Morgan Stanley Assumes Zenas Biopharma (ZBIO) at Equalweight

Morgan Stanley analyst Chris Yu assumes coverage on Zenas Biopharma (NASDAQ: ZBIO) with a Equalweight rating and a price target of $32.00.

The analyst comments: “We are Equal-weight on ZBIO with a $32 PT, supported principally by obexelimab (CD19 and FcγRIIb bifunctional antibody). (1) On IgG4-RD, we believe obexelimab is approvable based on the Ph3 profile (85% POS), but we look to gain more clarity on its peak sales potential. Specifically, we model 2035 risk-adjusted sales before royalty of ~ $650mn. We think IgG4-RD is a potentially multi-billion-dollar market, where patients are under-diagnosed and there is a need for chronic dosing in ~12,500 US patients per ZBIO estimate. Improved diagnosis rate and greater physician/patient awareness have the potential to increase the addressable patient population. In addition, we acknowledge obexelimab's potential differentiations from AMGN (covered by Terence Flynn)'s Uplizna, including SQ vs IV, Part D vs Part B, and B-cell inhibition vs depletion. Conversely, we also recognize Uplizna's higher efficacy (with the typical caveats of cross-trial comparison), Q6M vs QW for obexelimab, and AMGN's commercial strength. (2) On SLE, we are cautious on the Ph2 readout given the historically high failure rate in this disease and prior Ph2a miss from a IV formulation due to under-powering. As a result, we ascribe 55% POS to SLE.

We currently do not model orelabrutinib (oral BTKi), so success of this program would represent a potential source of upside to our estimates. Ph3 data of orelabrutinib in Primary Progressive MS (PPMS) and non-active Secondary Progressive MS (naSPMS) are expected in 2030.”

For an analyst ratings summary and ratings history on Zenas Biopharma click here. For more ratings news on Zenas Biopharma click here.

Shares of Zenas Biopharma closed at $26.71 yesterday.

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