JAZZ, ONC, ZYME Stocks In Focus After FDA Approves Gastroesophageal Cancer Therapy

The FDA approved Jazz Pharma’s Ziihera with chemotherapy, with or without BeOne’s Tevimbra, as an initial treatment for advanced HER2-positive gastroesophageal cancer.

• Zanidatamab, marketed as Ziihera, was originally developed by Zymeworks before being licensed by Jazz.
• The FDA decision triggered a $250 million milestone payment from Jazz to Zymeworks.
• The approval was based on the Phase 3 HERIZON-GEA-01 study.

Shares of Jazz Pharmaceuticals (JAZZ) gained around 4% on Tuesday to hit an all-time high after the U.S. Food and Drug Administration approved two treatments as initial therapy for adults with advanced HER2-positive gastroesophageal adenocarcinoma (GE).

The treatments are based on Ziihera, a cancer medicine developed and marketed by Jazz. The approval covers Ziihera with chemotherapy, as well as Ziihera with BeOne Medicines’ (ONC) Tevimbra immunotherapy.

Gastroesophageal adenocarcinoma includes cancers of the stomach and the esophagus. About 20% of patients have a protein called HER2, which helps the cancer cells spread. Ziihera blocks the protein.

ZYME To Receive $250M

Zanidatamab, marketed as Ziihera, was originally developed by Zymeworks (ZYME), before being licensed by Jazz. The FDA decision triggered a $250 million milestone payment from Jazz to Zymeworks. Zymeworks is also eligible for royalties ranging from 10% to 20% on Ziihera sales.

At the time of writing, ONC stock was up 2% while ZYME shares fell 7%.

Phase 3 Trial Shows Longer Survival

The approval was based on the Phase 3 HERIZON-GEA-01 study. Both Ziihera combinations reduced the risk of disease progression by 35% compared with the combination of Trastuzumab and chemotherapy. Median progression-free survival was 12.4 months versus 8.1 months in the comparison group.

The combinations also reduced the risk of death by 28%. Patients receiving the combination had median overall survival of 26.4 months, compared with 19.2 months for those receiving trastuzumab and chemotherapy.

“Today’s approval gives people diagnosed with HER2+ GEA a much-needed new treatment option and more choice in how their cancer is treated," said Martha Raymond, CEO and founder of GI Cancers Alliance.

The FDA decision triggered a $250 million milestone payment from Jazz to Zymeworks. Zymeworks is also eligible for royalties ranging from 10% to 20% on Jazz’s Ziihera sales.

Retail sentiment surrounding JAZZ on Stocktwits remained ‘bullish’ over the past 24 hours, while the sentiment flipped to ‘bullish’ from ‘bearish’ for ONC. ZYME sentiment trended in the ‘extremely bullish’ territory over the past 24 hours, despite the intraday decline.

JAZZ shares gained 51% so far this year, ONC stock has grown 22%, while ZYME stock has declined around 2%.

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