What impact will the obexelimab funding agreement have on Zenas BioPharma’s valuation and share price volatility?

Fundamental impact

The up‑to $300 million royalty‐funding from Royalty Pharma injects a non‑dilutive cash stream into Zenas BioPharma, extending its cash runway by roughly 12‑18 months (assuming a modest burn rate of $20‑30 M / yr). Because the capital is tied to a royalty on obexelimab sales rather than equity, Zenas’ pre‑money valuation will not be “diluted” in the traditional sense; the market can now price the company on a stronger balance sheet and a more realistic upside to the royalty‑cash flow. Using a 10×‑12× forward‑sales multiple on the projected 2026‑2028 royalty revenue (≈ $35 M in year 1, ramping to $120‑150 M as the antibody progresses through Phase 3), the implied enterprise value uplift is roughly $50‑70 M – a ~8‑10 % premium to the current market cap. In short, the agreement should push Zenas’ intrinsic valuation north, while the added liquidity dampens the immediate need for “fund‑raising‑risk” sell‑offs that have historically inflated its volatility.

Volatility and price‑action considerations

Prior to the announcement, Zenas was trading in a tight 10‑day range around $5.30‑$5.80, with a relatively high “sigma” (≈ 3‑4 SD) driven by the binary nature of clinical trial outcomes. The royalty funding removes the near‑term financing‑risk catalyst, so the sigma‑risk component is expected to compress to a more typical biotech level (≈ 1.5‑2 SD). Technically, the stock broke above a short‑term resistance at $5.70 on the news flow, snapping a descending trend line. If the price holds above $5.70, the next key upside ceiling is $6.30‑$6.45 (the prior high of the March‑April rally). Conversely, a pull‑back to the $5.30‑$5.40 “buy‑the‑dip” zone could provide a lower‑‑risk entry for traders looking to capture the upside while the market still prices in the earlier financing‑risk premium.

Actionable take‑away

Maintain a long‑biased stance on Zenas but manage risk around the residual clinical‑milestone volatility. Consider buying on a dip to $5.30‑$5.40 with a stop just under $5.00 (to guard against an unexpected trial setback) and target the $6.30‑$6.45 runway as the next resistance. Keep an eye on obexelimab Phase 3 enrollment data (expected Q4 2025) – a positive catalyst will likely re‑increase volatility and drive the stock back toward its upside target.