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On Wednesday, Oppenheimer made a significant adjustment to Zentalis Pharmaceuticals’ (NASDAQ:ZNTL) price target, reducing it from $20.00 to $10.00, while keeping a Perform rating on the company’s shares. The revision follows the release of new data from Zentalis regarding their drug azenosertib, marking the first data readout in over two years. The stock, currently trading at $1.94, has seen a dramatic decline of over 80% in the past year, according to InvestingPro data.
Analysts at Oppenheimer have taken a close look at the latest data from Zentalis Pharmaceuticals, which showcased the performance of azenosertib, particularly in treating ovarian cancer. The drug has demonstrated efficacy, especially among patients with CCNE1-high subtypes of the disease, consistently doubling the benchmark effectiveness rate of 15%. InvestingPro data reveals the company maintains a strong current ratio of 7.29, though it’s rapidly burning through cash with negative free cash flow of $172 million in the last twelve months.
Despite the positive aspects of the drug’s performance, concerns have been raised by investors regarding the duration of response (DoR), which was reported to be just under six months. Additionally, there are reservations about the timeline for a pivotal trial, estimated to take another two years, and the uncertainty surrounding the possibility of accelerated approval.
In response to these factors, Oppenheimer has adjusted its price target for Zentalis Pharmaceuticals. The firm acknowledges the issues raised but suggests that the drug’s results should be sufficient to generate investor interest. Given the limited treatment options available for platinum-resistant ovarian cancer, azenosertib could represent a valuable addition to the current therapeutic landscape.
The firm reiterated its Perform rating for Zentalis Pharmaceuticals and emphasized the importance of the new management team in building trust with investors. The new price target of $10 reflects a recalibration of expectations in light of the recent data and the discussions among investors regarding the drug’s prospects. InvestingPro subscribers have access to 8 additional key insights about Zentalis, including detailed financial health metrics and growth indicators that could help inform investment decisions in this volatile biotech stock.
In other recent news, Zentalis Pharmaceuticals reported promising clinical data from its studies of azenosertib, a therapeutic targeting Cyclin E1+ platinum-resistant ovarian cancer. The Objective Response Rate in heavily-pretreated patients was approximately 35%, based on results from a part of the DENALI study. The company also reached an agreement with the FDA on the design of the next part of the DENALI study, which may lead to an accelerated approval process.
In addition to these developments, Zentalis has expanded its leadership team with the appointments of Wendy Chang as Chief People Officer and Haibo Wang as Chief Business Officer. Analysts from TD Cowen and Oppenheimer have commended the FDA’s decision to lift the partial clinical hold on Zentalis’s cancer drug, azeno, allowing the company to proceed with its planned clinical trials.
The company is expected to reach several key milestones by the end of the year, including the release of various trial data. Furthermore, Zentalis held its 2024 Annual Meeting of Stockholders, where Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2024, and Dr. Kimberly Blackwell and Dr. Enoch Kariuki were elected to the company’s board. These are recent developments concerning Zentalis Pharmaceuticals.
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