Zentalis downgraded to Neutral at Wedbush as strategy shifts for azeno

As previously reported, Wedbush downgraded Zentalis to Neutral from Outperform with a price target of $12, down from $38. The firm notes the company announced updates to its ongoing azenosertib strategy in platinum-sensitive ovarian cancer, with a new focus on the 1L maintenance setting instead of the previous plan to evaluate azeno with chemotherapy in the recurrent PSOC setting with a maintenance component. Initiation of the study is planned for 2025, with additional details on the design of the study expected in the second half of 2024. While the market opportunity in 1L maintenance PSOC is relatively larger, Wedbush believes limited current insight into the potential benefit/risk of monotherapy azeno in the maintenance setting, the extended timeline and study cost introduce uncertainties around strategy that will limit share upside in the near-term. The firm is moving to the sidelines as it awaits greater clarity on the development path for azeno.