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On Tuesday, Guggenheim initiated coverage on Zenas Biopharma (NASDAQ:ZBIO) stock with a Buy rating and a price target of $45.00. The firm's optimism is based on Zenas Biopharma's lead asset, obexelimab, which is currently in development for various autoimmune diseases.
Obexelimab is a bifunctional B cell-inhibiting antibody targeting CD19 and FcγRIIb, with several ongoing clinical trials. The company anticipates top-line Phase III results for the treatment of IgG4-related disease (IgG4-RD) by the fourth quarter of 2025.
Additionally, Phase II results for multiple sclerosis (MS) are expected around mid-2025, with ongoing trials in systemic lupus erythematosus (SLE) and warm autoimmune hemolytic anemia (wAIHA), where initial results are anticipated in 2024.
The investment thesis highlights obexelimab's mechanism of action (MoA), which is validated in IgG4-RD by a similar drug, Uplizna, developed by Amgen (NASDAQ:AMGN).
Guggenheim notes that obexelimab's non-depleting MoA could result in rapid recovery of B cells upon withdrawal, potentially offering a more favorable safety profile. The ease of subcutaneous administration once a week is also seen as a benefit.
Obexelimab's broad targeting of B cells, including early precursors and plasma cells, is particularly promising for its efficacy in SLE and could have implications for other diseases where CD19 targeting is validated, such as generalized myasthenia gravis (gMG). This broad spectrum approach underpins Guggenheim's view that Zenas Biopharma is working towards developing a "pipeline-in-a-product."
Should obexelimab's development succeed, Guggenheim estimates that the drug could generate approximately $1.8 billion in global risk-adjusted peak sales across just two indications, IgG4-RD and SLE. The firm also suggests there is potential for additional upside from success in other indications.
In other recent news, Zenas Biopharma has been garnering attention for its ongoing clinical trials and promising drug candidate, obexelimab. The company is currently advancing its Phase 3 study for obexelimab in IgG4-Related Disease (IgG4-RD), with results expected in late 2025.
In addition, Phase 2 trials for Multiple Sclerosis (MS) and Systemic Lupus Erythematosus (SLE) are ongoing, with data anticipated in 2025 and early 2026, respectively.
The financial firm Jefferies initiated coverage on Zenas Biopharma, expressing a bullish outlook. Jefferies set a price target of $35 for Zenas Biopharma, highlighting the company's focus on the immunology and inflammation sector, particularly its leading product candidate, obexelimab.
Obexelimab is a first-in-class treatment with a unique inhibitory mechanism of action aimed at a range of B-cell driven autoimmune diseases.
Jefferies' positive stance is based on supportive preclinical and clinical data for obexelimab, and the success of comparable CD19/CD20 targeted compounds.
The firm's projections estimate total peak adjusted revenues for Zenas Biopharma at approximately $1.6 billion. These recent developments suggest a potential for growth in Zenas Biopharma's future.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Zenas Biopharma's (NASDAQ:ZBIO) financial position and market performance. The company's market capitalization stands at $781.24 million, reflecting investor interest in its potential. Notably, ZBIO has seen a significant 9.74% return over the last week, indicating recent positive sentiment aligning with Guggenheim's optimistic outlook.
However, it's important to note that ZBIO is not currently profitable, with a negative gross profit margin of -72.45% in the last twelve months as of Q2 2024. This is consistent with the company's developmental stage and focus on advancing its lead asset, obexelimab, through clinical trials.
InvestingPro Tips highlight that ZBIO holds more cash than debt on its balance sheet, which could provide financial flexibility as it progresses its clinical programs. Additionally, the company's liquid assets exceed short-term obligations, potentially offering a buffer for ongoing research and development expenses.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for ZBIO, providing deeper insights into the company's financial health and market position.
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