Key Takeaways
- Analyst firm Jefferies shifted Zealand Pharma from Buy to Hold rating due to limited upcoming catalysts
- Analysts reduced price target by 37%, from DKK505 down to DKK320
- Success probability for survodutide decreased to 40% from 60% following underwhelming Phase III results
- Major catalysts for both survodutide and petrelintide not expected until 2027–2028 timeframe
- ZEAL shares declined 5.32% following the announcement; Copenhagen-traded ZELA fell 2.7%
Shares of Zealand Pharma (ZEAL) tumbled 5.32% during Tuesday’s trading session after investment firm Jefferies revised its stance on the Danish biopharmaceutical company, moving from Buy to Hold while implementing a substantial 37% reduction in the price target to DKK320 from the previous DKK505.
The company’s shares trading on the Copenhagen exchange (ZELA) experienced a 2.7% decline to DKK273.40, underperforming the broader OMXC25 index, which registered a 0.5% decrease.
In arriving at the revised valuation, Jefferies implemented a 35% discount to its sum-of-the-parts analysis, reflecting the absence of significant near-term milestones anticipated within the next 6 to 12 months.
The rating adjustment comes on the heels of lackluster Phase III clinical data for survodutide, Zealand’s candidate drug targeting obesity and liver disorders, which was unveiled at the American Diabetes Association conference.
As a consequence of these results, Jefferies adjusted survodutide’s probability of success downward to 40% from the prior 60% estimate. This represents a significant recalibration for a company heavily invested in the obesity treatment pipeline.
Survodutide Results Cast Shadow on Near-Term Prospects
According to the investment firm, critical data from survodutide’s MASH liver disease trials won’t materialize until the latter half of 2027, establishing that readout as a pivotal moment for reducing risk associated with the asset.
The overall valuation of survodutide now depends significantly on successful Phase III outcomes in liver disease trials and initial commercialization performance — milestones that remain more than twelve months in the future.
Jefferies further noted that establishing confidence in petrelintide, Zealand’s amylin-focused obesity treatment candidate, will require considerable time.
The firm observed that forthcoming competitive obesity drug data anticipated throughout the next year may complicate petrelintide’s differentiation before more comprehensive trial data becomes available.
Petrelintide Advances to Phase 3, Yet Timeline Remains Extended
Notwithstanding the downgrade, Jefferies recognized that Zealand’s valuation potential over the long term remains compelling. The firm highlighted the company’s positive net cash balance, rare disease product portfolio, and risk-adjusted valuation of obesity-focused assets as favorable elements.
Zealand Pharma currently holds a market capitalization of approximately $3 billion, with InvestingPro analytics indicating the stock trades at a P/E multiple of 3.13, suggesting possible undervaluation relative to Fair Value calculations.
Petrelintide has successfully progressed into Phase 3 clinical trials through a partnership with Roche, following encouraging Phase 2 ZUPREME-1 outcomes demonstrating significant double-digit weight reduction combined with placebo-comparable tolerability profiles.
Phase 3 trial initiation is projected for the second half of 2026.
Deutsche Bank had recently elevated its price objective for Zealand Pharma to DKK300 from DKK275, pointing to favorable survodutide trial outcomes — though that adjustment now appears premature considering the most recent data disappointment.
Jefferies indicated that market participants may need to exercise patience until 2027 and 2028 for clinical readouts capable of meaningfully influencing market sentiment surrounding the stock.
The company also recently expanded its share capital by DKK53,183 through employee warrant exercises, generating 53,183 newly issued shares at various price points.
Zealand has nominated Camilla Sylvest for Board of Directors election, subject to shareholder approval during a meeting scheduled for May 2026.
Shares are presently trading at DKK273.40 on the Copenhagen exchange, while the US-listed ZEAL registered a 5.32% decline for the trading session.
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