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On Tuesday, Stifel analysts reiterated their Buy rating for Zymeworks stock (NASDAQ: ZYME) with a price target of $28.00, representing significant upside potential from the current price of $11.64. The company, with a market capitalization of $811 million, maintains a strong "Buy" consensus among analysts, with targets ranging from $12 to $30. According to InvestingPro data, two analysts have recently revised their earnings estimates upward for the upcoming period. This reaffirmation follows the presentation of updated results from the Phase 2 trial evaluating zanidatamab combined with chemotherapy in first-line HER2-positive gastroesophageal adenocarcinoma (GEA) at the ASCO meeting.
The analysts expressed confidence in the ability of zanidatamab combined with chemotherapy to outperform the standard-of-care trastuzumab combined with chemotherapy. The ongoing Phase 3 HERIZON-GEA-01 trial, which is expected to release topline data in the second half of 2025, is anticipated to further validate these findings. InvestingPro analysis shows Zymeworks maintains a healthy financial position with a current ratio of 4.71 and more cash than debt on its balance sheet, providing adequate runway for its clinical programs. The approximately three-year median overall survival observed in the study was highlighted as particularly notable.
Additionally, the analysts found preliminary safety and efficacy data for Johnson & Johnson’s pasritamig (KLK2xCD3) in heavily pretreated metastatic castration-resistant prostate cancer (mCRPC) patients to be promising. They noted the favorable safety profile and an encouraging eight-month radiographic progression-free survival, despite a 36% confirmed prostate-specific antigen response rate. This development is significant for Zymeworks due to their economic interest, which includes over $450 million in milestones and mid-single-digit royalties.
The competitive landscape in the field was also discussed, with presentations on FRα-targeting antibody-drug conjugates (ADCs) such as Eli Lilly (NYSE:LLY)’s LY4170156 and Genmab (NASDAQ:GMAB)’s Rina-S serving as a reminder of the challenges that Zymeworks’ ZW191 will face. The analysts emphasized the crowded field that ZW191 must navigate as it progresses.
Stifel’s reaffirmation of the Buy rating and the detailed analysis of the trial results underscore the potential of Zymeworks’ pipeline in the evolving oncology landscape. The company has demonstrated strong revenue growth of 85% over the last twelve months, though it remains pre-profitable. For deeper insights into Zymeworks’ financial health, growth prospects, and additional analyst perspectives, investors can access the comprehensive Pro Research Report available on InvestingPro, which provides detailed analysis of this and 1,400+ other US stocks.
In other recent news, Zymeworks Inc (NASDAQ:ZYME). reported a significant revenue increase for Q1 2025, reaching $27.1 million, up from $10 million in Q1 2024, primarily due to milestone payments from partners like GSK and Daiichi Sankyo. Despite the revenue growth, the company posted a net loss of $22.6 million, an improvement from the $31.7 million loss in the previous year. Additionally, China’s National Medical (TASE:BLWV) Products Administration granted conditional approval for Zymeworks’ zanidatamab for the treatment of HER2-positive biliary tract cancer. This approval marks a milestone as the first dual HER2-targeted bispecific antibody approved in China. Following this development, BeOne Medicines, Zymeworks’ collaboration partner, will make a $20 million milestone payment to the company. Despite these positive developments, H.C. Wainwright maintained a Neutral rating on Zymeworks’ stock, reflecting a cautious outlook. In contrast, TD Cowen initiated coverage with a Buy rating, highlighting the potential of Zymeworks’ unique platform and product pipeline. The company continues to advance its pipeline, preparing for investigational new drug applications for other product candidates.
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