Taking Stock of Zenas BioPharma (ZBIO) Valuation After Royalty Pharma Financing Boost

Zenas BioPharma (ZBIO) just locked in up to $300 million in non dilutive financing from Royalty Pharma, a move that helps support its balance sheet as Obexelimab advances through late stage trials.

See our latest analysis for Zenas BioPharma.

The market seems to like the added financial visibility, with the share price at $39.38 and a strong 30 day share price return of about 29 percent feeding into a powerful year to date share price return above 330 percent, signalling clear positive momentum after the Royalty Pharma deal.

If this deal has you thinking about where the next potential winner might come from, it could be worth scanning other promising healthcare stocks that are building momentum of their own.

With shares already up several hundred percent this year and trading only modestly below analyst targets, the key question now is whether Zenas is still mispriced or if the market is already discounting Obexelimab’s full potential.

Price-to-Book of 10.8x: Is it justified?

Zenas BioPharma is trading at a price-to-book ratio of 10.8 times, which, at a last close of $39.38, suggests a rich valuation versus many peers.

The price-to-book ratio compares the company’s market value to its net assets, a commonly used yardstick for early stage, asset heavy biopharma names where profits are still years away.

On one hand, Zenas screens as good value versus its broader peer set. Its 10.8 times price-to-book sits well below the 26.6 times average of comparable high growth names, implying investors are paying a smaller premium than they might elsewhere for similar balance sheet backing.

On the other hand, when lined up against the wider US biotech industry, Zenas looks significantly more expensive. Its 10.8 times price-to-book towers above the sector’s 2.7 times average and signals that expectations for Obexelimab and the broader pipeline are far higher than for a typical biotech stock.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-book of 10.8x (OVERVALUED)

However, setbacks in Obexelimab trials or delays in progressing the broader pipeline could quickly challenge today’s enthusiasm and compress Zenas’ elevated valuation.

Find out about the key risks to this Zenas BioPharma narrative.

Build Your Own Zenas BioPharma Narrative

If you would rather test the numbers yourself and challenge this view, you can quickly build a personalized thesis in just a few minutes: Do it your way.

A great starting point for your Zenas BioPharma research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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