Zenas BioPharma (ZBIO): Assessing Valuation After Successful Phase 2 Results in Multiple Sclerosis

Zenas BioPharma (ZBIO) caught investor attention after sharing encouraging data from its Phase 2 MoonStone trial of obexelimab in Relapsing Multiple Sclerosis. The therapy met its main trial goal and showed a strong drop in disease activity markers.

See our latest analysis for Zenas BioPharma.

After the impressive efficacy news, Zenas BioPharma’s momentum is hard to miss. The stock’s 1-day share price return of 33% reflects how clinical milestones can rapidly shift investor sentiment in biotech. With a soaring 58% 1-month share price return and year-to-date gains of over 250%, momentum is clearly building. At the same time, the total shareholder return over the past year, at 50%, reminds us that longer-term results also benefit from these breakthroughs.

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With shares trading just below analysts’ average target, some may wonder if Zenas BioPharma’s pipeline progress leaves further upside for investors, or if the market has already factored in much of the expected growth potential.

Price-to-Book of 5.6x: Is it justified?

With Zenas BioPharma’s last close at $31.80, its price-to-book ratio stands at 5.6x. This level is notably below the average of its closest peers but significantly above the broader biotech industry.

The price-to-book ratio compares a company’s market value to its underlying net assets. It is often used for asset-heavy sectors or for companies where earnings are volatile or negative. In biotech, this measure can indicate how the market values a company’s intangible assets, such as drug pipelines, which may not appear on the balance sheet.

Zenas BioPharma appears attractively priced using this metric relative to peer companies, which have an average price-to-book ratio of 21.9x. However, the US biotech sector as a whole averages a lower 2.5x. This underscores that Zenas’s premium is largely influenced by its pipeline momentum and investor enthusiasm, but it is not a bargain compared to the entire industry.

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

Result: Price-to-Book of 5.6x (UNDERVALUED relative to peers)

However, ongoing net losses and reliance on pipeline momentum mean that any clinical setbacks or changing investor sentiment could quickly reverse recent gains.

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

Build Your Own Zenas BioPharma Narrative

If you see things differently or enjoy hands-on research, you can easily build your own view of Zenas BioPharma's story 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 3 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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