Analyst Upgrades Zai Lab’s Price Objective on Strong Drug Portfolio and Growth Prospects

David Li, an analyst from Bank of America Securities, reiterated the Buy rating on Zai Lab (ZLAB – Research Report). The associated price target was raised to $25.00.

David Li has given his Buy rating due to a combination of factors, including the solid performance and growth potential of Zai Lab’s portfolio of drugs. In March 2024, Zai Lab’s sales figures showed varied year-over-year changes, with some drugs experiencing a slight decline while others, notably ripretinib, displayed a positive growth trend. David Li’s optimism is further bolstered by the recent approval of repotrectinib by the NMPA for ROS1-positive NSCLC in China, prompting an adjustment in the drug’s possibility of success (PoS) in his Discounted Cash Flow (DCF) model and leading to an increased revenue forecast.
Additionally, Li acknowledges the competitive landscape in China, highlighting that despite the presence of multiple PARP inhibitors, Zai Lab’s niraparib has maintained a significant market share. This, combined with the robust sales ramp-up of omadacycline, has led Li to not only reiterate a Buy rating but also to increase the price objective (PO) from USD 23.5 to USD 25.0. His valuation reflects confidence in the company’s future performance, considering these promising developments and the strategic positioning of Zai Lab’s drugs in the market.

In another report released on May 9, Leerink Partners also reiterated a Buy rating on the stock with a $63.00 price target.

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Zai Lab (ZLAB) Company Description:

Zai Lab Ltd. is a biopharmaceutical company, which engages in the licensing, developing, and commercializing proprietary therapeutics that address areas of unmet medical need. Its product pipelines include ZL-2306, ZL-2401, FPA144, ETX2514, and ZL-2301. The company was founded by Samantha Ying Du and Marietta Wu in 2014 and is headquartered in Shanghai, China.