Zentalis Pharmaceuticals, Inc. (ZNTL)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered a clinical execution update and a financially tighter quarter: license revenue was $0.00, GAAP EPS was -$0.67, and net loss was -$48.28M, impacted by a one-time restructuring charge and negative other income .
• EPS missed Wall Street consensus by ~$0.04 (actual -$0.67 vs. -$0.6265 consensus), while revenue was in line at $0 given the company’s pre-commercial status; 9 EPS and 8 revenue estimates were available from S&P Global* .
• Guidance and timelines were reaffirmed: DENALI Part 2 initiated in 1H 2025 (first patient dosed in April), topline by year-end 2026, and cash runway into late 2027 maintained .
• Strategic catalyst: initiation of DENALI Part 2 and Fast Track designation for azenosertib in Cyclin E1+ PROC; management sees DENALI Part 2 as potentially supporting accelerated approval, subject to FDA feedback .

What Went Well and What Went Wrong

What Went Well

• Initiated DENALI Part 2 with first patient dosed; moves Zentalis into late-stage development focused on Cyclin E1+ platinum-resistant ovarian cancer (PROC). “The initiation of DENALI Part 2 moves us into a new chapter as a late-stage development company…” — Julie Eastland, CEO .
• Consistent clinical profile: ORR ~35% and mDOR 6.3 months in Cyclin E1+ PROC in Part 1b; meaningful antitumor activity (ORR >30% at 400mg QD 5:2) across monotherapy studies, manageable safety profile .
• Regulatory momentum: FDA Fast Track designation for azenosertib in Cyclin E1+ PROC; manuscript supporting biomarker strategy published in npj Precision Oncology .

What Went Wrong

• GAAP EPS of -$0.67 missed consensus (-$0.6265) as restructuring costs ($7.8M) and negative “investment and other (expense) income, net” (-$2.66M) weighed on results .
• YoY comparison distorted by prior-year licensing revenue and other income: Q1 2024 license revenue was $40.56M and investment/other income net was +$34.95M, producing positive EPS in the prior year; no comparable revenue in Q1 2025 .
• Operating expenses remained elevated, including the non-recurring restructuring charge, though R&D and G&A declined YoY (R&D -$22.4M; G&A -$5.1M), signaling ongoing cost transition rather than a fully normalized run-rate yet .

Financial Results

• Values marked with * retrieved from S&P Global.

Operating detail (Q1 2025 vs. prior year):

Balance sheet snapshot:

Notes:

• The $332.5M cash figure includes $12.2M fair value of Immunome stock received as part of the October 2024 ADC asset sale .
• Company reiterates cash runway into late 2027 .

Guidance Changes

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the document set. Themes reflect management commentary across Q1 press release, FY 2024 release, and January/SGO updates.

Management Commentary

• “The initiation of DENALI Part 2 moves us into a new chapter as a late-stage development company… Zentalis is financially and organizationally well-positioned to continue advancing azenosertib as a potential treatment option for PROC patients.” — Julie Eastland, CEO .
• “The presentation of the updated DENALI Part 1b data at the SGO Annual Meeting supports our continued development of azenosertib… clear anti-tumor activity and durable response observed…” — Ingmar Bruns, M.D., CMO .
• “With a sharpened focus on clinical development, and strong cash position into late 2027, Zentalis is well-positioned to execute on our objectives with the goal of bringing azenosertib to patients as quickly as possible.” — Julie Eastland, CEO .

Q&A Highlights

• No Q1 2025 earnings call transcript was available in the document set; the company hosted a January 29 corporate event, but a transcript was not furnished here. No Q&A clarifications can be cited from a call transcript for Q1 2025.

Estimates Context

• EPS: Actual -$0.67 vs. consensus -$0.6265 (9 estimates) — modest miss; restructuring and negative other income contributed to the gap . Values retrieved from S&P Global*.
• Revenue: Actual $0.00 vs. consensus $0.00 (8 estimates) — in line with expectations for a clinical-stage company*.

• Values marked with * retrieved from S&P Global.

Implication: Street models likely need minimal top-line adjustment; EPS models may modestly increase near-term operating expense assumptions to reflect restructuring timing and lower other income.

Key Takeaways for Investors

• Clinical execution and regulatory positioning are the core drivers: DENALI Part 2 is underway, with topline expected by year-end 2026 and Fast Track designation in hand — stock likely to trade on patient accrual, early signals, and any FDA interactions .
• Financials showed a clean pre-commercial quarter: zero revenue, EPS miss tied to one-time restructuring and negative other income; R&D and G&A down YoY, suggesting cost discipline post-restructuring .
• Cash runway into late 2027 maintained, inclusive of Immunome equity received in 2024; cash burn trajectory should improve after one-time charges, supporting pivotal execution .
• Azenosertib efficacy narrative remains consistent (ORR ~35%, mDOR ~6.3 months in Cyclin E1+ PROC), reinforcing the biomarker-directed strategy and potential for accelerated approval if DENALI Part 2 is successful .
• Near-term trading: catalysts include trial enrollment updates, ASCO/medical conference visibility, and any regulatory feedback; absence of commercial revenue makes sentiment sensitive to data flow and timelines .
• Medium-term thesis: durability/consistency of efficacy and safety, clarity on dose selection (300mg vs. 400mg 5:2), and plan for Phase 3 concurrent enrollment can de-risk the path to registration .
• Risk watch: clinical event timing, safety signals, regulatory guidance, and financing environment for late-stage oncology assets given pre-commercial profile .

---

Additional references:

• Q1 2025 8-K 2.02 press release and financials: .
• FY 2024 press release (context and prior guidance): .
• January corporate and clinical updates: restructuring , Fast Track , SGO data .