Zentalis(ZNTL) - 2024 Q3 - Quarterly Report

Financial Performance - License revenue for the nine months ended September 30, 2024, was $40.6 million, with no revenue reported for the same period in 2023[11] - Total operating expenses for the three months ended September 30, 2024, were $51.4 million, down from $62.7 million in the same period of 2023, a reduction of approximately 17.5%[11] - Research and development expenses for the nine months ended September 30, 2024, were $134.8 million, compared to $138.0 million for the same period in 2023, a decrease of about 2.3%[11] - Net loss for the three months ended September 30, 2024, was $40.2 million, compared to a net loss of $55.5 million for the same period in 2023, reflecting an improvement of approximately 27.5%[11] - Total comprehensive loss for the nine months ended September 30, 2024, was $118,995,000, compared to $230,372,000 for the same period in 2023, indicating a 48.3% reduction[13] - The company reported a net loss attributable to Zentalis of $118,967,000 for the nine months ended September 30, 2024, compared to $230,280,000 for the same period in 2023, a 48.3% decrease[19] - Net loss attributable to Zentalis for the three months ended September 30, 2024, was $40.158 million, compared to a loss of $55.528 million for the same period in 2023, representing a 27.3% improvement[79] Assets and Liabilities - Total current assets decreased from $496.7 million as of December 31, 2023, to $400.3 million as of September 30, 2024, representing a decline of approximately 19.4%[9] - Total liabilities decreased from $114.3 million as of December 31, 2023, to $96.3 million as of September 30, 2024, a decline of approximately 15.8%[9] - Cash, cash equivalents, and restricted cash at the end of the period totaled $43,947,000, down from $113,370,000 at the end of September 2023[16] - The balance of cash and cash equivalents decreased from $110,750,000 in September 2023 to $41,320,000 in September 2024[16] - Zentalis' total equity as of September 30, 2024, was $354,331,000, down from $437,391,000 at the end of December 2023[18] Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2024, was $131,158,000, compared to $167,220,000 for the same period in 2023, reflecting a 21.5% decrease[14] - The company recorded lease income of $1.1 million from a sublease agreement for the nine months ended September 30, 2024[78] Shareholder Equity and Stock - The company completed a follow-on offering on June 15, 2023, raising approximately $250.0 million by issuing 11,032,656 shares at $22.66 per share[62] - Zentalis issued 30 shares under the employee stock purchase plan, raising $92,000 in additional paid-in capital during the three months ended September 30, 2024[18] - The company recorded share-based compensation expenses of $35,906,000 for the nine months ended September 30, 2024, compared to $40,940,000 for the same period in 2023[14] - Share-based compensation expense for the three months ended September 30, 2024, was $10,362 thousand, compared to $13,867 thousand for the same period in 2023, reflecting a decrease of approximately 25%[66] Product Development and Future Outlook - The company is substantially dependent on the success of its lead product candidate, azenosertib, for future revenue generation[8] - Zentalis' lead product candidate, azenosertib, is a WEE1 inhibitor targeting advanced solid tumors and hematologic malignancies[23] - The company is eligible to receive up to $275 million in development, regulatory, and sales milestones from the Immunome Agreements[37] - In October 2024, the company entered into an asset purchase agreement with Immunome, selling ZPC-21 and its proprietary ADC platform technology for approximately $21.9 million in shares and $5.0 million contingent upon developmental milestones[83] Marketable Securities and Investments - Total available-for-sale marketable securities amounted to $349.93 million as of September 30, 2024, with unrealized gains of $1.64 million[48] - The estimated fair value of available-for-sale marketable securities was $454.88 million as of December 31, 2023[53] - The company recorded equity investment gains of $5.7 million and $7.9 million during the three and nine months ended September 30, 2024, respectively[53] Other Financial Information - The company has incurred significant net losses since inception and expects to continue incurring losses for the foreseeable future[8] - The company has no substantial doubt about its ability to continue as a going concern within one year from the financial statement issuance date[24] - There have been no significant changes to the company's disclosures regarding market risk since the last annual report[84]