Zenas Biopharma Secures $300M Funding Deal

By Tamara Parker • Tuesday, September 02 10:14 • Permanent Link

Zenas Biopharma, Inc. and Royalty Pharma PLC have entered into an agreement where Royalty Pharma will provide up to $300 million in funding in exchange for a royalty on sales of Obexelimab. Initially, $75 million will fund the potential U.S. commercial launch of Obexelimab for the treatment of IgG4-related disease. An additional $150 million is associated with the upcoming results of the Obexelimab phase 3 INDIGO trial and FDA approval for the treatment of IgG4-related disease.

Obexelimab is an investigational bifunctional monoclonal antibody designed to inhibit B cell function, and it is in phase 3 development for the treatment of immunoglobulin G4-related disease (IgG4-RD), and phase 2 development for relapsing multiple sclerosis (RMS) and systemic lupus erythematosus (SLE).

Under the agreement, Zenas will receive up to $300 million, consisting of an upfront payment of $75 million, and three additional payments of $75 million each upon 1) achievement of defined success criteria in the phase 3 INDIGO trial of Obexelimab in IgG4-RD, 2) U.S. FDA approval of Obexelimab for IgG4-RD, and 3) U.S. FDA approval of Obexelimab for SLE. In exchange, Royalty Pharma will receive a 5.5% royalty on worldwide net sales of Obexelimab by Zenas and its affiliates and certain other payments associated with the commercialization of Obexelimab in partnered geographies.

With the receipt of the initial $75 million payment under the agreement with Royalty Pharma, Zenas expects to have cash to fund its operations through the first quarter of 2027.

This funding agreement highlights the companies' conviction in the potential of Obexelimab as a franchise molecule and provides Zenas with financial flexibility to rapidly advance its clinical programs and fund the commercial launch of Obexelimab if approved for the treatment of IgG4-RD.

In addition, Obexelimab has demonstrated compelling proof-of-concept in IgG4-RD, and Zenas is also conducting multiple phase 2 and phase 3 trials of Obexelimab in several autoimmune diseases including IgG4-RD, RMS, and SLE.

Advisors for this transaction included Evercore as the exclusive financial advisor and Ropes & Gray LLP as the legal advisor to Zenas Biopharma, while Goodwin Procter LLP and Maiwald GmbH acted as legal advisors to Royalty Pharma. Today the company's shares have moved -1.6% to a price of $16.00. For more information, read the company's full 8-K submission here.

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