Zenas BioPharma, Inc. — financial distress indicators
Financial-health summary
Zenas BioPharma, Inc.'s reported numbers place it in the 'Watch' financial-health band (distress score 45/100). The main indicators are losses in each of the last 3 years, operations consume cash and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 80% and the market-implied (Merton) default probability is 1.6%. In its favour: cash on hand covers all debt (net-cash balance sheet).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 1.40 → model probability 80%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +30% in a year.
Large issuance usually funds operating losses rather than growth.
Operating margin fell from -54% to -2114% in two years.
Sharp margin compression signals loss of pricing power or cost control.
0 severe and 1 moderate distress-related headlines in the last 6 months.
Headlines are corroborating evidence only; they are weighted lightly and never drive a flag alone.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Strong current ratio (11.94).
- Revenue still growing (+100% YoY).
📰 Recent news scan
- dilutCan Zenas BioPharma’s (ZBIO) Clinical Pipeline Justify Its Heavy Cash Burn?Yahoo Finance · 2026-09-23
- Zenas BioPharma Announces Upcoming Presentations of Orelabrutinib Data in Relapsing Remitting Multiple Sclerosis, Clinical Trial Designs in Progressive Multiple Sclerosis and Other Multiple Sclerosis Portfolio Data at MSYahoo Finance · 2026-10-07
- Zenas BioPharma to Host Virtual R&D EventYahoo Finance · 2026-10-06
- Why Is Zenas BioPharma (ZBIO) Filing More Than $240 Million In Shelves?Yahoo Finance · 2026-09-23
- Zenas BioPharma Announces Upcoming Presentations of Obexelimab Data in IgG4-Related Disease at the IgG4ward! 6th International Symposium on IgG4-Related Disease and ACR Convergence 2026Yahoo Finance · 2026-09-22
- Zenas BioPharma Announces Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)Yahoo Finance · 2026-09-18
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Zenas BioPharma, Inc.'s financial-health indicators show?
As of 2026-10-08, Zenas BioPharma, Inc.'s public financial data places it in the 'Watch' band with a distress score of 45/100, driven by losses in each of the last 3 years, operations consume cash and ohlson o-score signals likely failure. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Zenas BioPharma, Inc.'s financial distress score?
45/100 ('Watch'). Ohlson O-score 1.4 (model 1-year failure probability 80%). Merton distance-to-default 2.15 σ (model default probability 1.6%).
What works in Zenas BioPharma, Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Strong current ratio (11.94). Revenue still growing (+100% YoY).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Pharma & Biotech companies with distress indicators
- ABVC BioPharma, Inc. (ABVC)Very weak 100/100
- AKAN (AKAN)Very weak 100/100
- Endovia Health Sciences, Inc. (EDVA)Very weak 100/100
- Elicio Therapeutics, Inc. (ELTX)Very weak 100/100
- IM Cannabis Corp. (IMCC)Very weak 100/100
- NeuroSense Therapeutics Ltd. (NRSN)Very weak 100/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.