Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, H.C. Wainwright analyst Mitchell S. Kapoor revised the price target for Zura Bio Ltd. (NASDAQ: ZURA) shares, lowering it to $3.00 from the previous $5.00 while maintaining a Neutral rating on the company. The stock, currently trading at $1.17, has experienced significant pressure, falling over 70% in the past six months. According to InvestingPro data, analyst targets for the stock range from $5 to $26, with a consensus recommendation leaning towards Buy. The adjustment follows Zura Bio’s report of its fourth quarter and full-year 2024 financial results, which reflected a net loss of $0.15 per share, excluding non-controlling interest. This was narrower than the estimated net loss of $0.19 per share. InvestingPro analysis indicates the company maintains a ’Fair’ overall financial health score, though it’s currently not profitable and faces challenges with weak gross profit margins.
Zura Bio’s research and development (R&D) and selling, general, and administrative (SG&A) expenses for the period were $9.2 million and $6.5 million, respectively. These figures diverged from H.C. Wainwright’s estimates, which had predicted R&D expenses at $7.0 million and SG&A at $6.8 million. Looking ahead, the firm projects a net loss of $0.85 per share for the full-year 2025, an improvement from the previously estimated net loss of $0.92 per share.
The biotechnology company concluded the year 2024 with approximately $176.5 million in cash and cash equivalents. According to management, these funds are expected to sustain operations through 2027. InvestingPro analysis shows the company maintains a strong current ratio of 9.16, with liquid assets well exceeding short-term obligations, though the cash burn rate requires monitoring. However, the broader development-stage biotech sector is contending with increased regulatory risks due to recent changes at the FDA. This has introduced additional uncertainty into the market.
In response to the evolving industry landscape, H.C. Wainwright has increased the discount rate applied to Zura Bio from 13% to 14%. Additionally, the firm has made adjustments to the operating expenses in its financial model for the company, which has been updated to reflect the progression into the year 2025. As a result of these changes, the 12-month price target for Zura Bio has been reduced. Despite the lowered price target, H.C. Wainwright reaffirmed its Neutral rating on the stock.
In other recent news, Zura Bio Ltd. has announced its fourth-quarter earnings, confirming a strong cash position with approximately $177 million expected to support operations through 2027. The company is advancing its clinical trials, notably with tibulizumab, which is in a Phase 2 study for systemic sclerosis (SSc) and is set to begin another Phase 2 trial for hidradenitis suppurativa (HS) in the second quarter of 2025. Topline results from these studies are anticipated in 2026. Analysts have responded to these developments with varying targets: Chardan Capital Markets lowered its price target to $10 but maintained a Buy rating, while Guggenheim reiterated a Buy rating and a $15 target, reflecting confidence in Zura Bio’s financial stability and clinical progress.
Additionally, Leerink Partners maintained an Outperform rating with a $12 target, emphasizing the company’s strategic plans for its drug candidates. The firm also noted the importance of upcoming data from Novartis (SIX:NOVN), which could impact Zura Bio’s approach to treating HS. Piper Sandler, meanwhile, highlighted Zura Bio’s dual mechanism of action pipeline, which could gain validation from indirect catalysts in the biotech sector. These recent developments underscore Zura Bio’s ongoing efforts in advancing its drug pipeline and maintaining financial health, as noted by various analyst firms.
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