Stifel reiterates buy rating for Zymeworks stock after ASCO meeting

On Tuesday, Stifel analysts reaffirmed their Buy rating and maintained a $28.00 price target for Zymeworks stock (NASDAQ: ZYME), which currently trades at $11.64. With analyst targets ranging from $12 to $30, the stock shows significant potential upside according to InvestingPro data. The decision follows the presentation of updated results from the Phase 2 trial evaluating zanidatamab combined with chemotherapy in first-line HER2-positive gastric and esophageal adenocarcinoma (GEA) at the ASCO meeting.

The analysts expressed confidence in the potential of zanidatamab combined with chemotherapy to outperform the current standard-of-care treatment, trastuzumab with chemotherapy, in the ongoing Phase 3 HERIZONGEA-01 trial. The topline data from this trial is expected in the second half of 2025. The analysts highlighted the approximately three-year median overall survival observed in the Phase 2 study, noting it as particularly impressive given that most patients received trastuzumab and chemotherapy as post-progression therapy. The company’s strong financial health, evidenced by a healthy current ratio of 4.71 and more cash than debt on its balance sheet, positions it well to support ongoing clinical development.

The analysts also found the preliminary safety and efficacy data for Johnson & Johnson’s pasritamig (KLK2xCD3) in heavily pretreated metastatic castration-resistant prostate cancer (mCRPC) patients intriguing. They emphasized the drug’s safety profile and the potential financial milestones and royalties associated with it.

Additionally, presentations on FRα-targeting antibody-drug conjugates (ADC) from Eli Lilly (NYSE:LLY)’s LY4170156 and Genmab (NASDAQ:GMAB)’s Rina-S were noted. These presentations underscored the competitive landscape that Zymeworks’ ZW191 will need to navigate in the future.

Overall, Stifel analysts remain optimistic about Zymeworks’ prospects, driven by recent trial results and the company’s ongoing developments in the oncology field. The company has demonstrated impressive revenue growth of 85% over the last twelve months, though it remains unprofitable. For deeper insights into Zymeworks’ financial health and growth prospects, including additional analyst coverage and exclusive ProTips, visit InvestingPro.

In other recent news, Zymeworks Inc (NASDAQ:ZYME). reported a significant increase in revenue for the first quarter of 2025, reaching $27.1 million, up from $10 million in the same period the previous year. This growth was primarily attributed to milestone payments from partners such as GSK and Daiichi Sankyo. Despite the revenue increase, the company posted a net loss of $22.6 million, which was an improvement from the $31.7 million loss reported the previous year. Additionally, China’s National Medical (TASE:BLWV) Products Administration granted conditional approval for Zymeworks’ zanidatamab for HER2-positive biliary tract cancer, marking a significant regulatory milestone for the company.

Analyst firms have also weighed in on Zymeworks’ recent developments. Stifel analysts reaffirmed their Buy rating for the company’s stock, citing confidence in the potential of zanidatamab combined with chemotherapy in ongoing trials. TD Cowen initiated coverage with a Buy rating, highlighting the potential of Zymeworks’ product Ziihera, licensed to Jazz Pharmaceuticals (NASDAQ:JAZZ), as a future blockbuster. Meanwhile, H.C. Wainwright maintained a Neutral rating on the stock, despite the positive regulatory news from China. Investors are closely monitoring Zymeworks’ progress, particularly as the company continues to advance its pipeline of biotherapeutics and prepare for potential regulatory approvals in other regions.

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