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On Friday, William Blair initiated coverage on Zealand Pharma A/S (NASDAQ:ZEAL), a $6.9 billion market cap biotech company, with a Market Perform rating, citing the potential of the company’s lead drug candidate, petrelintide, in the obesity market. According to InvestingPro data, the stock appears fairly valued at current levels. The firm’s analyst highlighted the drug’s differentiation due to its mechanism of action as an amylin receptor agonist and its potential advantages over the GLP-1 receptor class of drugs.
Petrelintide is believed to offer clinically meaningful weight loss while potentially enhancing gastrointestinal tolerability and maintaining lean body mass, which could set it apart from existing treatments. The analyst also noted that the amylin mechanism has been clinically validated by Novo Nordisk (NYSE:NVO)’s cagrilintide. Analyst targets suggest potential upside, with price targets ranging from $104 to $153 per share.
In addition to petrelintide, Zealand Pharma is working with its partner Boehringer Ingelheim on survodutide for obesity with metabolic dysfunction-associated steatohepatitis (MASH). This collaboration is expected to provide a more immediate source of revenue for Zealand Pharma.
The company is advancing its portfolio in a market that is increasingly focused on innovative treatments for obesity and related metabolic disorders. With the initiation of coverage, investors will be watching Zealand Pharma’s progress closely as it continues to develop its pipeline of potential therapies.
In other recent news, Zealand Pharma has reported its full-year 2024 revenue at DKK 63 million, with a strong emphasis on its obesity treatment pipeline and significant investments in research and development. The company has ended the year with a robust cash position of DKK 9 billion, which supports its strategic focus on expanding its obesity and inflammation research. Zealand Pharma is gearing up for three large Phase 2b trials in 2025, and has outlined operating expenses for the year to be between DKK 2.0 billion and DKK 2.5 billion. The company is also exploring partnership opportunities for its obesity treatments, with potential Phase III trials on the horizon. Analysts have noted the firm’s strategic focus and financial health, particularly in its commitment to address the unmet medical needs in obesity treatment. Zealand Pharma’s CEO, Adam Steinspa, emphasized the company’s ambition to become a key player in the obesity market, highlighting the potential of their obesity pipeline. Despite the challenges in the competitive landscape, Zealand Pharma remains committed to advancing its research and development initiatives.
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