Zealand Pharma (ZEAL) Stock Tumbles 5% Following Jefferies Downgrade to Hold

Key Takeaways

• Jefferies shifted Zealand Pharma rating from Buy to Hold, pointing to absence of immediate catalysts
• Analysts reduced price target from DKK505 to DKK320 — representing a 37% decrease
• Success probability for survodutide reduced from 60% to 40% following underwhelming Phase III results
• Major catalysts for survodutide and petrelintide not anticipated until 2027–2028
• ZEAL shares declined 5.32% following the announcement; Copenhagen’s ZELA fell 2.7%

Zealand Pharma (ZEAL) shares slid 5.32% during Tuesday’s trading session after investment bank Jefferies downgraded the Danish biotechnology company from Buy to Hold, while simultaneously reducing its price target by 37% from DKK505 to DKK320.

Zealand Pharma A/S, ZEAL

The company’s shares listed in Copenhagen (ZELA) experienced a 2.7% decline to DKK273.40, underperforming the broader OMXC25 index, which decreased 0.5%.

Jefferies implemented a 35% discount to its sum-of-the-parts analysis, reflecting the absence of significant near-term catalysts anticipated within the next 6 to 12 months.

The rating adjustment follows lackluster Phase III data from survodutide, Zealand’s experimental treatment for obesity and liver conditions, which was unveiled at the American Diabetes Association conference.

As a consequence, Jefferies reduced the probability of success for survodutide from 60% to 40%. This represents a significant adjustment for a company whose obesity pipeline represents substantial value.

Survodutide Data Disappointment Clouds Near-Term Prospects

Analysts noted that pivotal MASH liver disease data for survodutide won’t arrive until the latter half of 2027, making that data release essential for reducing risk around the asset.

The overall valuation of survodutide now depends heavily on Phase III liver disease trial outcomes and initial commercial performance metrics — both events still over a year in the future.

Jefferies further noted that establishing confidence in petrelintide, Zealand’s amylin-focused obesity drug candidate, will require considerable time.

The investment firm observed that competitive obesity treatment data anticipated throughout the upcoming year could make differentiation more challenging for petrelintide before more mature clinical trial data becomes available.

Petrelintide Advances to Phase 3, But Timeline Extended

Notwithstanding the downgrade, Jefferies recognized that Zealand’s longer-term valuation profile remains compelling. The firm highlighted the company’s net cash balance, rare disease product portfolio, and risk-adjusted worth of obesity programs as positive factors.

Zealand Pharma carries a market capitalization near $3 billion, and InvestingPro analysis indicates the stock is trading at a P/E multiple of 3.13, suggesting potential undervaluation based on Fair Value metrics.

Petrelintide successfully progressed into Phase 3 development in partnership with Roche, following robust Phase 2 ZUPREME-1 data demonstrating substantial double-digit weight reduction with placebo-comparable tolerability.

Phase 3 clinical studies are scheduled to commence during the second half of 2026.

Deutsche Bank recently elevated its price target for Zealand Pharma to DKK300 from DKK275, citing encouraging survodutide trial outcomes — though that optimism now appears premature considering the latest data setback.

Jefferies indicated that investors may need to exercise patience until 2027 and 2028 for clinical data releases that could meaningfully alter market perception of the stock.

The company recently expanded its share capital by DKK53,183 through employee warrant exercises, resulting in the issuance of 53,183 additional shares at various strike prices.

Zealand has nominated Camilla Sylvest for Board of Directors election, subject to shareholder authorization at a meeting planned for May 2026.

Shares currently trade at DKK273.40 on the Copenhagen exchange, while the US-listed ZEAL declined 5.32% during the trading session.

The post Zealand Pharma (ZEAL) Stock Tumbles 5% Following Jefferies Downgrade to Hold appeared first on Blockonomi.