On March 25, 2021 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 fourth quarter and full year ended December 31, 2020 and highlighted recent corporate accomplishments (Press release, Zentalis Pharmaceuticals, MAR 25, 2021, View Source [SID1234577192]).

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"2020 was a pivotal year for Zentalis, marked by the advancement of our broad pipeline, multiple clinical and strategic collaborations, as well as successful public offerings," commented Dr. Anthony Sun, Chairman and Chief Executive Officer of Zentalis. "With the initiation of numerous studies at the end of 2020, our internally discovered candidates are now being investigated in a combined total of seven ongoing clinical trials, further exploring their potential to address a range of cancers. We believe our collaborations with global innovators in the biopharmaceutical and technology industries provide us with the resources needed to evaluate the full potential of our differentiated product candidates in the clinic as both monotherapies and in combinations."

Continued Dr. Sun, "Looking to the year ahead, we are strongly positioned to reach our upcoming milestones, starting with our late-breaker presentation discussing data from the Phase 1 portion of the Phase 1/2 monotherapy trial of ZN-c3 at AACR (Free AACR Whitepaper) in April. This readout, along with results from our other ongoing trials investigating ZN-c5, ZN-d5 and ZN-e4, is expected to deliver important insights into our clinical and regulatory strategies as we advance our objective of bringing improved therapies to cancer patients in need."

Program Highlights:

Zentalis initiated patient dosing in three combination and monotherapy clinical trials, which included a Phase 1b combination trial with ZN-c5 and abemaciclib (marketed as Verzenio by Eli Lilly) in ER+/HER2- advanced breast cancer, a Phase 1 combination dose escalation trial with ZN-c3 and chemotherapy in advanced ovarian cancer and a Phase 1 trial with ZN-d5 in acute myeloid leukemia and Non-Hodgkin’s lymphoma. Each trial will assess the safety, tolerability and pharmacokinetics of the respective candidate.

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 initially aim to validate Zentalis’ WEE1 inhibitor, ZN-c3, and its DNA damage response pathway in genetically distinct patient populations.

Three abstracts, including a late-breaker oral presentation on ZN-c3, were accepted for presentation at the upcoming American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2021. Zentalis expects to report clinical data from the Phase 1 portion of its Phase 1/2 monotherapy trial of ZN-c3 in advanced solid tumors.

Zentera Therapeutics, Zentalis’ majority-owned joint venture, submitted two IND applications in China for ZN-c5 and ZN-c3 in December 2020 and February 2021, respectively. A third IND application for ZN-d5 is expected to be submitted in 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.
Fourth Quarter and Full Year 2020 Financial Results

Cash and Marketable Securities Position: As of December 31, 2020, Zentalis had cash, cash equivalents and marketable securities of $338.5 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 were $29.5 million in the fourth quarter of 2020, compared to $11.9 million for the same period in 2019. This increase of $17.6 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 investigating ZN-c5, ZN-c3 and ZN-d5 in 2020. In addition, in 2020 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 $10.2 million primarily due to $5.3 million of additional employee related costs, of which $2.6 million was driven by non-cash stock-based compensation from incentive grants and increased headcount to support our platform development, $1.6 million of facilities and other allocated overhead expenses, $3.0 million of consulting, supplies and outside services, and decreased federal grant reimbursements of $0.3 million.
Research and development expenses for the full year were $84.9 million, compared with $38.4 million in 2019.

General and Administrative Expenses: General and administrative expenses for the fourth quarter were $10.7 million, compared to $3.0 million for the same period in 2019. This increase of $7.7 million was primarily attributable to an increase of $7.3 million in employee-related costs, of which $5.1 million was driven by non-cash stock-based compensation from incentive grants issued during the year and increased headcount to support our growth. The remaining increase in spend was primarily driven by professional service fees for legal services of $0.6 million, consulting and other outside services of $0.7 million, and insurance costs of $0.6 million, which were offset by allocated overhead expenses.
General and administrative expenses for the full year were $33.9 million, compared with $8.5 million in 2019.

Net Loss: The Company’s net loss for the fourth quarter of 2020 was $40.4 million, compared to a net loss of $14.5 million for the same period in 2019.
The Company’s net loss for the full year 2020 was $118.5 million, compared to a net loss of $46.4 million for the same period in 2019.

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.