Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Gold, one of the biotech analysts here, and it's my pleasure to introduce Julie Eastland, CEO to my immediate right, and Ingmar Bruns, CMO to the far right from Zentalis Pharmaceuticals. Before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/research-disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Julie, maybe I'll turn it over to you just to make a couple introductory comments, maybe for people who are less familiar with your story. Then we can hop into the Q&A.
Thank you. Thank you for having us. We always appreciate the opportunity to talk about Zentalis. Zentalis, for those of you who may not be familiar with it, is a small molecule oncology company focused first and foremost with our lead asset azenosertib in ovarian cancer. We'll talk more about where that is positioned and why we think that that's unique. This is certainly a great opportunity for patients in this setting, which have few options, to have a really novel approach. We'll talk more about that. I'm grateful to be here with my Chief Medical Officer, Ingmar Bruns. Zentalis is currently on a mission, and Ingmar can talk a little more about this, to develop azenosertib in registration trials. We're currently enrolling our Denali trial. This is a registration-intent study focused in platinum-resistant ovarian cancer, as I mentioned, for patients who have cyclin E1 protein overexpression.
This will be a trial that we are setting our sights on for accelerated approval, which will also be accompanied, of course, by a phase 3 confirmatory randomized trial.
Great. Thanks for that introduction. You've only been at Zentalis for less than a year now. I think you joined last November and came in and provided a clear path for the company and strategy. Maybe just talk about when you first joined, what was your focus on and how you ended up getting to this clear path forward.
Yeah, thanks. I think the company has done an amazing job of looking at azenosertib in a number of settings, and that continues today. The pipeline was full, and the company really needed to determine which lane they were going to go down to bring azenosertib to market. I think it was relatively straightforward because there's just a large body of data that's been developed around azenosertib, in particular in the platinum-resistant ovarian cancer. We see this as an opportunity that's very broad beyond the initial setting. We certainly saw a very clear path in terms of the clinical data that had been developed at the company over time. That data was very supportive of moving forward into registration-intent trials.
I think from a perspective of what do you focus on and how do you allocate capital, to me, it was very clear this was an opportunity to really get a foothold here for azenosertib in ovarian cancer and then continue to expand and look for other indications as we finished up some ongoing trials. That was straightforward to me. Ingmar joined with me, along with a couple other folks, our Chief Business Officer, Haibo Wang, as well as our HR person, who are folks we had worked with in the past. We think we all saw the same vision and the opportunity for azenosertib. It just needed focus, and it needed trial management. I think Ingmar saw the same opportunity that I did.
Yes. You mentioned sort of a breadth of a lot of data you had to sort through. Earlier this year in January, you gave a very comprehensive update across the program. Maybe just if you can walk us through some of the key highlights there, and then we can dig in a little more.
I'll just set the stage and let Ingmar talk about the data. In January, the company did present in a webcast the data from three studies. These are all single-agent arms of the trial. There was a 001 dose escalation trial that determined both dose and schedule in both two active doses of azenosertib in a schedule of five days on, two days off. There was the Mammoth trial, which was a trial that looked at a combination in PARPs as well as single-agent as an opposed PARP. The last trial was the Denali trial, which is the multipart trial. In part 1B of Denali, we enrolled 102 patients at the 400 milligram dose, all patients with platinum-resistant ovarian cancer.
In all of these studies, we looked retrospectively at patients' tumor blocks and samples to look for their levels of cyclin E1 protein expression, which we believe and have turned out to be an important marker for these patients and correlates highly to current meaningful clinical outcomes of azenosertib. Do you want to talk a little bit about the data, Ingmar?
Yeah, I think we're particularly intrigued by the fact that Julie mentioned the integrated analysis across those studies, that they were somewhat independent in terms of site participation and also time. The results, the response rates, and also the durability of response that we saw were very consistent, which in many ways is reassuring. Coming to Denali part 1, Julie already mentioned the 102 patients that were biomarker analyzed retrospectively. The latest data cut presented was at the SGO meeting earlier this year. There, the response rate was close to 35% with impressive durability of 6.3 months. This is still subject to change based on that data cut because there are active patients on the trial. Those are the Denali data in particular with a very manageable safety and tolerability profile.
I think just to add one point there, important data in the setting of standard of care, which is single-agent chemotherapy. Patients have had chemotherapy and other agents coming into the setting. Right now, the current offering for standard of care is single-agent chemo, which offers patients pretty low response rates from 4% to 13% and short duration. The data that Ingmar describes is a significant improvement for patients.
Yeah, no, definitely meaningful improvement there for sure. Maybe just talk about dosing a little bit. I know in the past, there's sort of been continuous dosing and then intermittent dosing. Maybe talk about how you got to your sort of selected dose.
Sure. Go ahead, Ingmar.
Yeah, so the dose selection happened in the original dose selection trial, the 01 trial that Julie briefly mentioned, including different schedules. The five on, two off intermittent schedule just turned out to be the best combination of exposure, efficacy, and then tolerability here. Going forward for part 1B of Denali, 400 milligram, the intermittent five on, two off schedule was chosen as the go-forward dose. We consider this also the primary dose of interest, right, because there's a correlation between exposure and response. What wasn't done in part 1B is the direct comparison with a lower dose. We all know that's necessary these days with the FDA's Project Optimus.
The data that we have gathered on the intermittent schedule, five on, two off for 300, were from other trials, those that Julie already mentioned, including Mammoth, the trial in PARP inhibitor resistant patients, as well as the original dose escalation trial. It's a cross-trial comparison and a relatively small number. The 300 milligram patients are more heavily pretreated as well. It's not really an apples-to-apples comparison. For that reason, we're grateful to do the comparison as well and staying focused on the 400 milligram five on, two off. Here now, we will certainly investigate in a prospective and randomized fashion.
Great. You're selecting the patients, cyclin E positive patients with the biomarker. Maybe just talk a little bit about the advantages of using that approach and what you've seen in the data. Yeah, so we've seen clearly, as Julie already mentioned, that this is predictive of response, right?
If we look at the overall population, there's a more than 10% difference in the response rate if we do the biomarker enrichment. We now, in part 2 of the Denali trial, do it prospectively, right? The part 1, as mentioned, was retrospective enrichment and with the proprietary cutoff of Zentalis. Gotcha.
Just on Denali part 1, maybe just talk about the patient population you enrolled there and what impact it had on the study in your view.
Yeah, part 1 was a PROC population with one to five prior lines of treatment. It was a biomarker unselected population with just the requirement of submitting tissue for retrospective analysis, as already said. The difference to part 2 is that the patients only have one to three prior lines of treatment. A lot less pretreatment in case of folate receptor alpha positivity than they are required to reserve mervituximab were available and reimbursed. Overall, this is, of course, a less heavily pretreated population.
Gotcha.
Maybe you can expand a little bit on the safety profile you observed in part 1. The discontinuation rate was a little bit higher than what we saw previously. Maybe talk a little bit about that and how you can mitigate that moving forward.
Yeah, happy to. You already said it, right? That was a bit of an outlier compared to the other studies we saw where the discontinuation rate was kind of where you would expect it for this drug class and for an oncology drug in general. There are a couple of reasons for this, right? Part of it is how the database was built and that every patient that basically discontinued and also had an AE of any grade was considered a discontinuation due to AE.
If you really look at the protocol algorithm for discontinuations, you have a repeated grade 4 event or a grade 4 event or repeated grade 3 event after dose reduction, then the rate is much lower and in line with prior studies like Mammoth and the 01 trial. That's one thing. We're confident that this is really a technicality as well. We also put several measures in place to ensure that this is not as high. Julie already alluded to it. There is more guidance in the protocol on how to deal with the key classes of side effects. Those are cytopenias, but even the high-grade ones were grade 3. This is, of course, something that we'll pay attention to, but this doesn't initially limit the patient. I think the most dominant class is GI toxicities.
There is extensive guidance now in the protocol for the investigators on how to deal with these adverse events and also the use of supportive care. Coming back to the cytopenias, we introduced the use of GCHF early. Last but not least, there is a really different approach to trial management and site management with really kind of high-touch interactions. You may wonder, OK, why is that necessary if this is a manageable safety profile? As with many drugs that have a relatively narrow therapeutic index, the prescribers and the providers learn over time, of course, as you go along in your development chain and then go towards launch. Once the drug really is broadly available, there is also an education process that has happened and people have learned to manage the drug then.
This is a small molecule orally available opportunity for patients, a non-chemo option. In the space, that's really sort of a new novel approach. I think physicians will understand and learn how to manage that when they're typically seeing patients either from a surgery perspective or seeing patients from an infusion center perspective. There is an opportunity, like there is with all therapeutics, to really help educate, manage, and support physicians and patients in this development period so that there really is a successful commercial launch in a broader space.
How much overlap is there between sort of the part 1 and part 2 sort of centers that are enrolling?
Yeah, there's a complete overlap. It's just that part 2 is going to expand the number of sites.
Gotcha. Maybe in the past, you were on clinical hold for a brief period of time. Maybe just remind us what triggered that and what the conclusion was there.
Yeah, so we looked at these cases, of course, when we came in. I think a couple of things that are important. Number one is that there weren't a lot of agency contacts in the past and a very large body of data with close to 800 patients across doses and combinations. There were these two deaths where the company, rightfully so, erred on the side of caution and considered them related to azenosertib. At the same time, if you look at these cases, you could also see alternative explanations for that. Of course, we want to be careful because we're talking about patients here.
That's what the company did, and it's the right decision to make. The U.S. Food and Drug Administration, and that's important to us, was important to us when we did our initial diligence, which seems really, in my experience, a rare event that they looked at the entirety of the data and then they asked no changes in protocol in terms of dose and schedule. There's really, after review, a lot of confidence in the drug and the program and, in particular, the safety profile. It was really a bit of an unfortunate situation, of course, unfortunate for those patients and sad that this happened, but unfortunate in the sense that the communication was really lacking and the interactions were lacking, though, in spite of accumulating so much data. There was a little bit of visibility there for the agency.
I think it was one of the reasons that triggered it.
I think also for the market in general, understanding the rationale behind it and that the agency was to the hold without change in dose or schedule. These are communications that I think were important to be made. Those are messages that we're happy to share today and bring forward. The agent's profile still remains a novel profile and a manageable side effect profile as well. In fact, compared to other WEE1 inhibitors, for example, ADAVA, looking at the IGNITE trial, you see a very favorable tolerability profile with the Zeno, which was really the sort of the basis and the thesis of the design of the molecule having fewer off-target kinase hits.
Makes sense. Maybe we can just switch now to sort of Denali phase 2. There are two parts there, so maybe just walk us through the design a little bit.
Yeah, so there's the, as already discussed, the original part 1B that was the 400 milligram with retrospective biomarker analysis for cyclin E1. We talked a little bit about the patient profile, one to five prior lines in the platinum-resistant setting. There are parts 2A or part 2 in general, which consists of two parts, 2A and 2B. Part 2A is basically the prospective dose confirmation. That's between 300 milligram and 400 milligram, both five on, two off, and they're randomized. Each arm is 30 patients. There's an opportunity for an earlier look as an interim. We'll confirm the dose with the U.S. Food and Drug Administration. It's also seamless design, so we'll continue to enroll into both arms while we confirm the dose and have that meeting with the agency.
We'll continue additional patients into 2B to get to a registrational trial size of about 100, a little over 100. There will be more patients than 100 because we're kind of continuously enrolling to not stall the trial.
Can you talk about what parts of the design so far that you have sort of feedback and agreement with the U.S. Food and Drug Administration (FDA)?
The entirety of the trial, right, and that's something that we're very happy about, that early on they confirmed the design, right? There is alignment with the design. That's not a small thing these days, right, as you know, because there's Project Front Runner, right? Generally, the U.S. Food and Drug Administration's guidance is towards doing this in randomized control trials. We've seen in the first half of 2025 alone a lot of single-arm approvals in phase 2 based on phase 2 accelerated approvals. They agreed to this design as just outlined. There is a confirmatory trial that needs to be largely enrolled at the time of the filing, right, which we'll plan in the same patient population.
Yeah. Can you just maybe talk a little bit about the status of 2A and how that's going versus your expectations in terms of enrollment?
Yeah, it's very active. I think we're on track with regard to the guidance here and updates.
We'll have guidance. We still expect top line data at the end of 2026. Denali, generally speaking, in part 2A, is on track.
Very good. In terms of disclosure, you know part 2A versus part 2B, you know what should we expect when 2A is completed or any kind of communication around that?
I think, and you can fill in, but they, you know part 2A and part 2B is really all part of one data set. At the selected doses, Ingmar mentioned, the totality of those patients will be part of the registration package. Once we've confirmed the dose and had alignment with the agency, we'll continue to enroll. We will not be planning to share data regarding the dose comparison. However, we will be able to share that we've selected a dose and that will be ongoing should the data support that. I think we will have a discussion around the dose selection, but it won't be at a clinical data level. We'll save that for the top line data at the end of 2026.
That's a meaningful update, right, because it's, you know, in addition to, of course, the Zentalis team, there's also an IDMC involved. Basically, if you hear that the dose has been selected and the trial goes forward, then it, of course, means there wasn't futility, which we don't expect. There's also positive news in terms of the tolerability and efficacy of the trial.
Makes sense.
Maybe just talk a little bit about what you think the bar is for accelerated approval for part 2B.
Yeah, we think it is around maybe a little bit below the data that we just shared that I mentioned earlier for part 1B in a more heavily pretreated population in that case. I think the bar is around, if it comes to response rate, 30%. Of course, it statistically will look at confidence intervals of excluding single-agent chemotherapy activity, which is not a particularly high bar. I think supportive data will be duration of response. Of course, you need to get somewhere in this five, five and a half to six months, which we exceeded in the past. There is certainly some expectation to see higher activity, higher efficacy due to the fewer lines of pretreatment. We've shared past small post-hoc analysis with all the caveats of small numbers. If you have fewer lines of treatment, certainly it doesn't work with DOR yet because of the small sample sizes.
The response rate goes up, right, with fewer lines of treatment. We're positive in that regard.
Gotcha. You mentioned also just a confirmatory study. I think you're planning to start that at some point next year. Maybe talk a little bit about your current thinking in terms of the design. Is there any other data you're sort of waiting for to sort of help inform that?
No, it will be important to start the study so it is largely enrolled at the time of the filing for the accelerated approval. We will actually see this as a combined data set. What you normally do is filing blinded data from the phase 3, even with your accelerated approval. We don't see these as completely separate entities, but actually combined. I think as it makes a lot of sense, it's to use the same patient population because that's the ultimate de-risking. Of course, your phase 2 data then translate into the phase 3. We're choosing the same patient population with one to three prior lines and one to four in case of folate receptor alpha positivity. The design is going to be a randomized control design, of course, with still standard of care single-agent chemotherapy, which we believe still holds largely, right, as investigators' choice chemotherapy.
We don't really see a gating event other than, of course, alignment with the FDA, which we plan on seeking this year, so that we can be prepared to start that enrollment in 2026.
Maybe you could talk a little bit about the market opportunity in sort of the cyclin E1 protein overexpression platinum-resistant ovarian cancer setting and sort of where you can fit in.
Right. I think this is a great opportunity to also help people understand that the biomarker selected population is around the protein expression level. There are many drivers of cyclin E1 protein expression beyond CCNE1 gene amplification. That's part of the story. Even patients with non-amplified status can have high protein expression and have shown to have meaningful responses to azenosertib. We presented that data at the SGO conference where we looked at responses for cyclin E1 protein expression with CCNE1 amp was either up or down. We see responses across the board. Other drivers of cyclin E1 then are other transcription factors, potential protein that doesn't degrade. What's important is really to look at those protein expression levels. In that setting, we see about 50% of the PROC population having an opportunity to be subject to and benefit from azenosertib. That's about 50% of that market.
It's about 21,500 patients. That's pretty significant when you think about correlates in the setting of other biomarker-directed therapies like mirvetuximab for folate receptor alpha high, which has about an opportunity of 35% of the PROC setting and has seen really market and successful uptake, which really describes the excitement for physicians and patients to have these biomarker selected opportunities. Quite a large opportunity in this first setting for azenosertib. Of course, we think opportunities beyond this market for the agents in earlier lines of ovarian or potentially in other tumor types.
Yeah, I wanted to ask what other sort of tumor types are you potentially considering?
We want as a master regulator. You could think about really combining azenosertib in a broad way outside of ovarian, wherever you might see other agents that are combinable with a small molecule. We think there are interesting opportunities broadly. A little more close to home, of course, earlier lines of ovarian cancer is probably the closest in terms of the concentric circle to what we're doing first off. In our 002 study, we're looking at a combination of azenosertib plus bevacizumab in terms of a dose escalation combination there. We'll look to explore other ways to expand in ovarian. In addition to that, there are currently a couple of investigator-sponsored studies that are ongoing that have really just started early. Some of those are in HER2 positive mediated tumors.
We'll see sort of a broad combination with standard of care in that setting and then also in triple negative breast. Of course, we currently have completed enrollment in our TTON trial, which is in USC. That is an indication that is obviously important, but a smaller indication and one in which we'll share data in the first half of next year. That's been our projection to have that data available. If we see interesting signals, we may look to see if there's a way to move forward in that setting. I think importantly, I want to be crystal clear, stay true to our focus. We came in in November and said dollar number one is going to take azenosertib into PROC patients to get to the market. Dollar number two is going to complete these other studies. We really want to remain focused on what our initial drive is.
If there's additional capital resources and opportunity to explore in combination in other settings, like we'd love to think about doing combinations with ADCs because we presented preclinical data with TOCA-1 and the microtubule inhibitors from preclinical data that really showed a synergy there. We'd love to find a way to continue to explore those opportunities for azenosertib beyond PROC.
You mentioned the TTON data first half of next year. How do you think about the bar there in terms of what you need to do to sort of move forward or not?
The landscape there has changed. I think we'll have to see how the data develops and where it compares in today's current environment and see what makes sense. I'm not going to, I don't have something to sort of predispose it. We'll see what the data looks like and go from there.
Yeah, no, it makes complete sense. You talked about capital resources, but maybe just touch on your current cash position and runway and sort of what that covers in your plan. The bar.
Yeah, sure. It was a very intentional reorganization, restructuring at the beginning of the year to ensure that we had the capital to get to accelerated approval with a runway into late 2027, so a sort of significant runway beyond a pivotal data point. At the end of Q2, we reported that we had cash equivalents and marketable securities of $303 million, again to extend our runway until late 2027.
Okay, great. Maybe last couple of minutes here, I could ask a couple of just macro questions. It's something we've been asking all our companies at the conference. Maybe two questions. The first one, just with China's rise in biotech innovation, how are you thinking about your competitive positioning here? Will this influence your R&D or BD strategies?
I think for a lot of companies that probably will. I think for us right now with our focus on registration-intent trials, and you know it's already going to be a phase 3 that will likely be a global study, that will probably not tackle China on our own right now. I think that the innovation coming out of China is a future opportunity for the company. I think it's a future opportunity for a lot of companies, but it doesn't really impact us in the short term. Ingmar, do you have any thoughts you want to add?
Yeah, no, I do agree, right? This, given the very focused effort here and given late-stage development, I think it's less relevant. I can, of course, see this if you're a platform company or in earlier stages similar to what Julie just said.
Yep.
Okay. Maybe second macro question, you know, just what has been most impactful for you from the regulatory side? Would it be changes at the U.S. Food and Drug Administration, MFN, or tariffs in any way?
Definitely for us right now in a registration setting, it's going to be any changes that may impact the U.S. Food and Drug Administration. That's my opinion. Ingmar can have his own. I will say we're really happy with the interactions with the U.S. Food and Drug Administration that we've seen. They're paying attention. They're very interested in patient populations with unmet need. They've been responsive. From our perspective, the changes that have been made have had little impact. Of course, we have some time to go before we get to really the big interactions around filing and approval. We'll see how things develop. So far, I think that's the area that we're looking at. I think MFN is not top of our list right now, but it's always something to keep an eye on.
Makes sense. Great. We're just about out of time, so why don't we end it there? Thanks so much, Julie and Ingmar. Really appreciate your time.
Thanks so much. Appreciate it.