H.C. Wainwright analyst Andrew Berens reiterated a Buy rating and $46.00 price target on Zymeworks (NASDAQ: ZYME).

The analyst commented: "Earlier this week, Gilead Sciences (GILD; not rated) announced that it will acquire the antibody-drug conjugate (ADC)-focused private company Tubulis, expanding Gilead’s ADC capabilities by adding next-generation assets and platforms designed to more selectively deliver diverse payloads to tumors and maximize patient benefit. This includes the Tubulis lead asset, TUB-040, a NaPi2b-directed ADC that is currently in Phase 1b/2 development for platinum-resistant ovarian cancer and NSCLC. Furthermore, Tubulis’ programs and platforms have broad potential across multiple tumor types, complementing Gilead’s existing oncology development and commercialization expertise. Per the terms of the deal, Gilead shall pay $3.15B in upfront cash consideration on a cash-free, debt-free basis, subject to customary adjustments, and up to $1.85B in contingent milestone payments. This acquisition exemplifies major pharma's appetite for novel, cutting-edge ADC companies. From our perspective, Zymeworks would also be in that vanguard and thus a potential acquisition target for major pharma. This notion is further supported by Zymeworks' already-inked collaboration agreements with major pharma companies. We reiterate our Buy rating and 12-month price target of $46."

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Shares of Zymeworks closed at $27.35 yesterday.