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Zymeworks: Early data compelling; Potential June catalyst

May 24, 2017

Barclays initiated coverage of Zymeworks Inc ZYME with an Overweight rating and price target of $20. The company released first-quarter earnings last week, reporting ($1.13) EPS on the quarter with revenue of $0.23 million.

Early-Stage, But Potentially Important

Zymeworks is a biopharma company focused on developing cancer treatments. Its most advanced asset is ZW25, an antibody currently being studied for the treatment of HER2+ cancers such as breast, gastric and ovarian.

Early data suggests efficacy and safety, and Barclays analyst Geoff Meacham, in a recent note, highlighted high unmet medical need for HER2+ cancer treatments.

Large Biopharma Partners

“Zymeworks also has a broader antibody platform, which is the basis for several collaboration agreements,” wrote Meacham. Another asset of note is ZW33, a bispecific antibody conjugate.

These agreements are with major players in the pharmaceutical sector, including GlaxoSmithKline plc (ADR) GSK, Eli Lilly and Co LLY and Merck & Co., Inc. MRK.

The analyst believes that sales could easily reach $1 billion if ZW25 or ZW33 are successful.

Catalysts To Look Out For

Meacham expects the upcoming American Society of Clinical Oncology meeting in June to be the nearest big driver of Zymeworks shares.

Clinical progression of ZW25 in the second half of fiscal 2017 and ZW33 in early 2018 will also impact shares.

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