US Biopharma In-Licenses 3 New Assets
Research Report

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Disclosures for Wedbush, Zenas BioPharma Inc., October 9, 2025

Valuation Sum-of-parts: DCF of 2027-37E ww sales of obexelimab in IgG4-RD (disc. 20%), plus a 6x multiple of obexelimab 2033/34E ww sales in MS and SLE, and orelabrutinib 2033E sales in MS (disc. 25%) Company Description ZBIO is a clinical-stage I&I company based in Waltham, MA focused on developing products with differentiated clinical profiles. Lead obexelimab is a CD19 mAb that suppresses but does not eliminate B cells to maintain protection against infections. Risks to the Attainment of Our Price Target and Rating: Risks to the attainment of our price target and rating for ZBIO include clinical and regulatory failure of obexelimab in target indications, and an inability to achieve sales estimates. The company’s lead program may not prove to be efficacious or yield desired dosing intervals, or safety signals could halt development or reduce uptake. Regulatory delays could impact market uptake and/or financing requirements. Lead programs and/or combinations could also face commercial challenges from current and future therapies. Analyst Certification We, Martin Fan, David Nierengarten and Dennis Pak, certify that the views expressed in this report accurately reflect our personal opinions and that we have not and will not, directly or indirectly, receive compensation or other payments in connection with our specific recommendations or views contained in this report. Mentioned Companies Investment Rating System: OUTPERFORM: Expect the total return of the stock to outperform relative to the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months. NEUTRAL: Expect the total return of the stock to perform in-line with the median total return of the analyst's (or the analyst's team) coverage universe over the next 6-12 months. 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Zenas BioPharma Inc. (ZBIO:NASDAQ) in-licensed three assets from InnoCare Pharma Ltd. (688428:SSE; 09969:HKEX), according to Wedbush Analyst Dr. Martin Fan in an Oct. 9 research note.

Wedbush raised its target price on the Massachusetts-based biopharma firm by 14% to reflect Zenas' newly gained Phase 3 investigative multiple sclerosis drug and Wedbush's revised expectation related to financing.

"In-licensing of additional preclinical assets from InnoCare adds further upside to our estimates," Fan wrote.

54% Upside Implied

Wedbush's new target price on this developer of therapies for autoimmune diseases is US$40 per share, up from US$35 previously, noted Fan. Compared to the new US$40 target, the company was trading at the time of the analyst's report at about US$25.90 per share. From this price, the return to target is 54%.

Zenas remains rated Outperform.

The Massachusetts-based company has 48.4 million (48.4M) shares outstanding, a market cap of US$1.3 billion and a 52-week range of US$5.83–26.59 per share.

New Clinical-Stage Asset

Fan discussed the three assets Zenas gained in the transaction. Orelabrutinib, the lead, is a central nervous system (CNS)-penetrant, Bruton's tyrosine kinase (BTK) inhibitor in Phase 3 development for progressive forms of multiple sclerosis.

There are other BTK inhibitors in late-stage development for multiple sclerosis, including these three in Phase 3: Sanofi SA's (SNY:NASDAQ) tolebrutinib, Novartis AG's (NVS:NYSE) remibrutinib and Roche Holdings AG's (RHHBY:OTCMKTS) fenebrutinib. Phase 2 candidates are Eli Lilly & Co.'s (LLY:NYSE) pirobrutinib and Biogen Inc.'s (BIIB:NASDAQ) BIIB-091.

Orelabrutinib demonstrated on-target potency comparable to that of tolebrutinib, according to InnoCare. The latter drug showed statistically significant benefit in six-month confirmed disability progression in a Phase 3 trial for secondary progressive multiple sclerosis (SPMS), but greater penetration and accumulation in the CNS.

Orelabrutinib in a Phase 2 trial in relapsing-remitting multiple sclerosis (RRMS) showed dose-dependent reductions in new gadolinium-enhancing T1 lesions (Gd+ T1 lesions) with sustained activity on secondary endpoints seen for almost two years out.

Orelabrutinib in a global Phase 3 trial in primary progressive multiple sclerosis (PPMS) is underway, having been started in Q3/25. Orelabrutinib in a global Phase 3 trial in SPMS is slated to commence in Q1/26.

Two Preclinical Inhibitors

The other two assets Zenas gained via the InnoCare Pharma deal are preclinical. One is ZB021, an orally administered interleukin-17A (IL-17A)/F inhibitor. The other is ZB022, a brain-penetrant tyrosine-kinase 2 (TYK2) inhibitor. For each, Zenas is expected to submit an investigational new drug (IND) application and commence enrollment for an upcoming Phase 1 clinical trial, in 2026, with possible results in 2027.

"We leave both programs as upside to our estimates until development indications are confirmed," Fan wrote.

Terms of the Deal

In the transaction, Zenas is granted the global commercialization and development rights for orelabrutinib and ZB022 and the global ex-China rights for ZB021, reported Fan. Development is not restricted to immunology and inflammation indications, however, InnoCare retains development rights for orelabrutinib in oncological indications.

For this trio of assets, Zenas paid a total upfront consideration of US$35 million (US$35M) in cash and 5M common shares. Zenas is to pay up to US$240M in cash and 2M in shares upon reaching certain developmental and regulatory milestones. Plus Zenas is to pay commercial sales milestones and tiered royalties.

Already Owned Program

Fan reported that Zenas is advancing obexelimab, a previously acquired CD19-targeted, B-cell inhibitor, in three indications: IgG4-related disease (Phase 3 INDIGO trial), relapsing multiple sclerosis (Phase 2 MoonStone trial) and systemic lupus erythematosus (Phase 2 SunStone trial).

Zenas recently announced blinded, pooled placebo and obexelimab efficacy data from MoonStone, and they "were consistent with functional activity for obexelimab in multiple sclerosis," noted the analyst. Specifically, data at 12 weeks showed about a 75% reduction in new and existing gadolinium-enhancing T1 (Gd+ T1) lesions. This was presumed to be due mostly to obexelimab treatment, randomized on a 2:1 basis in the study. These results are consistent with historical benchmarks seen with B-cell depleting antibodies and BTK inhibitors, which constituted about a 90% reduction in Gd+ T1 lesions at the same time point.

"We look for validation of obexelimab efficacy to read through to upcoming results for the Phase 3 INDIGO trial in IgG4-related disease," Fan wrote.

If the INDIGO data show a statistically significant benefit from obexelimab versus placebo in IgG4-related disease, Zenas will realize a US$75M milestone. Assuming this to be the case, the company's operational runway remains through Q1/27.

Catalysts to Watch For

Between Zenas' existing and new assets, the next 18-plus months should be catalyst rich, noted Fan, who presented a timeline of upcoming events. By the end of 2025, the biopharma is expected to announce topline data from two trials: Phase 2 MoonStone in multiple sclerosis and Phase 3 INDIGO in IgG4-related disease.

"With an increasingly diversified pipeline, favorable licensing/royalty deals and now two programs in Phase 3 development, we would be buyers ahead of upcoming data readouts," wrote Fan. These two programs are orelabrutinib (a new asset) in PPMS and obexelimab (an existing asset) in IgG4-related disease.

Next year, in Q1/26, the biopharma is slated to launch a Phase 3 trial of orelabrutinib in SPMS and announce 24-week follow-up results from Moonstone in RMS.

In Q2/26, Zenas could file a biologics license application for obexelimab in IgG4-relate disease. Topline data from the Phase 2 SunStone trial of obexelimab in systemic lupus erythematosus are due out mid-year. Also in 2026, Zenas is expected to file an IND for ZB021 and ZB022 and start a Phase 1 trial of each.

Looking further out, to 2027, the biopharma could take obexelimab to the market for IgG4-related disease and potentially commence a Phase 3 trial of obexelimab in systemic lupus erythematosus. In that year, initial results should be announced from the Phase 1 trials of ZB021 and ZB022.