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TICKERS: ZYME

Target Price Raised on Biotech Co.
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In an updated assessment of Zymeworks Inc.'s (ZYME:NYSE; ZYME:TSX) pipeline potential and upcoming catalysts, H.C. Wainwright & Co. analysts raised their target price on the company.

H.C. Wainwright & Co. analysts Robert Burns and Dr. Raghuram Selvaraju, in a research report published on September 25, 2024, maintained a Neutral rating on Zymeworks Inc. (ZYME:NYSE; ZYME:TSX) while raising their price target to US$12 from US$10.

The report follows the announcement of upcoming preclinical data presentations for two of Zymeworks' antibody-drug conjugate (ADC) assets at the EORTC-NCI-AACR (Triple) meeting in October.

The analysts highlighted the significance of the upcoming presentations, stating, "Zymeworks will present preclinical results for two of its preclinical ADC assets: (1) ZW220, a NaPi2b (SLC34A2)-targeted topoisomerase-1 inhibitor ADC [...]; and (2) ZW251, a glypican-3 (GPC3)-targeted topoisomerase-1 inhibitor ADC." They noted that these targets are highly expressed in various cancer types, including ovarian, lung, and liver cancers.

Burns and Selvaraju provided context on the potential of these assets, mentioning, "We remind investors that prior preclinical studies for ZW220 demonstrated superior internalization in vitro, as well as superior anti-tumor activity in vivo, compared to Roche's lifastuzumab vedotin." They also highlighted previously presented data for ZW251, which "showed strong anti-tumor activity across the GPC3 expression spectrum in a broad range of in vivo HCC CDX, PDX, and xenograft models."

The analysts outlined several upcoming catalysts for Zymeworks, including:

1. Potential FDA approval of zanidatamab in 2L BTC on November 29, 2024
2. Dosing of the first patients in clinical trials for ZW171 and ZW191 in 2H24
3. Top-line data release for the Phase 3 HERIZON-GEA-01 trial in 2Q25
4. IND submission and trial start for ZW220 in 2025
5. IND submission for ZW251 in 2H25

Regarding Zymeworks' strategic plans, the analysts noted the company's focus on developing ADCs and bispecific antibodies, with particular emphasis on ZW171's potential to address the limitations of current bispecific T-cell engagers.

H.C. Wainwright & Co.'s valuation methodology for Zymeworks is based on a discounted cash flow (DCF) approach. Burns and Selvaraju explained, "We use a discounted cash flow (DCF)-based approach to valuing Zymeworks. This yields a roughly US$902M total firm value. We utilize a 40-90% probability of approval for zanidatamab in biliary tract cancer (BTC), gastroesophageal adenocarcinoma (GEA), and metastatic breast cancer (mBC), and ascribe a 15% probability of approval to both ZW171 and ZW191."

The analysts added, "We employ a 10% discount rate, a 1.5% terminal growth rate, and a 27% effective tax rate."

In conclusion, while maintaining their Neutral rating, Burns and Selvaraju raised their 12-month price target to US$12 per share, reflecting their updated assessment of Zymeworks' pipeline potential and upcoming catalysts.


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Important Disclosures:

  1. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 
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Disclosures for H.C. Wainright & Co., Zymeworks Inc., September 25, 2024

This material is confidential and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake, please let us know by e-mail reply to [email protected] and delete it from your system; you may not copy this message or disclose its contents to anyone. The integrity and security of this message cannot be guaranteed on the Internet.

H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Robert Burns and Raghuram Selvaraju, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Zymeworks, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of August 31, 2024 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Zymeworks, Inc.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. Mr. Selvaraju, who is [the][an] author of this report, is the Chairman of and receives compensation from Relief Therapeutics Holding SA, a Swiss, commercial-stage biopharmaceutical company identifying, developing and commercializing novel, patent protected products in selected specialty, rare and ultra-rare disease areas on a global basis ("Relief"). You should consider Mr. Selvaraju's position with Relief when reading this research report. The firm or its affiliates received compensation from Zymeworks, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Zymeworks, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Zymeworks, Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request. H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report. H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst’s judgment as of the date of this report and are subject to change without notice. Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.





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