ZBIO Investors Face Critical Deadline to Join Securities Fraud Lawsuit Amid Allegations of IPO Deception

The recent securities fraud lawsuit against Zenas BioPharma, Inc. (NASDAQ: ZBIO) has reignited scrutiny over corporate transparency in biotech IPOs. Investors who purchased shares during the company’s September 2024 initial public offering (IPO) now have a narrow window to seek leadership in a class action targeting alleged financial misstatements. With stock prices slashed nearly 50% since the IPO, the case underscores the high stakes for shareholders and the legal mechanisms available to hold companies accountable for misleading disclosures.

The Core Allegations
The lawsuit, filed on April 28, 2025, in the U.S. District Court for the District of Massachusetts, accuses Zenas and its IPO underwriters of inflating the company’s financial stability. Plaintiffs allege that Zenas misrepresented its “operational runway”—the period it could sustain operations with existing cash and IPO proceeds—as 24 months. However, a subsequent November 2024 filing revealed the actual runway was only 12 months. This discrepancy, plaintiffs argue, artificially inflated the IPO price to $17 per share, leading to substantial investor losses. By April 15, 2025, ZBIO’s stock had plummeted to $8.72—a 48.7% decline from its IPO peak.

Deadline to Act
A critical deadline looms for investors: June 16, 2025, is the cutoff to seek appointment as lead plaintiff. This status requires demonstrating the largest financial loss and alignment with the class’s interests. However, all eligible investors who purchased ZBIO shares during the IPO period can participate in potential recovery without seeking lead plaintiff status.

Legal Landscape and Risks
The case, Buathongsri v. Zenas BioPharma, Inc. (25-cv-10988), is notable for naming both Zenas executives and IPO underwriters as defendants. This expands liability beyond the company itself, a strategy that could increase the likelihood of a settlement. The lawsuit cites violations of the Securities Act of 1933, which holds issuers and underwriters accountable for misleading prospectus materials.

While the class has not yet been certified, the involvement of prominent law firms like Schall Law and Robbins Geller Rudman & Dowd LLP signals a serious legal effort. These firms have a track record in high-stakes securities cases, raising the profile of the ZBIO litigation.

Historical Context and Precedent
This case follows a January 2025 settlement in a prior ZBIO securities fraud lawsuit, which resolved claims over misleading statements made between March 2022 and November 2022. That $12.5 million settlement, finalized by March 2025, highlights Zenas’s recurring issues with transparency—a red flag for investors. The current lawsuit, however, focuses on newer allegations tied to the IPO, suggesting ongoing governance concerns.

What’s at Stake for Investors?
The lawsuit seeks to recover losses for investors who bought ZBIO shares during the IPO. With the stock down nearly half its IPO value, the total losses for the class could exceed $200 million, based on the $17 IPO price and the number of shares sold. If successful, the case could also set a precedent for scrutinizing biotech IPOs, particularly around financial projections.

Conclusion: A Crossroads for ZBIO Investors
Zenas BioPharma’s legal battles underscore the risks of opaque financial disclosures in high-growth sectors. For investors, the June 16 deadline is a pivotal moment: failing to act could mean forfeiting the chance to influence the case’s outcome or secure compensation. With ZBIO’s stock down nearly 50% since its IPO and the company’s operational runway misstatements at the core of the lawsuit, the case could reshape expectations for transparency in biotech listings.

The data speaks plainly: from September 2024 to April 2025, ZBIO’s stock lost nearly half its value—a stark indicator of investor distrust following the alleged fraud. For those holding shares from the IPO, joining the lawsuit is not just an option—it’s a strategic move to protect capital in an industry where financial honesty is increasingly under the microscope.

Investors are urged to contact the Schall Law Firm promptly to assess eligibility and potential recovery. The clock is ticking.