SCHEDULE: Longitude Funds & Enright Drop Below 5% Zenas BioPharma Stake

Longitude Capital and its affiliates, along with director Patrick Enright, reported a decrease in their beneficial ownership of Zenas BioPharma to below 5% following a recent private placement.

Summary

• Longitude Capital Partners IV, LLC, Longitude Venture Partners IV, L.P., Longitude Prime Partners, LLC, Longitude Prime Fund, L.P., Patrick G. Enright, and Juliet Tammenoms Bakker are the reporting persons in this Schedule 13D/A filing.
• The filing is an amendment to a Schedule 13D, indicating a change in beneficial ownership of Zenas BioPharma, Inc. common stock.
• On October 9, 2025, the reporting persons collectively ceased to beneficially own more than 5% of Zenas BioPharma's securities.
• This change is primarily attributed to a Private Investment in Public Equity (PIPE) transaction that closed on October 9, 2025.
• In the PIPE, Zenas BioPharma issued 6,262,112 shares to institutional investors at a price of $19.00 per share and 48,918 shares to director and officer investors at a price of $20.85 per share.
• Longitude Venture Partners IV, L.P. purchased 105,265 shares in the PIPE for an aggregate price of $2,000,035.00.
• Patrick G. Enright, a member of the Issuer's board of directors, purchased 11,990 shares in the PIPE for an aggregate price of $249,991.50.
• As of the filing, Patrick G. Enright beneficially owns 2,631,522 shares, representing 4.9% of the class, including shares held directly, exercisable options, and shares held by affiliated funds.
• Juliet Tammenoms Bakker beneficially owns 2,607,199 shares, representing 4.9% of the class, through shared voting and dispositive power over shares held by affiliated funds.
• Longitude Venture Partners IV, L.P. beneficially owns 1,832,669 shares, representing 3.4% of the class.
• Longitude Prime Fund, L.P. beneficially owns 774,530 shares, representing 1.4% of the class.

Sentiment

Score: 7

Explanation: The filing reports a decrease in percentage ownership due to dilution from a capital raise, which is a neutral event in itself. However, the participation of existing institutional investors and a director in the PIPE indicates continued confidence and provides capital to the company, which is generally positive.

Positives

• Reporting persons, including a director, participated in the PIPE transaction, indicating continued investment and confidence in the company's prospects.
• The PIPE transaction successfully raised capital for Zenas BioPharma, providing funding for its operations and strategic initiatives.

Negatives

• The reporting group's beneficial ownership percentage dropped below 5%, which could be interpreted as a reduction in their relative influence or stake compared to the overall company size, primarily due to dilution from new share issuance.

Risks

• NA

Future Outlook

The filing does not contain explicit forward-looking statements or guidance from the company, only factual reporting of ownership changes and past transactions.

Industry Context

This filing reflects a common occurrence in the biopharma industry where venture capital firms and their principals invest in and support emerging companies, often participating in subsequent funding rounds like PIPE transactions. The dilution of their percentage stake due to new capital raises is a natural consequence of growth and further investment, especially when the company issues a significant number of new shares.

Comparison to Industry Standards

• Participation of existing institutional investors and directors in a PIPE transaction is a common practice, often seen as a vote of confidence in the company's future prospects.
• The pricing of the PIPE shares ($19.00 for institutional, $20.85 for D&O) suggests a differentiated valuation, potentially reflecting a premium for insider participation or specific terms, which is not uncommon.
• The decrease in percentage ownership below 5% for a significant investor group, while notable, is a mathematical outcome of dilution from new share issuance rather than a divestment, and is typical as companies grow and raise more capital from a broader investor base.

Corporate Governance

Related Party Transactions

• Patrick G. Enright, a member of the Issuer's board of directors, purchased 11,990 shares in the PIPE transaction for $249,991.50.
• Longitude Capital Partners IV, LLC and Longitude Prime Partners, LLC, whose managing members include Patrick G. Enright and Juliet Tammenoms Bakker, are general partners of funds (LVPIV and LPF) that beneficially own shares in Zenas BioPharma and participated in the PIPE.

Stakeholder Impact

• Shareholders: Existing shareholders experienced dilution due to the issuance of new shares in the PIPE, but the capital raise provides funding for the company's operations. The reporting group's reduced percentage ownership means less concentrated control.
• Investors (PIPE): New and existing investors who participated in the PIPE acquired shares and received registration rights, providing a path to liquidity.

Next Steps

• The Issuer filed a Form S-3ASR to register the PIPE Shares for resale, indicating future liquidity for these investors.

Key Dates

Recommendation

The filing primarily details a change in beneficial ownership due to a capital raise (PIPE). While the percentage ownership of a key investor group decreased, it was a result of dilution from new share issuance, not a divestment. The participation of existing institutional investors and a director in the PIPE suggests continued confidence and provides the company with additional capital. This is a neutral to slightly positive event, but without further financial or operational details from the company, a 'hold' recommendation is appropriate for existing investors, while new investors should await more comprehensive company updates.

Keywords

Zenas BioPharma, Longitude Capital, Schedule 13D/A, Beneficial Ownership, PIPE, Private Placement, Equity Investment, Biopharma, Institutional Investors, Director Investment, Shareholding, SEC Filing, Dilution