Zentalis Pharmaceuticals (ZNTL)

Zentalis Pharmaceuticals (ZNTL)

Now we’ll turn our attention to Zentalis Pharma, a clinical-stage biotech firm working on new treatments for a variety of cancers. The company uses its proprietary integrated discovery engine to develop novel small-molecule compounds as the base for new and more effective treatments. The company creates its drug candidate compounds based on a careful analysis of the cancer pathways, to ensure that potential therapeutics are on target.

The company’s approach – a careful discovery process, with drug candidates that have multiple potential applications – allows it to operate in a capital efficient manner. Zentalis’ leading candidate is azenosertib, or ZN-c3, a WEE1 inhibitor that is the subject of 8 separate clinical trials.

These trials are testing azenosertib as both a monotherapy and a combination therapy. The target cancers include uterine serous carcinoma, several ovarian cancers, osteosarcoma, and pancreatic cancer.

Upcoming catalysts from the company’s array of clinical trials include the scheduled release of positive clinical data of azenosertib as a combo treatment with chemotherapy against ovarian cancer. The data release is set for June 5, at the American Society of Clinical Oncology meeting.

Other upcoming catalysts include the planned release of data on azenosertib as a monotherapy dose during 1H23. This study will give data on maximum exposure and tolerability, as well as the clinical benefits of the drug candidate for a broad range of patients. In 2H23, the company expects to release data on azenosertib in combination with drug candidate ZN-d5. This data is being gathered in a Phase 1/2 study in the treatment of acute myeloid leukemia. Additional data on the company’s drug candidate ZN-d5, from a Phase 1/2 study against relapsed or refractory light chain amyloidosis, is also expected in 2H23.

Covering this biotech stock for Well Fargo, analyst Derek Archila sees the rash of upcoming data releases as the key point for investors to watch.

“This has been a sleepy stock, as there haven’t been a ton of clinical catalysts of late. Therefore, we like the setup, as the upcoming updates seem under the radar and the stock remains heavily shorted—could see a big squeeze… We like the risk/reward ahead of the dose optimization/RP2D data and subsequent ASCO presentations… In our base case for both updates, we think shares move to mid $40s (+100%), implying at ~$2.5B mkt cap, which we think is reasonable,” Archila opined.

All of the above prompted Archila to rate ZNTL an Overweight (i.e. Buy). On top of this, the analyst gives the stock a $46 price target, suggesting ~70% share appreciation in the coming year.

This is another stock that gets a unanimous Strong Buy rating from the Wall Street analysts, this one based on 8 recent positive reviews. ZNTL is trading for $26.98 and its $48.25 average price target implies a 12-month gain of ~79%.