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Zentalis Pharma: Charting A Way Forward

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Shares of Zentalis Pharmaceuticals Inc. (ZNTL) which touched an all-time of $61.29 on Dec.20, 2020, have since erased 20%, and are trading around $43 currently.

Zentalis is a clinical-stage biopharmaceutical company focused on discovering and developing small molecule therapeutics targeting fundamental biological pathways of cancers.

The lead candidate is ZN-c5, an oral selective estrogen receptor degrader (SERD), being developed for ER+/HER2-breast cancer.

The following are the ongoing trials with ZN-c5

-- A phase I/II clinical trial of ZN-c5 in patients with ER+/HER2- advanced or metastatic breast cancer as a monotherapy.
-- A phase Ib combination trial with ZN-c5 and Eli Lilly's Verzenio in ER+/HER2- advanced breast cancer.
-- A phase I/II combination trial with ZN-c5 and Pfizer's Ibrance in patients with ER+/HER2- advanced or metastatic breast cancer.

AstraZeneca's Faslodex, administered intramuscularly in the buttocks, is currently the only selective estrogen receptor degrader (SERD) that is approved for treating estrogen receptor (ER) positive advanced breast cancer.

The global annual sales of Faslodex were more than $1 billion in 2018, before generic versions of the drug entered the market. The worldwide sales of the drug were $580 million in 2020, down 35% compared to 2019.

Zentalis' ZN-c5 is designed to overcome some of the limitations of Faslodex, and the company sees a significant market potential for its oral SERD.

Up next is ZN-c3, an oral inhibitor of WEE1 in development for the treatment of advanced solid tumors. WEE1, a tyrosine kinase, is highly expressed and active in several cancer types.

The following are the ongoing trials with ZN-c3

-- A phase I/II study of ZN-c3 as a single agent and in combination with approved PARP inhibitors like Talzenna and Keytruda in patients with solid tumors.
-- A phase Ib combination trial of ZN-c3 with chemotherapy in ovarian cancer.

Initial clinical data from the phase I portion of the phase I/II monotherapy trial of ZN-c3 in advanced solid tumors is expected to be presented at the upcoming American Association for Cancer Research (AACR) Annual Meeting this month.

The company expects to initiate a phase II monotherapy trial of ZN-c3 in patients with Uterine Serous Carcinoma this year.

The other compounds that are in development include ZN-d5 and ZN-e4.

ZN-d5 is an oral selective inhibitor of B-cell lymphoma 2 (BCL-2) that is being initially developed for the treatment of hematologic malignancies. BCL-2 is a protein that plays a critical role in the regulation of cell death. The over expression of BCL-2 is frequently detected in numerous cancer types, which prevent apoptosis (programmed cell death) of cancer cells.

The following are the ongoing/planned trials with ZN-d5

-- A phase I trial of ZN-d5 as monotherapy in acute myeloid leukemia and Non-Hodgkin's lymphoma.
-- A phase Ib combination study of ZN-d5 with ZN-c5 in breast cancer is expected to be initiated this year.

AbbVie Inc.'s (ABBV) Venclexta, indicated for Chronic Lymphocytic Leukemia and Acute Myeloid Leukemia, is the only approved BCL2 inhibitor. The drug registered global net revenue of $1.34 billion for full year 2020, up 69% over 2019.

ZN-e4 is an oral, small molecule inhibitor of mutant epidermal growth factor receptor (EGFR) initially being developed for the treatment of non-small-cell lung carcinoma. EGFR regulates many cellular functions, including cell proliferation and survival, and is responsible for tumor growth in a number of cancers, including lung cancer.
AstraZeneca's Tagrisso is the only approved third-generation EGFR inhibitor and it is also associated with toxicities, including skin rashes, like the first- and second-generation inhibitors.

ZN-e4 is designed to achieve similar potency like current approved therapies but sans their drawbacks.

The following trial of ZN-e4 is underway

-- A phase I/II trial of ZN-e4 in patients with advanced non-small-cell lung carcinoma with activating EGFR mutations.

Looking to the Orient

Seeking to develop and commercialize its pipeline candidates in China, Zentera Pharma established a Shanghai-headquartered biopharma venture by the name Zentera Therapeutics last May.

Zentera Therapeutics 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.

Balance Sheet

The company's net loss for the full year 2020 widened to $118.5 million from $46.4 million for the same period in 2019. Being a clinical-stage company, no revenue has been generated to date.

As of December 31, 2020, Zentalis had cash, cash equivalents and marketable securities of $338.5 million. The cash on hand is expected to be sufficient to fund operating expenses and capital expenditure requirements into 2023.

Zentalis made its debut on the Nasdaq Global Market on April 3, 2020, offering its shares at a price of $18.00 each. ZNTL has thus far hit a low of $22.00 and a high of $61.29. The stock closed yesterday's (Mar.31, 2021) trading at $43.39, up 7.64%.

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