Kezar Life Sciences (KZR 0.51%), a clinical-stage biopharmaceutical company developing therapies for autoimmune diseases, released its second quarter 2025 financial results on August 13, 2025. The most important news was a narrower net loss, substantial cost reductions, and the lifting of a partial clinical hold for its lead drug candidate, zetomipzomib, in autoimmune hepatitis. For the quarter, The company reported a GAAP net loss per share of $1.87, an improvement from the $2.96 GAAP loss per share in Q2 2024. No revenue was reported, in line with expectations. The company achieved important regulatory milestones for zetomipzomib while tightening expenses, resulting in a steadier financial base this quarter, yet the path to commercialization remains challenging.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(1.87) | $(2.24) | $(2.96) | 36.8 % |
| Revenue (GAAP) | $0 | $0 | $0 | — |
| Research & Development Expense | $9.6 million | $16.3 million | (41.1 %) | |
| General & Administrative Expense | $5.0 million | $5.6 million | (10.7 %) | |
| Net Loss | $(13.7 million) | $(21.5 million) | 36.3 % | |
| Cash, Cash Equivalents & Marketable Securities | $100.8 million | N/A | N/A |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Success Factors
Kezar Life Sciences is focused on creating therapies for patients with autoimmune diseases—conditions in which the immune system attacks the body’s own healthy tissues. Its main asset is zetomipzomib, a selective immunoproteasome inhibitor. This experimental drug aims to modify the activity of immune cells involved in inflammation while reducing the side effects common with current standard treatments, such as broad immunosuppressive drugs.
The company’s recent work centers on developing zetomipzomib for severe indications like autoimmune hepatitis (AIH) and lupus nephritis. Successful clinical results and smooth regulatory progress are critical. Another priority is maintaining a strong cash position and operational discipline, while ongoing safety issues and competitive pressures from larger pharmaceutical firms present hurdles.
Second Quarter Performance and Regulatory Developments
During the period, Kezar sharply reduced its expenses, with GAAP research and development expenses dropped to $9.6 million, down from $16.3 million in Q2 2024. This reduction was primarily due to decreased clinical activities following the completion and closeout of clinical trials, as well as lower personnel and facility costs. General and administrative costs also declined to $5.0 million from $5.6 million a year ago, with management citing lower facility and personnel costs.
GAAP net loss narrowed to $13.7 million, a noticeable improvement from a $21.5 million loss in Q2 2024. This smaller loss resulted both from tighter spending controls and from fewer ongoing clinical trials. At quarter-end, Kezar held $100.8 million in cash, cash equivalents, and marketable securities—a decrease from $132.2 million as of December 31, 2024 but enough, at current spending rates, to fund operations into late 2026.
The most significant non-financial news was the U.S. Food and Drug Administration (FDA) lifting its partial clinical hold on the PORTOLA Phase 2a trial for zetomipzomib in AIH. In that study (PORTOLA Phase 2a, reported March 2025), 36% of zetomipzomib-treated patients achieved a complete biochemical response and a substantial reduction in steroid dose, while none in the placebo group did. The duration of response was over six months, with no disease flares in responders. The FDA’s decision opens a path to further pivotal clinical trials. Kezar has now requested a Type C meeting with the FDA, which is a formal discussion to agree on regulatory requirements for further clinical studies in AIH.
Although progress was made in AIH, the company remains under a clinical hold for lupus nephritis after previous serious adverse events. No new safety incidents or trial advances were reported in lupus nephritis this period. The PORTOLA results will be featured at The Liver Meeting 2025, raising the drug’s profile among liver disease specialists and other stakeholders. No new strategic partnerships or intellectual property updates were disclosed during the quarter.
Business Model and Product Pipeline
Zetomipzomib is a small molecule drug designed as a selective immunoproteasome inhibitor. This means it is engineered to block a specific enzyme found in immune cells, which can suppress abnormal immune responses, potentially without widespread immunosuppression. Its main clinical targets are autoimmune hepatitis and lupus nephritis, both of which are diseases driven by overactive immune responses and carry high unmet need for safer, more effective therapies.
Clinical success for zetomipzomib hinges on demonstrating both effectiveness and an acceptable safety profile. While the PORTOLA trial for AIH generated promising efficacy and safety data, safety concerns and prior fatalities in lupus nephritis trials continue to weigh on pipeline risk. The path forward includes plans for additional pivotal trials and ongoing discussions with regulators.
Looking Ahead: Financial and Regulatory Outlook
Kezar Life Sciences did not provide quantitative financial guidance for the upcoming quarter or full year. Management is focused on planning a registration-enabling trial for zetomipzomib in AIH, with a key FDA Type C meeting targeted for late 2025. Investors should monitor cash levels, operating expenses, and regulatory updates as the company prepares for larger trials and potential commercial planning.
With no revenue currently reported and substantial spending requirements for upcoming clinical trials, Kezar’s future depends on successful regulatory discussions and new clinical milestones.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
