SVB Securities downgraded Zymeworks Inc. ( NYSE: ZYME ) to Market Perform from Outperform on Friday, noting its recent pipeline updates and the licensing deal the Canadian biotech signed with Jazz Pharma ( JAZZ ) for cancer therapy zanidatamab.
After discussions with JAZZ management, the analysts led by Andrew Berens note that the Ireland-based company is unlikely to exercise its options for the treatment targeting some of the more significant indications, such as breast cancer and colorectal cancer.
The removal of breast cancer and colorectal cancer indications from the firm’s model reduces the ZYME price target to $8 from $19 per share.
Additionally, citing the company’s R&D Day, which concluded on Thursday, the analysts highlight the management’s ambitious goal of “developing a robust portfolio of antibody-drug conjugates.”
“….we think these assets are unlikely to become material components of the investment thesis until late 2023 or 2024,” the team wrote, arguing that the company has only ADC ZW-49 as a clinical-stage asset which, according to the analysts, has an uncertain value for many investors.
Wall Street has remained bullish on Zymeworks ( ZYME ), with an average rating of Buy from analysts . In contrast, Seeking Alpha Author ratings indicated a Hold rating for the stock, along with SA’s quant system , which consistently beats the market.
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Zymeworks downgraded at SVB citing Jazz licensing deal and clinical updates