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On Tuesday, Cantor Fitzgerald analysts maintained an Overweight rating on Zai Lab (NASDAQ:ZLAB) stock, with a price target of $56.00, well above the current trading price of $31.19. According to InvestingPro data, the stock has shown strong momentum with a 73% return over the past year. The analysts expressed confidence in the company’s ZL-1310 (DLL3-ADC) treatment for extensive stage small cell lung cancer (ES-SCLC), following recent data presented at the American Society of Clinical Oncology (ASCO) conference.
The data involved 74 patients and provided updates on the RP3D selection of 1.6 mg/kg and additional details on the Phase 3 trial design. These developments have increased the analysts’ confidence in ZL-1310’s potential to achieve accelerated approval, possibly by 2027.
A key consideration for the analysts was whether Imdelltra should be included in the control arm, which allows physician’s choice. Despite the potential for Imdelltra to raise the objective response rate (ORR) for the comparator arm, ZL-1310 showed an ORR of 60-70%, compared to Imdelltra’s 35-40%, suggesting a high probability of success.
The analysts noted that ZL-1310 could become a significant revenue generator, with potential sales of $1-2 billion in ES-SCLC and other neuroendocrine tumors. As Zai Lab approaches cash flow positivity by the end of the year, the analysts believe this is an opportune moment to invest in the company’s global pipeline.
In other recent news, Zai Lab has been the focus of several analyst evaluations and strategic forecasts. Cantor Fitzgerald has maintained its Overweight rating on Zai Lab, highlighting the company’s resilience amidst geopolitical tensions and potential growth drivers such as Bemarituzumab. The firm anticipates Zai Lab reaching profitability by the fourth quarter of 2025, despite market volatility and tariff disputes between the U.S. and China. Scotiabank (TSX:BNS) has initiated coverage with a Sector Outperform rating, setting a price target of $55 per share, emphasizing Zai Lab’s global potential and strong product pipeline.
Conversely, BofA Securities has downgraded Zai Lab from Buy to Neutral, though it raised the price target to $36.10, acknowledging both challenges with current products and promising pipeline developments. Despite the downgrade, BofA Securities noted the potential of Zai Lab’s pipeline, including Optune and Bemarituzumab, as factors that could drive future growth. The firm’s revised financial models reflect a more cautious near-term outlook but recognize the long-term growth prospects. Investors are closely monitoring these developments as Zai Lab continues to navigate the evolving geopolitical and market landscape.
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