- SVB Leerink downgraded Zymeworks Inc ZYME to Market Perform with a price target of $8, down from $19 following the recent divestiture of zanidatamab to Jazz Pharmaceuticals plc JAZZ and the unveiling of the company's early stage pipeline.
- While the JAZZ/ZYME deal is robust and front-loaded, providing the company with significant free cash flow to fund operations.
- But based on discussions with JAZZ management, it appears unlikely that the company will opt to pursue some of the larger indications for zanidatamab, like breast cancer and colorectal cancer, which were significant value drivers for the model.
- The analyst thinks these assets are unlikely to become material components of the investment thesis until late 2023 or 2024.
- SVB notes Zymeworks now only has ADC ZW-49 as a clinical-stage asset which remains largely of uncertain value to many investors based on clinical profile relative to other treatments and difficulty in finding a viable therapeutic window.
- The analyst removed the breast cancer and colorectal opportunities, which were ~$1.4 billion and ~$522 million, respectively.
- Price Action: ZYME shares are down 3.72% at $6.21 on the last check Thursday.
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