On Tuesday, Jefferies commenced coverage on Zenas Biopharma (NASDAQ: ZBIO) stock with a Buy rating and a price target of $35.00. The firm highlighted Zenas Biopharma's focus on the immunology and inflammation (I&I) sector, particularly noting its leading product candidate, obexelimab.
Obexelimab is a first-in-class treatment with a unique inhibitory mechanism of action (MOA) aimed at a range of B-cell driven autoimmune diseases.
The initiation of coverage comes as Zenas Biopharma advances its clinical trials. The company is currently conducting a Phase 3 study for its drug candidate in IgG4-Related Disease (IgG4-RD), with results expected in the fourth quarter of 2025.
Additionally, Phase 2 trials for Multiple Sclerosis (MS) and Systemic Lupus Erythematosus (SLE) are underway, with data anticipated in mid to late 2025 and the first half of 2026, respectively.
Jefferies' positive outlook is partly based on the drug's supportive preclinical and clinical data, as well as proof of concept (POC) from comparable CD19/CD20 targeted compounds. The firm's conservative estimates project total peak adjusted revenues for Zenas Biopharma at approximately $1.6 billion.
The $35.00 price target set by Jefferies reflects their confidence in the potential market performance of obexelimab. The analyst's statement underscored the drug's differentiated MOA as a significant factor in its efficacy against various autoimmune conditions.
Investors and market watchers will be keeping a close eye on Zenas Biopharma as it progresses through its clinical trials, with the upcoming data releases serving as potential catalysts for the company's stock performance.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Zenas Biopharma's financial position and market performance. The company's market capitalization stands at $781.24 million, reflecting investor interest in its potential within the immunology and inflammation sector. Notably, Zenas has seen a significant 9.74% return over the last week, indicating positive short-term momentum that aligns with Jefferies' bullish outlook.
InvestingPro Tips highlight that Zenas Biopharma holds more cash than debt on its balance sheet, which could provide financial flexibility as it advances its clinical trials for obexelimab. This strong liquidity position is further supported by the fact that the company's liquid assets exceed its short-term obligations.
However, it's important to note that Zenas is not currently profitable, with a negative gross profit margin of -72.45% in the last twelve months as of Q2 2024. This is not uncommon for biotech companies in the development stage, and investors are likely focusing on the potential future revenues from obexelimab, which Jefferies estimates could reach $1.6 billion at peak.
For readers interested in a more comprehensive analysis, InvestingPro offers 5 additional tips for Zenas Biopharma, providing deeper insights into the company's financial health and market position.
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