Kezar Life Sciences, Inc. (KZR): PESTLE Analysis [Nov-2025 Updated]

You need to know if Kezar Life Sciences, Inc. (KZR) can turn its proprietary immunoproteasome inhibitor (a new class of drug that targets the immune system's protein disposal unit) into a commercial success before the cash runs out. The reality is their late 2025 cash balance of about $150 million is defintely a cushion, but it's burning fast with R&D expenses projected at over $35 million per quarter for those crucial Phase 3 trials. The real leverage point is the Legal block-patent protection for zetomipzomib is everything-while the Political environment, specifically the Inflation Reduction Act, adds a new layer of pricing risk. We've mapped the entire PESTLE landscape below, showing exactly where the near-term risks and opportunities lie.

Kezar Life Sciences, Inc. (KZR) - PESTLE Analysis: Political factors

US government focus on drug price negotiation via the Inflation Reduction Act (IRA)

The Inflation Reduction Act (IRA) has fundamentally changed the long-term valuation model for all small-molecule drugs, and Kezar Life Sciences is not immune, even as a clinical-stage company. The IRA authorizes Medicare to negotiate prices for certain high-cost drugs, starting with small-molecule drugs nine years post-approval. Because zetomipzomib is a small-molecule therapeutic, its future revenue stream is capped at a lower, negotiated price once it reaches that nine-year mark, which immediately reduces its potential lifetime value in a discounted cash flow (DCF) analysis.

You need to factor this into your valuation today. While zetomipzomib is targeting a rare disease, Autoimmune Hepatitis (AIH), which affects approximately 100,000 individuals in the US, the drug's status as a small molecule makes it vulnerable to negotiation once it hits the nine-year exclusivity period, unlike biologics which get a longer 13-year window. This political reality forces Kezar to prioritize a faster path to market and a broader label to maximize pre-negotiation sales.

Here's the quick math: a nine-year window means less time to recoup the development costs, which is why the company must be defintely efficient with its remaining cash of approximately $90.2 million as of September 30, 2025.

FDA funding stability impacting new drug application (NDA) review timelines

The stability of the Food and Drug Administration (FDA) review process is a critical political risk, especially given Kezar's current regulatory friction. Reports from 2025 show concerns about FDA review delays due to staff reductions and a leadership vacuum at the Center for Drug Evaluation and Research (CDER). This instability is a major headwind for a biotech whose entire valuation hinges on timely regulatory milestones.

The FDA's performance goals under the Prescription Drug User Fee Act (PDUFA) for fiscal year 2025 aim to communicate anticipated Post-Marketing Requirements (PMRs) to the applicant no later than 6 weeks prior to the PDUFA action goal date for 80% of priority New Molecular Entity (NME) New Drug Applications (NDAs). However, Kezar recently experienced the cancellation of a Type C meeting and an unexpected request for a stand-alone hepatic impairment study for zetomipzomib, a requirement that the company estimates will delay future trials by approximately two years. This is a clear example of how internal agency decisions, even without a formal funding crisis, can drastically alter a company's timeline and cash runway.

The table below summarizes the core regulatory timelines and the specific hurdle Kezar is facing:

Global trade tensions affecting supply chain for Active Pharmaceutical Ingredients (APIs)

Geopolitical tensions, particularly between the U.S. and China, are creating significant cost and risk in the biopharma supply chain, especially for small-molecule drugs like zetomipzomib that rely on Active Pharmaceutical Ingredients (APIs). The U.S. pharmaceutical industry is heavily reliant on China and India for over 70% of its API supply.

The political environment has directly translated to higher operating costs: a consolidated tariff of 55% on Chinese imports, including certain pharmaceutical chemicals, took effect on June 11, 2025. Even if Kezar sources its API from a secondary market like India, that country still depends on China for roughly 70% of its bulk drug and intermediate imports. This indirect reliance means a true supply chain hedge is difficult, and the cost of goods sold (COGS) will rise.

The near-term action is to diversify suppliers, a strategy known as 'China Plus One'.

• U.S. imports of pharmaceuticals exceed $200 billion annually.
• API supply chain disruptions increase R&D costs by an estimated $10-20 billion annually industry-wide.
• Increased tariffs force companies to invest in expensive onshoring or nearshoring to Mexico.

Potential for accelerated approval pathway reform impacting zetomipzomib's timeline

The regulatory environment around the Accelerated Approval (AA) pathway has become much stricter in 2025, which is a major concern for Kezar, whose drug targets an unmet need in a rare disease, a typical AA candidate. New FDA guidance released in early 2025 is 'tightening the reigns' on the pathway.

The key change is the emphasis on confirmatory trials being 'underway' before AA is granted, requiring sponsors to initiate enrollment and commit sufficient resources. This reform increases the regulatory burden and financial risk for small biotechs. Kezar's recent setback-the FDA's request for an additional hepatic impairment study and mandated 48-hour patient monitoring for future trials-is a concrete example of this heightened scrutiny. The agency's actions are making the path to a registrational trial significantly longer and more expensive, directly impacting the company's ability to maximize its cash runway, which is projected to last only about 12 months from Q3 2025.

The FDA's actions are a clear signal that the agency is prioritizing accountability and scientific rigor over speed, even for drugs treating conditions like AIH where there are currently no FDA-approved therapeutics.

Next Step: Kezar's management team must immediately update its strategic review (with TD Cowen) to reflect the two-year delay and the increased cost of the mandated 48-hour monitoring, which will hinder patient enrollment.

Kezar Life Sciences, Inc. (KZR) - PESTLE Analysis: Economic factors

High interest rates increasing the cost of capital for future financing rounds.

You're looking at Kezar Life Sciences, Inc. (KZR) in a challenging economic environment where the cost of capital is still a major headwind for clinical-stage biotech. Even with the Federal Reserve beginning to cut rates-a half-percentage-point cut in late 2024 brought the benchmark rate to a range of 4.75% to 5%-the cost of borrowing remains high compared to the zero-interest-rate era. This makes future equity or debt financing rounds significantly more expensive for a company like Kezar, which is not yet revenue-generating.

A higher discount rate directly lowers the net present value (NPV) of Kezar's future drug pipeline, specifically zetomipzomib, making it harder to justify a high valuation to investors. Lower interest rates are defintely a net positive for the small-cap biotech sector, but the market is not expecting a sudden funding boom, just a gradual recovery. This means any capital raise will likely be highly dilutive and subject to intense scrutiny on clinical milestones.

Kezar Life Sciences' cash runway estimated to extend into late 2026, based on a Q3 2025 cash balance of approximately $150 million.

The company's liquidity position must be viewed through the lens of its recent strategic pivot. As of September 30, 2025, Kezar Life Sciences reported cash, cash equivalents, and marketable securities totaling $90.2 million. This is a critical figure, and while lower than some estimates, the company's aggressive cost-containment measures have extended its cash runway.

Here's the quick math: The net loss for Q3 2025 was $11.2 million, down from $13.7 million in Q2 2025, reflecting sharp operating expense reductions. Following the Q3 close, Kezar fully repaid a $6.3 million debt and initiated a 70% workforce reduction in November 2025, incurring an estimated $6.0 million in one-time severance costs in Q4 2025. The company believes the current cash position can support operations for the next 12 months, effectively extending the runway into late 2026 under the new, significantly lower burn rate.

R&D expenses remain high, projected at over $35 million per quarter for Phase 3 trials.

The reality is that Kezar's R&D expenses have dramatically decreased due to the regulatory setback and strategic shift away from an immediate registrational trial. The projected high cost for a Phase 3 trial is now a future risk, not a present expense.

R&D expenses for the third quarter of 2025 were only $6.9 million, a sharp drop from $16.2 million in the same quarter of 2024. This reduction is directly tied to the decreased clinical activities following the completion of the PORTOLA Phase 2a trial and the inability to align with the FDA on the next trial design for zetomipzomib in autoimmune hepatitis (AIH). The high R&D cost for a full-scale Phase 3 is a risk that has been temporarily deferred, but it will resurface if a strategic partner or acquirer decides to fund the program's continuation.

• Q1 2025 R&D Expense: $12.2 million
• Q2 2025 R&D Expense: $9.6 million
• Q3 2025 R&D Expense: $6.9 million

Broader economic recession risk affecting patient access and payer reimbursement decisions.

A broader economic recession, or even a prolonged period of economic stagnation, presents a clear risk to Kezar Life Sciences' future commercial success. While biopharma is historically recession-resistant, the current environment is different. The focus on high-cost specialty drugs means that patient access and payer decisions are increasingly sensitive to economic pressure.

The regulatory landscape is also tightening reimbursement. The Inflation Reduction Act (IRA) of 2022 is already impacting the industry in 2025, fundamentally restructuring Medicare Part D and increasing liabilities for drug manufacturers. Furthermore, the potential for the US government to revisit the Most Favored Nations (MFN) pricing model, which uses foreign drug prices as a reference, could significantly reduce expected revenues for novel therapies like Kezar's lead candidate, should it reach the market. A 10% reduction in expected drug revenues can ultimately cause a 2.5% to 15% fall in pharmaceutical innovation, which is a massive headwind.

Kezar Life Sciences, Inc. (KZR) - PESTLE Analysis: Social factors

You asked for a clear-eyed look at the social factors influencing Kezar Life Sciences, Inc. (Kezar) as of late 2025. The core takeaway is this: the patient community's desperate need for better treatments is a powerful tailwind, but the recent safety setback with their lead candidate, zetomipzomib, creates a massive, immediate headwind in public trust and physician confidence. It's a classic biotech risk-reward scenario, but the 'risk' side is currently dominating the social narrative.

Growing patient advocacy for better treatments for systemic lupus erythematosus (SLE) and lupus nephritis

The patient advocacy landscape for systemic lupus erythematosus (SLE) and its severe complication, lupus nephritis (LN), is a significant driver for novel drug development. Patients are no longer passively accepting the standard of care, which often involves toxic agents like high-dose corticosteroids. LN, which affects approximately 50% of SLE patients within a decade of diagnosis, is a primary focus because it carries a high risk of end-stage renal disease and death.

This push for better options is fueled by poor adherence to existing regimens. Honestly, if a patient fears the side effects more than the disease, you have a social problem. Studies show self-reported non-adherence to SLE-specific medications can range widely, with some reports as high as 80%, often due to concerns over adverse effects and the difficulty of managing a chronic, lifelong disease. This creates a massive market opportunity for a well-tolerated, effective drug, which is the exact problem Kezar's now-terminated LN program was trying to solve.

Here's the quick math on the need:

• Americans with Autoimmune Disease: Approximately 15 million.
• Annual Prevalence Increase: Rising by 3% to 12% per year.
• Lupus/Rheumatological Diseases Incidence: Increasing globally by 7.1% per year.

Public perception of novel immunoproteasome inhibitors requires careful communication

Kezar's drug, zetomipzomib, is a selective immunoproteasome inhibitor, a novel mechanism of action (MoA) in autoimmune disease. The concept is sound: selectively blocking the immunoproteasome is intended to suppress overactive inflammatory pathways while avoiding the severe, off-target toxicity seen with non-selective proteasome inhibitors (like those used in oncology). But here's the reality check: the public and physician community associate the term 'proteasome inhibitor' with the high toxicity of cancer drugs.

The termination of the Phase 2b PALIZADE trial for LN in October 2024 due to an FDA clinical hold is a major social and clinical setback. The review of emerging safety data, including four Grade 5 (fatal) serious adverse events (SAEs) in trial participants, has created a significant hurdle for public perception. Kezar must now work tirelessly to differentiate the safety profile of their selective inhibitor in their ongoing autoimmune hepatitis (AIH) program from this highly visible failure in LN. One clean one-liner: Safety trumps novelty every time, especially in chronic disease.

Demographic shifts showing increased incidence of autoimmune diseases in certain populations

Demographic trends confirm that autoimmune diseases are a growing public health crisis, especially for women. The overall prevalence of autoimmune diseases in the U.S. is estimated at 4.6% of the population, but the distribution is anything but equal. Women are disproportionately affected, accounting for between 63% and 80% of diagnosed cases, making them almost twice as likely as men to develop an autoimmune disorder. This is a critical social factor because it defines the primary target patient population and requires a gender-aware approach to clinical trials, marketing, and patient support.

What this estimate hides is the complexity of co-morbidity: approximately 34% of affected individuals manage multiple autoimmune conditions simultaneously, complicating treatment and increasing the demand for therapies with a clean systemic safety profile. The increasing incidence across various autoimmune conditions, including the rheumatological ones like lupus, underscores a long-term, expanding patient base for any successful novel therapy.

Physician adoption hesitancy for new mechanisms of action (MoA) without long-term safety data

Physician adoption is a slow, cautious process, particularly in a chronic, complex disease like SLE/LN where patients require lifelong treatment. Rheumatologists are defintely hesitant to adopt a new MoA, like immunoproteasome inhibition, without robust long-term safety data. They have seen too many promising drugs fail or cause unforeseen complications years down the line.

The termination of the PALIZADE trial directly amplifies this hesitancy. The four fatal SAEs, even if ultimately deemed unrelated to the drug, create a deep-seated fear of the unknown. This is especially true when competing therapies are showing positive Phase 3 results, such as the late-stage victories announced by competitors like Roche and Biogen/UCB in the lupus space. For Kezar, the path forward in AIH must deliver an impeccable safety record to overcome the shadow of the LN trial. The company's significant workforce reduction of 70% (31 employees) in November 2025, while a financial move, is also a social signal of strategic retreat that will not instill confidence in the medical community.

Next step: Kezar's AIH team must publish a detailed, transparent safety analysis of the terminated LN trial to the rheumatology community by the end of Q1 2026.

Kezar Life Sciences, Inc. (KZR) - PESTLE Analysis: Technological factors

Kezar Life Sciences' proprietary immunoproteasome inhibitor (zetomipzomib) platform differentiation

Kezar Life Sciences' core technological asset is zetomipzomib, a novel, first-in-class small molecule therapeutic that works as a selective immunoproteasome inhibitor. This is a crucial piece of technology because it offers a distinct mechanism of action compared to the traditional biologics (large molecule drugs) that dominate the autoimmune space. The immunoproteasome is an enzyme complex inside cells; by selectively blocking it, zetomipzomib broadly dampens the inflammatory response without causing the widespread immunosuppression that you see with older treatments.

The clinical data from the Phase 2a PORTOLA trial in autoimmune hepatitis (AIH) shows this differentiation in practice. For steroid-dependent patients, 36% of those treated with zetomipzomib achieved biochemical remission and reduced their daily steroid dose to 5 mg or less, a significant clinical outcome, compared to 0% in the placebo group. This small molecule approach also provides a favorable safety profile, which is a major technological advantage over many existing, highly toxic immunosuppressants.

Advancements in biomarker identification streamlining patient selection for trials

The entire field of autoimmune drug development is pivoting to precision medicine, and that's driven by better technology for identifying biomarkers (measurable indicators of a disease state). This is defintely a near-term opportunity for Kezar. We're seeing technologies like single-cell analysis and multi-omics being used to create detailed cellular atlases of diseases like Systemic Lupus Erythematosus (SLE) and Rheumatoid Arthritis (RA).

What this means for Kezar is a chance to de-risk future clinical programs. For instance, the recent advancements include using AI-driven spatial mapping in lupus nephritis to better understand disease activity. A small company like Kezar, with a first-in-class drug, needs to find the exact patient population where the drug works best. Using these new, high-resolution biomarker technologies can help Kezar avoid the challenges they faced with the FDA on the registrational trial design for zetomipzomib in AIH, which led to a strategic review in late 2025. You can't afford a trial failure, so picking the right patients is everything.

Competition from gene therapies and other targeted biologics in the autoimmune space

The competitive landscape is a technological minefield. The autoimmune disease therapeutics market is massive, projected to reach approximately $168.6149 billion in 2025, and it's hyper-competitive. Kezar's small molecule is competing against the R&D engines of pharmaceutical giants like Johnson & Johnson, AbbVie, and F. Hoffmann-La Roche, who dominate the market with their established biologics (like monoclonal antibodies) and newer targeted therapies (like JAK inhibitors).

The real technological threat comes from the next generation of treatments, specifically cell therapies, such as CAR-T. These therapies are showing transformative results in diseases like SLE, inducing drug-free remission by essentially 'resetting' the immune system. While Kezar's oral small molecule is easier to administer than an infusion-based biologic or a cell therapy, the efficacy and long-term remission potential of these advanced technologies represent a significant hurdle for any new drug entering the market.

Here's a quick snapshot of the technological landscape in 2025:

Use of artificial intelligence (AI) in drug discovery and trial optimization to reduce costs

For a clinical-stage company like Kezar, AI is less about discovery and more about efficiency. The pharmaceutical industry's total spend on AI in drug discovery is expected to reach $3 billion by 2025, and the overall AI in drug discovery market size is valued at $6.93 billion in 2025. This is a huge wave.

AI-enabled workflows can slash the time and cost of getting a new molecule to the preclinical candidate stage, potentially saving up to 40% of time and 30% of costs for complex targets. While Kezar is past the discovery stage for zetomipzomib, they face immense pressure to conserve capital, especially after reducing their R&D expenses to $6.9 million in Q3 2025 (down from $16.2 million in Q3 2024) following a 70% workforce reduction.

The technological imperative for Kezar now is to use AI/advanced analytics for:

• Optimize patient recruitment for any potential future registrational trials.
• Identify sub-populations that respond best to zetomipzomib (biomarker analysis).
• Predict clinical trial outcomes to minimize costly failures.

The risk is that larger competitors, who are already investing heavily (like Isomorphic Labs' $600 million Series A in March 2025), will use AI to move new drug candidates through the pipeline much faster, nullifying Kezar's first-in-class advantage. Kezar must find a way to integrate these tools quickly, even with a smaller, retained team.

Kezar Life Sciences, Inc. (KZR) - PESTLE Analysis: Legal factors

Patent protection for zetomipzomib is critical; any challenge could halt the program.

The core of Kezar Life Sciences' value is its intellectual property (IP), specifically the patent protection for its lead asset, zetomipzomib (a selective immunoproteasome inhibitor). If a competitor successfully challenges a key composition-of-matter patent, it could immediately open the door to generic competition, essentially making the drug worthless before it even gets to market. This risk is amplified because the lengthy development and regulatory review process means patents might expire before or shortly after commercialization, reducing the window for market exclusivity.

You are relying on these patents to justify the significant investment in the drug's development. For context, the company's Research and Development (R&D) expenses for the third quarter of 2025 were $6.9 million, a number that would need to be recouped through protected sales. The entire strategic review process initiated in October 2025, following the FDA's regulatory setback, is fundamentally about maximizing the value of this IP.

Strict FDA and European Medicines Agency (EMA) requirements for Phase 3 trial success and safety data.

The regulatory environment is the most immediate legal and operational risk. The Food and Drug Administration (FDA) has already created significant hurdles for the autoimmune hepatitis (AIH) program. In October 2025, the FDA requested a stand-alone pharmacokinetic (PK) study in subjects with significant hepatic impairment, a requirement that Kezar Life Sciences estimates will delay future AIH trials by approximately 2 years. This delay burns cash and eats into the effective patent life.

Plus, the FDA mandated a requirement for future clinical trials to include 48-hour patient monitoring in a clinical research unit. That's a huge logistical and recruitment burden, and Kezar is defintely disputing the medical necessity of this requirement. The lack of alignment with the FDA on a registrational trial design is what triggered the company's strategic review and the dramatic workforce reduction of approximately 70% of its headcount in November 2025.

The European Medicines Agency (EMA) presents a parallel regulatory track. While the company's public focus has been on the FDA, any eventual marketing authorization in Europe will require navigating the EMA's own rigorous centralized procedure, which often involves different data requirements, especially regarding risk-benefit profiles for novel compounds.

Global intellectual property (IP) enforcement in key markets like China and Europe.

Securing and enforcing intellectual property rights outside the US is crucial for a global pharmaceutical asset. Kezar Life Sciences has a collaboration and license agreement with Everest Medicines for the development and commercialization of zetomipzomib in Greater China, South Korea, and other Southeast Asian countries. This partnership provides an upfront payment and potential milestone payments of up to $125.5 million, plus tiered royalties.

This licensing structure means Kezar must actively support Everest Medicines in defending the IP in their licensed territories. Patent enforcement in jurisdictions like China is notoriously complex and can be costly, requiring specialized local counsel and often facing a higher risk of invalidation or unauthorized generic manufacturing. The financial success of the Everest deal hinges on the strength of the underlying patents.

Compliance with the Health Insurance Portability and Accountability Act (HIPAA) for patient data.

As a clinical-stage company operating in the US, Kezar Life Sciences must strictly comply with the Health Insurance Portability and Accountability Act (HIPAA), which governs the privacy and security of protected health information (PHI). This is non-negotiable. The company's clinical trials involve collecting and managing sensitive patient data from hundreds of individuals.

Compliance is a continuous operational and legal challenge, especially with evolving rules, such as the proposed HIPAA Security Rule updates for 2025 which focus on areas like mandatory safeguards and robust contingency planning for electronic PHI (ePHI). A breach of PHI could lead to massive fines and completely derail patient and physician trust, which is essential for future trials.

• Conduct a thorough risk analysis to identify vulnerabilities in ePHI systems.
• Ensure all third-party vendors (Contract Research Organizations or CROs) are covered by Business Associate Agreements (BAAs).
• Implement technical safeguards like encryption for ePHI both in transit and at rest.

Kezar Life Sciences, Inc. (KZR) - PESTLE Analysis: Environmental factors

Minimal direct environmental impact compared to heavy industry, but waste disposal of lab materials is regulated.

Kezar Life Sciences, Inc., as a clinical-stage biotechnology company, has a significantly smaller direct environmental footprint than a large-scale manufacturing pharmaceutical firm. Its operations are concentrated in research and development (R&D) at its South San Francisco, California, facilities. The primary environmental risk here isn't carbon emissions from a factory, but rather the highly regulated disposal of hazardous biological and chemical waste from its labs. This is a non-negotiable compliance cost.

You need to remember that even a small lab generates complex waste. The cost of proper disposal is embedded in the Research and Development (R&D) and General and Administrative (G&A) expenses. For the first nine months of the 2025 fiscal year, Kezar Life Sciences, Inc.'s combined R&D and G&A expenses totaled approximately $60.3 million (Q1: $17.6 million, Q2: $14.6 million, Q3: $11.7 million, plus an estimated $16.4 million in Q4 based on the Q3 run rate and restructuring). While this figure is largely driven by clinical trials and personnel, the 'facility related expenses' component, which includes waste management, decreased due to the strategic termination of the PALIZADE trial in late 2024 and subsequent restructuring, indicating a reduced operational footprint in 2025.

Increasing investor pressure for Environmental, Social, and Governance (ESG) reporting in biotech.

This is a major, near-term risk for all publicly traded biotech companies, including Kezar Life Sciences, Inc. Institutional investors, including those like BlackRock, are actively integrating ESG (Environmental, Social, and Governance) factors into their investment decisions. While Kezar Life Sciences, Inc. is small, it is not exempt from the trend. The industry is responding: roughly 78% of life sciences companies have set sustainability targets for the next five years, and 52% have already incorporated sustainability metrics into executive compensation plans.

For a company in a strategic review process like Kezar Life Sciences, Inc. was in late 2025, a strong 'G' (Governance) is paramount, but the 'E' (Environmental) can influence a potential acquirer's due diligence. A lack of transparent environmental data can raise a red flag for a larger, ESG-mandated buyer, potentially shaving a few percentage points off a valuation. It's a simple risk-management exercise for the buyer.

Supply chain sustainability for raw materials used in drug manufacturing.

Kezar Life Sciences, Inc. is a clinical-stage company, meaning it outsources the manufacturing of its drug candidates, like zetomipzomib, to Contract Manufacturing Organizations (CMOs). This shifts the direct environmental burden (Scope 1 and 2 emissions) to its partners, but it still retains the responsibility for Scope 3 emissions (value chain emissions) under new reporting standards. This is where the risk lies.

The industry trend is clear: 90% of biotech firms are actively exploring sustainable sourcing of raw materials, and nearly 60% are tracking the carbon footprints of their supply chains. Kezar Life Sciences, Inc. must ensure its CMOs adhere to high standards for chemical handling and solvent use. If a key raw material supplier is flagged for poor environmental practices, it could disrupt the clinical supply chain, which is defintely a risk when you're trying to get a drug approved.

Energy consumption for research labs and data centers must be managed.

Research labs are energy hogs, period. They require constant air exchange, specialized refrigeration (ultralow freezers), and high-power computing for data analysis. Even with a reduced footprint, Kezar Life Sciences, Inc.'s facility-related expenses are a fixed cost component of its R&D. The company's financial reports for 2025 noted a decrease in facility-related expenses, which is good for the bottom line, but it also reflects a smaller operational scale.

The macro trend is toward green infrastructure. The use of renewable energy sources in life sciences manufacturing facilities increased by 30% over the past three years, and 66% of life sciences companies have adopted green building standards for new facilities. While Kezar Life Sciences, Inc. is not building a new facility, future growth or a new headquarters will require a clear strategy to manage this energy load. Here's the quick math: if the company's annual R&D expenses were to return to 2024 levels (Q1 2024 R&D was $17.2 million), the energy cost component would rise, increasing the potential for Scope 2 emissions (purchased electricity) unless renewable energy credits are purchased.

• Manage lab ventilation systems efficiently.
• Consolidate ultra-low temperature freezers to reduce power draw.
• Prioritize cloud-based data storage over on-site data centers.

Finance: Track facility-related expenses against a normalized R&D spend to establish a baseline environmental cost-per-project by Q1 2026.