Zentalis selloff ‘misses the bigger picture,’ says Oppenheimer

Oppenheimer says Zentalis Pharmaceuticals’ Q3 update “provides early answers to several important questions.” The firm keeps an Outperform rating on the name with a $50 price target. The shares have been weak since azenosertib’s last clinical update with the main pushbacks being the competitiveness of azenosertib vis-a-vis investigational antibody-drug conjugates and Zentalis’ regulatory strategy in light of these new ADCs, the analyst tells investors in a research note. Given the stock selloff today, the firm says it is clear some investors haven’t yet bought into management’s consolidated focus on azenosertib and gynecological cancers. It finds this “to be noise that misses the bigger picture,” saying the updated clinical data actually bodes well for azenosertib’s primary development efforts in gynecological cancers.