aibioZenas BioPharma signs royalty financing with Royalty Pharma for up to $300 million
Zenas BioPharma sold Royalty Pharma a share of future obexelimab revenue for up to $300 million. It received $75 million at closing, and the other three $75 million payments depend on a Phase 3 milestone and two FDA approvals. The company says the cash lasts into the first quarter of 2027.
Key facts
- Companies
- Zenas BioPharma, Inc. (NASDAQ: ZBIO), Royalty Pharma plc (NASDAQ: RPRX)
- News type
- Financings
- Primary source
- Zenas BioPharma, Inc. Form 8-K filed September 2, 2025 (SEC EDGAR)
Zenas BioPharma, Inc. (Nasdaq: ZBIO) entered into a Revenue Participation Right Purchase and Sale Agreement on September 2, 2025 with Royalty Pharma Investments 2019 ICAV, which the filing calls RPI. Royalty Pharma plc (Nasdaq: RPRX) announced the deal the same day. Zenas reported it in a Form 8-K filed September 2, 2025, which furnished a press release as Exhibit 99.1.
The payments
The agreement is worth up to $300 million in four parts of $75 million each. The first part was paid at closing. The second is payable after milestones in Zenas' INDIGO Phase 3 trial of obexelimab in IgG4-related disease (IgG4-RD) are achieved, on or before a specified date. The third is payable after U.S. Food and Drug Administration (FDA) approval for IgG4-RD, and the fourth after FDA approval for systemic lupus erythematosus (SLE), each on or before a specified date. The 8-K does not give those dates.
What RPI receives
For each calendar quarter, RPI receives 5.5% of net sales of obexelimab sold by Zenas and its affiliates worldwide. It also receives 5.5% of net sales by licensees in the United States, the United Kingdom and the European Union. For licensees elsewhere, RPI takes 25% of royalty income that Zenas receives, less royalties Zenas owes Xencor Inc., and 25% of non-royalty income, other than certain milestone payments payable by Bristol-Myers Squibb.
The agreement can be terminated only by mutual written agreement of Zenas and RPI. It also contains customary representations, warranties, indemnities and covenants, and a limit on certain types of debt that Zenas can incur, which ends automatically on certain conditions, including a change of control.
What the company says about the money
Zenas says the initial $75 million will fund a potential U.S. commercial launch of obexelimab for IgG4-RD. It says the financing supports development and a potential IgG4-RD launch in the first half of 2027, subject to FDA approval. With the first payment, the company expects cash to fund operations through the first quarter of 2027.
The company expects topline results from INDIGO around the end of 2025, a Phase 2 trial in relapsing multiple sclerosis early in the fourth quarter of 2025, and a Phase 2 trial in SLE in mid-2026. The runway therefore ends after the Phase 3 readout that triggers the second payment. Chief Executive Officer Lonnie Moulder said the deal provides "financial flexibility to rapidly advance our clinical programs."
The drug and its supply chain
Obexelimab is a bifunctional monoclonal antibody designed to bind CD19 and FcγRIIb. The release says it has been evaluated in five completed trials involving 198 subjects, and that it was well tolerated. The company describes that record as "initial clinical proof of concept." Zenas describes itself as a clinical-stage global biopharmaceutical company.
The release names WuXi Biologics (Hong Kong) Limited as Zenas' current sole contract manufacturer for drug substance and drug product, and says it is located in China. The release lists changes in U.S.-China relations as a risk to suppliers, and cites a limited operating history, substantial losses since inception and the need for substantial additional financing.
Advisors and counsel
Evercore acted as exclusive financial advisor to Zenas, and Ropes & Gray LLP acted as its legal advisor. Goodwin Procter LLP and Maiwald GmbH acted as legal advisors to Royalty Pharma. The 8-K and the release name no placement agent, underwriter or lender.
Jennifer Fox, Chief Business Officer and Chief Financial Officer, signed the 8-K.
What the 8-K leaves out
The 8-K and the release give no Zenas cash balance or quarterly burn, so the cash runway claim cannot be checked against a balance. Zenas' annual report for 2024 shows a net loss of $157.0 million for the year and an accumulated deficit of $387.4 million at December 31, 2024. The full agreement will be filed with the Form 10-Q for the quarter ending September 30, 2025, with certain confidential terms redacted. Neither document gives the dates for the milestone and approval payments, or the cost of the royalty against the revenue Zenas expects.