On Wednesday, Piper Sandler adjusted its outlook on Jazz Pharmaceuticals (NASDAQ:JAZZ), increasing the share price target to $188 from $171 while maintaining an Overweight rating. This revision follows Jazz Pharmaceuticals' recent virtual R&D event, which focused on its experimental cancer treatment, zanidatamab (zani™), and its application in various solid tumor malignancies.
The company's development of zanidatamab includes its use in biliary tract carcinoma (BTC) and first-line gastroesophageal adenocarcinoma (GEA), with top-line Phase III progression-free survival (PFS) data expected by late 2024.
Additionally, Jazz Pharmaceuticals plans to initiate a Phase III study in the second half of 2024 targeting advanced metastatic breast cancer patients who have not responded to trastuzumab/deruxtecan (T-DXd) treatments.
Piper Sandler's analysis indicates that the current financial model only accounts for zanidatamab's potential in BTC. However, the firm suggests that the drug's value could extend beyond this single application. The reiteration of the Overweight rating and the raised price target reflect the firm's recognition of the potential for zani™ to contribute to Jazz Pharmaceuticals' portfolio, particularly considering the company's strong cash generation prospects.
Jazz Pharmaceuticals' stock is currently trading at an enterprise value to estimated 2024 earnings before interest, taxes, depreciation, and amortization (EV/2024E EBITDA) of approximately 6 times. Piper Sandler's stance implies that the market may be undervaluing the company's growth opportunities, particularly those associated with zanidatamab, beyond the BTC indication.
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