Fairmount Healthcare Fund II LP buys $5.1m of Zenas BioPharma stock By Investing.com
In a series of recent transactions, Fairmount Healthcare Fund II LP significantly increased its stake in Zenas BioPharma, Inc. (NASDAQ:ZBIO), a pharmaceutical company focused on the development of treatments for infectious diseases. On September 16, 2024, the fund purchased 300,000 shares of common stock at a price of $17.00 per share, totaling an investment of $5.1 million.
This purchase came along with the automatic conversion of various series of preferred stock into common stock upon the closing of Zenas BioPharma’s initial public offering. The conversion includes Series Seed, Series A, Series B, and Series C Convertible Preferred Stock, which were converted at 8.6831-for-1 without additional consideration. Notably, this conversion did not involve any cash transactions, and the shares have no expiration date.
Fairmount Funds Management LLC, which acts as investment manager for Fairmount Healthcare Fund II LP, confirmed that its managing members, Peter Harwin and Tomas Kiselak, disclaim beneficial ownership of the reported securities, except to the extent of their financial interest therein.
Additionally, Tomas Kiselak, a managing member of both Fairmount Funds Management LLC and Fairmount Healthcare Fund II LP, was granted stock options to purchase 37,000 shares of Zenas BioPharma common stock at $17.00 per share. These options are scheduled to vest over a three-year period beginning on September 12, 2025, assuming continuous service. Kiselak has a plan to convert any residual cash or stock received from the option to investment vehicles owned by Fairmount.
Fairmount Healthcare Fund II LP’s recent transaction and automatic share conversion highlights an important moment in Zenas BioPharma’s journey as the company moves toward its public offering. Investors in Zenas BioPharma will likely monitor how these developments affect the company’s stock performance and strategic direction in the competitive pharmaceutical industry.
InvestingPro Insights
Zenas BioPharma, Inc. (NASDAQ:ZBIO) has attracted investors’ attention with the recent rise in shares of Fairmount Healthcare Fund II LP. Because of this development, looking at some key financial metrics and InvestingPro tips can provide a deeper understanding of ZBIO’s financial health and market performance. From the last twelve months ending in Q2 2024, ZBIO reported a revenue of $50 million. However, the company is facing profitability challenges, as shown by its gross profit margin of -72.45% and operating income ratio of -112.87% . These statistics underscore the company’s struggle to control costs relative to revenues.
One of the InvestingPro tips for ZBIO indicates that the company has more cash than debt on its balance sheet, which is a good sign of liquidity and financial stability. In addition, ZBIO’s liquid assets exceed its short-term liabilities, suggesting that the company is in a good position to cover its immediate liabilities.
Despite this spending power, another InvestingPro Tip highlights that ZBIO suffers from weak gross profit margins and has not been profitable in the past twelve months. The company also does not pay dividends to shareholders, which may influence investment decisions for those looking for income-generating assets.
InvestingPro provides more information on ZBIO, with 5 InvestingPro tips available for interested investors looking for a comprehensive analysis. These tips can be found at: https://www.investing.com/pro/ZBIO.
With InvestingPro Fair Value of $13.35, it suggests that the market is likely to outperform ZBIO, given its recent trading price of $17.00 per share. This price difference could be of interest to investors considering the future trajectory of ZBIO’s stock price relative to its fundamental value.
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