Zentalis Pharmaceuticals, Inc. (ZNTL) Earnings Call Transcript & Summary

Thank you. Thank you. Thank you. All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Goltz, one of the biotech analysts here, and it's my pleasure to introduce the team from Zentalis. We have Julie Eastland, CEO, to my left, and to her left is Ingmar Bruns, CMO. And just a reminder, the format is a fireside talk. So if anyone in the audience has a question, please raise your hand and we'll try to address it in our discussion. But before we get started, I just need to read a quick disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. Please reach out to your Morgan Stanley sales representative. And with that, maybe I'll just hand it over to Julie for some brief introductory remarks, and then we can hop into Q&A.

Thanks, Mike. As always, we really appreciate the invite and the time. And just to go toe-to-toe for disclosures, since that seems to be the flavor, I would hate to be remiss in reminding the audience that we will be making estimates and forward-looking statements, and so there are risks and uncertainties associated with those and we encourage those listening to review our SEC filings. Now we both are squared away with our lawyers.

We did our duty here. Yeah. Maybe you just want to give a brief introduction to Zentalis and kind of at a high level, and then we can maybe start digging in a little bit.

Absolutely. Yes, absolutely, would love to. So Zentalis is a late-stage clinical development company focused on developing Zenocertib, which is a WEE1 inhibitor, it's a small molecule. Our focus is in platinum-resistant ovarian cancer (P-ROC) for patients who express high levels of a protein called cyclin E1. We are currently conducting the Denali trial. Part 2 of that trial is a trial intended to be registrational for an accelerated approval pathway in the U.S. And in addition to that, we are also enrolling our Aspenova trial, which is the companion trial, which is a randomized controlled trial, which supports accelerated approval but also converts to a global full approval. So very busy. We also are expanding in some earlier lines of ovarian, doing some proof of combination studies there that we're happy to talk about. And then very interested in furthering the development of Zenocertib and other combination and other tumor types, and all focused with the intent to bring the drug to as many patients as possible.

Great, and thanks for that introduction. And maybe since your initial focus is on ovarian cancer, more in the late line setting, but maybe just paint the picture for us in the ovarian cancer landscape, how it's been evolving, where the competitors are, et cetera.

Sure. It's an exciting space, exciting for patients, but also for drug developers, because a lot of new opportunities. I think overall when you kind of think about the totality of the work that's being done, it's really around targeted therapies. And in our case around biomarker selected, patient population where there is a high unmet need. Probably higher unmet need given the cyclin E1 patients, certainly in the P-ROC setting, typically don't do as well, progress faster, so no targeted therapies for these patients, cyclin E1 patients in the platinum resistance space. We think there's a clear advantage for a different modality. Zenocertib is an oral. It is not a chemotherapeutic agent, which is primarily, if not all, that's available to patients. And again, it's for this important biologically different selected population. So a real advantage, we think, compared to maybe some other targeted agents that are coming along.

And I guess the biomarker selected approach, maybe just talk about the unmet need. And you mentioned it's not chemo, obviously, so what are some of the advantages there?

Yes. So I think, Ingmar, do you want to talk about the characteristics of Zenocertib then, compared to chemo? I think that would be helpful.

Ingmar. Yeah, no, happy to. Yes, so I mean, compared to most of the available chemotherapies out there, it is an oral therapy. Some oral chemotherapies out there, but not many. Right. And, you know, it is differentiated due to its five on two off schedule, which is part of the, as we see, good tolerability. And in terms of safety, it really is differentiated due to a lower rate of cytopenias, namely neutropenia. Other side effects include GI toxicities, but also to a lower degree. And then the third group of side effects fatigue. For those overall, it's providing additional flexibility due to the oral route of administration. It is due to its, you know, schedule has been developed across a large number of patients, actually over 1,000 now, very well tolerated, yet efficacious. And it is from, you know, primarily single-agent chemotherapy, well differentiated in terms of its toxicity profile, but also from the emerging players like ADCs or taxane regimen.

And maybe just from a patient journey perspective to kind of understand how patients really see a lot of chemotherapy in the early P-ROC settings. And for cyclin E1 patients in particular, they tend to move through therapies in a more rapid fashion. And so as they come into the platinum resistance setting, their choices are chemotherapy. And obviously, they've built up cumulative toxicities around neuropathies. Women experience hair loss. Another, you know, a number of chemotherapy-like compounding issues. So really looking for an alternative to some of those toxicities as a break in the P-ROC setting because currently standard of care is either taxane-based or other chemotherapy-based options for patients. So not great choices.

Yeah. And just in the P-ROC selected patient population, can you give us an idea of the size of that, you know, relative to P-ROC?

Yeah, absolutely. So we've seen in our historical studies about 50% of our patients that we've looked at retrospectively screened for high cyclin E1 protein. So we expect about 50% of the P-ROC population to be available. That represents about 20,000 patients across the U.S., EU5, UK, and Japan, so a pretty sizable market. And we expect to see about 50% of that as an opportunity for the cyclin E1 patients.

Great. And we'll move more to ovarian, but just also you mentioned previously other ways to sort of move upstream, maybe combinations, maybe other indications as well. So maybe just talk about beyond P-ROC, what are the opportunities you're considering?

Yes, I think we've said very clearly our strategic focus has been to utilize our capital resources to get this agent to patients with platinum resistant ovarian cancer first. Our second dollar goes to earlier ovarian. That's currently a POC trial, concept trial, in second line maintenance. That's the combination of Zenocertib plus bevacizumab. These are patients who had progressed while on a PARP inhibitor in the earlier first line setting. They come into the second line setting and they get into maintenance with bevacizumab as their choice. We're adding Zenocertib on that and able to really see the safety combination is the goal as well as see some additional activity with regards to improvement in PFS. That would be kind of a proof of concept data set that would allow us to really expand into a broader first and second line setting for the agent. And then separately, we have some really exciting data at AACR around triple negative breast cancer in combination with ADCs with different payloads, as well as with, you know, single agent taxane. And that was, of course, in PDX models as preclinical models. But again, really sort of proof of concept showing the benefit of Zenocertib in the face of cytotoxic agents, whether that's a single agent chemotherapy or whether that is ADCs, that we'd like to see to extend that to the clinic, as well as I think Ingmar can certainly talk about other tumor types that he's super excited about. Make some decisions about where we go next outside of ovarian shortly. We plan to, as this has always been the promise of a WEE1 inhibitor, to be single agent, but also a good combination partner with cytotoxic agents across multiple different tumor types. So, P-ROC's the beginning, not the end of the story.

I don't know if, Ingmar, you want to talk a little bit about where you might go post-Ovarian, or what are some of the concerns?

As you think about that decision? Yes, I think there's several factors that, you know, of course, lead that decision. And one of them is, of course, biology mechanism. So that's certainly a big part of the process. Present in disease with p53 loss right or mutation so it's really We've some interesting data in triple negative breast cancer. You know, there's certainly p53 mutation in a large proportion of patients to be found there. But we're also, you know, excited in HPV-driven disease to just name a few is all early days. Make decisions here, but that's certainly an exciting space where we think biology will lead the way. And that's even indication agnostic, right, if you look at HPV disease in particular. And then, of course, the other factor would be combination partners, so if you look at those with extreme extensive replication stress, right? So, you know, of course there's, you know, comes to mind first, of course, ADCs and topo one payloads, of course, create a great deal of replication stress here. So those are certainly interesting combination partners. And then lastly, of course, it's a little bit around the setting, right, so I think it makes sense to start where we already developed a footprint now in gynecological oncology or some adjacent indications, right, also looking towards commercialization, right, where you build the, you know, strategic capabilities and even sales force, et cetera, So, ranking highest is probably the biology and the mechanistic differentiation here.

Yep, makes sense. Maybe we can shift now back to ovarian and Ingmar, you gave a little bit of a preview of the profile that we've seen so far across a number of studies. Julie, you mentioned the dosing, so maybe just talk a little bit about, you know, how you're dosing the drug now versus, you know, how you dosed it in the past and what gives you confidence there?

Yeah, so, um, we. As we have disclosed, we selected a dose, right, and we have determined pre-dose, pre-dose previously already that the five on two off schedule is most favorable. That's really the best combination of, by the way, not an uncommon schedule, but the best combination of really the exposure that we want and the tolerability that we also desire at the same time. And I think if we look at our relative dosing intensity, we see that this is very high, and over the many and long efforts to determine the right schedule and dose here, this has been well established. All of this is now in the Denali trial, which again is a three-part seamless design were, you know, initially was the original, the dose escalation, but then part 1B was a retrospective biomarker analysis at 400 milligrams, and then importantly, part 2A, which we have uh press released, was the dose confirmation between 300 and 400 milligrams. So we decided to move forward with 400 milligrams of the five on two off schedule, and 2B is now the expansion, and the latest addition is Core 2C, where we really want to account for the real-world treatment paradigm or the emerging real-world treatment paradigm. We already had patients into A and B, even 1B that were also treated with Taxane regimens while in the P-ROC stage already.

And with the addition of 2C, maybe talk about impact it's had on timelines, and then also talk about how it impacts the analysis of the primary endpoint.

Yes, I'll take the first part, and I'll have Ingmar address any impacts to the study. But importantly, this does represent patients who have an opportunity to experience the agents that are approved today. And A and B, as Ingmar pointed out in the Denali Part 2 trial, have been enrolling since 2025. And so, of course, those patients are enrollment is complete in parts A and B. And so that data is maturing. Cohort 2C, which Ingmar just addressed, is currently enrolling, and so in order to allow that cohort to enroll, to follow for the primary endpoint of overall response, and to let let those patients develop a little bit of the secondary endpoints around duration of response. Collectively, because all three parts will be an integrated analysis to support accelerated approval, to allow Part 2C to kind of catch up on the duration. So instead of parsing out data, we're going to shift to the first half of next year so we have a whole answer and not just part of an answer.

Makes sense. Do you want to talk a little bit about impacts on 2C at all to the study endpoint?

Yes, so we don't expect any particular impact, right, because we think that, the setting in 2C, patients will perform similar to what we've seen in prior studies to A and B. There's no mechanistic reason to believe that they, you know, perform differently, if at all, then, you know, might perform better, but no concerns on inferior response rate or durability here.

Can we go back to the Phase 2 update earlier this year? You didn't give us too many specifics on the details, but you did give us a flavor of what you saw, so maybe if you can just characterize that for us.

Yes, I think we can reiterate that just before you do, Ingmar, that this is a blinded trial. So unfortunately, data details aren't going to be available until we complete the study, so that we don't set ourselves back. And with that, we can sort of reiterate the 2A sort of disclosures. A little bit to glean there.

Yeah, that's obviously correct, but the I think it was a decision that was based on efficacy, right, where we said it's very clearly differentiated and, I would think about this in the magnitudes that we've observed before. We already said that it's very consistent across trials, so it's really a meaningful difference that is beyond doubt in favor of 400 milligrams, while the tolerability and has been broadly comparable. So again, this decision was based on efficacy, not not on the safety or tolerability profile.

And just as a reminder, 2A was the dose comparison of 300 to 400, as Ingmar mentioned. We also disclosed at that time that, in addition to what Ingmar said about efficacy and tolerability between the two doses, that in addition to that, you know, we had seen a discontinuation rate that was about half of what we had seen in Part 1B of Denali. Had not seen any grade 5 treatment related events in our data set. And so we wanted to provide a readout that the trial can be enrolled, that we can select a dose, and that we can keep patients on trial.

Makes sense. And you also shared that update with the FDA, so maybe you can just talk about some feedback you've gotten or what you learned in that conversation.