Bankinter | The payment corresponds to the FDA’s full approval on 2 October of the Zepzelca + Tecentriq (Roche) combination as a first-line maintenance treatment for adults with advanced small cell lung cancer whose disease has not progressed after first-line induction treatment with atezolizumab, carboplatin and etoposidei. Jazz Pharma is the exclusive licensee of Zepzelca for the US.
Bankinter’s opinion: Positive news, despite which the stock fell yesterday, marking eight consecutive days of decline in which it has lost 12.7%. In Q2, the Company had net cash of €81 million (6% of its market capitalisation), to which €43 million from this milestone (another 3% of its market capitalisation) can be added. The relevant questions are (i) how much of this income will be recognised in 2025 sales and how much will be deferred to subsequent years, and (ii) the additional income to be received for compliance with other regulatory milestones. Our estimates considered that the combo approval milestone would occur in early 2026, with 50% of the payment being recorded as 2026 sales, and we estimated an additional regulatory milestone of another $50 million (also recording 50%) for approval in other geographies by 2026. The positive news is that this first payment has been brought forward to 2025, and we continue to expect the aforementioned additional milestone in 2026.
Looking ahead, the relevant factor will be the evolution of direct sales of Zepzelca and royalties after achieving this approval. The recent inclusion of the combo in the treatment guidelines for small cell lung cancer issued by the US National Comprehensive Cancer Network should contribute to sales growth. We reiterate our Buy recommendation and target price of €100/share.
