Dive Brief:

• Zenas BioPharma said Monday that its experimental drug obexelimab met the main goal of a trial in a rare inflammatory condition called IgG4 related-disease. But the effects appeared to fall short of what a standard one Wall Street analyst considered crucial for it to become a “commercially viable drug.”
• The trial tested obexelimab against placebo in people who are already on standard treatments for the condition, and found those given Zenas’ drug had a 56% reduced risk of disease flare-ups over the course of a year. Though cross-trial comparisons can be misleading, Amgen’s Uplizna, which was approved in April 2025 to treat the condition, reduced flare-ups by 87% in clinical testing.
• Zenas shares fell by more than 55% in morning trading Monday, erasing hundreds of millions of dollars in market value. Zenas recently reported promising data for obexelimab in multiple sclerosis, but a potential approval in that condition is likely years away.

Dive Insight:

IgG4-related disease is an autoimmune condition in which misfiring B cells attack organs and cause swelling, fibrosis and tumor-like masses. In the past, the disorder has typically been treated through steroids and off-label use of the older antibody drug Rituxan. But the clearance of Uplizna marked the first time a drug had specifically been approved for the disorder.

Zenas has been hoping obexelimab will prove a viable alternative to Uplizna, with the Phase 3 trial result Monday serving as the main proof. The Massachusetts-based biotech enrolled 194 people in the trial, randomizing half to receive obexelimab and the other half to get a placebo in addition to standard steroid treatments. Obexelimab’s main objective was to lower patients’ chances of having a flare-up of inflammation that can worsen disease symptoms.

Zenas said that, by that measure, the study was a success, as obexelimab’s 56% risk reduction hit statistical significance. The company expects to file a U.S. approval application in the second quarter of 2026.

However, in previewing the study readout, Jefferies analyst Roger Song wrote that obexelimab needed to reduce the risk of flares by 65% to prove “commercially viable.” Song argued that obexelimab didn’t necessarily need to match Uplizna’s effectiveness, because it has other differentiating features, such as the potential for in-home dosing and carrying less risk of opportunistic infections.

Zenas had $297 million in cash, short-term investments and other current assets as of Sept. 30, 2025. It had expenses of more than $50 million per quarter through the first nine months of 2025.

The company also recently raised money from Royalty Pharma by selling a 5.5% royalty on future worldwide net sales of obexelimab. The deal, worth up to $300 million, consisted of a $75 million up front payment, and included additional payments of $75 million each on “achievement of [the] defined success criteria” in the Phase 3 trial and obexelimab’s FDA approval.