Vertex Pharmaceuticals stock falls after pain drug fails in Phase 2 study
On Monday, H.C. Wainwright reiterated a Buy rating with a price target of $10.00 on Zentalis Pharmaceuticals (NASDAQ:ZNTL) stock. Currently trading at $1.77, significantly below its 52-week high of $16.27, the stock has caught analysts’ attention with an average price target suggesting substantial upside potential. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 7.29, though it’s currently experiencing volatile price movements. The firm’s positive stance comes after Zentalis presented updated results from the DENALI Phase 2 trial at the Society of Gynecologic Oncology (SGO) 2025 conference. The trial focuses on azenosertib as a monotherapy for patients with platinum-resistant ovarian cancer (PROC).
The new data highlighted a higher objective response rate (ORR) among patients with Cyclin E1+ tumors, indicating the predictive value of Cyclin E1 overexpression for therapeutic benefit. In the response-evaluable Cyclin E1+ PROC patient group, the ORR was reported at 34.9% (15 out of 43 patients), with a confidence interval (CI) of 95% ranging from 21.0% to 50.9%. With a market capitalization of $126 million and substantial cash reserves, InvestingPro analysis indicates the company is currently undervalued, though it’s worth noting the stock has declined over 87% in the past year. The intent-to-treat (ITT (NYSE:ITT)) Cyclin E1+ population exhibited an ORR of 31.3% (15 out of 48 patients), with a CI of 95% between 18.7% and 46.3%, and a median duration of response (mDOR) of 6.3 months.
These findings build upon the previously reported data, which showed an ORR of 31.3% in the CCNE1+ population, with a median duration of response of approximately 5.5 months. The results are notably more favorable when compared to historical chemotherapy benchmarks, which typically show a 4-13% ORR and a median progression-free survival (mPFS) of 3.2-3.8 months.
A significant outcome from the DENALI Part 1b trial is the validation of Cyclin E1 overexpression as a biomarker for responsiveness to azenosertib. Zentalis estimates that around 50% of PROC patients exhibit Cyclin E1 overexpression, regardless of CCNE1 gene amplification. This discovery could be instrumental in the selection of patients for future clinical trials, potentially improving treatment outcomes by focusing on a molecularly defined subset of PROC patients. H.C. Wainwright’s reiterated Buy rating and $10 price target reflect these promising developments. For deeper insights into Zentalis’s financial health and additional analyst recommendations, investors can access 12 more exclusive ProTips and comprehensive financial metrics through InvestingPro.
In other recent news, Zentalis Pharmaceuticals has shared significant updates concerning its lead drug candidate, azenosertib, which is being tested for ovarian cancer treatment. The company reported an Objective Response Rate (ORR) of approximately 35% in heavily pretreated patients with Cyclin E1+ platinum-resistant ovarian cancer, based on results from Part 1b of the DENALI study. In light of these developments, several analyst firms have adjusted their price targets for Zentalis. H.C. Wainwright reduced its price target to $10.00 but maintained a Buy rating, while Oppenheimer also set its target at $10.00, keeping a Perform rating. Jefferies, however, lowered its price target to $2.50 and reiterated a Hold rating, expressing caution about the competitive landscape and differentiation of azenosertib.
Zentalis has reached an agreement with the FDA on the design of the DENALI Part 2 study, which is set to begin in the first half of 2025, with topline data expected by the end of 2026. The drug’s median duration of response was reported to be around 5.5 months, with ongoing studies showing a well-characterized safety profile. Despite the price target reductions, analysts see potential in azenosertib as a treatment option for platinum-resistant ovarian cancer, given the limited existing alternatives. The company has also announced a strategic refocusing effort, including a workforce reduction, to extend its cash runway into late 2027. These recent developments have positioned Zentalis with a clear regulatory path and a focus on advancing its clinical programs.
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