Zentalis Pharmaceuticals Inc Stock

Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, 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 backslash research disclosures. If you have any questions 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, Michael. 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 that. 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 azenosertib, which is a WEE1 inhibitor, it's a small molecule. Our focus is in platinum-resistant ovarian cancer 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 azenosertib 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 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 PSOC 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. Azenosertib 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?

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

Yeah, no, happy to, Julie. 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 -- schedule has been developed across a large number of patients, actually over 1,000 now, very well tolerated, yet efficacious.

And it is from 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 understand how patients really see a lot of chemotherapy in the early PSOC 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 -- number of chemotherapy-like compounding issues. So really looking for an alternative to some of those toxicities as a break in the PROC setting because currently standard of care is either taxane-based or other chemotherapy-based options for patients. So not great choices.

Yes. And just in the PROC selected patient population, can you give us an idea of the size of that, you know, relative to PROC?

Yes, 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 PROC population to be available. That represents about 20,000 patients across the US, 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 move upstream, maybe combinations, maybe other indications as well. So maybe just talk about beyond PROC, 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, proof-of-concept trial, in second line maintenance. That's the combination of azenosertib 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 azenosertib 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 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 azenosertib 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. We'll make some decisions about where we go next outside of ovarian shortly. We plan to, as this has always been the promise of a OE1 inhibitor, to be single agent, but also a good combination partner with cytotoxic agents across multiple different tumor types. So, PROC'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. What are some of the considerations as you think about that decision?

Yes, I think there's several factors that, 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, as Julie, it's really -- we've some interesting data in triple-negative breast cancer. 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. We haven't really made decisions here, but that's certainly an exciting space where we think biology will lead the way. And that's even indication agnostic, if you look at HPV-driven 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 -- what comes to mind first, of course, ADCs and TOPO1 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, 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?

Yes. As we have disclosed, we selected a dose, right, and we have determined 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 where, 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 Cohort 2c, where we really want to account for the real-world treatment paradigm or the emerging real-world treatment paradigm. We already had patients in 2a and b, even 1b, that were also treated with taxane regimens while in the PROC 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 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. 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, 2a and b. There's no mechanistic reason to believe that they perform differently, if at all, they might perform better.. But no concerns on inferior response rate or durability here.

Can we go back from the Phase II update earlier this year, and 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.

Okay. 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 off set ourselves back. So with that, we can reiterate the IIa disclosures there's a little bit to glean there.

Yes, that's obviously correct. But 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 magnitude that we've observed before. We already said that very consistent across trials. So it's really a meaningful difference that is beyond doubt in favor of 400 milligrams, while the tolerability and safety has been broadly comparable. So again, this decision was based on efficacy, not on the safety or tolerability profile.

And just as a reminder, IIa 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 2 doses that in addition to that, we had seen a discontinuation rate that was about half of what we had seen in Part 1b of DENALI. We 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 the 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.

Go ahead, Ingmar.

Yes. So recent interaction with the FDA and just a couple of goals. And part of it was, as always, to reiterate the fit of DENALI for an accelerated approval and then, of course, also confirm 2C as such as an acceptable approach. We had also previously via an information amendment filed the IIa data to the FDA.

So we also, importantly, wanted to make sure that we have a discussion time with them, even though we decided to in the sense of proceeding fast to go ahead and not wait for a meeting to confirm that. But the conversation with the FDA, there was short. In line with what I said earlier, they were 100% in agreement that this was the right choice and the only obvious choice here in terms of dosing selection for DENALI. But again, also use that to get confirmation on the fitness of IIC and the overall IIA, B and C data set as an integrated analysis as Julie already mentioned as a continued fit for accelerated approval.

Can you talk about your thinking on the bar for accelerated approval? And maybe remind us what you've shown previously in some of your data and kind of how that compares?

Yes. So we've previously seen consistently through the earlier studies that, again, as a reminder, DENALI 1B, that was the first -- the second part actually, a little bit confusing of DENALI with the 400 milligram in a retrospective biomarker analysis is an important study because that's where the Cyclin E1 biomarker was validated and qualified. So now we're prospectively validating it in Part 2 and eventually ASPENOVA. And then there was MAMMOTH originally in PARP inhibitor refractory patients. And of course, last but not least, the original dose escalation called 001 study.

And all of these studies showed a very consistent, pretty similar setting, but more lines of treatment on 001 and even DENALI Part 1b as well as MAMMOTH, but very consistent, remarkably consistent response rate and relatively consistent duration of response as well. And so that was above 30%, and that's where the bar for an accelerated approval remains. And the duration of response is just supportive evidence, as you know, right? So the primary certainly is the response rate. But then you, of course, want to be better than what the duration of standard of care would be. So we see that north of 5 months and that's really in the territory where we have consistently shown data.

Can you talk about other differences in DENALI versus some of the other studies? You mentioned one already. It's an earlier-stage patient population. So maybe that helps improve the response potentially. Any other differences that might drive a further improvement?

Yes. In terms of lines of treatment, and Julie can certainly chime in, but 1 to 3 for DENALI 1, DENALI Part 2 and 1 to 4 in case of patients with folate receptor alpha high and mirvetuximab was available and reimbursed in the respective geography. That's for IIa/IIb. It's also the case for ASPENOVA. There's one slight difference, and that's cohort 2C, which generally allows 1 to 4 lines irrespective of folate receptor alpha status or prior mirv. And that's just what we did because it's close enough.

But of course, we wanted to make sure that slightly more narrow population of the taxane regimens has a good chance of being enrolled at the time that we intend because after all, the taxane regimens are great options, of course, for patients and with a demonstrated benefit. But also, there is, of course, limited in that sense, restricted eligibility, right, due to prior taxane use paclitaxel really in the front line and the second line, lots of neuropathies along the way, right? And so we do think that, that's unfortunately, only an option for a limited patient population and therefore, we made that design choice.

I think just in addition, the 001 study, the dose escalation had quite a lot higher lines of therapy, 1 to 13 and MAMMOTH was 1 to 9. So the difference is between -- you've got the early trials, DENALI Part 1b was 1 to 5 prior lines. So Part 2 and ASPENOVA have certainly tightened up the number of lines of therapy, still seeing across those other 3 trials, the above 30% response rates and over 5 months for duration. So the lines of therapy matter, but at the end of the day, the bar is being met.

Yes.

And I mentioned it briefly already, right? The trials MAMMOTH-01 as well as DENALI 1b had retrospective biomarker assessment, right? And that's, again, how the threshold was determined. And Part 2 is prospective use of biomarkers. That's really, as you know, the gold standard of selection biomarker development and the additional differences between them.

Yes. When you have the data first half of next year and next steps would be potentially filing and getting on the market. So maybe talk a little bit about pre-commercial activities, what you're doing, what you can do until you get data? And then once you get data, kind of what are the remaining steps there?

Yes. We're very excited to start that process. We've brought talent on board. We're being very careful in how we allocate capital. But we do have a head of our commercial activities, Sarah Kelly, who joined us a few months ago, and she's already hit the ground running.

And today, we are focused on market research. We're focused on market development for both pathologists as well as for physicians because we'll have the companion diagnostic along with the therapy that we are seeking to get approval together. So market development, pricing, payer, all of these research components could start now. And some of the heavier lift in the investments can then be staged post data.

Makes sense. And you've mentioned the Phase III sort of confirmatory study, ASPENOVA. Maybe just talk a little bit about the design of that study, where you are in enrollment, maybe how that's tracking versus your expectations?

Yes, 420 patients, PROC similar eligibility as with DENALI Part 2, 1 to 3 prior lines and then again, a fourth line if folate receptor alpha high and mirvetuximab is available in that respective geography or country. And control arm investigator's choice, still standard single-agent chemotherapy with paclitaxel, PLD, gemcitabine and topotecan, which remains the global standard for trial with such a footprint, right, because any of the newer entrants are just not available outside of U.S. mostly or in case of the relacorilant combination. And yes, 1:1 randomization, 420 patients.

Sounds good. Maybe one last question, then we'll go into survey questions, but maybe talk about current cash position and kind of what runway does that give you? And what does it cover?

Yes. So at Q2, we reported just under $175 million. But in August, we added another 93-ish, $92.6 million to that. That was really the goal there was to enable to come into the data really at strength, and that gives us a runway into the first half of '28. That's about a year beyond the expected data readout for DENALI. And so in addition to that, it brought a nice set of investors to the table with nice support and sort of well-known name. So ultimately, the focus here was to ensure that capital was available for our pre-commercial activities for ASPENOVA enrollment and importantly, for just runway extension.

Okay. Great. Maybe now we can go to -- we've got 3 survey questions. They're kind of on themes across biotech, and we're sort of asking all the biotech companies. So I'll start with the first one here. It's just how has the rise of China origin innovation sort of changed your competitive positioning and your R&D versus BD playbook?

Yes. And I think from an opinion perspective, you get what you pay for. So here's -- but I think we are always for new innovation. It creates opportunities. We think China is a very exciting place and has been a very exciting place for a long time. And we see if nothing else there from a BD perspective, we can't afford to do right now, but certainly a place to go that's broader than just the U.S. or European markets to look for new opportunities. And then, of course, that could create really interesting partnering opportunities or future play for assets in China. So we think the innovation is great. And I think anything that brings innovation to patients is great. So go China.

Yes. Makes sense. And second question here is kind of a hot topic since this weekend is just are you implementing AI adoption? And if so, where has it changed a decision, a time line, a cost or a probability of success? And I guess, what evidence should we expect over the next 2 years?

Yes. I mean I think AI is super exciting. And Ingmar, you could chime in on the sort of the research side of it. And with everything, we want to take a measured approach. We want to utilize tools that can really enhance our business, not for the sake of just implementing a tool. And so I think while we're bringing AI in, we're bringing it in, in a very focused way, which can enhance our business system or enable us to be more efficient or faster in certain processes.

So we're very careful about how we're doing that. And important, if nothing else, of course, is the sacred of our data and the confidentiality, of course, of that data. And so AI, we will use where appropriate in the right type of closed systems. And maybe, Ingmar, I don't know if you want to add.

Yes, not much to add, right? I think it's very comprehensive. But I do think we are using it really for including in clinical development and medical writing, et cetera, for routine tasks, right, where I think is that you leverage it to accelerate things, right, and reduce the actual workload where we can. It's probably not different from most other companies or settings here, but that's really where we focus on less so on the -- what we really think is the intellectual core of our operation and activities here.

And it's an enhancement, not a replacement. And it's a great way to leverage a resource. At the end of the day, you're still responsible for the content, you still need to review, you still need to make sure the data going in is the right data. So it's not free in terms of workload and nor should it be, but we think it's helpful.

Makes sense. And then the third theme here is which policy variables, whether it's FDA, Medicare negotiations, MFN, tariffs sort of global pricing. I know some of those don't apply. But just what matters most for you? And what have you changed, if anything, because of it?

Probably not a surprise, but the FDA is the near-term sort of key, but following very quickly on the heels of that are things like Medicare, Medicare reimbursement, MFN eventually, I mean, ASPENOVA is a global trial for full approval. And so pricing on a global basis will be something in the future. And you're right, it's not a tomorrow. The accelerated approval is a U.S. launch. ASPENOVA global full approval. So all those things have to be thought about. But what's actionable for us primarily is, of course, the regulators in terms of the FDA. And then second to that is going to be thinking about azenos pricing and reimbursement in the U.S. market. And tariffs, not so much, knock on wood, but we keep a watchful eye on that, but not as impactful.

Maybe just in terms of your FDA interactions over this process. I know you've had a few over time. Is it the same group of people at the FDA? Is there turnover? Like how has that impacted things?

Go ahead, Ingmar.

Yes. No, it's been -- our experience really is a positive one. So they have been a very consistent and reliable partner and same group, same people involved over multiple interactions now. And we don't certainly see a change to the negative, remained a really trustworthy partner and a strong collaborative there is.

Okay. Great. Looks like we're out of time. So why don't we wrap it up there. Thanks, Julie. Thanks, Ingmar. Really appreciate your time today.

Thank you, Mike. Good to see you.

Good to see you.

Thanks, everybody, for coming.

All right. Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, 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. And 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/researchdisclosures. And if you have any questions, please reach out to Morgan Stanley sales representative. And with that, Julie, maybe I'll turn it over to you just to make a couple of introductory comments, maybe for people who are less familiar with your story, and then we can hop into the Q&A.

Yes. Well, thank you. Thank you for having us. We always appreciate the opportunity to talk about Zentalis. And 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. And we'll talk more about where that is positioned and why we think that, that's unique. But this is certainly a great opportunity for patients in this setting, which have few options to have a really novel approach, and we'll talk more about that.

And so I'm grateful to be here with my CMO, Ingmar Bruns. And Zentalis is currently on a mission, and Ingmar can talk a little more about this, to develop azenosertib in registration trials. And so 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 positive protein expression. And 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 III confirmatory randomized trial.

Great. Thanks for that introduction. And you've only been at Zentalis for less than a year now. I think you joined last November and sort of came in and provided sort of a clear path for the company and strategy. So maybe just talk about when you first joined sort of what was your focus on and how you ended up sort of getting to this clear path forward?

Yes. Well, thanks. I think the company has done an amazing job of looking at azenosertib in a number of settings, and that continues today. But the pipeline was full, and the company really needed to determine which lane they were going to go down to bring azenosertib to market. And I think it was relatively straightforward because there's just a large body of data that's been developed around azenosertib and in particular, in the platinum-resistant ovarian cancer.

So we see this as an opportunity that's really broad beyond the initial setting, but we certainly saw a very clear path in terms of the clinical data that had been developed at the company over time. And that data was very supportive of moving forward into registration trials. So 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.

So that was, I think, straightforward to me and Ingmar joined with me along with a couple of other folks, our Chief Business Officer, Haibo Wang, as well as our HR person who -- folks we had worked with in the past. We think we all saw the same vision and the opportunity for azenosertib. And so it just needed focus and it needed trial management. I think Ingmar saw the same opportunity that I did.

And you mentioned sort of a breadth of a lot of data you sort of had to sort through. And earlier this year in January, you kind of gave a very comprehensive update across the program. So maybe just if you can walk us through some of the key highlights there, we can dig in a little more.

Yes, I'll just set the stage and let Ingmar talk about the data. So in January, the company did present in the webcast the data from three studies. These are all single-agent arms of the trial. So there was a 001 dose escalation trial that determined both dose and schedule in both two active doses of azenosertib in a schedule of 5 days on, 2 days off. There was the MAMMOTH trial, which was a trial that looked at combination in PARPs as well as single-agent Azeno post PARP -- and then the last trial was the DENALI trial, which is a multipart trial.

In Part 1b of DENALI, we enrolled 102 patients at the 400-milligram dose, all patients with platinum-resistant ovarian cancer. And 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 has turned out to be an important marker for these patients and correlates highly to currently meaningful clinical outcomes of azenosertib. Do you want to talk a little bit about the data, Ingmar?

Yes. So 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 -- but the results, the response rates and also durability of response that we saw were very consistent, which in many ways, is reassuring. But then 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. And there, the response rate was close to 35% and with impressive durability of 6.3 months. And it's still subject to change based on that data cut because there are active patients on the trial, but those are the DENALI data in particular with a very manageable safety and tolerability profile.

And 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. And 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. So the data that Ingmar describes a significant improvement for patients.

Definitely a 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. So maybe talk about how you got to your sort of selected dose.

Sure. Ingmar?

Yes. So the dose selection happened in the original dose escalation trial, the 001 trial that Julie briefly mentioned and including different schedules and 5 on to off intermittent schedule just turned out to be the best combination of exposure efficacy and then tolerability here. And so going forward for Part 1b of DENALI 400-milligram, the intermittent 5 on to 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.

But what wasn't done in Part 1b is the direct comparison with the lower doses. We all know that necessary these days with FDA's Project Optimus and the data that we have gathered on the intermittent schedule 5 on to off the 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.

So it's a cross-trial comparison and a relatively small number and the 300-milligram patients are more heavily pretreated as well. So it's not really an apples-to-apples comparison. So for that reason, we're grateful to do the comparison as well and staying focused on the 400-milligram 5 on to off. But here now, we will certainly investigate in a prospective and randomized fashion.

You're selecting the patients, Cyclin E positive patients with the biomarker. So maybe just talk a little bit about the advantages of using that approach and what you've seen in the data.

Yes. So we've seen clearly, as Julie already mentioned, that this is predictive of response, right? So if we look at the overall population, there's a more than 10% difference in the response rate, if we do the biomarker enrichment. And so 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.

Got you. And just on DENALI Part 1, maybe just talk about the patient population you enrolled there and just sort of what impact it had on the study in your view?

Yes. So Part 1 was a PROC population [ with ] 1 to 5 prior lines of treatment. And it was a biomarker unselected population, which is the requirement of submitting tissue for retrospective analysis, as already said. The difference to Part 2 is that the patients only have 1 to 3 prior lines of treatment. So a lot less pretreatment in case of folate receptor alpha positivity, then they are required to reserve mirvetuximab where available and reimbursed. But overall, this is, of course, a less heavily pretreated population.

Got you. And maybe you can expand a little bit on the safety profile you observed in Part 1, maybe the discontinuation rate was a little bit higher than what we saw previously and what -- maybe talk a little bit about that and how you maybe can mitigate that moving forward.

Happy to. Yes. So you already said it, right? So that was a bit of an outlier compared to the other studies we saw where there were -- the discontinuation rate was kind of where we would expect it for this drug class and for oncology drug in general. There's 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, right? So 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 001 trial. So that's one thing. So we're confident that this is really a technicality as well, but we also put several measures in place to ensure that this is not as high and Julie already alluded to it.

There's more guidance in the protocol on how to deal with the key classes of side effects, and those are cytopenias, but they're really even the high-grade ones were Grade 3. And this is, of course, something that we will pay attention to, but this doesn't initially limit the patients. I think the most dominant class is GI toxicities, right? And there's extensive guidance now and the protocol for the investigators on how to deal with these adverse events and also the use of supportive care. We're also coming back to the cytopenias, introduced the use of G-CSF early.

And then last but not least, is a really different approach to trial management and site management with really kind of high-touch interactions. And you may wonder, okay, why is that necessary if this is a manageable safety profile. But with many of drugs that have a relatively narrow therapeutic index, the prescribers and the providers, they learn over time, of course, as you go along in your development chain and then go towards launch. And once the drug really is broadly available, then there is, of course, also an education process that has happened and people will learn to manage the drug then.

And this is a small molecule orally available opportunity for patients, a non-chemo option. And so in the space, that's really sort of a new novel approach. And 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. So 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?

Yes, there's a complete overlap. It's just that Part 2 is going to expand the number of sites. Right.

Yes. Got you. Then maybe in the past, you were on clinical hold sort of for a brief period of time. Maybe just remind us what triggered that and what the conclusion was there.

Yes. So we looked at these cases, of course, when we came in. And 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 -- but a very large body of data with close to 800 patients across doses and combinations. And then there were these 2 deaths where the company rightfully so erred on the side of caution -- and considered them related to azenosertib. But at the same time, if you look at these cases, you could also see alternative explanations for that.

But of course, we want to be careful because we talked about patients here, and that's what the company did, and it's the right decision to make. The FDA, 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 for -- in terms of dose and schedule. So 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 of that the communication was really lacking and the interactions were lacking. So despite accumulating so many data, there was little visibility there for the agency. I think it was one of the reasons that triggered it.

And I think also for the market in general, so 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, and those are messages that we're happy to share today and bring forward. But the agent's profile still remains a novel profile and a manageable side effect profile as well. And in fact, compared to other Wee1 inhibitors, for example, Adavo, looking at the IGNITE trial, you see a very favorable tolerability profile with Azeno, 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. And maybe we can just switch now to sort of DENALI Phase II. There's 2 parts there. So maybe just walk us through the design a little bit and...

Yes. So there's the -- as already discussed, the original Part 1b that was the 400-milligram with retrospective biomarker analysis for Cyclin E1. And we talked a little bit about the patient profile, 1 to 5 prior lines in the platinum-resistant setting. And then there's Part 2a or Part 2 in general, which is -- consist of 2 parts, IIa and IIb. So IIa is basically the prospective dose confirmation. That's between 300 milligram and 400 milligram, both 5 on to off, and they're randomized. And each arm is 30 patients. There is an opportunity for an earlier look as an interim, and then we'll confirm the dose with the FDA. And it's also a seamless design. So we'll continue to enroll into both arms while we confirm the dose and have that meeting with the agency. And then we'll continue additional patients into IIb to get to a registrational trial size of about 100 a little over 100. It won't be more patients than 100 because we are 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 FDA?

So the entirety of the trial, right? And that's something that we're very happy about that early on, they confirmed the design, right? So there is alignment with the design. And that's not a small thing these days, right, as you know, because -- there's project frontrunner, right? Generally, the FDA's guidance is towards doing this in randomized controlled trials. We've seen in the first half of 2025 alone, a lot of single-arm approvals in the Phase II -- based on Phase II accelerated approvals. But they agreed to this design as just outlined. And then there's a confirmatory trial that needs to be largely enrolled at the time of the filing, right, which we will plan in the same patient population.

Can you just maybe talk a little bit about just the status of IIa and just how that's going versus your expectations in terms of enrollment?

Yes. So it's very active. And I think we're on track with regard to the guidance here. And updates.

Yes, we'll have guidance. We still expect top line data at the end of 2026 and DENALI, generally speaking, in Part 2a is on track.

And just in terms of disclosure, Part IIa versus Part IIb, any -- what should we expect when IIa is completed or any kind of communication around that?

Yes. I think and you can fill in, but the Part IIa and Part IIb is really all part of one data set. So at the selected dose, as Ingmar mentioned, the totality of those patients will be part of the registration package. So once we've confirmed the dose and had alignment with the agency, we'll continue to enroll. And so 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 were -- that will be ongoing should the data support that. So 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.

So that's a meaningful update, right, in addition to, of course, the Zentalis gene, there's also an [ IDMC ] involved, right? So basically, if you hear that dose has been selected, the trial goes forward, then it, of course, means there was futility, which we don't expect. But there's also a 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 [ 1b ].

Yes. So 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. So I think the bar is around if it comes to response rate, 30%. Of course, statistically we 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. And of course, you need to get somewhere in the 5, 5.5 to 6 months, which we exceeded in the past.

And there's certainly some expectation to see higher activity, higher efficacy due to the fewer lines of pretreatment. And we've shared past small post-hoc analysis with all the caveats of small numbers. But if you have fewer lines of treatment, certainly, it doesn't work with the [indiscernible] yet because of the small sample sizes, but the response rate goes up, right, with fewer lines of treatment. So we're positive in that regard.

Got you. 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 and the -- 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, and we will actually see this as a combined data set, right? What you normally do is filing blinded data from the Phase III even with your accelerated approval. So we don't see these as completely separate entities, but it's actually combined. I think as it makes a lot of sense is the -- to use the same patient population, because that's the ultimate derisking. Of course, your Phase II data then translate into the Phase III. So we're choosing the same patient population with 1 to 3 prior lines and 1 to 4 in case of folate receptor alpha positivity -- and the design is going to be a randomized controlled design, of course, with still standard of care single-agent chemotherapy, which we believe still holds largely, right, as investigator's choice chemotherapy.

And we don't really see a gating event other than, of course, alignment with the FDA, which we plan on seeking this year and so that we can be prepared to start that enrollment in 2026.

Maybe you can talk a little bit about the market opportunity in sort of the Cyclin E PROC setting and sort of where you can fit in?

Right? And I think this was a great opportunity to also help people understand that the biomarker selective population is around the protein expression levels. There is many drivers of Cyclin E1 protein expression beyond CCNE1 gene amplification. That's part of the story that even patients with non-amplified status have -- can have high protein expression and have shown to have meaningful responses to azenosertib, and 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.

And we see responses sort of across the board. So other drivers of Cyclin E1 then are other transcription factors, potential protein that doesn't degrade. And so what's important is really to look at those protein expression levels. And in that setting, we see about 50% of the PROC population having an opportunity to be subject to and benefit from azenosertib. So that's about 50% of that market. It's about 21,500 patients.

And 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 sort of market and successful uptake, which really describes the excitement for physicians and patients to have these biomarker selected opportunities. So quite a large opportunity in this first setting for azenosertib. And then, of course, we think opportunities beyond this market for the agent in earlier lines of ovarian or potentially in other tumor types.

I wanted to ask what other sort of tumor types are you potentially considering or...

Well, we won as a master regulator. So 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. So we think there is interesting opportunities broadly, but a little more close to home, of course, earlier lines of ovarian cancer is probably the closest in terms of the concentric circles to what we're doing first off. And in our 002 study, we're looking at a combination of azeno plus bevacizumab in terms of the dose escalation combination there, and we'll look to explore other ways to expand in ovarian. In addition to that, there is 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. So we'll see sort of a broad combination with standard of care in that setting. And then also in triple-negative breast. And then, of course, we currently have completed enrollment in our TETON 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. And 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 #1 is going to take azeno into PROC patients to get to the market. Dollar #2 is going to complete these other studies. And so we really want to remain focused on what our initial drive is. And 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 TOPO1 and MK2 inhibitors from preclinical data that really showed a synergy there. So we'd love to find a way to continue to explore those opportunities for Azeno beyond PROC.

You mentioned the TETON data first half of next year. Just what -- how do you think about the bar there in terms of what you need to do to sort of move forward or not?

Yes. I mean the landscape there has changed. And so 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. So I'm not going to -- I don't have something to sort of predispose it. We'll see what the data looks like.

Yes. No, it makes complete sense. And maybe you talked about capital resources. So maybe just touch on your current cash position and runway and sort of what that covers in your plans.

Sure. And 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 significant runway beyond the pivotal data point. At the end of Q2, reported that we had cash, cash equivalents and marketable securities of $303 million, again, to extend our runway into late 2027.

Okay. Great. And 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. So maybe 2 questions. The first one, just with China's rise in biotech innovation, how are you thinking about your competitive positioning here? And 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 trials, and it's already going to be a Phase III 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?

Yes. No, I do agree, right? So this -- given the very focused effort here and late-stage development, I think it's less relevant. But I can, of course, see this if you're a platform company, you're in earlier stages similar to what Julie just said.

Yes. Okay. And then maybe second macro question. Just what has been most impactful for you from the regulatory side? Would it be changes at the FDA MFN or tariffs in any way?

So definitely for us right now in a registration setting, it's going to be any changes that may impact the FDA. That's my opinion. Mark can have his own. But I will say we're really happy with the interactions with the FDA that we've seen. They're paying attention. They're very interested in patient populations with unmet need. They've been responsive. So from our perspective, the changes that have been made have had a little impact. And of course, we have some time to go before we get to really the big interactions around filing and approval. So we'll see how things develop. But 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.