aibioZenas BioPharma signs Royalty Pharma funding deal worth up to $300 million
Royalty Pharma will pay $75 million upfront for a 5.5% royalty on worldwide net sales of obexelimab, with three more $75 million payments tied to milestones.
Key facts
- Companies
- Zenas BioPharma, Inc. (NASDAQ: ZBIO), Royalty Pharma plc (NASDAQ: RPRX)
- News type
- Mergers
- Primary source
- Zenas BioPharma, Inc. 8-K (2025-09-02)
Zenas BioPharma, Inc. (Nasdaq: ZBIO) agreed on September 2, 2025 to receive up to $300 million from Royalty Pharma plc (Nasdaq: RPRX) in exchange for a royalty on sales of obexelimab, its lead antibody. The first $75 million is an upfront payment. Three further payments of $75 million each depend on three events: defined success in the Phase 3 INDIGO trial in IgG4-related disease, U.S. FDA approval of obexelimab for that disease, and U.S. FDA approval for systemic lupus erythematosus.
What Royalty Pharma receives
In return, Royalty Pharma receives a 5.5% royalty on worldwide net sales of obexelimab by Zenas and its affiliates, plus certain other payments tied to commercialization in partnered geographies. The release does not say how long the royalty runs.
Zenas takes cash now in exchange for a share of future obexelimab sales, and the royalty stays with the company after the payments are made.
A short runway with a long wait
Zenas says that with the initial $75 million, it expects to fund operations through the first quarter of 2027. The company plans a potential IgG4-related disease launch in the first half of 2027, subject to FDA approval.
The three further payments are tied to a trial readout expected around the end of this year and to approvals that have not been granted. Until those events occur, the upfront is the only cash from the deal. The stated runway runs through the first quarter of 2027, while the launch is planned for the first half of 2027 and depends on a Phase 3 result the company does not yet have. The release also lists a need for substantial additional financing, a limited operating history and substantial losses since inception among its risks, and names WuXi Biologics (Hong Kong) Limited, in China, as its current sole contract manufacturer for drug substance and drug product.
The lupus milestone
One of the three contingent payments depends on FDA approval for systemic lupus erythematosus, yet the release describes obexelimab's SLE program as Phase 2. It says a Phase 2 trial in SLE is expected in mid-2026, and it describes a Phase 2 trial in relapsing multiple sclerosis expected early in the fourth quarter of 2025. A payment tied to approval in a disease where the drug is still in Phase 2 development is a long-dated condition, and the release does not give a date for that approval.
The science behind the bet
The company's latest annual report on Form 10-K describes obexelimab as a bifunctional monoclonal antibody designed to bind both CD19 and FcγRIIb, which are broadly present across the B cell lineage. The company says the design inhibits B cells without depleting them, and it argues that anti-CD20 and other anti-CD19 agents can deplete circulating B cells for six months or longer, which may raise the risk of serious infections and blunt vaccine responses.
The release adds that obexelimab has been evaluated in five completed clinical trials in a total of 198 subjects and was well tolerated, which the company calls an initial clinical proof of concept. The filing presents the mechanism as the company's belief, based on existing clinical data. The registration-directed INDIGO trial is where that belief will be tested in IgG4-related disease. The Phase 3 trial completed enrollment in November 2024, according to the same report.
Who advised and who speaks
Evercore acted as exclusive financial adviser and Ropes & Gray LLP acted as legal adviser to Zenas BioPharma. Goodwin Procter LLP and Maiwald GmbH acted as legal advisers to Royalty Pharma. Lonnie Moulder, founder and chief executive officer of Zenas, called the deal a way to fund a launch and described obexelimab as "a franchise molecule." Pablo Legorreta, founder and chief executive of Royalty Pharma, said there is clear unmet need in IgG4-related disease.
Both quotes frame the deal in positive terms, and neither addresses the timing gap or the lupus milestone.
What is still open
The release sets out the upfront, the milestones and the royalty. It does not state the total cost of the royalty over its life, the conditions for the INDIGO milestone beyond the phrase "defined success criteria," or what Zenas would do if the upfront ran short before approval. The Phase 3 result is not due until around year-end.