Shares of Zealand Pharma A/S moved lower on Tuesday following an analyst downgrade from Jefferies, which re-rated the Danish biotech from Buy to Hold and substantially cut its price target.
In Copenhagen trading the stock fell 2.7% to DKK273.40, underperforming the OMXC25 benchmark, which declined 0.5% on the session.
Jefferies reduced its 12-month target price to DKK320 from DKK505. The brokerage said the new target represents a roughly 35% discount to its sum-of-the-parts valuation, reflecting recent setbacks affecting Zealand's obesity drug development program.
The downgrade stemmed in part from disappointing Phase III results for survodutide, which prompted Jefferies to lower its probability of success for that candidate to 40% from 60%. The firm also indicated that it now expects material, value-creating catalysts to be unlikely to emerge within the next six to 12 months.
Despite the change in rating, Jefferies left a degree of optimism in its view of the company by describing Zealand's valuation as still attractive. The brokerage highlighted the firm's net cash position, its portfolio in rare disease indications and the risk-adjusted value tied to its obesity assets as supports for the share price.
Jefferies further noted that investors may need to wait for later-stage clinical readouts to restore stronger sentiment, identifying 2027 and 2028 as the likely timeframe for more meaningful results on survodutide and on petrelintide. In addition, the broker warned that data expected from competitor obesity drugs over the coming year could make it harder for Zealand's lead obesity candidate, petrelintide, to distinguish itself until it produces more advanced trial evidence.
Market context and note
The downgrade and price-target cut reflect Jefferies' reassessment of near-term prospects rather than a wholesale rejection of Zealand's long-term potential. The broker balanced the setback in survodutide with the company's cash runway and other asset values, but drew attention to the timing and competitive pressures facing the obesity program.
Bottom line
Jefferies' move to Hold and the DKK320 target underscore a more cautious near-term outlook for Zealand Pharma, driven by recent clinical trial results and a stretched timetable for future catalysts, while the broker maintains that structural valuation supports remain in place.