Zenas BioPharma (NASDAQ:ZBIO) Shares Down 15.5% on Analyst Downgrade

Zenas BioPharma, Inc. (NASDAQ:ZBIO) fell 15.5% during mid-day trading on Tuesday after Morgan Stanley downgraded the stock from an overweight rating to an equal weight rating. Morgan Stanley now has a $19.00 price target on the stock, down from their previous price target of $37.00. Zenas BioPharma traded as low as $13.74 and last traded at $14.04. 792,708 shares changed hands during mid-day trading, a decline of 72% from the average session volume of 2,857,139 shares. The stock had previously closed at $16.61.

Several other analysts have also weighed in on the company. Evercore ISI assumed coverage on Zenas BioPharma in a report on Wednesday, November 26th. They set an “outperform” rating and a $55.00 price target on the stock. Wedbush restated an “outperform” rating and issued a $45.00 target price on shares of Zenas BioPharma in a report on Monday, December 22nd. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Zenas BioPharma in a research note on Monday, December 29th. Wall Street Zen raised shares of Zenas BioPharma from a “sell” rating to a “hold” rating in a research note on Saturday, November 8th. Finally, Citigroup upped their target price on Zenas BioPharma from $27.00 to $46.00 and gave the company a “buy” rating in a research note on Tuesday, October 28th. Six research analysts have rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Zenas BioPharma presently has an average rating of “Moderate Buy” and a consensus price target of $43.14.

Key Stories Impacting Zenas BioPharma

Here are the key news stories impacting Zenas BioPharma this week:

• Positive Sentiment: Phase 3 INDIGO trial met its primary endpoint: obexelimab reduced IgG4‑RD flare risk and reportedly hit all key endpoints — a clear clinical win that supports regulatory and commercial potential. INDIGO transcript
• Positive Sentiment: Bullish research and commentary argue the INDIGO win could reshape Zenas’s autoimmune franchise and highlight other pipeline assets (e.g., orelabrutinib, BTK program) that add upside beyond a single indication. Commercial impact analysis
• Neutral Sentiment: Market-structure and valuation dynamics likely amplified the reaction: commentators note that a prior run-up in the stock and cross-trial comparisons created conditions for a sharp, rapid re‑pricing when investors debated long‑term commercialization. Selloff analysis
• Negative Sentiment: Shares plunged after the data release despite the positive readout — several outlets report heavy intraday selling and a steep drop from recent highs as investors reassessed near-term commercial prospects. Plunge coverage
• Negative Sentiment: Morgan Stanley cut its rating on ZBIO, lowering analyst sentiment and adding immediate selling pressure from institutional accounts. MS downgrade Firm rating note
• Negative Sentiment: A Pomerantz LLP investor investigation was announced, introducing potential legal/financial risk that can weigh on sentiment and share price until resolved. Investor alert
• Negative Sentiment: Coverage noting the stock “tanked” despite the positive trial and further articles documenting the sharp decline highlight that market reaction has been driven more by sentiment, analyst downgrades and perceived commercial uncertainty than by the headline clinical readout. Zacks tanking story

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the stock. Quarry LP boosted its position in Zenas BioPharma by 34.5% during the third quarter. Quarry LP now owns 1,134 shares of the company’s stock valued at $25,000 after purchasing an additional 291 shares in the last quarter. Millennium Management LLC bought a new stake in shares of Zenas BioPharma in the 3rd quarter valued at about $1,595,000. Bank of America Corp DE grew its position in shares of Zenas BioPharma by 5.8% in the 3rd quarter. Bank of America Corp DE now owns 14,809 shares of the company’s stock worth $329,000 after buying an additional 818 shares during the last quarter. Alliancebernstein L.P. grew its position in shares of Zenas BioPharma by 12.2% in the 3rd quarter. Alliancebernstein L.P. now owns 18,350 shares of the company’s stock worth $407,000 after buying an additional 1,990 shares during the last quarter. Finally, Creative Planning bought a new position in shares of Zenas BioPharma during the 3rd quarter worth approximately $264,000.

Zenas BioPharma Price Performance

The company has a market cap of $886.26 million, a PE ratio of -2.34 and a beta of -1.45. The company has a debt-to-equity ratio of 0.37, a current ratio of 5.66 and a quick ratio of 5.66. The stock’s 50-day moving average is $35.51 and its 200 day moving average is $24.02.

Zenas BioPharma (NASDAQ:ZBIO) last issued its quarterly earnings data on Wednesday, November 12th. The company reported ($1.22) EPS for the quarter, missing the consensus estimate of ($0.87) by ($0.35).

Zenas BioPharma Company Profile

Zenas BioPharma, Inc is a clinical-stage biotechnology company focused on the discovery and development of novel therapies in oncology and infectious diseases. The company’s proprietary platform integrates structure-guided design, computational modeling and high-throughput screening to address challenging protein-protein interactions. Zenas BioPharma is advancing multiple preclinical and clinical-stage candidates aimed at providing new treatment options where current modalities may be limited by efficacy or safety concerns.

Founded in 2021 and headquartered in Cambridge, Massachusetts, Zenas BioPharma was built to streamline the drug discovery process from target identification through to IND-enabling studies.