Kezar Life Sciences (KZR – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Derek Archila from Wells Fargo maintained a Hold rating on the stock and has a $2.00 price target.
Derek Archila has given his Hold rating due to a combination of factors including the progression of Kezar Life Sciences’s Zeto trials and updates on KZR-261. The limited near-term catalysts for Zeto and reservations regarding the efficacy of KZR-261 contribute to a cautious stance. Despite reaching the maximum tolerated dose in the dose escalation for KZR-261 and moving into dose expansion in melanoma, the lack of shared response or safety data at this stage leaves skepticism about the drug’s activity. The company’s strategy to potentially backfill the escalation phase is seen as an attempt to identify a clearer efficacy signal, which also contributes to the Hold rating.
Furthermore, timelines for Zeto’s Phase 2 trial in Autoimmune Hepatitis (AIH) have been reiterated, with enrollment expected to complete by the end of 2024 and top-line results anticipated mid-2025. While there is optimism about the enrollment pace, there isn’t enough information to significantly de-risk the investment. The PALIZADE trial’s progress for lupus nephritis is on track, but specific details are lacking, and the expected data publication for Zeto MISSION later in the year is not likely to be a major stock mover. Additionally, the company’s financial position, with cash sufficient until the second half of 2026, leaves little room for error. Therefore, the stock is expected to remain range-bound, with the potential catalyst of KZR-261 Phase 1 data by the end of 2024 being cautiously regarded due to uncertainties surrounding the data’s impact.
According to TipRanks, Archila is a 4-star analyst with an average return of 6.4% and a 42.32% success rate. Archila covers the Healthcare sector, focusing on stocks such as Argenx Se, Nurix Therapeutics, and Celldex.
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Kezar Life Sciences (KZR) Company Description:
Kezar Life Sciences, Inc. is a clinical-stage biotechnology company, which discovers and develops novel small molecule therapeutics to treat autoimmunity and cancer. The firm specializes in the areas of protein degradation and protein secretion to discover & develop novel therapies for the treatment of serious and unmet medical needs. Its product include KZR-616, an immunoproteasome inhibitor, has completed testing in healthy volunteers. The company was founded by John Fowler, Christopher J. Kirk and Jack Taunton on February 20, 2015 and is headquartered in South San Francisco, CA.
