This Analyst Says Zentalis' Increased Focus On WEE1 Program Is 'Prudent', Slashes Price Target By 37%

Zentalis Pharmaceuticals Inc ZNTL decided to discontinue the development of oral SERD asset ZN-c5 and EGFR inhibitor ZN-e4 following the completion of existing clinical trials.
The company will focus its capital on developing the WEE1 drug, ZN-c3, and BCL-2 inhibitor, ZN-d5.
SVB Leerink says that the decision was not unexpected given the difficulty the SERD class has had demonstrating superiority to aromatase inhibitors in the metastatic settings and the cost needed to pursue development in the adjuvant setting.
"We believe some investors will be disappointed that the asset was not able to be monetized given the initial enthusiasm for this class," the analyst writes.
SVB thinks focusing on the WEE1 program is prudent, particularly as ZNTL now has the most advanced WEE1 inhibitor in development, as AstraZeneca Plc AZN recently terminated their WEE1 inhibitor adavosertib.
SVB has removed the ZN-C5 and ZN-e4 programs from the model and reduced R&D expense forecasts. The net of changes drops the price target to $42 from $67.
Zentalis held cash, cash equivalents, and marketable securities of $455.2 million, sufficient to fund its operating expenses and capital expenditure requirements into Q1 of 2025.
Price Action: ZNTL shares closed 2.41% lower at $30 on Wednesday.

Analyst Calendar