Zenas BioPharma, Inc. (ZBIO) September 9, 2026 Conference Transcript

This is day one of Citi's Biopharma Back to School Summit here in New York City. I'm Yigal Nahamavitz. I'm one of the biotech analysts. It's my great pleasure to introduce Zenas Biopharma, Lonnie Mulder, Chairman and CEO. Lonnie, I've known you for a long time, so great to see you again running yet another company. And so love to discuss everything you're doing. I know you wanted to make some introductory remarks going through a little bit on high level on the slide. So over to you to get it started, and then we can, you know, dive into some of the details. So great. Thank you, Hugo.

We appreciate the invitation and being here at the Citi Conference that we've attended many years in a row at various companies along the way. And today we're here at Zennis. We've had a good day with investors, and I thought it would be good maybe to start out with a few comments. But, of course, we'll be making some forward-looking statements, and I would refer anyone to our SEC filings. So, as a company, before we get into, I think, some of the things that people have in mind, some of the topical items, is to step back and what are we building here? So right now in 2026, if you look at Zennis, we have two late-stage programs that are substantial. And one of them, Abexilumab, is under review with the FDA for IgG4-related disease with a Bidufa date of May of 2027. Three additional programs that have great potential that we brought into the company through our business development activities. And a team that we've assembled that many people who we've worked with previously that have brought medicines across the finish line and ultimately commercialized successfully. And an infrastructure that's global in scope from a development standpoint, we conduct all of our trials globally. And then finally, the company's well-positioned from a cash position. If you take our last reported cash of over $670 million, and with an Obexlamab approval, an additional $75 million coming in from Pharmacon and $75 million from Royalty Pharma, we would have a cash runway through the second quarter of 2029. So, well-positioned. And just look out five years with execution. We have the potential approval of three molecules across multiple indications in large markets totaling over $50 billion in sales globally. So, I think we're well-positioned. Now, what we need to do is execute. So what's in the near term, meaning even the next quarter and the next couple of quarters for ibexilumab, as I mentioned, the IgG4-RD-BLA is under review. We have an investor event coming up September 29th, where Dr. Guy Katz from Mass General Hospital, an IgG4-related disease expert, will cover clinical data, and management will describe all of our commercialization activities and how we view the market. And then in October, we have the IgG4RG Symposium, and in November, the American College of Rheumatology Conference, and we've submitted to those meetings our open label extension data from the original indigo phase three IgG4-related disease trial. People may recall that in that phase three trial, We had a flare protection rate of about three-quarters, about three-quarters of the patients. But we previously reported in the open-label extension, the OLE, that at the six-month point, we were protecting over 90% of the patients. And we're really excited to share the 12-month data at these medical conferences. In addition, the vaccine sub-study data where in the open label extension, we're looking at the administration of either flu or COVID vaccines and how that can be utilized in patients that are on a vexilumab. And then, of course, people are well aware of our lupus program, our Sunstone SLE phase 2b top line results in the biomarker population and the overall population will be available in the fourth quarter. The arelibrutinib phase 3 programs are ongoing, both the PPMS study, Primrose, and the Monarch SPMS study. ZBO21, that is garnering quite a bit of interest now because we're in the clinic. Our oral IL-17 inhibitor will have the SAD and the MAD study results, that safety, tolerability, and pharmacokinetics in the fourth quarter as we prepare to move into a patient clinical program next year and report results in a patient setting. ZB014, the anti-CD19 FC gamma R2B long-acting molecule, will have SAD and MAD studies up and running next year with clinical data. And then finally, our ZB022 brain penetrant TIC2 inhibitor, part of our neuroimmunofranchise, will have clinical data next year. So, a lot going on.

Indeed, a lot going on. All right, well, maybe we could start with obexilumab. So the data that you're going to show, this longer-term flare protection data, I gather the data is going to continue to improve, and what time point are you looking at for this next look?

Yeah, so what I had mentioned was that we previously reported the patients who had achieved six months on therapy in the open label extension that the flare protection was over 90 percent it was 92 percent okay so you'll have to stay tuned for what the data would be um i would say you know i'm not going to categorize it's an improvement because that's about as good as it gets okay right so um you'll see the data when it comes out and what we'll be sharing is the uh 12 month of flare probabilities and people can can assess that data when it's available um so tell us so the the padufas next uh next year tell us a little bit more about you know what you're doing

in terms of understanding uh the market uh in igg4 rd obviously you know you have we have one other drug that's uh approved there and is uh has launched um so you know talk about what your your commercial team is doing to you know understand you know where you would expect the uptake for OBEX and how its profile would be competitive relative to the MGen product.

So I would back up and just look at the whole treatment paradigm and how it's evolving for IgG4-related disease patients. As you know, historically, glucocorticoids, an intensive steroid dosing regimen, and then tapering the dosing down is what was used in patients who flared, and that's still used in a reasonable number of patients. Over time, it was determined that targeting B cells was effective, and that was with rituximab. The challenge with rituximab has always been that it's not FDA approved, and there is not data from a randomized phase three controlled trial. It does work, but it's many times hard to obtain and get it paid for. As you mentioned another drug has launched, and that's now been in the marketplace for just over a year. So it's still early days of the first and only approved drug. So there's a lot of market development still to take place. And when I speak to market development, that covers several areas. One important area is diagnosis. So an improvement in diagnosing patients. We believe there are 30,000 patients that have IgG4-related disease in the U.S., but the actual diagnosed and treated population today is 20,000. So how does the diagnosis rate increase? How are patients identified and brought into the treatment market? And then the other aspect of the market is because historically there were no approved drugs, and what was used were steroids, and steroids just can't be administered chronically. The market was intermittent administration of steroids. So patient flares treat their flare. And some patients maybe give them low dose steroids for a period of time, but that's just not sustainable. It's hard for patients to tolerate. So that was intermittent. The drug that's approved is a drug for maintenance. It's based on a maintenance design of a phase three trial, similar to the maintenance design of our indigo trial for abexilumab, so we would anticipate the same thing. This is long-term maintenance, and it's shifting the paradigm to go from the steroid intermittent treatment to continual therapy. That's important. That's what we're going to need to do in this marketplace. But, you know, it's important to build the market, but importantly for patients. These patients have a chronic disease with chronic inflammation, and they don't always have symptoms. They may not have symptoms, but they have inflammation, lesions, lesions that become fibrotic that then lead to a decrement in the organ. So to continually suppress that inflammation is critical. And that's why, you know, the first drug we would anticipate our drug is for continuous administration. And we believe our drug as an at-home subcutaneous formulation, which really fits the paradigm in rheumatology. And we know from the GLP-1 market that at-home subcutaneous administration is something that's well accepted by patients and with our drug also well tolerated. So the market obviously is evolving to drugs that are approved and needs to evolve where there's continuous therapy. And for our drug, a drug that's an inhibitor of B cells as opposed to a depleter of B cells. If you consider the other two biologic agents, they deplete B cells. So you're depleting, if this is continuous therapy to protect these patients, you're depleting the B cell compartment every six months for years and years. And for clinicians, they pause in thinking about that in rheumatology. You know, they've had patients with severe hospitalized infections. They've had patients who have succumbed during COVID because they couldn't mount a vaccine response. So having a highly effective agent like abexilumab that has perhaps flexibility in, of course, being an inhibitor where you could pull it back if you needed to to treat a comorbidity, to vaccinate a patient potentially, is highly desirable. In our market research, you asked about what our team's doing. We're doing a lot of market research, and we've shared some of this publicly. Point to that profile leads to a preference share of 50% of the frontline treatment with the other two agents dividing the rest of the share. You know, our goal is then to achieve that, but that's what the market research is telling us. So the team is being built to execute and deliver that type of outcome. We've had our medical science liaisons in the field for some time now. We have had our commercial infrastructure, marketing, sales leadership, market access in place for some time. Really what we need to add finally would be the sales force, and that's a team of about 45 to 50 people. That's the right size for the number of rheumatologists and gastroenterologists that treat IgG4RD. We have a good sense from claims data where these treatments take place, where these patients exist, so that we deploy efficiently this group and we'll be well prepared for the So you fit 50% share from your market research, and then the other two agents that would split But the residual part of the market would be the other drug, Glintzina, and then Rituxan.

Oh, as an option.

That's what the market research outcome was.

Even though the Rituxan didn't have any approval there, it would be an off-label option.

That's how it's being used now, when it can be obtained.

And then, of course, you mentioned this vaccine sub-study and the point being regarding the ability to maintain or mount a vaccine or response. So just at a high level, just kind of outline what you're going to show there.

So the open label extension study I mentioned before has a sub-study within it where there's clinical sites throughout the world that are participating and entering patients that would receive either a flu vaccine, a COVID-19 vaccine, or both. So what happens is a Bexlamab is paused for varying periods of time, so we're investigating that. The vaccines are administered, and two weeks later, titers are assessed. So we're looking at protective titers, which is a standard that's known, and whether those are achieved in a reasonable percentage of the population in the study.

So that's the type of data that will be shared. okay um and so then you'll sort of figure out you said it's sort of staggered in the sense that you'll withdraw um obex for different periods of time and then do the vaccination and see what the minimum amount of time is you need to stop obex is that kind of where you're going with that it's it's you know it's measured in weeks yeah and then the vaccine and then measure the titers in two weeks and then restart a excellent amount okay so we'll get that data later that's right it is here this fall yeah um and then on one of the earlier slides you'd mentioned um well you have your own r&d day but then there's this uh so this igg4 summit or symposium yeah so the a little bit more

there's a um there's a well it's it's typically every two years i think during covid it might have been in every three years but in every every other year and it's going to move to annual igg4 international symposium where the tops 100 or so igg4 experts get together and this year john stone and mass general is sponsoring sponsoring it so it's a boston-based meeting in october um and it's a typical medical conference except there's only one room right and there's presentations uh from um those who have submitted abstracts so there'll be posters oral presentations, et cetera, across all aspects of diagnosing, treating, managing IgG4RD.

Okay.

And then, of course, ACRs in November.

Right. As far as outside of the United States, do you have any, can you just quickly elaborate what you would do in terms of filing XUS for OBEX?

So we have plans to file this half of the year in Europe, so we'll file an MAA. We already have medical science liaisons in the field. We have market access in Europe, and Europe was a really important part of our Phase III program. Quite a few KOLs there. We're investigators. And we're close to the IgG4-related disease community there. And when you say a launch in Europe, you typically talk about Germany. For us, we're going to submit. Obviously, we have strategic assessment to do relative to MFN and what impact that could have on pricing. So we're not making any strategic decision about Europe yet, but we will move forward at least with the submission at this time. And we have plenty of time to think through the strategy.

And just a big picture, like the scale of the opportunity in Europe, in IGG4, how does it, is it just scale by population or is it?

Yeah, it scales by population. So, you know, Europe, depending on how you define Europe, but if you're defining Europe of the, you know, more of the 350,000 or more of the 400,000, 400 million, I'm sorry, population, you know, you're going to get a market size that's similar to the US population.

Okay. And Japan is a future consideration? Japan is our partner, Bristol-Myers Squibb. So they'll take the lead there?

They'll take the lead on that.

Okay. That makes sense. And now you mentioned the second generation longer Half-Life version. That one, that would be sort of a lifecycle extension or would it launch? You mean you have both available in the market, I gather? Yeah, that's a way to think about it.

Life cycle extension. You know, our current dose administration for Bexilumab is a weekly subcutaneous administration. We'll launch with pre-filled syringes. We'll submit an SBLA for the auto injector pen as soon as the BLA is approved, and then that should launch within a year. And it's a low-viscosity, 2-mil solution, so it's about an 8-second sub-Q, pretty convenient. And then the product profile for ZB014, which is CD19, FC-gamma, R2B antibody, with two mutations in the FC portion of the antibody, the target, based on the preclinical data, would be a monthly administration. And then we would also anticipate longer exclusivity. So strategically, we'll make decisions about which future indications would go to abexilumab and which indications would go to this new molecule. Obviously, those strategic decisions will come after we have the initial clinical data next year.

Okay. All right, let's switch over. So the other big catalyst you mentioned is SLE. Actually, I'm getting a lot of questions on that one from people interested in the story. So everyone's trying to understand, you know, the expectations. And so just tell us, you know, well, first of all, just sort of summarize the Sunstone study, what the design is, and then what are the endpoints? And what would be, you know, what are you aiming for in terms of a profile there that would be competitive?

So this is a randomized study, one-to-one, abexlimab versus placebo with background lupus therapy, corticosteroids with a target de-escalation down to five milligrams of prednisone equivalent. The study really takes in moderate to severe disease. We put in place a screening tool where investigators who then assess inclusion, exclusion criteria to enroll a patient leads to a screening additionally by an expert, which interestingly enough, removes a number of patients to make sure we truly get moderate to severe disease that controls the placebo response. And the trial also, although we would call it an all-comer trial, is interrogating a biomarker in all patients. And that biomarker was based on some earlier work that showed a much higher level of responsiveness to the drug in a phase 2a lupus study. So it's a biomarker assessment in a classical design looking at BICLA. We'll also look at SRI-4 and a number of other measures.

Okay, so the biomarker is something that you haven't specified yet, or you talked about it?

Actually, in the phase 2a study that was previously published, the biomarker is well described in that publication. At that time, it was RNA sequencing, identifying really a gene profile, several gene profiles that happened to be highly responsive. We've taken that, and we're working with a commercial entity who have simplified the whole process to, uh, uh, so that it's not deep sequencing. And, uh, that's what we're using in our study.

Okay. Um, and so as far as what you're looking for in terms of an effect size relative to placebo, um, potentially reduced use of background therapy, can you speak to some of those end points as far as what, you know, what, uh, best we should look for? Sure, sure.

Sure. The study, as you know, the currently approved agents on the market, there's two on the market that are approved for SLE. Both of those had effect sizes in the teens. And then there's some recent data from a B-cell targeting agent, an anti-CD20 depleting antibody that had an effect size just over 20%. So we're looking at that around 20%, put an error bar around it that says you have a drug. We think our profile based on our ease of administration at home, the tolerability would play well. But then we're assessing the biomarker population. So in the fourth quarter, we'll present the biomarker top line results and the overall top line results. And where we go from there really depends upon that data. The biomarker in the phase 2A study showed up in about a third of the patients. We think it could be a little higher than that based on the work we've done since. So that alone could be a standalone if, in fact, the effect size was dramatic enough that that would be a really compelling program. If the overall fits into the range I was talking about before, that could be a program, or you can combine it where you would do an overall population, but test the biomarker population first, and then test the overall. So think about oncology studies. Think about PD-1. Think about PARP inhibitors. That's the concept. But we won't know. We have plans for all scenarios, but let's see the data.

So I guess at the risk of getting too into the weeds on this, what the, just kind of, can you frame what aspects of this biomarker signature that you've got from the prior studies would suggest or imply a stronger performance with OBEX? Is there evidence that would suggest?

In the original phase 2A study, on the primary endpoint of the study that was conducted by the discoverer of the molecule, the overall effect size in intent-to-treat population was 17%. In that same study, that was using an IV dosing regimen that lost target coverage at C-TROF. In that same study, if you looked at patients that were at the median of C-TROF or above, the effect size doubled to 35%. Our current sub-Q regimen puts every patient at C-TROF above that level. So that's encouraging as a signal-finding study, and that's why we went into this program. program. In the biomarker population, again, smaller numbers, retrospective, the effect size was 52%. So that was the signal that told us we should investigate that in a phase two program.

Okay. So there's sort of two higher levels there. There's the exposure, as you point out, and then this additional lever of the biomarker. Okay. That's all. And then the timing for that, you said fourth quarter, but I get together, you haven't been more specific than fourth quarter. No, we haven't.

Okay.

All right. Great. So let's talk a little bit about the product that you got from InnoCare, the oral abrutinib.

Which one? We have three.

That's true. Okay. Well, let's talk about- We'll start with oral abrutinib. Let's start with oral abrutinib. So there've been some interesting good developments in ms uh even last week if i've got the rms data um from uh novartis but in any case so just tell us a little bit more about the the ms strategy you know at zenas because you know you would you would you had started and after the ipo there was a potential for obex to be an ms drug um it brought in oral abrutin to beat the btk inhibitors as we know from right You know, speaking with the experts in MS is sort of the next frontier in terms of innovation. So, you know, tell us a little bit more about oral abrutinib. How does it differentiate from some of the notable pharma molecules that are getting a lot of attention, too?

So we have, you know, two strategic components to the franchises we're building, rheumatology and neuroimmunology, with MS being the initial focus. So as you mentioned, Abexilumab, we had conducted a Phase II study in RRMS, and those results were highly positive. In RRMS, the challenge is today to start a Phase III program with a primary endpoint of ARR, or annualized relapse rate, is challenging because the patients who are available for clinical trials have such low relapse rates. The ones that tend to have higher ones are already receiving a B-cell targeting agent, so it's a bit challenging. Now, if we can evolve to a different primary endpoint, let's say disability progression, then it's a different story, perhaps. But that's B-cell targeting with a Bexlimab in MS. And if we get an evolution in regulatory thinking, perhaps 014, our extended half-life molecule, might be a reasonable thing to consider. So we landed on, at this point, we're pursuing progressive MS forms, which is where the greatest need is. And that's primary progressive, PPMS, and secondary progressive. progressive, and specifically with FDA guidance, non-active or NA-SPMS. So that's our strategy, progressive MS. So we know, you know, level setting across the BTK inhibitors, of course, we have the tolibrutinib challenges that they faced with FDA in non-relapsing SPMS, which isn't quite what FDA is asking for, and some toxicity. That drug, though, is now approved in Europe for patients. And then we had earlier in the year, Phenobrutinib from Roche report out our RMS data, but relevant to us, the progressive data in PPMS. And you might recall that their PPMS trial compared Phenobrutinib to a crevice, which is the only approved agent for PPMS. A data set that's probably not overly impressive, but it works, it's approved. And numerically, phenobrutinib beat it. Not statistically, it was a non-inferiority trial. So that NDA's in, and we would expect an action in the first quarter if they get priority review. I think that's likely in the first quarter of next year. And I think that'll be interesting news for the BTK inhibitor class in MS. And then most recently, you mentioned remobrutinib from Novartis in an RRMS trial with data to come at the MS Toronto meeting, where we'll also be with additional data on arelibrutinib. We'll get to see, I would assume, their full data set from an efficacy and a safety standpoint. And then that molecule is also in an SPMS trial that we'll report out at some point. At least what's publicly available, it doesn't look like a pure NA SPMS trial, But for us, we're focusing on PPMS and NASPMS, and both of those phase III trials are up and running, and results from those trials should be in 2030. Now, when we look at the molecules, we think this molecule, although it's indicated in other parts of the world in heme malignancies, it is purpose-built for progressive MS. A combination of potency and CNS penetration. If you look across the BTK inhibitors, you'll see that tolibrutinib and remibrutinib have the lowest CNS penetration. Very modest CNS penetration. Remibrutinib, very potent peripheral agent, effective, hits B cells, works in RMS. But we believe in progressive disease. You need to get in the central compartment, not only hip B cells, centrally resident macrophages, microglia. That's what's going to make a difference on disability progression. So those agents, less brain penetration, reasonable potency. Phenobrutinib, a combination of potency and brain penetration, steps up just a bit. it's multiples when you look at our arelibrutinib ratio of cns concentration to potency so we think this molecule has an opportunity best in class and also compared to those other two agents might sound simple but really important to patients it's the only once a day being investigated in progressive disease so that's how we see it and we're executing on the studies right now um and then on the sort of on the the that's the efficacy side and the convenience side in terms of the safety side obviously in this class we've seen other some other the other compounds have seen liver signal um can you just speak to uh you know your comfort around around that with oral abrutinib and what you might expect yeah i think um across the agents that did phase two trials, all of them showed up with an elevation of liver enzymes and sometimes bilirubin, a few high-law cases here and there. In the arelibrutinib program in phase two, some was also observed. No clinical sequelae, no clinical symptoms, all patients recovered, and that moved everyone towards doing liver monitoring because you need to catch the trajectory early interestingly remabrutinib was not the subject of phase two so you know everyone else experienced that in phase two then put the monitoring into phase three remabrutinib went right to phase three and put the monitoring in so it's a different ball game the other thing to think about here is this disease. These patients, yeah, the relibrutin of phase two trials, seven and a half percent of the patients had elevated liver enzymes in the placebo group. A year ago, Roche issued a dear doctor letter on a crevice to assess liver function before starting therapy because a number of patients had shown up on the liver transplant list who had taken a crevice. Your doctor let her go down. What does an anti-CD20 antibody have to do with driving liver toxicity? There's something background happening in MS patients, and we would hope to figure it out, but no one's figured it out yet. So for us in our trial program, aligned with FDA and EMA, we have liver monitoring over the first three months. You catch the trajectory, you should be in good shape. What's really interesting, These patients that have elevated liver enzymes, a large percentage of them, if you pause the drug and restart it, you don't see it again. It's a real interesting dilemma, but what you do is monitor and you keep patients safe. This is progressive disease. This is, you know, PPMS, SPMS. This is serious disease. The risk-benefit, we believe, is there with a highly effective agent, and that's why the agency is allowing for these trials to go forward with monitoring.

And then, so RMS, you mentioned potentially the longer half-life next generation could be applicable there. If we see the full data from Novartis that you mentioned in RMS in a few weeks, maybe would oral abrutinib potentially be something you would consider for an RMS trial or not necessarily, or the bar would not be good there?

Yeah, I think RRMS is in a parking lot until the primary endpoint evolves, potentially.

Okay, fair enough. All right. So some of the other assets, if we could speak to those quickly, the IL-17 and the TIC2 inhibitor, where are those?

Yeah, the TIC2 inhibitor is in IND enabling and will initiate the initial phase one next year. The IL-17 inhibitor, it's an AAF inhibitor, is really exciting and moving quickly. So we're, you know, almost through all of SAD, the single ascending dose. We're well into the MAD. We'll report the fourth quarter, the safety, tolerability, and the pharmacokinetics. And then we'll move right to a patient proof-of-concept study next year. So what one would want to look for is, you know, the kind of exposure we're getting. I can tell you now, and we've already discussed this openly, that this is a once-a-day drug. This is a true small molecule. In primates, it had 80% bioavailability. That's been a challenge in trying to come up with good molecules in this area. So we're excited about the potential here. It's early days, but we'll have that data next quarter.

Okay. Looking forward to that, too. One more, which we're asking all the companies today and tomorrow, is just anything you want to say in terms of the use of artificial intelligence tools at Zenos, either on the drug discovery level or the, you know, efficiency level, helping filing your, you know, you've submitted the BLA, obviously. Has that helped in any way? Talk, just quickly, tell us.

Obviously, this is a topical subject. We're not a discovery organization, so we don't use AI in that arena because we don't do drug discovery. We search and we in-license. But across the organization, we spent some time and we picked what we would use. And we use Claude. And we have a number of use cases and a lot of training going on and appropriate policies in place. And it's touching all parts of the business, in the administrative parts of the business, obviously. You know, we do a lot of it, things that you would do with Internet searches in the past, how quickly you can assemble information across a field and all the published studies and all the science in an area and have that summarized for you. In writing, we use it in writing. We did not use it in the BLA for a Bexilumab. For our very first BLA, we did it the old-fashioned way. Good call. And I'm quite comfortable doing it the old-fashioned way. So over time, it will expand. And we imagine all the ways we can use it. I can't say we've implemented nearly what's possible at this point in time.

Sure. I don't think any of us have. fully uh fully leveraged its potential um all right well there's a lot to look forward to with the several readouts next quarter and then of course the uh the padufa in the second quarter of 27 so very good looking forward to all of it thank you thank you lani thank you all