Sign in
ZP

Zentalis Pharmaceuticals, Inc. (ZNTL)·Q2 2025 Earnings Summary

Executive Summary

  • EPS beat: diluted EPS was −$0.37 vs Wall Street consensus of −$0.51*, driven by materially lower operating expenses post restructuring .
  • Operating expenses fell 45% YoY to $36.1M, with R&D down to $27.6M (−$20.8M YoY) and G&A down to $8.4M (−$8.3M YoY), reflecting tight cost control and prioritization of azenosertib .
  • Cash, cash equivalents and marketable securities were $303.4M, with runway into late 2027 maintained; topline DENALI Part 2 data (registration‑intent) expected by year‑end 2026 .
  • Clinical/regulatory catalysts: ongoing DENALI Part 2 dose confirmation (300mg/400mg QD 5:2) and planned Phase 3 confirmatory study initiation in 2026, supporting potential accelerated approval in Cyclin E1‑positive PROC (subject to FDA feedback) .

Note: No Q2 2025 earnings call transcript was available/published in our document catalog; analysis relies on the 8‑K and press release, plus corporate presentation furnished in the 8‑K .

What Went Well and What Went Wrong

What Went Well

  • Substantial Opex reduction: total operating expenses fell to $36.1M from $65.1M YoY; R&D down $20.8M and G&A down $8.3M, consistent with strategic restructuring and focus on late‑stage azenosertib development .
  • Management execution and focus: “We are maintaining momentum with the DENALI Phase 2 clinical trial and remain on track to disclose topline data… by year end 2026” — CEO Julie Eastland .
  • Strengthened balance sheet visibility: $303.4M cash and equivalents with runway into late 2027, supporting execution through DENALI Part 2 topline read .

What Went Wrong

  • No revenue in the quarter; the model remains pre‑commercial, with Q2 license revenue at $0 (same as Q2 2024) .
  • Companion diagnostic costs increased by $3.1M, partially offsetting cuts elsewhere; underscores the need to invest in biomarker‑driven strategy .
  • Long‑dated clinical timeline: topline DENALI Part 2 read by YE 2026 and Phase 3 initiation planned in 2026 heighten interim execution risk and dependency on FDA alignment .

Financial Results

Income Statement (Quarterly)

Metric ($USD Millions unless noted)Q2 2024Q1 2025Q2 2025
License Revenue$0 $0 $0
Research & Development Expense$48.4 $27.2 $27.6
General & Administrative Expense$16.8 $10.6 $8.4
Restructuring$0 $7.8 $0
Total Operating Expenses$65.1 $45.6 $36.1
Investment & Other Income (Expense), net$(22.9) $(2.7) $9.2
Net Loss$(88.3) $(48.3) $(26.9)
Diluted EPS ($)$(1.24) $(0.67) $(0.37)

Balance Sheet / Liquidity KPIs

Metric ($USD Millions)Jun 30, 2024Mar 31, 2025Jun 30, 2025
Cash, Cash Equivalents & Marketable Securities$371.1 $332.5 $303.4
Working Capital$333.3 $293.5 $272.6
Total Assets$430.3 $384.0 $351.7
Total Liabilities$93.2 $88.6 $77.2
Total Equity$337.2 $295.4 $274.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayThrough late 2027Into late 2027 (FY24 update, Q1’25 maintained) Into late 2027 Maintained
DENALI Part 2 toplineYE 2026YE 2026 (FY24/Q1’25) YE 2026 Maintained
Phase 3 confirmatory initiation20262026 planned (FY24) 2026 planned post dose confirmation/FDA feedback Maintained
Revenue/OpEx/EPS guidance2025Not provided Not provided N/A
Dividends/Tax rate/Segment guidance2025Not provided Not provided N/A

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript found/published; themes below reflect company earnings materials and corporate presentation.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Regulatory pathway / accelerated approvalFast Track received (Jan 2025); registration‑intent DENALI Part 2; Phase 3 planned DENALI Part 2 on track; potential accelerated approval subject to FDA; Phase 3 initiation planned 2026 Steady progress; regulatory alignment reiterated
Biomarker strategy (Cyclin E1+) & companion diagnosticCyclin E1 identified as predictive biomarker; proprietary IHC cutoff; companion diagnostic planning Cyclin E1+ prevalence ~50% of PROC; CDx spend rose by $3.1M Execution intensifying on biomarker/CDx
R&D execution & safety profileORR ~35% and mDOR 6.3 months in Cyclin E1+ PROC (Part 1b); manageable safety Safety/efficacy profile reinforced in presentation; 300mg/400mg 5:2 doses Consistent profile; dose confirmation underway
Financial disciplineRestructuring, opex reductions expected post Q1 Opex −45% YoY; runway maintained Improving cost structure
Pipeline breadth (beyond PROC)Ongoing TETON (USC) with H1’26 data; bevacizumab combos ongoing Continued enrollment; focus remains on PROC for near‑term registration intent Focused near‑term; breadth maintained

Management Commentary

  • “We are maintaining momentum with the DENALI Phase 2 clinical trial and remain on track to disclose topline data from DENALI Part 2 by year end 2026.” — Julie Eastland, CEO .
  • “This restructuring prioritizes the late‑stage development of azenosertib and extends the Company’s cash runway into late 2027.” .
  • Program focus: proprietary Cyclin E1 IHC biomarker strategy and dose confirmation (300mg/400mg QD 5:2) with potential accelerated approval subject to FDA .

Q&A Highlights

  • No Q2 2025 earnings call transcript was available/published; company communications were via press release and an investor presentation furnished in the 8‑K .
  • Materials emphasized dose confirmation in DENALI Part 2, Phase 3 initiation in 2026, and cash runway through late 2027; no financial guidance introduced .

Estimates Context

How results compared to Wall Street consensus (S&P Global):

MetricQ1 2025Q2 2025
EPS Consensus Mean ($)−0.6265*−0.5086*
EPS Actual ($)−0.67 −0.37
Revenue Consensus Mean ($MM)0.0*0.0*
Revenue Actual ($MM)0.0 0.0
EPS – # of Estimates9*7*
Revenue – # of Estimates8*7*

Interpretation:

  • EPS beat in Q2: −$0.37 vs −$0.51* (n=7), reflecting lower opex and positive other income; revenue in‑line at $0* .
  • Prior quarter (Q1) slightly missed EPS vs consensus amid restructuring charges *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Cost discipline is taking hold; total operating expenses down 45% YoY drove a meaningful EPS beat and reduced net loss, improving funding runway confidence through late 2027 .
  • Near‑term stock narrative hinges on clinical/regulatory milestones: DENALI Part 2 enrollment/dose confirmation and Phase 3 initiation in 2026; topline data by YE 2026 is the pivotal catalyst for accelerated approval discussions .
  • Biomarker‑led strategy (Cyclin E1 IHC) continues to differentiate the program and expand the addressable PROC population (~50%), though CDx expenses rose; monitoring CDx execution and payer/regulatory acceptance is critical .
  • With no product revenue, interim valuation will be sensitive to trial updates, FDA feedback, and cash burn trajectory; the improved “Investment and other income” in Q2 provided a tailwind to EPS .
  • For trading: EPS beats tied to opex control can support near‑term sentiment; however, major re‑rating likely awaits clinical readouts (YE 2026) and Phase 3 progress .
  • Medium term: focus diligence on DENALI Part 2 dose selection outcomes (300mg vs 400mg 5:2), subgroup performance, and Phase 3 design vs SOC chemo to assess registration prospects .
  • Watch for continued opex trends and any monetization/partnership opportunities that could further de‑risk funding to Phase 3 and beyond .