On November 9, 2020 Zentalis Pharmaceuticals, Inc. (Nasdaq: ZNTL), a clinical-stage biopharmaceutical company focused on discovering and developing small molecule therapeutics targeting fundamental biological pathways of cancers, reported financial results for the third quarter ended September 30, 2020, and highlighted recent corporate accomplishments (Press release, Zentalis Pharmaceuticals, NOV 9, 2020, View Source [SID1234570460]).
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"We are proud of the clinical progress we have made this quarter, making meaningful strides in the advancement of our broad oncology pipeline," commented Dr. Anthony Sun, Chairman and Chief Executive Officer of Zentalis. "In July, we announced positive topline results from the Phase 1 monotherapy dose escalation trial of our lead candidate, ZN-c5, with a clinical benefit rate of 40%. Based on this candidate’s favorable tolerability and encouraging anti-tumor activity, we are preparing to initiate the Phase 2 trial in patients with ER+/HER2- advanced breast cancer in the first half of 2021."
Continued Dr. Sun, "In addition to our multiple ongoing studies, we remain on track to initiate a Phase 1b trial of ZN-c5 and Verzenio (abemaciclib) in collaboration with Eli Lilly, as well as a Phase 1 combination trial with ZN-c3 and a chemotherapy agent before year-end. Supported by our recent financing, we maintain a strong position for sustained clinical and strategic growth and look forward to expanding the breadth of our pipeline with the hopes of bringing transformative cancer treatments to patients."
Program Highlights:
In July 2020, Zentalis announced positive topline results from the Phase 1 monotherapy dose escalation trial of ZN-c5 in patients with ER+/HER2- advanced breast cancer. ZN-c5 was well tolerated and showed preliminary efficacy, with a clinical benefit rate of 40%. The Company expects to initiate the Phase 2 monotherapy trial in the first half of 2021.
In July 2020, the Company entered into a clinical collaboration with Eli Lilly to evaluate the combination of ZN-c5, the Company’s oral selective estrogen receptor degrader (SERD) product candidate, and Verzenio (abemaciclib), Eli Lilly’s CDK4 and 6 inhibitor. Zentalis plans to initiate a Phase 1b open label, multicenter trial in patients with ER+/HER2- advanced breast cancer before year-end.
In September 2020, Zentalis hosted a virtual meeting with Key Opinion Leaders on its investigational WEE1 inhibitor, ZN-c3, and its potential for the treatment of advanced solid tumors. Currently, the Company is conducting a Phase 1/2 clinical trial of ZN-c3 in patients with advanced solid tumors and expects to report topline results from the Phase 1 portion of this trial in 2021.
Corporate Highlights:
In August 2020, Zentalis closed a follow-on offering of common stock resulting in gross proceeds of approximately $166.0 million.
In July 2020, the Company appointed Kimberly Blackwell, M.D., to the Board of Directors. Dr. Blackwell is the current Chief Medical Officer of Tempus, as well as a renowned breast cancer researcher who has made significant contributions to the biopharmaceutical industry for more than two decades.
In September 2020, Zentalis appointed Alexis Pinto, J.D., as Chief Legal Officer. Ms. Pinto joins Zentalis with over 20 years of legal and strategic business development experience in the healthcare industry, most recently at Celgene Corporation.
Third Quarter 2020 Financial Results
Cash and Marketable Securities Position: As of September 30, 2020, Zentalis had cash, cash equivalents and marketable securities of $367.4 million. Zentalis expects that its existing cash, cash equivalents and marketable securities, which includes the net proceeds of approximately $155.2 million from the 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 were $24.7 million in the third quarter of 2020, compared to $10.7 million for the same period in 2019. This increase of $14.0 million was primarily due to increases in external research and development expenses related to Zentalis’ lead product candidates, as the Company advanced its Phase 1/2 clinical trials for ZN-c5 and ZN-c3 and prepared for ZN-d5 development. In addition, in the three months ended September 30, 2020, the Company conducted additional preclinical studies, incurred additional manufacturing costs, and incurred increased costs for study and lab materials.
General and Administrative Expenses: General and administrative expenses were $10.1 million in the third quarter of 2020, compared to $1.8 million for the same period in 2019. This increase of $8.3 million was primarily attributable to an increase of $6.5 million in employee-related costs of which $5.0 million was driven by non-cash, stock-based compensation from incentive grants issued during the quarter and increased headcount to support growth. Professional service fees for legal, accounting and consulting services increased by $1.1 million to support the increased operations of the organization, and insurance costs increased by $0.7 million related to operating as a public company.
Net Loss: The Company’s net loss for the third quarter of 2020 was $34.7 million, compared to the net loss of $12.6 million for the same period in 2019.
Impact from COVID-19 Pandemic: The Company is continuing to monitor how the spread of the COVID-19 pandemic is affecting its employees, business, preclinical studies and clinical trials. The COVID-19 pandemic has caused disruptions to the Company’s development plans and research-stage programs, including delayed initiations, suspended enrollment at some clinical sites for new patients, and limited operations at its laboratory facilities. As a result, this pandemic may continue to impact Zentalis’ business, revenues, results of operations and financial condition.