Zenas BioPharma's Obexelimab Falls Short in IgG4-Related Disease Trial, Shares Plummet

Zenas BioPharma's experimental drug obexelimab has met the primary endpoint in a Phase 3 trial for IgG4-related disease, but the results have failed to impress investors and analysts, leading to a significant drop in the company's stock price. The trial outcomes, while positive, appear to fall short when compared to a recently approved competitor, raising questions about the drug's commercial viability.

Trial Results and Market Reaction

Zenas announced on Monday that obexelimab achieved its main goal in a study involving patients with IgG4-related disease, a rare inflammatory condition. The drug demonstrated a 56% reduced risk of disease flare-ups over a one-year period compared to placebo in patients already receiving standard treatments. However, this efficacy pales in comparison to Amgen's Uplizna, which was approved in April 2025 and showed an 87% reduction in flare-ups during clinical testing.

The market's reaction to the news was swift and severe, with Zenas shares plummeting by more than 55% in morning trading on Monday. This sharp decline erased hundreds of millions of dollars in market value, reflecting investor disappointment and concerns about the drug's future prospects.

Commercial Viability and Competition

Jefferies analyst Roger Song had previously stated that obexelimab needed to reduce the risk of flares by at least 65% to be considered "commercially viable." While Song acknowledged that obexelimab didn't necessarily need to match Uplizna's effectiveness due to potential differentiating features such as in-home dosing and lower risk of opportunistic infections, the 56% risk reduction appears to have fallen short of market expectations.

The competitive landscape for IgG4-related disease treatments has become more challenging with the recent approval of Uplizna. As the first drug specifically approved for this disorder, Uplizna has set a high bar for efficacy that obexelimab has struggled to meet in this latest trial.

Financial Implications and Future Outlook

Despite the setback, Zenas remains committed to advancing obexelimab. The company plans to file a U.S. approval application in the second quarter of 2026. As of September 30, 2025, Zenas reported $297 million in cash, short-term investments, and other current assets, with quarterly expenses exceeding $50 million.

To bolster its financial position, Zenas recently secured a deal with Royalty Pharma, selling a 5.5% royalty on future worldwide net sales of obexelimab. The agreement, worth up to $300 million, includes a $75 million upfront payment and additional milestone payments tied to the Phase 3 trial success and FDA approval.

While the company has also reported promising data for obexelimab in multiple sclerosis, a potential approval in that indication is likely years away. As Zenas navigates this challenging period, the pharmaceutical industry will be watching closely to see how the company positions obexelimab in the competitive landscape of rare disease treatments.