Zenas BioPharma (ZBIO) remains undervalued, as investor concerns over its phase 3 INDIGO trial for obexelimab place too much emphasis on comparisons with Amgen's Uplizna while overlooking factors that could support broader market adoption, Wedbush said in a Friday note.

The brokerage said the addressable market for obexelimab could be about 75% larger than previously estimated, adding that the drug's favorable safety profile, lower steroid use, reduced infection risk and lower treatment costs compared with Uplizna could support broader adoption.

Wedbush said several upcoming catalysts over the next 12 months, including data from the INDIGO vaccine sub-study, topline phase 2 SunStone trial results in systemic lupus erythematosus, and healthy volunteer data for oral IL-17 inhibitor ZB021, could renew investor interest.

Updates on Uplizna sales and growth in the IgG4-related disease market could further support obexelimab's commercial outlook, with its safety profile and potential physician and payor preferences helping offset concerns over initial INDIGO efficacy results, the report added.

Wedbush maintained its outperform rating on the stock with a $45 price target.