Ziihera's EU Approval: A Paradigm Shift in HER2-Positive Biliary Cancer and Jazz's Oncology Ascendancy

The European Commission's conditional approval of Jazz Pharmaceuticals' (NASDAQ: JAZZ) Ziihera® (zanidatamab) on July 1, 2025, marks a pivotal moment in oncology. This first-of-its-kind therapy for HER2-positive biliary tract cancer (BTC) not only addresses a devastating unmet need but also positions Jazz as a leader in precision oncology. With a robust clinical profile and strategic partnerships, Ziihera could redefine Jazz's valuation and its trajectory in a crowded but underpenetrated market.

A Clinical Breakthrough: Precision Strikes Against an Aggressive Cancer

Biliary tract cancers—encompassing gallbladder and cholangiocarcinoma—are rare but lethal, with most cases diagnosed at advanced stages. Only 26% of BTC patients globally are HER2-positive, a biomarker linked to poorer outcomes. Until now, these patients faced grim odds: median survival post-progression to second-line therapy was just 6–9 months, with few effective treatment options.

Ziihera changes this calculus. In the Phase 2b HERIZON-BTC-01 trial, Ziihera achieved a 41.3% confirmed objective response rate (cORR) in HER2-positive BTC patients, rising to 51.6% in the most aggressive IHC 3+ subgroup. Median overall survival (OS) reached 15.5 months, nearly double prior benchmarks. The drug's dual HER2 targeting mechanism—inducing complement-dependent cytotoxicity (CDC), antibody-dependent cellular cytotoxicity (ADCC), and phagocytosis (ADCP)—delivers a multifaceted attack on cancer cells, setting it apart from single-agent therapies.

While adverse events like diarrhea (46%) and infusion reactions (33%) were common, the safety profile is manageable, especially compared to chemotherapy. This efficacy and tolerability could solidify Ziihera's role as a first-line therapy if ongoing Phase 3 trials succeed, further expanding its addressable market.

Market Opportunity: A Niche, but Lucrative, Patient Population

While BTC represents less than 1% of global cancer cases, its aggressive nature and lack of targeted therapies create a high-value opportunity. With ~26,000 new BTC cases annually worldwide, and 26% testing HER2-positive, Ziihera's addressable patient population could exceed 7,000 patients per year.

At a projected price point of $150,000–$200,000 per year (comparable to other bispecific antibodies), Ziihera's peak sales potential could approach $1 billion globally, especially with approvals in the U.S. (2024), China (2025), and now the EU. The lack of direct competitors in the EU—where no HER2-targeted BTC therapies exist—grants Jazz a first-mover advantage, potentially locking in market share until 2030+ as later-stage trials in rival drugs (e.g., trastuzumab derivatives) unfold.

Strategic Impact: Strengthening Jazz's Oncology Portfolio

Ziihera is not an isolated victory. It underscores Jazz's broader oncology strategy: targeting rare, biomarker-driven cancers with high unmet needs. The drug's bispecific mechanism and partnership with BeOne Medicines (Asia-Pacific rights) and Zymeworks (original developer) exemplify Jazz's ability to in-license transformative therapies.

The EU approval also complements Jazz's existing oncology assets, such as Xywav for narcolepsy and Defitelio for hematologic disorders, diversifying its revenue streams. With Ziihera's global reach and Orphan Drug Designations in key markets, Jazz's oncology division could evolve into a $2–3 billion revenue segment by 2030, rivaling its sleep disorder franchise.

Valuation: Is Jazz Undervalued?

Jazz's stock has underperformed peers like Roche (OTC: RHHBY) and Merck (NYSE: MRK) in 2025, trading at a 15.2x EV/EBITDA multiple versus the sector's 18–20x average. This discount reflects concerns over Ziihera's conditional approval risks and competition. However, the Phase 2 data and first-mover status in BTC suggest upside potential.

If Ziihera's Phase 3 HERIZON-BTC-302 trial confirms its efficacy in first-line settings, Jazz's valuation could rise sharply. Analysts estimate $1.5 billion in peak sales for Ziihera, which would add ~15–20% to Jazz's current $10 billion revenue base.

Risks to Consider

• Phase 3 Trial Outcomes: Continued EU approval hinges on confirming Ziihera's benefits in combination therapy. Delays or underwhelming data could pressure the stock.
• Pricing Pushback: High drug costs may face scrutiny in Europe, though Jazz's orphan drug status and limited alternatives could soften backlash.
• Manufacturing Capacity: Scaling production for a bispecific antibody—complex to manufacture—requires execution.

Investment Recommendation: Buy Jazz Before the EU Launch

Ziihera's EU approval is a binary inflection point for Jazz. With a clear path to $1 billion+ sales and a robust oncology pipeline, Jazz is undervalued at current levels. Investors should accumulate shares below $120, targeting a 12–18 month price target of $150–$170, assuming positive Phase 3 data and strong EU uptake.

While risks exist, the combination of Ziihera's clinical profile, market exclusivity, and Jazz's strategic execution makes this a high-reward, medium-risk bet for oncology-focused portfolios.

Final Take: Jazz's Ziihera isn't just a drug—it's a new standard for HER2-positive BTC. For investors, this approval is the start of a transformative story in oncology.