common stock for a cost of $91,069, and incurred commission expense of $75, under the 2025 Repurchase Program, which have been recorded against accumulated deficit. The Company retired all 3,766,336 shares repurchased. These shares were returned to the status of authorized and unissued shares.

The following table presents the Company’s 2025 Repurchase Program activity for the periods indicated:

On May 14, 2026, the Company terminated the 2025 Repurchase Program and the board of directors of the Company authorized a new share repurchase program providing the ability to repurchase up to $125.0 million in shares of the Company's common stock (the “2026 Repurchase Program”).

During the nine months ended September 30, 2026, the Company repurchased 1,971,454 shares of its common stock for a cost of $49,373 and incurred commission expense of $39, under the 2026 Repurchase Program, which have been recorded against accumulated deficit. The Company retired all 1,971,454 shares repurchased. These shares were returned to the status of authorized and unissued shares.

Excise tax was estimated as $797 during the nine months ended September 30, 2026, for purchases under the 2025 Repurchase Program and 2026 Repurchase Program.

The following table presents the Company’s 2026 Repurchase Program activity:

Stock-Based Compensation

In connection with the Redomicile Transactions in 2022, Zymeworks BC assigned to the Company, and the Company assumed, all of Zymeworks BC’s rights and obligations under each of the stock-based compensation plans, as described below, and such plans became the Company’s stock-based compensation plans, with each outstanding award assumed by the Company and deemed exchanged for equivalent awards of the Company, except that the security issuable upon exercise or settlement, as applicable, will be shares of common stock of the Company rather than common shares of Zymeworks BC.

Original Stock Option Plan

On July 14, 2006, the shareholders of the Company approved an employee stock option plan (the “Original Plan”). The total number of options outstanding is not to exceed 20% of the issued common shares of the Company. Options granted under the Original Plan are exercisable at various dates over their 10-year life. The exercise prices of the Company’s stock options under the Original Plan are denominated in Canadian dollars. Upon the effectiveness of the Company’s New Plan described below, no further options were issuable under the Original Plan. However, all outstanding options granted under the Original Plan remain outstanding, subject to the terms of the Original Plan and the applicable grant documents, until such outstanding options are exercised or they terminate or expire by their terms.

New Plan and Inducement Plan

On April 10, 2017, the Company’s shareholders approved a new stock option plan, which became effective immediately prior to the consummation of the Company’s initial public offering (“IPO”). This plan allows for the grant of options and also permitted the Company to grant incentive stock options (“ISOs”), within the meaning of Section 422 of the Internal Revenue Code, to its employees, until the shares reserved for issuance of ISOs were depleted. On June 7, 2018, the Company’s shareholders approved an amendment and restatement of this plan (this plan, as amended and restated, the “New Plan”), which includes an article that allows the Company to grant restricted shares, RSUs, PSUs and other share-based awards, in addition to stock options. As of September 30, 2026,4,987,937 shares of common stock were available for future award grants under the New Plan (December 31, 2025:5,023,809 shares of common stock).

On January 5, 2022, the board of directors approved the Zymeworks Inc. Inducement Stock Option and Equity Compensation Plan (the “Inducement Plan”) and reserved 750,000 of the Company’s common shares for issuance pursuant to equity awards granted thereunder. On July 19, 2024, the board of directors approved an amendment and restatement of the Inducement Plan, which increased the number of shares of the Company’s common stock available for future issuance pursuant to equity awards granted under the Inducement Plan by 700,000 shares. As a result of this increase, a total of 1,450,000 shares will have been available for issuance pursuant to equity awards granted under the Inducement Plan since the inception of the Inducement Plan in January 2022. As of September 30, 2026,622,500 shares of common stock were available for future award grants under this plan (December 31, 2025:390,000).

RSUs

The following table summarizes the Company’s RSU activity under the New Plan since December 31, 2025:

As of September 30, 2026, there was $22,430 of unamortized RSU expense that will be recognized over a weighted average period of 1.88 years.

PSUs

The following table summarizes the Company’s PSU activity under the New Plan since December 31, 2025:

As of September 30, 2026, there was $8,557 of unamortized PSU expense that will be recognized over a weighted average period of 2.36 years.

Stock Options

The following table summarizes the Company’s stock options granted in Canadian dollars under the Original Plan and the New Plan:

The following table summarizes the Company’s stock options granted in U.S. dollars under the New Plan and the Inducement Plan:

During the nine months ended September 30, 2026, the Company received cash proceeds of $14,340 from stock options exercised.

The stock options outstanding at September 30, 2026 expire at various dates from November 9, 2026 to September 27, 2036.

The estimated fair values of options granted to officers, directors, employees and consultants are amortized over the relevant vesting periods. Stock-based compensation expense for equity classified instruments, RSUs, PSUs as well as the financial statement impact of the amortization and periodic revaluation of liability classified instruments, are recorded in research and development expense and selling, general and administration expense as follows:

The amounts above include stock-based compensation expense relating to RSUs and PSUs of $5,167 and $8,863 for the three and nine months ended September 30, 2026, respectively (2025: $2,727 and $7,353).

The estimated fair value of stock options granted under the New Plan was determined using the Black-Scholes option pricing model with the following weighted-average assumptions:

At September 30, 2026, the unamortized compensation expense related to unvested options was $23,481. The remaining unamortized compensation expense as of September 30, 2026 will be recognized over a weighted-average period of 1.76 years.

10. Research, Collaboration and Licensing Agreements

Revenue recognized from the Company’s strategic partnerships which includes amounts from Jazz is summarized as follows:

During the three months ended September 30, 2026, the Company recognized $250 million of milestone revenue from Jazz related to Ziihera's U.S. approval for GEA. This amount is presented within accounts receivable on the accompanying balance sheet as of September 30, 2026, and was collected subsequent to quarter end.

Viatris Collaboration Agreement (YUPELRI)

As part of the acquisition of Theravance, the Company acquired rights and obligations under a collaboration agreement with Viatris Inc. (“Viatris”) related to the development and commercialization of YUPELRI (revefenacin) (the “Viatris Agreement”).

In the US, Viatris leads the commercialization of YUPELRI, and the Company co-promotes the product under a profit and loss sharing arrangement (65% to Viatris;35% to the Company). Outside the US (excluding China and adjacent territories), Viatris is responsible for development and commercialization and will pay the Company a tiered royalty on net sales at percentage royalty rates ranging from low double-digits to mid-teens. Viatris also holds exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include the Hong Kong SAR, the Macau SAR, and Taiwan (collectively, the “China Region”), and the Company is eligible to receive tiered royalties ranging from 14% to 20% on net sales of nebulized revefenacin in the China Region. Viatris is responsible for all aspects of development and commercialization in the China Region, including pre-and post-launch activities and product registration and all associated costs. Viatris is the principal in the YUPELRI sales transactions, and as a result, the Company does not reflect the product sales in its consolidated financial statements.

As of September 30, 2026, the Company remains eligible to receive from Viatris up to $172.5 million of remaining sales and regulatory milestone payments associated with YUPELRI monotherapy worldwide, including $125.0 million of U.S. sales milestones, $10.0 million of European Union regulatory milestones, and $37.5 million of sales milestones in the China Region. The U.S. sales milestones are payable upon achievement of certain annual aggregate U.S. net sales thresholds, while the China Region milestones are payable upon achievement of certain cumulative net sales thresholds in the China Region.

The Viatris Agreement is considered to be within the scope of ASC 808, Collaborative Arrangements, as the parties are active participants and exposed to the risks and rewards of the collaborative activity. In accordance with the applicable accounting guidance, amounts receivable from Viatris in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as revenue from “Viatris collaboration agreement” irrespective of whether the overall collaboration is profitable.

The future potential milestone amounts for the Viatris Agreement were not included in the original transaction price, as they were all determined to be fully constrained following the concepts of ASC 606, Revenue from Contracts with Customers. As part of the Company’s evaluation of the constraint on development and regulatory milestones, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals which are not within its control and uncertain at this stage. In June 2025, YUPELRI received regulatory approval by China’s National Medical Products Administration (“NMPA”) which triggered a $7.5 million milestone payment by Viatris.

Sales-based milestone payments and royalty arrangements will be recognized when the sales occur or the milestone is achieved. In December 2025, the Company recognized a $25.0 million milestone related to the achievement of $250.0 million in US net sales in 2025. For the three and nine months ended September 30, 2026, the Company has not achieved any YUPELRI-related milestones.

Since December 31, 2025, there have not been any material changes to the key terms of the Company's collaboration and license agreements.

Contract Assets and Liabilities

As of September 30, 2026, contract assets from research, collaboration and licensing agreements were $2,340 (December 31, 2025: $2,752). As of September 30, 2026, short-term and long-term contract liabilities were $16,659 and $0, respectively (December 31, 2025: $2,418 and $14,606, respectively). Contract liabilities relate to deferred revenue from the BeOne and Jazz agreements.

11. Leases

The lease for the Company’s office and laboratory spaces in Vancouver, British Columbia, which was entered into in January 2019, has an initial term expiring in February 2032, withtwo five-year extension options. In addition, the Company leases office spaces in Bellevue, Washington and in Redwood City, California with lease terms expiring between August 2027 and July 2029. None of the optional extension periods have been included in the determination of the right-of-use assets or the lease liabilities for operating leases as the Company did not consider it reasonably certain that the Company would exercise any such options. The Company ceased its use of its office space in Redwood City, as of March 31, 2026 and fully amortized the right-of-use asset of this lease as of March 31, 2026.

As part of the acquisition of Theravance on September 23, 2026, the Company assumed operating leases related to office facilities in South San Francisco, California and Dublin, Ireland. The acquired lease right-of-use assets and lease liabilities were recognized at their estimated acquisition-date fair values in accordance with ASC 805, Business Combinations. These amounts differ from Theravance's historical carrying values immediately prior to the acquisition.

Theravance leases office and laboratory space intwo buildings in South San Francisco, California, under a non-cancelable operating lease that ends in May 2030. These facilities consist of approximately 162,000 square feet of office and laboratory space. Of this office and laboratory space, approximately 130,000 square feet was subleased to subtenants as of September 30, 2026.

The balance sheet classification of the Company’s lease liabilities was as follows:

Cash paid for amounts included in the measurement of operating lease liabilities for fixed payments for the three and nine months ended September 30, 2026 was $1,032 and $3,205, respectively (2025: $1,077 and $3,200), and were included in net cash used in operating activities in the condensed consolidated statement of cash flows.

As of September 30, 2026, the maturities of the Company’s operating lease liabilities were as follows:

The cost components of the operating leases were as follows for the three and nine months ended September 30, 2026 and 2025:

The expense for the nine months ended September 30, 2026 includes $766 of accelerated amortization for the right-of-use asset of the Company's office space in Redwood City.

12. Commitments and Contingencies

Commitments

The Company has entered into research collaboration agreements with strategic partners in the ordinary course of operations that may include contractual milestone payments related to the achievement of pre-specified research, development, regulatory and commercialization events and indemnification provisions, which are common in such agreements. Pursuant to the agreements, the Company is obligated to make research and development and regulatory milestone payments upon the occurrence of certain events and royalty payments based on net sales. The maximum amount of potential future indemnification is unlimited, however, the Company currently holds commercial and product liability insurance that limits the Company’s liability and may enable it to recover a portion of any future amounts paid. Historically, the Company has not made any indemnification payments under such agreements and believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to indemnification obligations for any period presented in the interim condensed consolidated financial statements.

Contingencies

From time to time, the Company may be subject to various legal proceedings and claims related to matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred.

Future Royalty Payment Contingency - Ampreloxetine

In connection with the acquisition of Theravance, the Company evaluated the acquired contingent obligation related to previous funding received from Royalty Pharma Investments (“Royalty Pharma”) in exchange for certain future royalty rights to ampreloxetine. The arrangement included $25.0 million of upfront funding received in July 2022, a potential $15.0 million contingent milestone, and potential future royalty payments. The amounts payable under the arrangement are contingent on specified regulatory and commercial outcomes for ampreloxetine. If ampreloxetine regulatory approval is not achieved or if ampreloxetine sales are never recognized, the Company would not be obligated to repay any of the funding amounts received from Royalty Pharma. Accounting for the acquisition of Theravance is discussed in Note 4 of these financial statements.

On March 3, 2026, the ampreloxetine Phase 3 clinical study (CYPRESS) did not meet its primary endpoint and subsequently the CYPRESS program was phased out. The Company does not have any current plans to resume clinical trials related to the program and as such there are no payments expected to be made to Royalty Pharma. The fair value of the liability assumed as of the acquisition date was determined to be nil as described in Note 4. The Company will continue to assess the accounting for this contingent obligation should there be any relevant clinical developments.

13. Business Segments

The Company operates and manages its business in a single reportable segment, which is the management of a portfolio of licensed healthcare assets and development of novel multifunctional biotherapeutics (the “biotherapeutics segment”).

The accounting policies of the biotherapeutics segment are the same as those described in the summary of significant accounting policies.

The Company’s Chief Operating Decision Maker (“CODM”) is the Chair of the Board of Directors and Chief Executive Officer. The CODM assesses performance for the biotherapeutics segment and decides how to allocate resources based on the results of our strategic planning, with segment income (loss) being used to monitor performance against the budgeted costs of that strategy. The measure of segment assets is reported on the balance sheet as total consolidated assets.

Segment profit or loss is measured as net income (loss) presented in the condensed consolidated statements of operations and comprehensive income (loss). For the purpose of evaluating segment performance and allocating resources, the CODM reviews the Company’s consolidated financial information together with certain operating metrics and evaluates net income (loss) against comparable prior periods and the Company’s annual operating plan. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

In addition to the significant expense categories included within the condensed consolidated statements of income (loss) and comprehensive income (loss), the following table sets forth disaggregated research and development expenses:

14. Subsequent Events

On October 15, 2026, the statute of limitations expired for the 2022 U.S. federal income tax return of a U.S. subsidiary acquired in the Theravance acquisition. The Company is currently evaluating the impact of the statute expiration on the acquired uncertain tax position and related purchase accounting. The ultimate amount and accounting treatment remain subject to completion of the Company's analysis.

On October 20, 2026, the Company collected milestone receivable amount of $250 million from Jazz, in relation Ziihera's U.S. approval for GEA.

On October 22, 2026, the Company entered into an exclusive global license and collaboration agreement with Roche for the development of ZW209. Under the agreement, the Company is eligible to receive an upfront payment of $55 million, a $40 million payment upon initiation of the Phase 1b trial, and additional development, commercial and sales-based milestone payments of up to $718 million, and tiered high single digit to mid-teen royalties on future net sales of any approved medicines resulting from the collaboration.