Zenas BioPharma, Inc. 10-K

Item 8. Financial Statements and Supplementary Data ​ ZENAS BIOPHARMA, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements for the Years Ended December 31, 2024 and 2023: ​ ​ ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 135 Consolidated Balance Sheets ​ 136 Consolidated Statements of Operations and Comprehensive Loss ​ 137 Consolidated Statements of Stockholders’ Equity ​ 138 Consolidated Statements of Cash Flows ​ 139 Notes to Consolidated Financial Statements ​ 140 ​ 134 Table of Contents ​ Report of Independent Registered Public Accounting Firm ​ To the Shareholders and the Board of Directors of Zenas BioPharma, Inc. ​ Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Zenas BioPharma, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in convertible preferred stock and stockholders' equity (deficit) and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. ​ Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ /s/ Ernst & Young LLP ​ We have served as the Company’s auditor since 2021. Boston, Massachusetts March 11, 2025 ​ ​ ​ 135 Table of Contents PART I —FINANCIAL INFORMATION Item 1. Financial Statements Zenas BioPharma, Inc. ​ Consolidated Balance Sheets (in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Assets ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 319,742 ​ $ 56,857 Short-term investments ​ ​ 31,024 ​ ​ — Restricted cash ​ ​ 90 ​ ​ — Prepaid expenses and other current assets ​ ​ 5,067 ​ ​ 2,947 Total current assets ​ ​ 355,923 ​ ​ 59,804 Property and equipment, net ​ ​ 185 ​ ​ 193 Operating lease right-of-use assets, net ​ ​ 1,004 ​ ​ 821 Restricted cash ​ ​ — ​ ​ 86 Other non-current assets ​ ​ 12,856 ​ ​ 7,276 Total assets ​ $ 369,968 ​ $ 68,180 Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit) ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable (includes $ 560 and $ 21 owed to related parties, respectively) ​ $ 17,136 ​ $ 5,396 Accrued expenses (includes $ 260 and $ 404 owed to related parties, respectively) ​ ​ 39,371 ​ ​ 17,306 Operating lease liabilities, current ​ ​ 785 ​ ​ 556 Total current liabilities ​ ​ 57,292 ​ ​ 23,258 Operating lease liabilities, non-current ​ ​ 218 ​ ​ 257 Convertible notes, at fair value ​ ​ — ​ ​ 20,300 Total liabilities ​ ​ 57,510 ​ ​ 43,815 Commitments and contingencies (Note 14) ​ ​ ​ ​ ​ ​ Convertible preferred stock: ​ ​ ​ ​ ​ ​ Series Seed convertible preferred stock, par value $ 0.0001 per share; 0 and 1,785,714 shares authorized, issued and outstanding as of December 31, 2024 and 2023 , respectively. ​ ​ — ​ ​ 956 Series A convertible preferred stock, par value $ 0.0001 per share; 0 and 17,589,380 shares authorized, issued and outstanding as of December 31, 2024 and 2023 , respectively. ​ ​ — ​ ​ 55,840 Series B convertible preferred stock, par value $ 0.0001 per share; 0 and 81,242,587 shares authorized, issued and outstanding as of December 31, 2024 and 2023 , respectively. ​ ​ — ​ ​ 193,290 Stockholders’ equity (deficit): ​ ​ ​ ​ ​ ​ Preferred stock, par value $ 0.0001 per share; 25,000,000 and no shares authorized as of December 31, 2024 and 2023, respectively; no shares issued and outstanding as of December 31, 2024 and 2023. ​ ​ — ​ ​ — Common stock, par value $ 0.0001 per share; 175,000,000 shares authorized as of December 31, 2024 and 2023; 41,793,412 and 1,576,854 shares issued and outstanding as of December 31, 2024 and 2023, respectively. ​ ​ 4 ​ ​ — Additional paid-in capital ​ ​ 699,651 ​ ​ 4,645 Accumulated other comprehensive income ​ ​ 194 ​ ​ 37 Accumulated deficit ​ ​ ( 387,391 ) ​ ​ ( 230,403 ) Total stockholders’ equity (deficit) ​ ​ 312,458 ​ ​ ( 225,721 ) Total liabilities, convertible preferred stock and stockholders’ equity (deficit) ​ $ 369,968 ​ $ 68,180 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 136 Table of Contents Zenas BioPharma, Inc. ​ Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2024 ​ ​ 2023 Revenue: ​ ​ ​ ​ ​ ​ License and collaboration revenue ​ $ 5,000 ​ $ 50,000 Total revenue ​ ​ 5,000 ​ ​ 50,000 Operating expenses: ​ ​ ​ ​ ​ ​ Research and development (includes $ 3,524 and $ 3,041 from related parties, respectively) ​ ​ 139,139 ​ ​ 60,033 General and administrative (includes $ 0 and $ 8 from related parties, respectively) ​ ​ 29,749 ​ ​ 17,114 Acquired in-process research and development ​ ​ — ​ ​ 10,000 Total operating expenses ​ ​ 168,888 ​ ​ 87,147 Loss from operations ​ ​ ( 163,888 ) ​ ​ ( 37,147 ) Other income, net: ​ ​ ​ ​ ​ ​ Fair value adjustments to convertible notes ​ ​ ( 846 ) ​ ​ ( 300 ) Other income, net ​ ​ 8,175 ​ ​ 624 Total other income (expense), net ​ ​ 7,329 ​ ​ 324 Loss before income taxes ​ ​ ( 156,559 ) ​ ​ ( 36,823 ) Income tax provision ​ ​ ( 429 ) ​ ​ ( 301 ) Net loss to common stockholders ​ $ ( 156,988 ) ​ $ ( 37,124 ) Net loss per share attributable to common stockholders - basic and diluted ​ $ ( 11.89 ) ​ $ ( 24.25 ) Weighted-average common stock outstanding - basic and diluted ​ ​ 13,198,960 ​ ​ 1,531,178 Comprehensive loss: ​ ​ ​ ​ ​ ​ Net loss to common stockholders ​ $ ( 156,988 ) ​ $ ( 37,124 ) Other comprehensive income: ​ ​ ​ ​ ​ ​ Unrealized gain on marketable securities, net tax ​ ​ 31 ​ ​ — Foreign currency translation adjustment ​ ​ 126 ​ ​ 78 Comprehensive loss ​ $ ( 156,831 ) ​ $ ( 37,046 ) ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ ​ ​ 137 Table of Contents Zenas BioPharma, Inc. ​ Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) (in thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible Preferred Stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series Seed ​ Series A ​ Series B ​ Series C ​ Common Stock ​ ​ Additional Paid-in ​ Accumulated Other Comprehensive ​ Accumulated ​ Total Stockholders' Equity ​ Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Income (Loss) Deficit (Deficit) Balance as of December 31, 2022 ​ 1,785,714 ​ $ 956 ​ 17,589,380 ​ $ 55,840 ​ 77,052,632 ​ $ 183,290 ​ — $ — ​ 1,549,275 ​ $ — ​ $ 1,034 ​ $ ( 41 ) ​ $ ( 193,279 ) ​ $ ( 192,286 ) Issuance of Series B convertible preferred stock as payment of Xencor milestone, net of issuance costs of $ 0 ​ — ​ ​ — ​ — ​ ​ — ​ 4,189,955 ​ ​ 10,000 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercises of common stock options ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ 27,579 ​ ​ — ​ ​ 116 ​ ​ — ​ ​ — ​ ​ 116 Stock-based compensation expense ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ 3,495 ​ ​ — ​ ​ — ​ ​ 3,495 Foreign currency translation adjustment ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ 78 ​ ​ — ​ ​ 78 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 37,124 ) ​ ​ ( 37,124 ) Balance as of December 31, 2023 ​ 1,785,714 ​ $ 956 ​ 17,589,380 ​ $ 55,840 ​ 81,242,587 ​ $ 193,290 ​ — $ — ​ 1,576,854 ​ $ — ​ $ 4,645 ​ $ 37 ​ $ ( 230,403 ) ​ $ ( 225,721 ) Repurchase of unvested restricted stock awards ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ ( 21,172 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of Series C convertible preferred stock, net of issuance costs of $ 619 ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 116,275,239 ​ 199,526 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Conversion of convertible preferred stock to common stock upon closing of initial public offering ​ ( 1,785,714 ) ​ ​ ( 956 ) ​ ( 17,589,380 ) ​ ​ ( 55,840 ) ​ ( 81,242,587 ) ​ ​ ( 193,290 ) ​ ( 116,275,239 ) ​ ( 199,526 ) ​ 24,978,715 ​ ​ 2 ​ ​ 449,610 ​ ​ — ​ ​ — ​ ​ 449,612 Issuance of common stock from initial public offering, net of underwriting discounts, commissions and other issuance costs ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ 15,220,588 ​ ​ 2 ​ ​ 234,300 ​ ​ — ​ ​ — ​ ​ 234,302 Exercises of common stock options ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 38,427 ​ ​ — ​ ​ 275 ​ ​ — ​ ​ — ​ ​ 275 Stock-based compensation expense ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ 10,821 ​ ​ — ​ ​ — ​ ​ 10,821 Unrealized gain on investments ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ 31 ​ ​ — ​ ​ 31 Foreign currency translation adjustment ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ 126 ​ ​ — ​ ​ 126 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 156,988 ) ​ ​ ( 156,988 ) Balance as of December 31, 2024 ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ — $ — ​ 41,793,412 ​ $ 4 ​ $ 699,651 ​ $ 194 ​ $ ( 387,391 ) ​ $ 312,458 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 138 Table of Contents Zenas BioPharma, Inc. ​ Consolidated Statements of Cash Flows (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 156,988 ) ​ $ ( 37,124 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Acquired in-process research and development ​ ​ — ​ ​ 10,000 Depreciation expense ​ ​ 137 ​ ​ 113 Net amortization of premiums and accretion of discounts on short-term investments ​ ​ ( 602 ) ​ ​ — Stock-based compensation expense ​ ​ 10,821 ​ ​ 3,495 Change in fair value of convertible notes ​ ​ 846 ​ ​ 300 Non-cash lease expense ​ ​ 681 ​ ​ 726 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ ​ ( 7,701 ) ​ ​ ( 3,349 ) Accounts payable ​ ​ 11,740 ​ ​ ( 418 ) Accrued expenses ​ ​ 22,065 ​ ​ ( 3,558 ) Operating lease liabilities ​ ​ ( 673 ) ​ ​ ( 714 ) Net cash used in operating activities ​ ​ ( 119,674 ) ​ ​ ( 30,529 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Purchase of property and equipment ​ ​ ( 131 ) ​ ​ ( 17 ) Purchase of short-term investments ​ ​ ( 36,421 ) ​ ​ — Proceeds from sale and maturities of short-term investments ​ ​ 6,000 ​ ​ — Net cash used in investing activities ​ ​ ( 30,552 ) ​ ​ ( 17 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Proceeds from issuance of Series C convertible preferred stock, net of issuance costs ​ ​ 178,381 ​ ​ — Proceeds from initial public offering, net of underwriting discount and commissions ​ ​ 240,636 ​ ​ — Payment of initial public offering costs ​ ​ ( 6,334 ) ​ ​ — Proceeds from sale of convertible notes ​ ​ — ​ ​ 20,000 Proceeds from exercise of stock options ​ ​ 275 ​ ​ 116 Net cash provided by financing activities ​ ​ 412,958 ​ ​ 20,116 Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ ​ 157 ​ ​ 78 Net increase (decrease) in cash, cash equivalents and restricted cash ​ ​ 262,889 ​ ​ ( 10,352 ) Cash, cash equivalents and restricted cash at beginning of period ​ ​ 56,943 ​ ​ 67,295 Cash, cash equivalents and restricted cash at end of period ​ $ 319,832 ​ $ 56,943 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Fair value of BMS Note recognized as Series C Convertible preferred stock upon conversion ​ $ 21,146 ​ $ — Conversion of convertible preferred stock to common stock upon closing of initial public offering ​ $ 449,612 ​ $ — Right-of-use assets obtained under operating lease arrangements ​ $ 1,100 ​ $ — Deferred offering costs in accrued expenses ​ $ — ​ $ 1,388 ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents and restricted cash: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 319,742 ​ $ 56,857 Restricted cash ​ ​ 90 ​ ​ 86 Total cash, cash equivalents and restricted cash ​ $ 319,832 ​ $ 56,943 ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 139 Table of Contents Zenas BioPharma, Inc. Notes to Consolidated Financial Statements ​ 1. Nature of Business Organization Zenas BioPharma, Inc. (“Zenas” or the “Company”) was incorporated in November 2019 as Zenas BioPharma (Cayman) Limited, an exempted company incorporated in the Cayman Islands with limited liability, and commenced operations in 2020. On August 2, 2023, the Company (then known as Zenas BioPharma (Cayman) Limited (“Zenas Cayman”)) de-registered from the Cayman Islands and registered by way of continuation in the State of Delaware (the “Redomicile”). Zenas is a clinical stage global biopharmaceutical company committed to being a leader in the development and commercialization of transformative immunology-based therapies for patients in need. The Company’s goal is to build an immunology and inflammation (“I&I”) focused biopharmaceutical company. The Company has in-licensed and is developing several product candidates for the treatment of various auto-immune and rare diseases. The Company is headquartered in Waltham, Massachusetts and operates in one segment, which is the business of acquiring and developing immune-based therapies for potential commercialization. The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries which include Zenas BioPharma (HK) Limited (“Zenas HK”), Zenas BioPharma (USA) LLC (“Zenas US”), Shanghai Zenas Biotechnology Co. Limited (“Zenas China”), Zenas BioPharma Securities Corp., and Zenas BioPharma GmbH. Liquidity and Capital Resources Since its inception, the Company has devoted its efforts principally to research and development and raising capital. The Company is subject to risks and uncertainties common to clinical stage companies in the biopharmaceutical industry, including, but not limited to, completing preclinical studies and clinical trials, obtaining regulatory approval for product candidates, market acceptance of products, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, reliance on third-party organizations, protection of proprietary technology, compliance with government regulations, and the ability to raise additional capital to fund operations. The Company’s revenues to date have been generated from payments received under the Company’s license and collaboration agreement with Bristol-Myers Squibb Company (“BMS”) and novation agreement with Tenacia Biotechnology (“Tenacia”) (see Note 7, License and Collaboration Revenue ). The Company has not generated any revenue from product sales since inception, and its product candidates currently under development will require significant additional research and development efforts, including extensive clinical testing and regulatory approval prior to commercialization. On September 16, 2024, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 258.7 million. The Company received $ 234.3 million in net proceeds after deducting underwriting discounts, commissions and other offering expenses. In connection with the IPO, all outstanding shares of convertible preferred stock converted into 24,978,715 shares of the Company’s common stock. In connection with, and prior to, the Company’s IPO, the Company effected a 1-for- 8.6831 reverse stock split of the Company’s issued and outstanding common stock and adjusted the conversion ratio of all the Company’s outstanding convertible preferred stock. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the reverse stock split and the adjustment of the preferred stock conversion ratios. The Company has incurred operating losses and negative cash flows since its inception, including net losses of $ 157.0 million and $ 37.1 million in the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the Company had an accumulated deficit of $ 387.4 million and $ 230.4 million, respectively. Management expects operating losses and negative operating cash flows to continue for the foreseeable future. 140 Table of Contents The Company expects that its existing cash, cash equivalents and short-term investments of $ 350.8 million as of December 31, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date this Form 10-K is filed. The Company will need additional financing to support its continuing operations and to pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of private or public equity financings, debt financings or other capital sources, including collaborations with other companies or other strategic transactions and licensing agreements. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all. The inability to raise capital as and when needed could have a negative impact on the Company’s financial condition and its ability to pursue its business strategy. The Company will need to generate significant revenue to achieve profitability, and it may never do so. ​ 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries. All intercompany accounts, transactions, and balances have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been or omitted pursuant to such rules and regulations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, expenses, and related disclosures. The Company bases its estimates on historical experience, known trends and other market- specific factors or other relevant factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis using such factors and adjusts those estimates and assumptions as facts and circumstances dictate. Actual results may differ from those estimates or assumptions. Significant estimates in these consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation and pre-initial public offering (“IPO”) valuations of common stock, and convertible debt. Cash, Cash Equivalents The Company considers all highly liquid investments with original or remaining maturity from the date of purchase of three months or less to be cash equivalents. Cash equivalents may include money market funds, corporate debt securities, U.S government agency notes and overnight deposits. Short-Term Investments The Company classifies all investments with a remaining maturity when purchased of greater than three months as “available-for-sale”. Available-for-sale securities with a remaining maturity of greater than one year are classified as non-current assets. Available-for-sale securities are carried at fair value based upon market prices at period end, with the unrealized gains and losses included in accumulated other comprehensive loss as a component of stockholders’ equity (deficit) until realized. The amortized cost of investments in this category is adjusted for amortization of premiums and accretions of discounts over the life of the instrument. Realized gains and losses are determined using the specific identification method and are included in other income (expense). The Company reviews its portfolio of investments, using both quantitative and qualitative factors, to determine if declines in fair value below cost have resulted from a credit-related loss. If the decline in fair value is due to credit-related factors, a loss is recognized in other income (expense). 141 Table of Contents Restricted Cash Restricted cash consists of cash held as collateral for a letter of credit the Company issued as a security deposit for its lease of office space in Waltham, MA, which terminated in January 2025. Amounts are reported as non-current unless restrictions are expected to be released in the next 12 months. Deferred Offering Costs The Company capitalizes legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as other non-current assets until such financings are consummated. After consummation of the equity financing, these costs will be recorded in stockholders’ equity (deficit) as a reduction of additional paid-in-capital generated as a result of the offering. If the Company terminates its plan for an equity financing, any costs deferred will be expensed immediately. Upon closing the IPO in September 2024, the related deferred offering costs were recorded against the IPO proceeds. No deferred offering costs were recorded as of December 31, 2024. As of December 31, 2023, the Company had $ 1.4 million in deferred offering costs which were included in other assets. Segment Reporting Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company has one reportable segment focused on the research and development of precision immunology-based therapies. The Company’s chief operating decision-maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of making operating decisions, assessing financial performance, and allocating resources. As of December 31, 2024 and 2023, the Company’s long-lived assets held outside of the U.S. were immaterial. For additional information on our segment reporting, see Note 17, Segment Information to these consolidated financial statements. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and short-term investments. The Company attempts to minimize the risks related to cash, cash equivalents and short- investments by investing in a broad range of financial instruments, as defined by the Company’s investment policy. The Company has established guidelines related to the quality of the institutions, financial instruments and allowable investments. The Company minimizes credit risk by choosing only highly rated financial institutions as counterparties. Significant Suppliers The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs, including preclinical and clinical studies and testing. In particular, the Company relies on a single manufacturer and expects to continue to rely on a single or small number of manufacturers to supply it with its requirements for the drug product related to these programs. These programs could be adversely affected by a significant interruption in the supply of drug substance and drug product. Translation of Foreign Currency The functional currency for most of our foreign subsidiaries is their local currency. For our non-U.S subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign currency exchange rates for the period. Adjustments resulting from the translation of the financial statements of our foreign subsidiaries into U.S. dollars are excluded from our determination of net loss and are recorded in accumulated other comprehensive income (loss), as a separate component of equity. For foreign subsidiaries where the functional currency of assets and liabilities differs from their local currency, non-monetary assets and liabilities are translated at the rate of the exchange in effect on the date assets were acquired while monetary assets and liabilities are translated at current rates of exchange as of the balance sheet date. 142 Table of Contents Income and expense items are translated at the average foreign currency rates for the period. Translation adjustments of these subsidiaries are included in other (income) expense, net in our consolidated statements of income. Realized and unrealized foreign currency transaction losses were $ 0.2 million and $ 0.1 million for each of the years ended December 31, 2024 and 2023, respectively. Fair Value Measurements ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following: Level 1— Quoted market prices in active markets for identical assets or liabilities. Level 2— Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3— Unobservable inputs for the asset or liability (i.e. supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The majority of our financial assets have been classified as Level 1. Our financial assets (which typically include cash equivalents and marketable equity securities) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models. The pricing services utilize industry standard valuation models, including both income and market- based approaches and observable market inputs to determine value. These observation market inputs included reportable tables, benchmark yields, broker quotes, bids, offers, current spot rates and other industry and economic events. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. When such events occur, the Company compares the carrying amount of the assets to their undiscounted expected future cash flows. If this comparison indicates there is an impairment, the amount of the impairment is calculated as the difference between the carrying value and fair value. To date, no such impairments have been recognized. Property and Equipment Property and equipment are recorded at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets ( three to seven years ). Assets under capital leases are amortized over the shorter of their useful 143 Table of Contents lives or lease terms using the straight-line method. Major replacements and improvements are capitalized, while general repairs and maintenance are expensed as incurred. License and Collaboration Revenue The Company enters into license and collaboration arrangements with third parties, under which the Company licenses or may license rights to certain of the Company’s product candidates and may perform research and development services in connection with such arrangements. The terms of these arrangements typically include payment of one or more of the following: non-refundable, upfront fees; reimbursement of research and development costs; development, clinical, regulatory and commercial sales milestone payments, and royalties on net sales of licensed products. ​ At contract inception, the Company analyzes its collaboration and license arrangements to assess whether such arrangements are within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple units of account, the Company first determines which units of the collaboration are deemed to be within the scope of ASC 808 and which units of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ​ Contracts are considered to be collaborative arrangements when they satisfy the following criteria defined in ASC 808: (i) the parties to the contract must actively participate in the joint operating activity and (ii) the joint operating activity must expose the parties to the possibility of significant risks and rewards, based on whether or not the activity is successful. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, either by analogy to authoritative accounting literature or by applying a reasonable and rational policy election. Payments received from or made to a partner that are the result of a collaborative relationship with a partner, instead of a customer relationship, such as co-development activities, are recorded as a reduction or increase to research and development expense, respectively. ​ For the units of account within the scope of ASC 606, to determine the appropriate amount of revenue to be recognized for the arrangements, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer. ​ The promised goods or services in the Company’s arrangements typically consist of a license to the Company’s intellectual property and research and development services. The Company provides options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available and whether the goods or services are integral or dependent to other goods or services in the contract. ​ The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which 144 Table of Contents method best predicts the amount expected to be received. The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. ​ The Company’s contracts often include development and regulatory milestone payments that are assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. Due to the uncertainty of research and development and regulatory based milestones that are not within the control of the Company, payment becomes probable upon achievement. At the end of each reporting period, the Company re-evaluates the probability of achievement of such development and clinical milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and collaboration revenue in the period of adjustment. Any amounts due to the Company but not received as of period-end will be recorded to other current assets. ​ For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of the Company’s collaboration arrangements. ​ The Company allocates the transaction price based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs including a reasonable margin. Variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation. The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. ​ Research and Development Expenses Research and development costs include (i) employee-related expenses, including salaries, benefits, and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as CRO agreements and consultants; (iii) costs associated with preclinical activities and (iv) lab supplies, lab expenses and an allocation of rent, depreciation, and infrastructure. Costs incurred in connection with research and development activities are expensed as incurred. ​ Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data, such as patient enrollment or clinical site activations, provided by the Company’s clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved, and experience with similar contracts. Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable. The Company monitors each of these factors and adjusts estimates accordingly. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception. ​ Asset Acquisitions and Acquired In-Process Research and Development Expense The Company accounts for acquisitions of assets or a group of assets that do not meet the definition of a business as asset acquisitions based on the cost to acquire the asset or group of assets, which include certain transaction costs. In an asset acquisition, the cost to acquire is allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values as of the acquisition date. No goodwill is recorded in an asset acquisition. Assets that are 145 Table of Contents acquired in an asset acquisition for use in research and development activities that have an alternative future use are capitalized as in process research and development (“IPR&D”). Acquired IPR&D that has no alternative future use as of the acquisition date is recognized as acquired IPR&D expense as of the acquisition date. The Company will recognize additional acquired IPR&D expenses in the future if and when the Company becomes obligated to make contingent milestone payments under the terms of the agreements by which it acquired the IPR&D assets. The Company classifies payments made for the acquisition of IPR&D assets, whether capitalized or expensed, as investing activities on its statement of cash flows. ​ Contingent consideration in the form of milestone payments related to IPR&D with no alternative future use are charged to expense when the related milestone is achieved and becomes payable. For the year ended December 31, 2024, the Company did not recognize any acquired IPR&D expense. For the year ended December 31, 2023, the Company recognized $ 10.0 million of IPR&D expense, in connection with the consideration due under the 2021 Xencor Agreement. ​ For additional information on our asset acquisitions and acquired in-process research and development, please see Note 8, License and Option Agreements, to these consolidated financial statements. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss consists of net loss and other comprehensive loss. During the years ended December 31, 2024 and 2023, the Company’s only element of other comprehensive loss was foreign currency translation adjustments. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of use lease assets (“ROU assets”), current portion of lease obligations and long-term lease obligations on the Company’s consolidated balance sheet. Assets subject to finance leases are included in property and equipment, and the related lease obligation is included in other current liabilities and other long-term liabilities on the Company’s consolidated balance sheet. Lease assets are tested for impairment in the same manner as long-lived assets used in operations. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense, while expense for financing leases is recognized as depreciation expense (classified as an operating expense) and interest expense (classified as a non-operating expense) using the effective interest method. The Company has elected the short-term lease recognition exemption for short-term leases, which allows the Company not to recognize lease liabilities and ROU assets on the consolidated balance sheet for leases with an original term of twelve months or less. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and their corresponding ROU assets are initially recognized based on the present value of lease payments over the expected remaining lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. Certain adjustments to the ROU asset may be required for items such as incentives received from the lessor. The interest rate implicit in lease contracts is typically not readily determinable. Therefore, the Company utilizes its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the fixed rate at which the Company could borrow, on a collateralized basis, the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the ROU assets for straight-line rent expense, or any incentives received and remeasures the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. The Company generally accounts for non-lease components together with lease components. The Company expenses variable payments included in a lease arrangement as such expenses are incurred. For additional information on our leases, please see Note 6, Leases , to these consolidated financial statements. 146 Table of Contents Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes , which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all deferred tax assets will not be realized. The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a “more likely than not” threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits included in the Company’s consolidated balance sheets as of December 31, 2024 and 2023. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company has not recognized interest or penalties related to uncertain tax positions in its consolidated statements of operations and comprehensive loss since inception. Stock-Based Compensation The Company grants stock-based awards to employees, non-employee consultants and members of its board of directors (the “Board”). Stock-based compensation is recognized as expense for each stock-based award based on its estimated fair value on the date of grant. The Company’s share-based payments include stock options and grants of restricted common stock. The value of the award is recognized as expense on a straight-line basis over the requisite service period, and expense is adjusted for pre-vesting forfeitures in the period in which the forfeitures occur. Stock-based compensation expense is classified in the accompanying consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients service payments are classified. The Company estimates the fair value of each restricted stock award (“RSA’s”) at its grant date based on the estimated fair value of the Company’s common stock on that date as determined by the Board. The Company estimates the fair value of stock option awards on the grant date using a Black-Scholes option pricing model. The Company estimates the expected option lives using the simplified method, volatility using historical stock prices of peer companies, the risk-free rates using the U.S Treasury yield curve in effect with a remaining term equal to the expected term and dividend yield based on the Company’s history of paying no dividends and the expectations of paying no cash dividends in the foreseeable future. Prior to the Company’s IPO, the fair value of the Company’s common stock on the date of grant was determined by the Board, taking into consideration its most recently available third-party valuations of common stock as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the grant date. For additional information on our share-based compensation, please see Note 11, Stock-Based Compensation , to these consolidated financial statements. Convertible Preferred Stock The Company classified its convertible preferred stock as temporary equity (between liabilities and stockholders’ equity (deficit)) in the accompanying consolidated balance sheet because it could have become redeemable due to certain change in control clauses that were outside of the Company’s control. The convertible preferred stock was not redeemable, except in the event of a deemed liquidation event. As the occurrence of a deemed liquidation event was not currently probable at December 31, 2023, the carrying values of the convertible preferred stock were not being accreted to their redemption values. Upon the completion of the Company’s IPO on September 16, 2024, all outstanding shares of the Company’s convertible preferred stock converted into shares of the Company’s common stock. For additional information on our convertible preferred stock, please see Note 9, Convertible Preferred Stock , to these consolidated financial statements. 147 Table of Contents Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period and, if dilutive, the weighted-average number of potential shares of common stock. Net loss per share attributable to common stockholders is calculated using the two- class method, which is an earnings allocation formula that determines net loss per share for the holders of the Company’s common shares and participating securities. The Company’s convertible preferred stock contained participation rights in any dividend paid by the Company and is deemed to be a participating security. Net loss attributable to common stockholders and participating preferred shares are allocated to each share on an as-converted basis as if all of the earnings for the period had been distributed. The participating securities do not include a contractual obligation to share in losses of the Company and are not included in the calculation of net loss per share in the periods in which a net loss is recorded. ​ Diluted net loss per share is computed using the more dilutive of (a) the two-class method or (b) the if- converted method. The Company allocates earnings first to preferred stockholders based on dividend rights and then to common and preferred stockholders based on ownership interests. The weighted-average number of common shares included in the computation of diluted net loss per share gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and preferred stock. ​ Common stock equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued if their effect is antidilutive. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2024 and 2023. ​ Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed, we do not believe that the adoption of recently issued standards have or may have a material impact on our consolidated statements or disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU 2023-07”) , which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. This standard became effective for the Company for the annual reporting period ended December 31, 2024, using the retrospective method. The adoption of this standard resulted in additional disclosure of the significant expenses reviewed by the Company’s CODM. The adoption did not have a material impact on the consolidated financial position or results of operations. See Note 17, Segment Information , for our updated segment presentation. ​ In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”) , which requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for the Company beginning in fiscal year 2025, with early adoption permitted. ASU 2023-09 may be applied retrospectively or prospectively to the financial statements. The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures. In November 2024, the FASB issued 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) , which requires entities to disclose additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 is effective annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied retrospectively or 148 Table of Contents prospectively to the financial statements. The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures. ​ 3. Fair Value Measurements The following tables present information about the Company’s assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ Description ​ Total Carrying Value ​ ​ Quoted Prices in Active Market (Level 1) ​ Significant Other Observable Inputs (Level 2) ​ Significant Other Observable Inputs (Level 3) ​ Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash ​ $ 19,070 ​ $ 19,070 ​ $ — ​ $ — ​ Money market funds ​ ​ 300,672 ​ ​ 300,672 ​ ​ — ​ ​ — ​ Investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ 3,315 ​ ​ — ​ ​ 3,315 ​ ​ — ​ Corporate debt securities ​ ​ 8,601 ​ ​ — ​ ​ 8,601 ​ ​ — ​ Government securities ​ ​ 19,108 ​ ​ 19,108 ​ ​ — ​ ​ — ​ Total assets ​ $ 350,766 ​ $ 338,850 ​ $ 11,916 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 Description ​ Total Carrying Value ​ ​ Quoted Prices in Active Market (Level 1) ​ Significant Other Observable Inputs (Level 2) ​ Significant Other Observable Inputs (Level 3) Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BMS note ​ $ 20,300 ​ $ — ​ $ — ​ $ 20,300 Total liabilities ​ $ 20,300 ​ $ — ​ $ — ​ $ 20,300 ​ There have been no material impairments of our assets measured and carried at fair value during the year ended December 31, 2024. The fair value of Level 1 instruments classified as money market funds and government securities are valued using quoted market prices in active markets. The fair value of Level 2 instruments classified as short-term investments was determined using other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date and fair value is determined using models or other valuation methodologies. There were no transfers between levels during the years ended December 31, 2024 and 2023. The short-term investments are classified as available-for-sales securities. As of December 31, 2024, the remaining contractual maturities of the available-for-sales securities were within one year, the balance in the Company’s accumulated other comprehensive income was comprised solely of activity related to the Company’s available-for-sale securities. There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the year ended December 31, 2024. As a result, the Company did not reclassify any amounts out of accumulated other comprehensive income for the same period. The Company has a limited number of available-for-sale securities in insignificant loss 149 Table of Contents positions as of December 31, 2024, which the Company does not intend to sell and has concluded will not be required to sell before recovery of the amortized cost for the investment maturity. The following table summarizes the available-for-sale securities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Amortized Cost ​ ​ Gross Unrealized Gains ​ ​ Gross Unrealized Losses ​ ​ Fair Value Short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper $ 3,311 ​ $ 4 ​ $ — ​ $ 3,315 Corporate debt securities ​ 8,589 ​ ​ 12 ​ ​ — ​ ​ 8,601 Government securities ​ 19,093 ​ ​ 17 ​ ​ ( 2 ) ​ ​ 19,108 Total $ 30,993 ​ $ 33 ​ $ ( 2 ) ​ $ 31,024 ​ Certain short-term debt securities with original maturities of less than 90 days are included in cash and cash equivalents on the consolidated balance sheets and are not included in the table above. The Company did not hold any investments as of December 31, 2023. Convertible Notes In August 2023, the Company entered into a $ 20.0 million convertible promissory note agreement with BMS (the “BMS Note”) in connection with its strategic license and collaboration agreement with BMS (the “BMS Agreement”) (see Note 7, License and Collaboration Revenue ). In the event that the Company issued and sold its convertible preferred stock to accredited investors with total gross proceeds equal to at least $ 70.0 million (a “BMS Qualified Financing”), the outstanding principal and accrued interest of the BMS Note were automatically convertible into equity securities sold in the BMS Qualified Financing at the conversion price equal (i) to the outstanding principal and accrued interest under the BMS Note divided by (ii) the lowest cash price paid per equity security. The Company elected the fair value option to account for the BMS Note. Changes in fair value at every reporting date are recorded as a component of the other income (expense), net. The BMS Note was classified as a liability on the Company’s consolidated balance sheet as of December 31, 2023 and was initially recorded at fair value. The Company subsequently remeasured the fair value of the BMS Note at each applicable reporting period. On May 3, 2024, the Company issued and sold Series C convertible preferred stock (“Series C Preferred Stock”), which was deemed to be a BMS Qualified Financing, as described above, and resulted in the outstanding BMS Note plus accrued interest being automatically converted into 12,284,686 shares of Series C Preferred Stock (see Note 9, Convertible Preferred Stock ). Immediately prior to settlement, the BMS Note was remeasured to fair value utilizing fair value of the shares of Series C Preferred Stock for which the BMS Note converted into. The BMS Note settling in shares of Series C Preferred Stock represents the redemption of stock-settled debt and was therefore accounted for as an extinguishment. Upon extinguishment, no gain or loss was recognized. The Company recorded a $ 0.8 million change in fair value of the BMS Note as component of other income (expense), net for the year ended December 31, 2024. 150 Table of Contents The following tables presents changes to the Company’s liabilities with significant unobservable inputs (Level 3 liabilities) during the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ Convertible notes Convertible Note: ​ ​ Balance as of December 31, 2022 ​ $ — Issuance of BMS Note ​ ​ 20,000 Change in fair value of BMS Note ​ ​ 300 Balance as of December 31, 2023 ​ $ 20,300 Change in fair value of BMS Note ​ ​ 846 Issuance of Series C Preferred Stock in exchange for BMS Note ​ ​ ( 21,146 ) Balance as of December 31, 2024 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4. Other Assets Other assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Clinical trial deposits ​ $ 12,639 ​ $ 5,788 Deferred offering costs ​ ​ — ​ ​ 1,388 Other ​ ​ 217 ​ ​ 100 Total other assets ​ $ 12,856 ​ $ 7,276 ​ ​ ​ ​ 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ External research, development and manufacturing expenses $ 29,338 ​ $ 9,398 Employee compensation and benefits ​ 8,308 ​ ​ 5,122 Professional and consultant fees ​ 1,265 ​ ​ 2,379 Income taxes payable ​ 211 ​ ​ 301 Other ​ 249 ​ ​ 106 Total accrued expenses $ 39,371 ​ $ 17,306 ​ ​ 6 . Leases T he Company has various leases for office space, which are accounted for as operating leases and generally have terms of less than two years in length, some of which have the option to renew. The Company recognizes monthly operating lease expense on a straight-line basis over the term of the lease as general and administrative expenses in the consolidated statements of operations and comprehensive loss. Variable lease expense relates primarily to office lease common area maintenance, insurance, and property taxes, is expensed as incurred, and is excluded from the 151 Table of Contents calculation of the lease liabilities and right-of-use assets. For each of the years ended December 31, 2024 and 2023, the Company incurred variable lease expense of $ 0.1 million, respectively. ​ Supplemental balance sheet information related to operating lease assets and liabilities was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ ​ 2023 Operating lease assets ​ $ 1,004 ​ $ 821 Operating lease liabilities ​ $ 1,003 ​ $ 813 Weighted average remaining term in years ​ ​ 1.3 ​ ​ 1.6 Weighted average discount rate used to measure lease liabilities ​ ​ 10.99 % ​ ​ 18.39 % ​ For each of the years ended December 31, 2024 and 2023, the total lease cost for operating leases (recorded in general and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss) was $ 0.9 million, respectively. ​ The minimum lease payments under the Company’s operating leases are expected to be as follows: ​ ​ ​ ​ ​ Fiscal Year Amount 2025 ​ $ 896 2026 ​ ​ 241 Thereafter ​ ​ — Total future minimum lease payments ​ ​ 1,137 Less: imputed interest ​ ​ ( 134 ) Total operating lease liabilities ​ $ 1,003 ​ During the year ended December 31, 2024, the amount of right-of-use assets obtained under new operating lease arrangements was $ 1.1 million. There were no right-of-use assets obtained under new operating lease arrangements during the year ended December 31, 2023. Cash paid for lease liabilities was $ 0.9 million for the years ended December 31, 2024 and 2023, respectively. ​ ​ 7. License and Collaboration Revenue License and Collaboration Agreement with Bristol-Myers Squibb In August 2023, the Company entered into a license and collaboration agreement with Bristol-Myers Squibb (the “BMS Agreement”), under which the Company granted BMS an exclusive license to (i) develop, manufacture (subject to the Company’s rights to be the exclusive manufacturer for BMS for a certain period of time), commercialize or otherwise exploit obexelimab and any biological product (irrespective of presentations, formulations or dosages) containing obexelimab but not any of the Company’s other proprietary active ingredient (the “BMS Product”) into Japan, South Korea, Taiwan, Singapore, Hong Kong and Australia (collectively, the “BMS Territory”) and (ii) develop and manufacture obexelimab and the BMS Product outside the BMS Territory provided that obexelimab and the BMS Product are solely used in the BMS Territory. Pursuant to the BMS Agreement, BMS paid the Company a one-time non-refundable upfront cash payment of $ 50.0 million. The Company is entitled to receive further separate development and regulatory milestone payments from BMS up to approximately $ 79.5 million. The Company is also entitled to receive one-time sales milestone payments up to $ 70.0 million upon BMS achieving certain net sales milestones in a given year in the BMS Territory. The Company is also eligible to receive tiered high single-digit to low double-digit royalties on net sales in the BMS Territory, subject to specified reductions. 152 Table of Contents The Company will continue to perform and oversee the ongoing Phase 3 trial of obexelimab in the IgG4-RD indication and BMS will participate in the performance of the study. BMS also has the right to participate in other global clinical studies that the Company chooses to perform. Pursuant to such global studies, including the IgG4-RD study, the Company and BMS have defined roles with specified activities assigned to each party in their respective jurisdictions. These activities are overseen by a joint steering committee, which has equal representation of the parties. BMS will fund their pro rata share of the total global study costs up to a specified percentage of the patients enrolled in the study from the BMS Territory. Should the percentage of patients from the BMS Territory fall below the specified percentage, BMS’s funding would proportionately decrease. BMS is responsible for the development and commercialization of obexelimab within the BMS Territory, including the performance of any local studies within its jurisdiction that it chooses to perform, while the Company retains responsibility for the development and commercialization for the remainder of the world. The Company is responsible for manufacturing the clinical supply and commercial supply of obexelimab, each at cost plus single-digit margin. The Company evaluated the terms of the BMS Agreement to determine whether it is a collaborative arrangement in the scope of ASC 808. The Company concluded that the BMS Agreement is a collaborative arrangement under ASC 808 as both parties are active participants in the global clinical trial and are exposed to significant risks and rewards of those activities. The Company determined that the BMS Agreement contained two material components: (i) the license granted to BMS to develop, manufacture and commercialize obexelimab within the BMS Territory, and related activities in the BMS Territory, including manufacturing and (ii) the global development of obexelimab, which at execution, solely relates to the ongoing Phase 3 trial for IgG4-RD. The Company used criteria specified in ASC 606 to determine whether the components of the BMS Agreement are performance obligations to a customer and concluded that BMS is the Company’s customer for the license and related activities in the BMS Territory under ASC 606. The global development activities under the agreement do not represent a transaction with a customer and reimbursement payments received by the Company for global development activities are accounted for as a reduction of the related research and development expenses. The Company recorded $ 6.0 million and $ 4.1 million as a reduction to research and development expenses during the years ended December 31, 2024 and 2023, respectively, with $ 2.0 million and $ 1.3 million of outstanding receivable, included in prepaid expenses and other current assets on the Company’s consolidated balance sheet as of December 31, 2024 and 2023, respectively. The Company evaluated the license and related activities under ASC 606 as these transactions are considered transactions with a customer, and identified four material promises at the outset of the BMS Agreement, which consists of (i) the exclusive license, (ii) the initial technology transfer, (iii) clinical manufacturing supply related to development in the BMS Territory and (iv) commercial manufacturing supply related to commercialization within the BMS Territory. The Company determined that the exclusive license and initial technology transfer were not distinct from each other, as the exclusive license has limited value without the corresponding technology transfer. As such, for the purposes of ASC 606, the Company determined that the two material promises, the exclusive license and the initial technology transfer, should be combined into one distinct performance obligation. The Company further evaluated the material promise associated with the clinical manufacturing supply and the commercial manufacturing supply, within the BMS Territory, concluding that because BMS is not obligated to purchase any minimum amount, the clinical manufacturing supply and commercial manufacturing supply represent a purchase option and not a performance obligation. The Company further concluded that the customer option is not priced at a significant and incremental discount at the execution of the arrangement and therefore does not represent a material right. Therefore, each of the clinical and commercial manufacturing activities were excluded as performance obligations at the outset of the arrangement. The transaction price of the BMS Agreement was determined to be $ 50.0 million, which consisted of the upfront cash payment, and was allocated to the one combined performance obligation. The other potential consideration, which includes development, regulatory, and sales milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestones were not deemed probable of achievement and were therefore fully constrained. The Company issued the BMS Note in connection with the BMS Agreement, and the BMS Note was recorded at fair value separate from the transaction price of the BMS Agreement (see Note 3, Fair Value Measurements ). The Company reevaluates the transaction price at the end of each reporting period as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company adjusts its estimate of the transaction price, and any addition to the 153 Table of Contents transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal. The Company evaluated the license under ASC 606 and concluded that the license is a functional intellectual property license. The Company determined that BMS benefited from the license along with the initial technology transfer at the time of the transfer, and therefore the related performance obligation is satisfied at a point in time. The Company satisfied the performance obligation through delivery of the license and initial technology transfer and therefore recognized the upfront payment of $ 50.0 million as revenue during year ended December 31, 2023. The Company did not recognize revenue under this arrangement in the year ended December 31, 2024, as no milestones were achieved or deemed probable of achievement, and as such, all remaining milestones remained fully constrained and excluded from the transaction price. Tenacia Biotechnology Co. Novation Agreement In October 2024, the Company entered into a novation agreement with Tenacia Biotechnology (Hong Kong) Co., Limited (“Tenacia”), under which the Company transferred its rights and obligations under the agreements with Dianthus to Tenacia (the “Tenacia Agreement”). Pursuant to the Tenacia Agreement, the Company, transferred all the ZB005 inventory, analytical methods and manufacturing records generated, under the Dianthus Option Agreement and the License Agreement (collectively the “Dianthus Agreements”), see Note 8, License and Options Agreements, for additional information, to Tenacia, for the exclusive right to research, develop, manufacture and commercialize products within greater China. Pursuant to the Tenacia Agreement, Tenacia paid the Company a one-time non-refundable upfront cash payment of $ 5.0 million. The Company is entitled to receive further development, regulatory and sales milestones from Tenacia of up to approximately $ 86.0 million if certain milestones are successfully achieved. The Company evaluated the terms of the Tenacia Agreement and determined it is within the scope of ASC 606 . The Company identified the following promises in the Tenacia Agreement that were evaluated under the scope of ASC 606: (i) transfer of the license, (ii) assignment of all rights, title and interests in ZB005 inventory, manufacturing records, analytical methods and draft IND component, (iii) services to be performed in accordance with manufacturing technology transfer and (iv) transfer, up to one year after the effective date, of any tangible embodiments of know-how that was not previously provided. The Company also evaluated whether certain options outlined in the Tenacia Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options conveyed a material right to Tenacia and, therefore, are not considered separate performance obligations within the Tenacia Agreement. The Company assessed the above promises and determined that the license for ZB005, asset transfer and technology transfer are a combined distinct performance obligation within the scope of ASC 606 . The future technology know-how transfer services, for one year after the effective date, is a promise that is separately identifiable. The Company determined the likelihood of Tenacia requesting additional know-how transfer to be remote and any requests to require minimal resource allocation, as the Company has concluded all work on ZB005 within greater China. As such, the Company considered the continued know-how transfer to be immaterial in the context of the promises. Therefore, the license, asset transfer and technology transfer represent a single performance obligation within the scope of ASC 606 at contract inception. The Company concluded that the transaction price of $ 5.0 million was allocated to the combined performance obligation, which was recognized upon delivery prior to December 31, 2024. The Company used the most likely amount method to estimate variable consideration and estimated that the most likely amount for each potential developmental and regulatory variable consideration milestone payment under the agreement is zero, as achievement of those milestones is uncertain and susceptible to factors outside the Company’s control. Accordingly, all such milestone payments were excluded from the transaction price. Management will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, will adjust the transaction price as necessary. Sales based milestones structured on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the sales relate. The Company will recognize such revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). 154 Table of Contents As of December 31, 2024, no milestones were achieved or deemed probable of achievement. ​ 8. License and Option Agreements Xencor, Inc. 2020 Xencor Agreement In September 2020, the Company entered into a license agreement (the “2020 Xencor Agreement”) with Xencor, Inc. (“Xencor”), to obtain (i) an exclusive, royalty-bearing, sublicensable worldwide license under certain patent rights controlled by Xencor and (ii) a non-exclusive payment bearing license under certain know-how controlled by Xencor to research, develop, manufacture, market and sell three antibody product candidates, including ZB002. The 2020 Xencor Agreement became effective in November 2020, upon the Company’s issuance of 5,041,542 shares of its Series A Preferred Stock, which had a fair value of $ 16.1 million to Xencor as initial consideration. The Company concluded that as no processes or other activities that would constitute a business were acquired, and the acquired assets did not have an alternative future use, the upfront consideration was expensed to acquired IPR&D during the year ended December 31, 2020. ​ The Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing the licensed assets. The royalty percentage rates vary by geographic areas as defined in the 2020 Xencor Agreement and range from the mid-single digits to the mid-teens. ​ The Company is also obligated to reimburse Xencor for third-party costs incurred by Xencor for certain patent filings, prosecution and maintenance as further specified in the 2020 Xencor Agreement. During the year ended December 31, 2024 no costs were incurred related to the 2020 Xencor Agreement. During the year ended December 31, 2023, the Company incurred immaterial costs related to the 2020 Xencor Agreement. ​ 2021 Xencor Agreement In May 2021, the Company entered into a license agreement (the “2021 Xencor Agreement”) with Xencor to obtain an (i) exclusive, royalty-bearing, sublicensable worldwide license under certain patent rights controlled by Xencor and (ii) a non-exclusive payment bearing license under certain know-how controlled by Xencor to research, develop, manufacture, market and sell obexelimab. The 2021 Xencor Agreement became effective in November 2021, upon the execution of an amendment to the 2021 Xencor Agreement and the Company’s concurrent issuance of a warrant to Xencor (the “Xencor Warrant”) as initial consideration, which entitled Xencor to receive a number of the Company’s convertible preferred stock in the Company’s next “qualified financing”. The Company concluded that as no processes or other activities that would constitute a business were acquired, and the acquired assets did not have an alternative future use, the upfront consideration of $ 20.7 million was expensed to acquired IPR&D during the year ended December 31, 2021. ​ The Company is obligated to make specified development, regulatory and commercial milestone payments of up to $ 10.0 million at Xencor’s option either in cash or fully-paid newly issued shares. The Company is obligated to make regulatory milestone payments up to $ 75.0 million. The Company is also obligated to make one-time sales milestone payments up to $ 385.0 million upon achieving milestone events of net sales in a given calendar year in the territory equal to certain threshold amounts. In addition, the Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing obexelimab, with the royalty rates varying based on regions and ranging from the mid-single digits to the mid-teens. ​ In April 2023, the Company incurred a $ 10.0 million development milestone pursuant to the 2021 Xencor Agreement, which Xencor elected to receive in the form of the Company’s Series B Preferred Stock. See Note 9, Convertible Preferred Stock, for details . The milestone was recorded as acquired IPR&D expense in the Company’s consolidated statements of operations and comprehensive loss. The Company did not record any expenses related to reimbursable patent-related costs during the year ended December 31, 2024. The Company recorded an immaterial amount to general and administrative expenses in the consolidated statements of operations and comprehensive loss 155 Table of Contents during each of the year ended December 31, 2023, relating to reimbursable patent-related costs owed to Xencor. During the year ended December 31, 2024 no milestone expense was incurred. ​ Dianthus Therapeutics Inc. In September 2020, the Company entered into an agreement (the “Dianthus Option Agreement”) with Dianthus Therapeutics Inc. (“Dianthus”), a therapeutic antibody company. Under the terms of the Dianthus Option Agreement, the Company obtained an exclusive option to negotiate and enter into exclusive license agreements with Dianthus for the rights to research, develop, manufacture, market and sell products related to either or both of two antibody product candidates based on Dianthus’ proprietary technology in China, Hong Kong, Macau and Taiwan (the “Zenas Territories”). Dianthus retains all rights to develop and commercialize the product candidate subjects of the two options outside of the Zenas Territories. Upon execution of the Dianthus Option Agreement, the Company issued 18,063 shares of its common stock to Dianthus as initial consideration, which was recorded to acquired IPR&D expense during the year ended December 31, 2020. ​ Under the Dianthus Option Agreement, Dianthus will notify the Company when it has identified each of two antibody product candidates, and the Company will then have sixty ( 60 ) days to notify Dianthus if the Company intends to exercise each of the options. In September 2021, Dianthus notified the Company that it had identified the first lead antibody product candidate pursuant to the Dianthus Option Agreement, ZB005 (also known as DNTH103). In October 2021, the Company notified Dianthus of its intention to exercise its option to ZB005 pursuant to the Dianthus Option Agreement. This notification resulted in a $ 1.0 million milestone obligation to Dianthus, which was expensed in 2021 upon exercise and subsequently paid during the year ended December 31, 2022. The Company and Dianthus executed a license agreement for ZB005 in June 2022 (the “Dianthus License Agreement”). ​ The Company is also required to reimburse Dianthus for a specified percentage of certain third-party costs which Dianthus incurs in its initial discovery and development activities related to each of the two options. To date, the Company has only exercised its option with respect to the ZB005 program, and as a result, it has only reimbursed Dianthus with respect to costs associated with the ZB005 program. During the years ended December 31, 2024 and 2023, the Company incurred $ 5.1 million and $ 3.0 million of reimbursable expenses, respectively, which are recorded within research and development expenses in the consolidated statements of operations and comprehensive loss. Of these amounts, $ 0.5 million and an immaterial amount were recorded in accounts payable, and $ 0.3 million and $ 0.4 million were recorded in accrued expenses on the Company’s consolidated balance sheets as of December 31, 2024 and 2023, respectively. ​ The binding key terms included in the Dianthus License Agreement, and that would be included in a future license agreement if the Company exercises its option with respect to a second research program, also include the Company’s obligation to make specified development milestone payments to Dianthus, one time only, regardless of the number of assets the Company in-licenses from Dianthus with respect to such research program. The milestone obligations for each research program would total up to $ 11.0 million, based on achievement of each of the specified milestone events. If the Company successfully commercializes a product(s) under a license agreement, the Company will be obligated to make tiered royalty payments, on a product-by-product basis, to Dianthus on annual net sales of such products. Royalties will be calculated as specified percentages of annual net sales, ranging from the mid-single digits to the low-double digits, with each specified tiered level of annual net sales having a specified percentage. ​ In October 2024, the Company entered into the Tenacia Agreement. Pursuant to the Tenacia Agreement, the Company transferred its rights, and obligations under the Dianthus Option Agreement and the Dianthus License Agreement to Tenacia. As a result, Zenas has no further obligations to Dianthus under the Dianthus Option Agreement and the Dianthus License Agreement. For additional information on our Tenacia Agreement, please see Note 7, License and Collaboration Revenue , to these consolidated financial statements. 156 Table of Contents Viridian Therapeutics, Inc. In October 2020, the Company entered into a license agreement with Viridian Therapeutics, Inc. (“Viridian”), to obtain an exclusive, royalty-bearing, sublicensable license to research, develop, manufacture, market and sell certain antibody product candidates based on Viridian’s proprietary technology (the “Viridian Agreement”). The Company’s license rights are limited to non-oncology indications and to the Zenas Territories. Viridian retains its rights to develop and commercialize such product candidates outside of the Zenas Territories. Upon execution of the Viridian Agreement, the Company issued 38,707 shares of its common stock to Viridian as initial consideration which was recorded as acquired in-process research and development expense in its consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. ​ The Company is obligated to make development milestone payments to Viridian, totaling up to $ 12.0 million, based on achievement of each of the specified milestone events. The Company is also required to pay Viridian tiered royalties on annual net sales of successfully commercialized products utilizing the licensed technology. The royalty percentage rates range from the mid-single digits to the low-double digits. During the year ended December 31, 2024 and 2023, the Company did not incur or pay any milestones to Viridian. ​ During the year ended December 31, 2021, the Company and Viridian entered into two letter agreements to authorize initiation of certain manufacturing and development activities related to the licensed product candidate, ZB001 (also known as VRDN-001). In each of the letter agreements the Company requested, and Viridian agreed, to engage a third-party contract manufacturer (the “CMO”) to initiate certain work with respect to activities pursuant to one or more statements of work under existing agreements between Viridian and the two CMOs. In May 2022, the Company entered into a manufacturing development and supply agreement with Viridian. The Company pays Viridian for all amounts the CMOs invoice to Viridian for the specified activities. The first letter agreement subsequently was amended three times to add further activities and costs to those detailed in the original letter agreement. ​ During the years ended December 31, 2024 and 2023, the Company recognized an immaterial amount of expenses, respectively, which were recorded in research and development expenses in the consolidated statements of operations. As of December 31, 2024, and 2023, immaterial amounts were recorded in accounts payable and accrued expenses. Viridian has agreed to reimburse the Company for certain services it performs on Viridian’s behalf, with reimbursements being recorded as a reduction in research and development expenses. During the year ended December 31, 2024, the Company recorded $ 1.7 million in reimbursable expenses. During the year ended December 31, 2023, the Company had no reimbursable expenses. As of December 31, 2024, Viridian had not notified the Company of any additional antibody product candidate. ​ 9. Convertible Preferred Stock In September 2020, the Company issued and sold 1,785,714 shares of Series Seed convertible preferred stock (“Series Seed Preferred Stock”) in a private financing transaction, at a purchase price of $ 0.56 per share, for total net cash proceeds of $ 1.0 million. In November 2020, the Company issued 5,041,542 shares of Series A convertible preferred stock (“Series A Preferred Stock”) to Xencor as initial consideration for the 2020 Xencor Agreement. Also in November 2020, the Company issued and sold 12,547,838 shares of Series A Preferred Stock in a private financing transaction, at a purchase price of $ 3.1878 per share, for total net cash proceeds of $ 39.9 million. In November 2022, the Company issued and sold 25,139,732 shares of Series B Preferred Stock in a private financing transaction, at a purchase price of $ 2.38666 per share, for total net cash proceeds of $ 59.4 million. Concurrent with the issuance and sale of the Series B Preferred Stock, which was deemed to be a qualified financing as defined in the convertible note agreement from notes issued to several investors in 2021, and resulted in the principal plus accrued interest being automatically converted into Series B Preferred Stock, the outstanding convertible notes from 2021 were exchanged for 37,471,107 shares of Series B Preferred Stock. At the same time, the Xencor Warrant, which was issued as initial consideration for the 2021 Xencor Agreement, was deemed exercised for 14,441,793 shares of Series B Preferred Stock. 157 Table of Contents In April 2023, the Company incurred a $ 10.0 million development milestone pursuant to the 2021 Xencor Agreement. Xencor elected to receive payment in the form of the Company’s Series B Preferred Stock and the Company issued 4,189,955 shares of Series B Preferred Stock as payment for the development milestone in June 2023 (see Note 8, License and Option Agreement to these consolidated financial statements). In May 2024, the Company issued and sold 103,990,553 shares of Series C convertible preferred stock (“Series C Preferred Stock”) in a private financing transaction, at a purchase price of $ 1.72131 per share, for total net cash proceeds of $ 178.4 million. Concurrent with the issuance and sale of the Series C Preferred Stock, which was deemed to be a BMS Qualified Financing as defined above in Note 3, Fair Value Measurements, the principal plus accrued interest of the BMS Note was automatically converted into 12,284,686 shares of Series C Preferred Stock, thereby making the total Series C issuance equal to 116,275,239 shares. Upon the issuance of the Series Seed, Series A, Series B, and Series C Preferred Stock, the Company assessed the embedded conversion and liquidation features of the shares and determined that such features did not require the Company to separately account for these features. In September 2024, the Company completed its IPO, in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 258.7 million. The Company received approximately $ 234.3 million in net proceeds, after deducting underwriting discounts and commissions and other offering costs. In connection with the IPO, all outstanding shares of Preferred Stock converted into an aggregate of 24,978,715 shares of common stock and no convertible preferred stock was outstanding as of December 31, 2024. Preferred Stock consisted of the following as of December 31, 2023 (in thousands, except share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ Preferred Stock ​ ​ ​ ​ ​ ​ ​ Common Stock ​ ​ Preferred Stock ​ Issued and ​ ​ ​ ​ ​ ​ ​ Issuable Upon ​ ​ Authorized ​ Outstanding ​ Carrying Value ​ Liquidation Value ​ Conversion Series Seed Preferred Stock 1,785,714 1,785,714 $ 956 $ 1,000 205,653 Series A Preferred Stock ​ 17,589,380 ​ 17,589,380 ​ ​ 55,840 ​ ​ 56,071 ​ 2,025,699 Series B Preferred Stock ​ 81,242,587 ​ 81,242,587 ​ ​ 193,290 ​ ​ 193,898 ​ 9,356,392 Total ​ 100,617,681 ​ 100,617,681 ​ $ 250,086 ​ $ 250,969 ​ 11,587,744 ​ The holders of preferred stock had the following rights, preferences and privileges prior to conversion into common stock upon the closing of the IPO: Voting ​ The holder of each share of Preferred Stock was entitled to one vote for each share of common stock into which it would convert and to vote with the common stock on all matters. ​ Conversion ​ Each share of convertible preferred stock was automatically converted into a share of common stock, upon affirmative vote of majority of the holders of each series or upon the closing of an initial public offering of the Company’s common stock which resulted in a specified minimum amount of gross cash proceeds. The conversion ratio was initially one share of common stock for each share of convertible preferred stock and was adjustable in the event of a split or reverse split of the Company’s common stock, an issuance or declaration of dividends to holders of the Company’s common stock, a reorganization or merger transaction, or certain issuances of shares of common stock which were dilutive to holders of the Company’s preferred stock. Holders of preferred stock had the right to one vote for each share of the Company’s common stock which were dilutive to holders of the Company’s preferred stock. Holders of preferred stock had the right to one vote for each share of the Company’s common stock into which such holder’s shares of preferred stock could then convert. 158 Table of Contents ​ Dividends ​ Holders of Series C Preferred Stock were entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series C Preferred Stock issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions). If any assets or funds remain after dividends had been distributed to holders of Series C Preferred Stock, holders of Series B Preferred Stock would have been entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series B issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions). If any assets or funds remain after dividends had been distributed to holders of Series B Preferred Stock, holders of Series A Preferred Stock would had been entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series A issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions). If any assets or funds remain after dividends had been distributed to holders of Series A Preferred Stock, holders of Series Seed Preferred Stock would have been entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series Seed issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions). The right to receive dividends on shares of all series of preferred stock was not cumulative, and no such right accrued to holders of such shares. There were no dividends declared or paid as of December 31, 2024 and 2023. ​ Liquidation Preference ​ In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company or a deemed liquidation event, holders of Series C Preferred Stock prior and in preference to any distribution to holders of Series B Preferred Stock, Series A Preferred Stock, Series Seed Preferred Stock and common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared but unpaid dividends. After full payment to holders of Series C Preferred Stock, holders of Series B Preferred Stock prior and in preference to any distribution to holders of Series A Preferred Stock, Series Seed Preferred Stock and common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared and unpaid dividends. After full payment to holders of Series B Preferred Stock and Series A Preferred Stock, holders of Series Seed Preferred Stock prior and in preference to any distribution to holders of common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared and unpaid dividends. After full payment to holders of Series C Preferred Stock, Series B Preferred Stock, Series A Preferred Stock, holders of Series Seed Preferred Stock prior and in preference to any distribution to holders of common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared and unpaid dividends. Any remaining amounts after payment to holders of preferred stock, would have been paid to holders of common shares. A deemed liquidation event was defined as any consolidation, amalgamation, scheme of arrangement or merger of the Company (and any of its subsidiaries) or other reorganization resulting in loss of more than 50% voting power; the sale, transfer, lease or other disposition of all or substantially all of the Company’s assets; or the exclusive licensing of all or substantially all of the Company’s intellectual property. ​ Redemption ​ The Preferred Stock did not have redemption rights, except for the contingent redemption upon the occurrence of a Liquidation Event. ​ ​ 10. Common Stock In August 2023, all outstanding shares of ordinary stock of Zenas Cayman automatically converted into shares of common stock of the Company upon the Redomicile and incorporation of the Company in the State of Delaware as Zenas BioPharma, Inc. In May 2024, the Company amended and restated its certificate of incorporation, whereby the Company increased the shares of common stock it was authorized to issue to 294,784,925 shares. Upon consummation of the IPO, 159 Table of Contents the Company restated its certificate of incorporation, and as of December 31, 2024, the Company was authorized to issue 175,000,000 shares of $ 0.0001 par value common stock. The voting, dividend and liquidation rights of the holders of the Company’s common stock were subject to and qualified by the rights, powers and preference of the holders of any preferred stock then issued and outstanding. The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders (and written actions in lieu of meetings), and there are not any cumulative voting rights. The number of authorized shares of common stock may be increased or decreased by the affirmative vote of the holders of shares of capital stock of the Company; however, the issuance of common stock may be subject to the vote of the holders of one or more series of convertible preferred stock. The Company had reserved the following shares of common stock for the potential conversion of outstanding convertible preferred stock and exercise of stock options: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Conversion of outstanding shares of convertible preferred stock ​ — ​ 11,587,744 Options to purchase common stock ​ 8,706,197 ​ 2,382,933 Remaining shares reserved for future issuance ​ 359,399 ​ 60,792 Total ​ 9,065,596 ​ 14,031,469 ​ ​ ​ ​ 11. Stock-Based Compensation 2020 Plan On August 21, 2020, the Company’s sole director and member approved the Zenas BioPharma (Cayman) Limited 2020 Equity Incentive Plan (the “2020 Plan”). Upon effectiveness of the 2024 Plan (as defined below), the Company ceased granting additional awards under the 2020 Plan. The 2020 Plan allowed the Company to grant stock options, restricted stock awards (“RSAs”), restricted stock units, and other stock-based awards to employees, officers, directors and consultants of the Company and its subsidiaries. Since inception of the 2020 Plan, the Company has granted RSAs and stock options which generally vest over four years , with 25 % of the total shares granted vesting on the anniversary of the vesting commencement date and the remaining 75 % vesting in equal monthly installments over the subsequent thirty-six (36) months. The 2020 Plan was subsequently amended by the Board and provided for the issuance of 2,560,401 shares of common stock as of December 31, 2023, of which 60,792 shares of common stock remained available for future grant under the 2020 Plan. Upon effectiveness of the 2024 Plan (as defined below), the remaining available shares for future grant were transferred to the 2024 Plan. 2024 Plan On September 3, 2024, the Board adopted the 2024 Equity Incentive Plan (the “2024 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO. The 2024 Plan provides for the award of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, unrestricted stock, restricted stock units and other stock-based awards. Upon the effectiveness of the 2024 Plan, the number of shares of common stock initially reserved for issuance was 4,775,477 shares of common stock which is equal to 12 % of the number of shares of common stock issued and outstanding immediately following the consummation of the Company’s IPO. The number of shares reserved and available for issuance under the 2024 Plan will automatically increase each January 1, beginning on January 1, 2025 through January 1, 2034, by the number of shares equal to the lesser of (a) five percent of the aggregate number of shares of common stock outstanding as of such date, and (b) a number of shares as may be determined by the Board on or prior to such date. 160 Table of Contents As of December 31, 2024, there were 359,399 shares available for issuance under the 2024 Plan. On January 1, 2025, the shares available for issuance under the 2024 Plan was increased to 2,449,069 . Restricted Stock Awards The following table presents a summary of the Company’s RSA activity and related information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ Number of ​ Average Grant-Date ​ Shares Fair Value Unvested as of December 31, 2023 ​ ​ 27,200 ​ $ 2.71 Vested ​ ​ ( 6,028 ) ​ ​ 0.01 Repurchased ​ ​ ( 21,172 ) ​ ​ 3.48 Unvested as of December 31, 2024 ​ ​ — ​ $ — ​ There were no RSAs granted during the year ended December 31, 2024. As of December 31, 2024, there was no compensation cost related to unvested RSAs as all were fully vested. Stock Options The Company has granted stock-based awards with either service or performance based vesting conditions. Compensation expense related to awards to employees and directors with service based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Compensation expense related to awards to employees with performance based vesting conditions is recognized based on the grant date fair value once the achievement of the performance condition is probable. The table below presents the weighted-average assumptions used in estimating the fair values of stock options granted during the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 2023 Risk-free interest rate ​ ​ 3.80 % ​ 4.13 % Expected term (in years) ​ ​ 6.07 ​ ​ 6.04 ​ Expected volatility ​ ​ 94.31 % ​ 87.86 % Expected dividend yield ​ ​ 0.00 % ​ 0.00 % ​ The following table presents a summary of the Company’s stock option activity and related information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ Aggregate ​ ​ ​ ​ ​ ​ Remaining ​ Intrinsic ​ Number of Shares Weighted - Average Exercise Price Contractual Term (in years) Value (in thousands) Outstanding - December 31, 2023 ​ ​ 2,382,933 ​ $ 8.51 ​ ​ ​ ​ $ 8,084 Granted ​ ​ 6,736,822 ​ ​ 14.67 ​ ​ ​ ​ ​ ​ Exercised ​ ​ ( 38,427 ) ​ ​ 7.11 ​ ​ ​ ​ ​ 231 Forfeited or cancelled ​ ​ ( 375,131 ) ​ ​ 10.29 ​ ​ ​ ​ ​ ​ Outstanding - December 31, 2024 ​ ​ 8,706,197 ​ $ 13.21 ​ ​ 8.76 ​ $ 2,104 Options vested and exercisable as of December 31, 2024 ​ ​ 1,294,162 ​ $ 7.64 ​ ​ 5.51 ​ $ 1,901 Options vested and expected to vest as of December 31, 2024 ​ ​ 8,706,197 ​ $ 13.21 ​ ​ 8.76 ​ $ 2,104 ​ 161 Table of Contents The aggregate intrinsic value of the stock options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those stock options that had an exercise price lower than the fair value of the Company’s common stock as of the measurement date of December 31, 2024. There were 38,427 options exercised for the year ended December 31, 2024, resulting in total proceeds of $ 0.3 million and 27,579 options exercised for the year ended December 31, 2023, resulting in total proceeds of $ 0.1 million. The weighted-average grant date fair value of options granted during the years ended December 31, 2024 and 2023, was $ 11.38 and $ 8.11 per share, respectively. The fair value is being expensed over the associated service period of the award on a straight-line basis based on the grant date fair value or once the achievement of the performance condition is probable. As of December 31, 2024, unrecognized compensation was $ 74.4 million, which is expected to be recognized over a weighted average period of 3.6 years. The total fair value of options vested during the years ended December 31, 2024 and 2023 was $ 4.6 million and $ 2.6 million, respectively. The Company recognized stock-based compensation expense related to the issuance of equity awards to employees in the consolidated statement of operations as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Research and development ​ $ 4,066 ​ $ 1,600 General and administrative ​ ​ 6,755 ​ ​ 1,895 Total stock-based compensation expense ​ $ 10,821 ​ $ 3,495 ​ Employee Stock Purchase Plan On September 3, 2024, the Board adopted the 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO. The Company initially reserved 397,956 shares for issuance under the ESPP. The number of shares of common stock available under the ESPP will automatically increase on January 1 st of each year, beginning on January 1, 2025 through January 2034, by the number of shares equal to the lesser of (a) one percent of the aggregate number of shares of common stock outstanding as of such date, and (b) a number of shares as may be determined by the Board on or prior to such date, up to a maximum of 1,000,000 shares in the aggregate per year. On January 1, 2025, the shares of common stock reserved for issuance under the ESPP was increased to 815,890 . As of December 31, 2024, no shares of common stock have been issued and no stock-based compensation has been recognized related to the ESPP. ​ ​ ​ ​ 12. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Numerator: ​ ​ ​ ​ ​ ​ Net loss attributable to common stockholders ​ $ ( 156,988 ) ​ $ ( 37,124 ) Denominator: ​ ​ ​ ​ ​ ​ Weighted-average common stock outstanding - basic and diluted ​ ​ 13,198,960 ​ ​ 1,531,178 Net loss per share attributable to common stockholders - basic and diluted ​ $ ( 11.89 ) ​ $ ( 24.25 ) ​ The Company’s potentially dilutive securities, which include convertible preferred stock, restricted stock and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both 162 Table of Contents basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following shares from the computation of diluted net loss per share attributable to common stockholders as of December 31, 2024 and 2023 because including them would have had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Convertible preferred stock ​ — ​ 11,587,744 Unvested restricted stock ​ — ​ 27,200 Options to purchase common stock ​ 8,706,197 ​ 2,382,933 ​ The BMS Note was also outstanding as of December 31, 2023, which could have obligated the Company to issue preferred shares or common shares upon the occurrence of various future events at prices and in amounts that are not determinable until the occurrence of those future events. Because necessary conditions for the conversion of the BMS Note had not been satisfied as of December 31, 2023, the Company has excluded the BMS Note from the table above and the calculation of diluted net loss per share. As of December 31, 2024 the BMS Note is no longer outstanding. ​ 13. Income Taxes The following table presents the components of loss before the provision for (benefit from) income taxes during the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 U.S. ​ $ ( 160,918 ) ​ $ ( 10,845 ) Non-U.S. ​ 4,359 ​ ( 25,978 ) Loss before taxes on income ​ $ ( 156,559 ) ​ $ ( 36,823 ) 163 Table of Contents ​ The components of the income tax provision for the years ended December 31, 2024 and 2023 are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Current income tax provision: ​ ​ Federal ​ $ 123 ​ $ 289 State ​ 306 ​ 12 Foreign ​ — ​ — Total current income tax provision ​ 429 ​ 301 ​ ​ ​ ​ ​ ​ ​ Deferred income tax provision: ​ ​ Federal, state and foreign ​ — ​ — Total deferred income tax provision ​ — ​ — Total income tax provision ​ $ 429 ​ $ 301 ​ A reconciliation of the income tax expense computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal benefit 6.4 3.4 ​ Change in valuation allowance ( 32.3 ) ( 26.4 ) ​ IP transfer ​ ( 0.3 ) ​ — ​ Research and development tax credits 4.9 8.8 ​ Foreign tax rate differential 0.2 ( 7.6 ) ​ Other adjustments ( 0.2 ) — ​ Effective income tax rate ( 0.3 ) % ( 0.8 ) % ​ The Company’s change in effective tax rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 decreased primarily due to a change in income earned in the U.S. 164 Table of Contents The following table presents the components of the Company’s deferred tax assets and liabilities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Deferred tax assets: ​ ​ Net operating loss carryforwards ​ $ 29,605 ​ $ 9,960 Capitalized research and development ​ 39,716 ​ 19,573 Research and development tax credits ​ 14,292 ​ 6,547 Accruals ​ 1,886 ​ 1,424 Milestone payments ​ 442 ​ 719 Stock-based compensation ​ 4,016 ​ 1,188 Other ​ 901 ​ 550 Total deferred tax assets ​ 90,858 ​ 39,961 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Amortization and other ​ ( 563 ) ​ ( 200 ) Total deferred tax liabilities ​ ( 563 ) ​ ( 200 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset before valuation allowance ​ ​ 90,295 ​ ​ 39,761 Valuation allowance ​ ​ ( 90,295 ) ​ ​ ( 39,761 ) Net deferred tax asset ​ $ — ​ $ — ​ ASC Topic 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, the Company has recorded full valuation allowances against its domestic and foreign deferred tax assets as of December 31, 2024, because management has determined that it is more likely than not that these assets will not be realized. The valuation allowance increased by $ 50.5 million from December 31, 2023 to December 31, 2024, primarily due to additional net operating losses related to the U.S. and non-U.S. entities as well as the capitalization of research and development expenses under Internal Revenue Code Section 174 (“Section 174”) at the U.S. entity. Beginning on or after January 1, 2022, Section 174 of the U.S. internal revenue code was amended as part of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) to no longer permit an immediate deduction for research and development expenditures in the tax year that such costs are incurred. Rather, the research and development expenses must be capitalized and amortized over five years for research performed in the U.S. and fifteen years for research performed outside the U.S. As a result of this provision, the Company capitalized applicable costs resulting in a deferred tax asset of $ 39.7 million as of December 31, 2024. As of December 31, 2024, the Company had approximately $ 75.5 million and $ 65.0 million of U.S. federal and state net operating loss (“NOL”) carryforwards, respectively. As of December 31, 2023, the Company had approximately $ 2.3 million of U.S. federal NOL carryforwards. The Company had no state NOL carryforwards as of December 31, 2023. The Company utilized previous net operating loss carryforwards to offset the taxable income in prior years. The federal NOL carryforwards do not expire, but they may be limited in their usage to an annual deduction equal to 80 % of annual taxable income. The state NOL carryforwards expire in 20 years , starting in 2042. The federal and state NOL carryforwards are fully offset by valuation allowances. As of December 31, 2024, the Company had $ 13.3 million and $ 1.2 million in federal and state general business or research and development tax credit carryforwards. As of December 31, 2023, the Company had $ 5.9 million and $ 0.8 million in federal and state general business or research and development tax credit carryforwards. These carryforwards are subject to review and possible adjustment by the appropriate taxing authorities. The federal and state research credit carryforwards expire in 20 years and 15 years , respectively, starting in 2036. The federal and state tax credit carryforwards are fully offset by valuation allowances. 165 Table of Contents As of December 31, 2024 and 2023, the Company had $ 54.2 million and $ 53.7 million of foreign NOL carryforwards, respectively. Foreign NOL carryforwards of $ 47.8 million will carryforward indefinitely, with the remaining expiring between 2026 and 2028. The foreign NOL carryforwards are fully offset by valuation allowances. The Company files income tax returns in the U.S., as well as various state and foreign jurisdictions. The Company is not currently under any income tax examinations. All tax years generally remain open in each jurisdiction. ​ There have been no unrecognized tax benefits since the Company’s inception. The Company’s policy is to record estimated interest and penalties related to the underpayment of income taxes as a component of its income tax provision. As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions and since inception, no amounts have been recognized in the Company’s consolidated statements of operations and comprehensive loss. Under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended, utilization of the NOLs and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382, as well as similar state provisions. These ownership changes may limit the amount of NOLs and research and development tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. If a change in control as defined by Section 382 has occurred at any time since the Company’s formation, utilization of its NOLs or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, which could then be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOLs or research and development tax carryforwards before their utilization. ​ ​ ​ ​ 14. Commitments and Contingencies Operating Leases The Company has entered into arrangements for leases of office space; see Note 6, Leases, for details. License and Option Agreements The Company entered into licenses agreement under which it is obligated to make fixed and contingent payments; see Note 8, License and Option Agreements , for details. Other Contracts The Company has entered into agreements with certain vendors for the provision of services that the Company is not contractually able to terminate for convenience and thereby avoid any and all future obligations to the vendors. Under such agreements, the Company is contractually obligated to make certain minimum payments to the vendors, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and certain officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or services as directors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not currently aware of any indemnification claims and had not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2024. 166 Table of Contents Litigation and Other Proceedings The Company may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which the Company is focused. As of December 31, 2024, the Company was not subject to any material legal proceedings which would reasonably be expected to have a material adverse effect on the Company’s financial results. ​ 15. Employee Benefit Plans Effective June 2020, the Company adopted the Zenas BioPharma 401(k) Plan (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Internal Revenue Code. Eligible employees are permitted to contribute to the 401(k) Plan within statutory and 401(k) Plan limits. Since inception of the 401(k) Plan and through the year ended December 31, 2024, the Company has made a one-time contribution of $ 0.1 million to the 401(k) Plan. ​ 16. Related Party Transactions Xencor, Inc. The Company has obtained exclusive, worldwide licenses from Xencor to research, develop, manufacture, market and sell three antibody product candidates pursuant to two license agreements. The Company has concluded that Xencor is a related party, because as initial consideration for the 2020 Xencor Agreement, the Company issued 5,041,542 shares of its Series A Preferred Stock to Xencor during the year ended December 31, 2020. In April 2023, Xencor elected to receive payment for a development milestone in the form of the Company’s Series B Preferred Stock and the Company issued 4,189,955 shares of Series B Preferred Stock as payment for the development milestone in June 2023. As of December 31, 2024, Xencor held 7.4 % of shares of the Company’s outstanding common stock. The Company did no t incur any costs related to reimbursable patent-related costs as of December 31, 2024. Viridian Therapeutics, Inc. The Company has obtained a license from Viridian to research, develop, manufacture, market and sell an antibody product candidate in China. The Company has concluded that Viridian is a related party because although Fairmount Funds Management LLC owns less than 5 % of shares of the Company’s outstanding common stock, they have a seat on the Board and are also a 10% or greater stockholder of Viridian and have two seats on Viridian’s board of directors. As initial consideration for this license, the Company issued 38,707 shares of its common stock to Viridian during the year ended December 31, 2020. As of December 31, 2024, Viridian held less than 0.1 % of shares of the Company’s outstanding common stock. Dianthus Therapeutics, Inc ​ The Company obtained an exclusive option to negotiate and enter into exclusive license agreements with Dianthus for the rights (in the Zenas Territories only) to either or both of two antibody product candidates. In June 2022, the Company and Dianthus entered into the Dianthus License Agreement. The Company has concluded that Dianthus is a related party because the Company’s Chair of the Board is a member of the board of directors of Dianthus. As initial consideration for this license, the Company issued 18,063 shares of its common stock to Dianthus during the year ended December 31, 2020. In October 2024, the Dianthus Option Agreement and Dianthus License Agreement and all of their related rights and obligations were transferred to Tenacia. As of December 31, 2024, Dianthus held less than 0.1 % of shares of the Company’s outstanding common stock. ​ For additional information on our license arrangements, please see Note 8, License and Option Agreements , to these consolidated financial statements. ​ 17. Segment Information ​ The Company manages its operations on a consolidated basis as a single reportable segment focused on the research and development of precision immunology-based therapies. The accounting policies of the single reportable segment are 167 Table of Contents identical to those described in Note 2, Summary of Significant Accounting Policies . When evaluating the Company’s financial performance, the CODM regularly reviews consolidated net loss, total expense and direct expenses by program and compared to budget. The CODM allocates resources based on the Company’s available cash resources, forecasted expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities on a program basis. Segment asset information regularly provided to the CODM is consistent with that reported on the consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash, cash equivalents and marketable securities balances. Revenue is primarily attributed to individual countries based on the location of the license, as of December 31, 2024 and 2023, revenue was attributed to our China and U.S. entity, respectively. The following table presents certain financial data for the Company’s reportable segments for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31 ​ ​ ​ 2024 ​ ​ 2023 Revenue ​ $ 5,000 ​ $ 50,000 Less: ​ ​ ​ ​ ​ ​ Direct research and development expenses: 1 ​ ​ ​ ​ ​ ​ Obexelimab ​ ​ 94,563 ​ ​ 25,446 Other programs (ZB002 & ZB004) ​ ​ 2,115 ​ ​ 6,242 Partnered regional programs (ZB001 & ZB005) ​ ​ 6,737 ​ ​ 6,738 Unallocated research and development 2 ​ ​ 31,658 ​ ​ 20,008 General and administrative 3 ​ ​ 22,995 ​ ​ 15,218 Stock-based compensation ​ ​ 10,821 ​ ​ 3,495 Other segment items 4 ​ ​ ( 6,901 ) ​ ​ 9,977 Segment Net Loss ​ $ ( 156,988 ) ​ $ ( 37,124 ) ​ 1 Direct research and development expenses primarily consist of direct costs incurred to specific programs research and development activities, including costs to conduct clinical trials and to manufacture clinical drug supply. 2 Unallocated research and development expenses primarily consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, such as personnel costs for employees involved in research and development activities, excluding stock-based compensation, as well as contract services not allocated to specific programs. 3 General and administrative expenses primarily consist of all other personnel costs, excluding stock-based compensation, professional fees, depreciation expense, as well as facilities expenses. ​ 4 Other segment items consist of acquired in-process research and development, fair value adjustments to convertible notes, other income, net and income tax provision. Other income, net consists of interest income and realized and unrealized gains and losses on foreign currency transactions. ​ ​ 18. Subsequent Events Zai License Agreement On January 24, 2025, the Company entered into a license agreement (the “Zai License Agreement”) with Zai Lab (Hong Kong) Limited (“Zai”), under which the Company granted Zai an exclusive sublicense to develop and commercialize ZB001 and related programs in greater China. As partial consideration for the Zai License Agreement, the Company received an upfront fee of $ 10.0 million from Zai. In addition, the Company is eligible to receive up to $ 96.0 million upon the achievement of certain future development and commercial milestones and royalty percentage rates from the low to mid-single digits, net of pass-through obligations due to Viridian. ​ ​ 168 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​