Zentalis Pharmaceuticals Reports First Quarter 2021 Financial Results and Operational Update
May 17 2021 - 7:00AM
Zentalis Pharmaceuticals, Inc. (Nasdaq: ZNTL), a clinical-stage
biopharmaceutical company focused on discovering and developing
small molecule therapeutics targeting fundamental biological
pathways of cancers, today announced financial results for the
first quarter ended March 31, 2021 and highlighted recent
corporate accomplishments.
“This quarter, we have made tremendous progress advancing the
clinical development of one of our lead programs, ZN-c3,
underscored by strong data recently presented in a late-breaking
session at AACR,” commented Dr. Anthony Sun, Chairman and Chief
Executive Officer of Zentalis. “These initial results from the
Phase 1 monotherapy trial not only demonstrated signals of
single-agent efficacy and a superior safety profile compared to
other WEE1 inhibitors in development, but also generated multiple
confirmed Exceptional Responses across differing solid tumor types.
With the recommended dose selected, we look forward to pursuing
many planned trials with ZN-c3 this year and exploring its
best-in-class potential both as a monotherapy and in
combination.”
Continued Dr. Sun, “In parallel, we continue to make great
headway with the development of our additional differentiated
oncology candidates – ZN-c5, ZN-d5 and ZN-e4 – with numerous trials
on track to initiate in 2021. Looking ahead to our catalyst-rich
year, we remain focused on executing on our clinical strategy and
creating value for our stakeholders, in hopes of delivering
innovative treatments to help improve the lives of cancer
patients.”
Program Highlights:
- In April 2021, Zentalis reported initial results from the Phase
1 portion of a Phase 1/2 trial of ZN-c3 in advanced solid tumors in
a late-breaking session at the American Association of Cancer
Research (AACR) Annual Meeting, which was further discussed at a
webcast event with Key Opinion Leaders.
- ZN-c3 generated three Exceptional Responses in heavily
pretreated patients with ovarian cancer, colorectal cancer and
non-small cell lung cancer, as well as two unconfirmed Partial
Responses in patients with uterine serous carcinoma;
- Showcased favorable safety results with a wide therapeutic
window;
- A Unique Predictive Biomarker was identified for the
Exceptional Responders, with plans to further investigate the
biomarker in this patient population;
- Selected Recommended Phase 2 Dose for ZN-c3 to be 300 mg QD
with continuous dosing.
- In April 2021, we entered into a Clinical Trial Collaboration
and Supply Agreement with GSK to investigate the combination of
ZN-c3, our oral WEE1 inhibitor, and niraparib, GSK’s poly
(ADP-ribose) polymerase (PARP) inhibitor, in patients with advanced
epithelial ovarian cancer. The Company expects to initiate a Phase
1b trial with this combination in the second half of 2021.
- Zentera Therapeutics, Zentalis’ majority-owned joint venture,
filed four Clinical Trial Applications (CTAs, China equivalent of
IND) and three have been approved in China to date for ZN-c5,
ZN-c3, and ZN-c3 in combination. A fourth CTA was submitted earlier
this month for ZN-d5.
- In February 2021, Zentalis entered into a strategic
collaboration with Tempus to leverage its patient-derived organoid
biological modeling platform to aid Zentalis in discovering and
developing novel oncology therapies. The collaboration will assist
in the validation of Zentalis’ mechanistic discoveries, initially
focusing on its WEE1 inhibitor, ZN-c3, across patient tumor
populations.
Anticipated Milestones:
- The Company plans to report interim results from numerous
ongoing trials with ZN-c5 and to share guidance on future
development plans for this product candidate in the second quarter
of 2021.
- Zentalis expects to initiate several studies in the coming
months, including:
- A Phase 2 trial of ZN-c3 in uterine serous carcinoma in the
third quarter of 2021;
- A Phase 1/2 trial of ZN-c3 in combination with chemotherapy in
osteosarcoma in the third quarter of 2021; and
- A Phase 1/2 trial of ZN-c3 in combination with GSK’s niraparib
in ovarian cancer in the second half of 2021.
Corporate Highlights:
- In February 2021, the Company appointed Enoch Kariuki,
Pharm.D., to the Board of Directors. Dr. Kariuki most recently
served as Chief Financial Officer at VelosBio and has over a decade
of experience in life sciences investment banking, strategic
advising and business development.
First Quarter 2021 Financial Results
- Cash and Marketable Securities Position: As of
March 31, 2021, Zentalis had cash, cash equivalents and
marketable securities of $298.4 million. Zentalis expects that its
existing cash, cash equivalents and marketable securities, which
includes the net proceeds of approximately $155.2 million from the
August 2020 follow-on offering, will enable the Company to fund its
operating expenses and capital expenditure requirements into
2023.
- Research and Development Expenses: Research
and development expenses for the three months ended March 31,
2021 were $38.4 million, compared to $13.3 million for the three
months ended March 31, 2020. The increase of $25.1 million was
primarily due to increases in external research and development
expenses related to our lead product candidates, as we advanced our
Phase 1/2 clinical trials for each of ZN-c5, ZN-c3, ZN-d5 and
ZN-e4. In addition, in the three months ended March 31, 2021,
we conducted additional preclinical studies, incurred additional
manufacturing costs, and incurred increased costs for study and lab
materials. Unallocated research and development expenses increased
by $14.0 million primarily due to $6.6 million of additional
employee related costs, of which $3.0 million was driven by
non-cash stock-based compensation from incentive grants and
increased headcount to support our platform development. Expenses
attributable to collaborations and strategic alliances increased by
$3.0 million while allocated expenses, including software, supplies
and insurance increased by $2.4 million and outside services
increased by $2.0 million to support our growth.
- General and Administrative Expenses: General
and administrative expenses for the three months ended
March 31, 2021 were $11.9 million, compared to $3.1 million
during the three months ended March 31, 2020. This increase of
$8.8 million was primarily attributable to an increase of $8.3
million in employee-related costs, of which $6.4 million was driven
by non-cash stock-based compensation from incentive grants, and
from increased headcount to support our growth. Consulting and
outside services increased by $0.7 million, and fees increased by
$0.3 million to support the increased operations of the
organization. Insurance costs increased by $0.7 million due to
operating as a public company offset by allocated expenses.
- Net Loss: Net loss was $50.4 million for three
months ended March 31, 2021, compared to $16.2 million for the
three months ended March 31, 2020. The increase of $34.2
million was primarily the result of the increases in research and
development and general and administrative expenses discussed
above.
- Impact from COVID-19
Pandemic: Though the impact of the COVID-19 pandemic to
our business and operating results presents additional uncertainty
and cannot be predicted with confidence, we continue to use the
best information available to inform our critical accounting
estimates.
About Zentalis Pharmaceuticals
Zentalis Pharmaceuticals, Inc. is a clinical-stage
biopharmaceutical company focused on discovering and developing
small molecule therapeutics targeting fundamental biological
pathways of cancers. The Company is developing a broad pipeline of
potentially best-in-class oncology candidates, all internally
discovered, which include ZN-c5, an oral selective estrogen
receptor degrader (SERD) for ER+/HER2- breast cancer, ZN-c3, a WEE1
inhibitor for advanced solid tumors, ZN-d5, a BCL-2 inhibitor for
hematologic malignancies, and ZN-e4, an EGFR inhibitor for
non-small cell lung carcinoma (NSCLC). Zentalis has licensed ZN-c5,
ZN-c3 and ZN-d5 to its majority-owned joint venture, Zentera
Therapeutics, to develop and commercialize these candidates in
China. Zentalis has operations in both New York and San Diego.
For more information, please visit www.zentalis.com. Follow
Zentalis on Twitter at @ZentalisP and on LinkedIn at
www.linkedin.com/company/zentalis-pharmaceuticals.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding our expectations surrounding the development, potential,
safety, efficacy, and regulatory and clinical progress of our
product candidates in the Unites States and globally, plans and
timing for the initiation of and the release of data from our
clinical trials and our ability to meet other key milestones,
activities in connection with our collaboration with Tempus, the
anticipated impact of the COVID-19 pandemic on our business and
operating results, our participation in upcoming events and
presentations, and the sufficiency of our cash and cash
equivalents. These statements are neither promises nor guarantees,
but involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to, the
following: the COVID-19 pandemic has adversely impacted and
may continue to adversely impact our business, including our
preclinical studies and clinical trials; our limited operating
history, which may make it difficult to evaluate our current
business and predict our future success and viability; we have and
expect to continue to incur significant losses; our need for
additional funding, which may not be available; our substantial
dependence on the success of our lead product candidate; failure to
identify additional product candidates and develop or commercialize
marketable products; the early stage of our development efforts;
potential unforeseen events during clinical trials could cause
delays or other adverse consequences; risks relating to the
regulatory approval process or ongoing regulatory obligations;
failure to obtain U.S. or international marketing approval; our
product candidates may cause serious adverse side effects;
inability to maintain our collaborations, or the failure of these
collaborations; our reliance on third parties; effects of
significant competition; the possibility of system failures or
security breaches; risks relating to intellectual property; our
ability to attract, retain and motivate qualified personnel; and
significant costs as a result of operating as a public company.
These and other important factors discussed under the caption “Risk
Factors” in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2021 filed with the U.S. Securities and Exchange
Commission (SEC) and our other filings with the SEC could cause
actual results to differ materially from those indicated by the
forward-looking statements made in this press release. Any such
forward-looking statements represent management’s estimates as of
the date of this press release. While we may elect to update such
forward-looking statements at some point in the future, we disclaim
any obligation to do so, even if subsequent events cause our views
to change.
Investor Contact:
Rebecca John
Solebury Trout
1.646.378.2935
rjohn@soleburytrout.com
Media Contact:
Julia Deutsch
Solebury Trout
1.646.378.2967
jdeutsch@soleburytrout.com
Zentalis Pharmaceuticals,
Inc.
Condensed Consolidated Statements of
Operations(Unaudited)(In
thousands, except per unit and per share amounts)
|
Three Months EndedMarch 31, |
|
2021 |
|
2020 |
Operating
Expenses |
|
|
|
Research and development |
$ |
38,394 |
|
|
|
$ |
13,258 |
|
|
General and administrative |
11,953 |
|
|
|
3,141 |
|
|
Total operating expenses |
50,347 |
|
|
|
16,399 |
|
|
Operating loss |
(50,347 |
) |
|
|
(16,399 |
) |
|
Other Income
(Expense) |
|
|
|
Interest income |
143 |
|
|
|
164 |
|
|
Other expense |
(44 |
) |
|
|
— |
|
|
Net loss before income taxes |
(50,248 |
) |
|
|
(16,235 |
) |
|
Income tax expense |
196 |
|
|
|
— |
|
|
Net loss |
(50,444 |
) |
|
|
(16,235 |
) |
|
Net loss attributable to
noncontrolling interests |
(543 |
) |
|
|
(109 |
) |
|
Net loss attributable to
Zentalis |
$ |
(49,901 |
) |
|
|
$ |
(16,126 |
) |
|
Net loss per common share
outstanding, basic and diluted |
$ |
(1.24 |
) |
|
|
— |
|
|
Net loss per Class A common
unit outstanding, basic and diluted |
— |
|
|
|
$ |
(2.88 |
) |
|
Common shares/units used in
computing net loss per share/Class A common unit, basic and
diluted |
40,359 |
|
|
|
5,601 |
|
|
Zentalis Pharmaceuticals, Inc.
Selected Condensed Consolidated Balance Sheet
Data(Unaudited)(In
thousands)
|
As of March 31, |
|
As of December 31, |
|
2021 |
|
2020 |
Cash, cash equivalents and marketable securities |
$ |
298,381 |
|
|
$ |
338,505 |
|
Working capital (1) |
273,557 |
|
|
316,503 |
|
Total assets |
328,353 |
|
|
365,555 |
|
Total liabilities |
35,715 |
|
|
32,178 |
|
Total Zentalis equity |
292,638 |
|
|
333,377 |
|
|
|
|
|
(1) The Company
defines working capital as current assets less current
liabilities. |
|
|
|
|
|
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