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Investing.com - Morgan Stanley has raised its price target on Zenas Biopharma (NASDAQ:ZBIO) to $34.00 from $31.00 while maintaining an Overweight rating following positive clinical trial results. The stock, currently trading at $33.11, has surged 192% year-to-date, with InvestingPro data showing analyst targets ranging from $24 to $45.
The price target increase comes after Zenas reported initial 12-week data from its Phase 2 MoonStone study of obexelimab in relapsing multiple sclerosis (RMS). The drug demonstrated a 95% relative reduction in new Gd-enhancing T1 MRI lesions over weeks 8 and 12 compared to placebo, with a p-value of 0.0009. The $1 billion market cap company maintains a strong financial health score according to InvestingPro analysis, with more cash than debt on its balance sheet.
The adjusted mean number of new Gd-enhancing T1 lesions per scan was 0.01 in the obexelimab group versus 0.23 with placebo. Morgan Stanley had previously expected an approximately 85-90% reduction to put the drug on comparable footing with B cell-depleting agents.
Zenas also reported that obexelimab significantly reduced the cumulative number of new and/or enlarging T2-weighted hypertense lesions compared to placebo during the same period. These lesions represent the amount of disease burden or chronic lesion load.
The safety profile was consistent with prior trials of obexelimab, according to the company. Morgan Stanley increased its probability of success for the RMS program to 35% in its financial model, contributing to the higher price target.
In other recent news, Zenas BioPharma announced significant advancements in its clinical trials and strategic partnerships. The company reported positive results from its Phase 2 MoonStone trial of obexelimab for relapsing multiple sclerosis (RMS), where the drug met its primary endpoint by demonstrating a 95% reduction in new gadolinium-enhancing T1 brain lesions compared to placebo. This result was statistically significant, indicating near-complete suppression of inflammatory markers by week 8, sustained through week 12. Following these impressive trial outcomes, Jefferies raised its price target for Zenas Biopharma to $52, maintaining a Buy rating.
In a strategic move, Zenas BioPharma entered a licensing agreement with InnoCare Pharma, expanding its pipeline with orelabrutinib, a BTK inhibitor in Phase 3 development for multiple sclerosis. This agreement grants Zenas global development and commercialization rights for orelabrutinib outside of oncology, along with rights to two other autoimmune product candidates. H.C. Wainwright maintained a Buy rating on Zenas Biopharma with a $30 price target, citing the expanded pipeline as a positive development. These recent developments underscore Zenas BioPharma’s progress in advancing its therapeutic offerings for multiple sclerosis.
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