Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 07, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39263 | |
Entity Registrant Name | Zentalis Pharmaceuticals, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3607803 | |
Entity Address, Address Line One | 1359 Broadway | |
Entity Address, Address Line Two | Suite 801 | |
Entity Address, City or Town | New York, | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10018 | |
City Area Code | 212 | |
Local Phone Number | 433-3791 | |
Title of 12(b) Security | Common Stock,$0.001 par value per share | |
Trading Symbol | ZNTL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 70,609,407 | |
Entity Central Index Key | 0001725160 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 266,558 | $ 43,069 |
Marketable securities, available-for-sale | 286,428 | 394,302 |
Prepaid expenses and other current assets | 10,943 | 14,562 |
Total current assets | 563,929 | 451,933 |
Property and equipment, net | 6,650 | 7,705 |
Operating lease right-of-use assets | 36,584 | 42,373 |
Prepaid expenses and other assets | 7,918 | 9,723 |
Goodwill | 3,736 | 3,736 |
Investment in Zentera Therapeutics | 0 | 21,213 |
Restricted cash | 2,627 | 2,627 |
Total assets | 621,444 | 539,310 |
Current liabilities | ||
Accounts payable | 12,305 | 11,247 |
Accrued expenses | 39,454 | 45,400 |
Total current liabilities | 51,759 | 56,647 |
Deferred tax liability | 0 | 853 |
Long-term lease liability | 44,027 | 45,166 |
Other long-term liabilities | 2,376 | 2,620 |
Total liabilities | 98,162 | 105,286 |
Commitments and contingencies | ||
EQUITY | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value; 250,000,000 shares authorized; 70,603,663 and 59,280,247 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 70 | 59 |
Additional paid-in capital | 1,295,520 | 1,031,462 |
Accumulated other comprehensive loss | (338) | (1,353) |
Accumulated deficit | (772,111) | (596,365) |
Total stockholders’ equity | 523,141 | 433,803 |
Noncontrolling interests | 141 | 221 |
Total equity | 523,282 | 434,024 |
Total liabilities and stockholders’ equity | $ 621,444 | $ 539,310 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock issued (in shares) | 70,603,663 | 59,280,247 |
Common stock outstanding (in shares) | 70,603,663 | 59,280,247 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Expenses | ||||
Research and development | $ 42,684 | $ 43,825 | $ 91,268 | $ 89,937 |
Zentera in-process research and development | 45,568 | 0 | 45,568 | 0 |
General and administrative | 15,664 | 19,636 | 32,033 | 31,403 |
Total operating expenses | 103,916 | 63,461 | 168,869 | 121,340 |
Operating loss | (103,916) | (63,461) | (168,869) | (121,340) |
Other Income (Expense) | ||||
Investment and other income, net | 4,451 | 424 | 8,560 | 850 |
Net loss before income taxes | (99,465) | (63,037) | (160,309) | (120,490) |
Income tax (benefit) expense | (605) | 17 | (497) | 50 |
Loss on equity method investment | 13,704 | 5,338 | 16,014 | 7,089 |
Net loss | (112,564) | (68,392) | (175,826) | (127,629) |
Net loss attributable to noncontrolling interests | (37) | (35) | (80) | (195) |
Net loss attributable to Zentalis | $ (112,527) | $ (68,357) | $ (175,746) | $ (127,434) |
Net loss per common share outstanding, basic (in dollars per share) | $ (1.85) | $ (1.34) | $ (2.93) | $ (2.64) |
Net loss per common share outstanding, diluted (in dollars per share) | $ (1.85) | $ (1.34) | $ (2.93) | $ (2.64) |
Common shares used in computing net loss per share, basic (in shares) | 60,790 | 51,117 | 60,038 | 48,197 |
Common shares used in computing net loss per share, diluted (in shares) | 60,790 | 51,117 | 60,038 | 48,197 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (112,564) | $ (68,392) | $ (175,826) | $ (127,629) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on marketable securities | 218 | (670) | 1,015 | (1,654) |
Total comprehensive loss | (112,346) | (69,062) | (174,811) | (129,283) |
Comprehensive loss attributable to noncontrolling interests | (37) | (35) | (80) | (195) |
Comprehensive loss attributable to Zentalis | $ (112,309) | $ (69,027) | $ (174,731) | $ (129,088) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Activities: | ||||
Consolidated net loss | $ (112,564) | $ (68,392) | $ (175,826) | $ (127,629) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 344 | 348 | 704 | 692 |
Operating lease right-of-use asset and fixed asset impairment | 4,953 | 0 | ||
Noncash consideration portion of Zentera in-process research and development | 15,045 | 0 | ||
Loss on equity method investment | 13,704 | 5,338 | 16,014 | 7,089 |
Share-based compensation | 27,075 | 26,911 | ||
(Loss)/gain on disposal of equipment | (4) | 57 | ||
(Accretion of discounts)/amortization of premiums on marketable securities, net | (6,483) | 17 | ||
Deferred income taxes | (853) | 0 | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses and other assets | (3,922) | (6,663) | ||
Accounts payable and accrued liabilities | (5,805) | 4,025 | ||
Operating lease right-of-use assets and liabilities, net | 544 | 2,278 | ||
Net cash used in operating activities | (128,558) | (93,223) | ||
Investing Activities: | ||||
Purchases of marketable securities | (189,085) | (277,576) | ||
Proceeds from maturities of marketable securities | 304,457 | 156,000 | ||
Purchases of property and equipment | (319) | (728) | ||
Net cash provided by (used in) investing activities | 115,053 | (122,304) | ||
Financing Activities: | ||||
Proceeds from issuance of common stock, net | 235,680 | 209,297 | ||
Proceeds from issuance of common stock under equity incentive plans | 1,314 | 1,416 | ||
Net cash provided by financing activities | 236,994 | 210,713 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 223,489 | (4,814) | ||
Cash, cash equivalents and restricted cash at beginning of period | 45,696 | 62,584 | ||
Cash, cash equivalents and restricted cash at end of period | 269,185 | 57,770 | 269,185 | 57,770 |
Supplemental disclosure of non-cash investing and financing activities: | ||||
Accrued capital expenditures | 0 | 91 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | 266,558 | 55,143 | 266,558 | 55,143 |
Restricted cash | 2,627 | 2,627 | 2,627 | 2,627 |
Total cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statement of Cash Flows | $ 269,185 | $ 57,770 | $ 269,185 | $ 57,770 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Noncontrolling Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 45,491,000 | |||||
Beginning balance at Dec. 31, 2021 | $ 364,482 | $ 45 | $ 723,593 | $ (125) | $ (359,559) | $ 528 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 26,911 | 26,911 | ||||
Other comprehensive loss | (1,654) | (1,654) | ||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs (in shares) | 11,284,000 | |||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs | 209,297 | $ 11 | 209,286 | |||
Issuance of common stock in connection with restricted stock unit vesting (in shares) | 149,000 | |||||
Issuance of common stock in connection with restricted stock unit vesting | 1 | $ 1 | ||||
Issuance of common stock upon exercise of options, net (in shares) | 42,000 | |||||
Issuance of common stock upon exercise of options, net | 803 | 803 | ||||
Shares issued under employee stock purchase plan (in shares) | 16,000 | |||||
Shares issued under employee stock purchase plan | 612 | 612 | ||||
Cancellation of restricted stock awards (in shares) | (15,000) | |||||
Net loss attributable to non-controlling interest | (195) | (195) | ||||
Net loss attributable to Zentalis | (127,434) | (127,434) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 56,967,000 | |||||
Ending balance at Jun. 30, 2022 | 472,823 | $ 57 | 961,205 | (1,779) | (486,993) | 333 |
Beginning balance (in shares) at Dec. 31, 2021 | 45,491,000 | |||||
Beginning balance at Dec. 31, 2021 | 364,482 | $ 45 | 723,593 | (125) | (359,559) | 528 |
Ending balance (in shares) at Dec. 31, 2022 | 59,280,000 | |||||
Ending balance at Dec. 31, 2022 | 434,024 | $ 59 | 1,031,462 | (1,353) | (596,365) | 221 |
Beginning balance (in shares) at Mar. 31, 2022 | 45,584,000 | |||||
Beginning balance at Mar. 31, 2022 | 315,666 | $ 46 | 734,997 | (1,109) | (418,636) | 368 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 16,764 | 16,764 | ||||
Other comprehensive loss | (670) | (670) | ||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs (in shares) | 11,284,000 | |||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs | 209,297 | $ 11 | 209,286 | |||
Issuance of common stock in connection with restricted stock unit vesting (in shares) | 104,000 | |||||
Issuance of common stock upon exercise of options, net (in shares) | 9,000 | |||||
Issuance of common stock upon exercise of options, net | 158 | 158 | ||||
Cancellation of restricted stock awards (in shares) | (14,000) | |||||
Net loss attributable to non-controlling interest | (35) | (35) | ||||
Net loss attributable to Zentalis | (68,357) | (68,357) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 56,967,000 | |||||
Ending balance at Jun. 30, 2022 | 472,823 | $ 57 | 961,205 | (1,779) | (486,993) | 333 |
Beginning balance (in shares) at Dec. 31, 2022 | 59,280,000 | |||||
Beginning balance at Dec. 31, 2022 | 434,024 | $ 59 | 1,031,462 | (1,353) | (596,365) | 221 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 27,075 | 27,075 | ||||
Other comprehensive loss | 1,015 | 1,015 | ||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs (in shares) | 11,033,000 | |||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs | $ 235,680 | $ 11 | 235,669 | |||
Issuance of common stock in connection with restricted stock unit vesting (in shares) | 73,500 | 218,000 | ||||
Issuance of common stock upon exercise of options, net (in shares) | 51,500 | 51,000 | ||||
Issuance of common stock upon exercise of options, net | $ 941 | 941 | ||||
Shares issued under employee stock purchase plan (in shares) | 25,000 | |||||
Shares issued under employee stock purchase plan | 373 | 373 | ||||
Cancellation of restricted stock awards (in shares) | (3,000) | |||||
Net loss attributable to non-controlling interest | (80) | (80) | ||||
Net loss attributable to Zentalis | (175,746) | (175,746) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 70,604,000 | |||||
Ending balance at Jun. 30, 2023 | 523,282 | $ 70 | 1,295,520 | (338) | (772,111) | 141 |
Beginning balance (in shares) at Mar. 31, 2023 | 59,442,000 | |||||
Beginning balance at Mar. 31, 2023 | 385,665 | $ 59 | 1,045,568 | (556) | (659,584) | 178 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 13,342 | 13,342 | ||||
Other comprehensive loss | 218 | 218 | ||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs (in shares) | 11,033,000 | |||||
Issuance of common stock in connection with an equity offering, net of underwriting discounts, commissions and offering costs | 235,680 | $ 11 | 235,669 | |||
Issuance of common stock in connection with restricted stock unit vesting (in shares) | 79,000 | |||||
Issuance of common stock upon exercise of options, net (in shares) | 51,000 | |||||
Issuance of common stock upon exercise of options, net | 941 | 941 | ||||
Cancellation of restricted stock awards (in shares) | (1,000) | |||||
Net loss attributable to non-controlling interest | (37) | (37) | ||||
Net loss attributable to Zentalis | (112,527) | (112,527) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 70,604,000 | |||||
Ending balance at Jun. 30, 2023 | $ 523,282 | $ 70 | $ 1,295,520 | $ (338) | $ (772,111) | $ 141 |
Organization and Business
Organization and Business | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Organization Zentalis Pharmaceuticals, Inc. (“Zentalis,” “We” or the “Company”) is a clinical-stage biopharmaceutical company discovering and developing small molecule therapeutics targeting fundamental biological pathways of cancers. Utilizing its Integrated Discovery Engine, the Company is developing a focused pipeline of potentially best-in-class oncology candidates, which include azenosertib (ZN-c3), a WEE1 inhibitor for advanced solid tumors, ZN-d5, a BCL-2 inhibitor for hematologic malignancies and related disorders, and a heterobifunctional degrader of BCL-xL for solid and hematological malignancies. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. All of the Company’s tangible assets are held in the United States. Liquidity |
Interim Unaudited Financial Sta
Interim Unaudited Financial Statements | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Interim Unaudited Financial Statements | Interim Unaudited Financial Statements Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements but do not include all disclosures required by U.S. GAAP. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operation for the periods presented, with such adjustments consisting only of normal recurring adjustments. Certain reclassifications have been made to the prior period condensed consolidated balance sheet to conform to the current period presentation. The accompanying interim unaudited condensed consolidated financial statements include our wholly-owned subsidiaries and a variable interest entity (“VIE”), for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. We evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, we apply a qualitative approach that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE. We will continuously assess whether we are the primary beneficiary of a VIE, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of such VIE. During the periods presented, we have not provided any other material financial or other support to our VIE that we were not contractually required to provide. The equity method is used to account for investments in which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded on the balance sheet, and the share of net income or losses of equity investments is recognized on a one quarter lag in investment and other income (expense), net. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates. Significant Accounting Policies During the six months ended June 30, 2023, we adopted the following significant accounting policies not previously reported in the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Acquisitions and Contingent Consideration The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting as indicated in ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquired entity and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquired entity based on the fair value estimates as of the date of acquisition. In accordance with Accounting Standards Codification (ASC) 805, Business Combinations, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss. Contingent consideration liabilities expected to be |
Significant Transactions
Significant Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Significant Transactions | Significant Transactions Zentera Therapeutics On June 15, 2023, we announced that we and certain of our wholly owned subsidiaries had entered into an agreement to terminate our Collaboration and License Agreements (the “Termination Agreement”) with Zentera Therapeutics, a Shanghai-based clinical-stage biopharmaceutical company focused on developing cancer therapeutics (“Zentera”), pursuant to which such wholly owned subsidiaries had granted to Zentera certain development and commercialization rights to our product candidates, azenosertib, ZN-d5 and ZN-c5 (the “Zentera Collaboration Products”) in the People’s Republic of China, Macau, Hong Kong and Taiwan (collectively, “Greater China”). As a result of the termination of these agreements, we have regained the rights from Zentera for azenosertib, ZN-d5 and ZN-c5 in Greater China, and now hold worldwide development and commercialization rights to these assets. Concurrent with the agreement to terminate the Collaboration and License Agreements, we executed a share purchase agreement (the “Share Purchase Agreement”) with Zentera to return our 40.3% equity stake in Zentera for de minimis consideration. We assessed the Termination Agreement and Share Purchase Agreement together and determined that the transaction to reacquire the licensed intellectual property without an acquired workforce, inputs or any substantive processes capable of contributing to the ability to produce outputs, represents asset acquisitions for accounting purposes. The total consideration transferred of $45.6 million was comprised of the following components: Fixed consideration of $30 million, representing an up-front payment. Fixed consideration of forgiveness of $9.4 million of outstanding receivables under the Collaboration and License Agreements. Fixed consideration of the return of our 40.3% equity stake in Zentera for de minimis cash consideration. Using the adjusted balance sheet method under the cost approach, the difference between the carrying value of the equity method investment at the time of the transaction and the fair value of the equity method investment after the return of the intellectual property was $13.7 million, which was recognized as a loss on the equity method investment line item in the statement of operations during the second quarter of 2023. Variable consideration of a change in control milestone payment as contingent consideration can be either zero or $15.0 million. The value of the contingent consideration of approximately $0.5 million was calculated using estimates of future discounted cash flows, and other significant estimates including estimates for probability of milestone achievement and discount rates. The value of the contingent consideration for this milestone will be remeasured at fair value at each reporting period with gains and losses reported in the statement of operations. We also incurred $0.5 million of acquisition-related costs that were included in the total consideration for the acquired assets. Additional consideration to be paid to Zentera includes a low single digit royalty on net sales of azenosertib, ZN-d5 and ZN-c5 in the Greater China region. These additional payments are payable only after regulatory approval and commercials sales in the Greater China region and are excluded from the transaction price. The fair value of in-process research and development assets acquired was based on the market approach, which includes significant estimates. These estimates included calibration adjustments for comparable companies, cost estimates, control and marketability discounts, as well as estimates for the probability of success and applicable discount rates. The excess of the fair value of the consideration given in exchange for the Zentera in-process research and development received was accounted for as a contract termination cost. The Company determined to recognize the full amount of $45.6 million in the condensed consolidated statement of operations and comprehensive loss during the three months ended June 30, 2023. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Kalyra Pharmaceuticals, Inc. On December 21, 2017, we acquired $4.5 million of Kalyra Pharmaceuticals, Inc.’s (“Kalyra”) Series B Preferred Stock representing a 25% equity interest in Kalyra for purposes of entering the analgesics therapeutic research space. The acquisition price was paid entirely in cash. In accordance with the authoritative guidance, we concluded that Kalyra is a business consisting of inputs, employees, intellectual property and processes capable of producing outputs. Additionally, we have concluded that Kalyra is a VIE, we are the primary beneficiary and have the power to direct the activities that most significantly affect Kalyra’s economic performance through common management and our board representation. Prior to December 21, 2017, the Company and Kalyra transacted for the delivery of research and development services and support. The financial position and results of operations of Kalyra have been included in our consolidated financial statements from the date of the initial investment. Pursuant with authoritative guidance, we have recorded the identifiable assets, liabilities and noncontrolling interests in the VIE at their fair value upon initial consolidation. The identified goodwill is comprised of the workforce and expected synergies from combining the entities . T otal assets and liabilities of Kalyra as of June 30, 2023 and December 31, 2022 are immaterial. The liabilities recognized as a result of consolidating Kalyra do not represent additional claims on our general assets. Pursuant to the authoritative guidance, the equity interest in Kalyra not owned by Zentalis is reported as a noncontrolling interest on our condensed consolidated balance sheets. The following is a reconciliation of equity (net assets) attributable to the noncontrolling interest (in thousands): June 30, December 31, 2023 2022 Noncontrolling interest at beginning of period $ 221 $ 528 Net loss attributable to noncontrolling interest (80) (307) Noncontrolling interest at end of period $ 141 $ 221 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value MeasurementAvailable-for-sale marketable securities consisted of the following (in thousands): June 30, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper $ 171,816 $ 12 $ (200) $ 171,628 Corporate Debt Securities — — — — US Government Agencies 85,248 28 (112) 85,164 US Treasury 29,702 — (66) 29,636 $ 286,766 $ 40 $ (378) $ 286,428 December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper $ 296,309 $ 71 $ (587) $ 295,793 Corporate Debt securities 7,472 — (26) 7,446 US Government Agencies 23,970 — (182) 23,788 US Treasury securities 67,904 — (629) 67,275 $ 395,655 $ 71 $ (1,424) $ 394,302 As of June 30, 2023, forty-two of our available-for-sale debt securities with a fair market value of $193.7 million were in a gross unrealized loss position of $0.4 million. Of those, thirty-eight have been in a gross unrealized loss position of $0.4 million for less than one year and four have been in a gross unrealized loss position of $25.9 thousand for more than one year. When evaluating an investment for impairment, we review factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, our intent to sell or the likelihood that we would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of June 30, 2023, because we do not intend to sell these securities, and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis. Contractual maturities of available-for-sale debt securities are as follows (in thousands): June 30, 2023 December 31, 2022 Estimated Fair Value Due within one year $ 264,470 $ 394,302 After one but within five years 21,958 — $ 286,428 $ 394,302 The Company had $0.5 million in contingent consideration liabilities as of June 30, 2023 related to the agreement to terminate its Collaboration and License Agreements with Zentera. The contingent consideration balance is limited to one potential milestone payment measured at fair value (See Note 3 - Significant Transactions for additional information). The fair value of the contingent consideration is estimated based on the monetary value of the milestone discounted for the probability of achieving the milestone and a present value factor based on the timing of when the milestone is expected to be achieved. The value for the contingent consideration balance is based on significant inputs not observable in the market which represents Level 3 measurement within the fair value hierarchy. This liability did not exist as of December 31, 2022. The following table summarizes the financial assets and liabilities that are measured on a recurring basis at fair value as of June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 Level 1 Level 2 Level 3 Total estimated fair value Financial assets: Cash equivalents: Money market funds $ 261,994 $ — $ — $ 261,994 Commercial paper — — — — Total cash equivalents: 261,994 — — 261,994 Available-for-sale marketable securities: Commercial paper — 171,628 — 171,628 Corporate Debt Securities — — — — US Government Agencies — 85,164 — 85,164 US Treasury securities 29,636 — — 29,636 Total available-for-sale marketable securities: 29,636 256,792 — 286,428 Total assets measured at fair value $ 291,630 $ 256,792 $ — $ 548,422 Financial Liabilities: Contingent consideration $ — $ — $ 500 $ 500 Total financial liabilities $ — $ — $ 500 $ 500 December 31, 2022 Level 1 Level 2 Level 3 Total estimated fair value Financial assets: Cash equivalents: Money market funds $ 26,811 $ — $ — $ 26,811 Commercial paper 1,998 — — 1,998 Total cash equivalents: 28,809 — — 28,809 Available-for-sale marketable securities: Commercial paper — 295,793 — 295,793 Corporate Debt Securities — 7,446 — 7,446 US Government Agencies — 23,788 — 23,788 US Treasury securities 67,275 — — 67,275 Total available-for-sale marketable securities: 67,275 327,027 — 394,302 Total assets measured at fair value $ 96,084 $ 327,027 $ — $ 423,111 Financial Liabilities: Contingent consideration $ — $ — $ — $ — Total financial liabilities $ — $ — $ — $ — The following significant unobservable inputs were used in the valuation of the contingent consideration payable to Zentera pursuant to the Termination Agreement at June 30, 2023. Contingent Consideration Liability Fair Value as of June 30, 2023 Valuation Technique Unobservable Input Range (in thousands) Milestone payment $ 500 Discounted cash flow Likelihood of occurrence 1.0% - 2.4% Discount rate 40% Expected term Perpetuity The following table reflects the activity for the Company’s contingent consideration, measured at fair value using Level 3 inputs (in thousands): Contingent consideration at December 31, 2022 $ — Issuance of contingent consideration to Zentera 500 Changes in the fair value of contingent consideration — Contingent consideration at June 30, 2023 $ 500 |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets Prepaid expenses and other assets consisted of the following (in thousands): June 30, December 31, 2023 2022 Prepaid insurance $ 1,322 $ 1,018 Prepaid software licenses and maintenance 574 958 Foreign R&D credit refund 911 659 Prepaid research and development expenses 13,872 15,002 Interest receivable 878 508 Sublease assets 932 — Zentera receivable — 5,874 Other prepaid expenses 372 266 Total prepaid expenses and other assets 18,861 24,285 Less long-term portion 7,918 9,723 Total prepaid expenses and other assets, current $ 10,943 $ 14,562 |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2023 2022 Lab equipment $ 2,754 $ 2,622 Leasehold improvements 4,432 4,891 Office equipment and furniture 1,854 2,065 Computer equipment 150 150 Construction in progress 224 37 Subtotal 9,414 9,765 Accumulated depreciation and amortization (2,764) (2,060) Property and equipment, net $ 6,650 $ 7,705 Depreciation and amortization expense for the three months ended June 30, 2023 and 2022 was approximately $344 thousand and $348 thousand, respectively. Depreciation and amortization expense for the six months ended June 30, 2023 and |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands): June 30, December 31, 2023 2022 Accrued research and development expenses $ 28,783 $ 32,310 Accrued employee expenses 7,992 11,246 Accrued legal expenses 602 1,256 Accrued general and administrative expenses 996 662 Lease liability 2,335 2,162 Contingent consideration 500 — Taxes payable 622 384 Total accrued expenses 41,830 48,020 Less long-term portion 2,376 2,620 Total accrued expenses $ 39,454 $ 45,400 |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Follow-on Offering of Common Stock On June 15, 2023, we completed a follow-on offering in which we issued and sold 11,032,656 shares of common stock at a public offering price of $22.66 per share. The total gross proceeds for the offering were approximately $250.0 million, before deducting offering expenses of $14.3 million payable by us. Share-based Compensation Effective April 2020, the Company’s Board of Directors adopted, and the Company’s stockholders approved, the 2020 Incentive Award Plan (the “2020 Plan”), as amended in January 2021, which allows for grants to selected employees, consultants and non-employee members of the Board of Directors. We currently grant stock options and restricted stock units (“RSUs”), under the 2020 Plan. Awards may be made under the 2020 Plan covering up to the sum of (1) 5,600,000 shares of common stock; plus (2) any shares forfeited from the unvested restricted shares of our common stock issued upon conversion of unvested Class B common units (up to 1,250,000 shares); plus (3) an annual increase on the first day of each fiscal year beginning with the fiscal year ending December 31, 2021 and continuing to, and including, the fiscal year ending December 31, 2030, equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by our Board of Directors. At June 30, 2023, 10,223,133 shares were subject to outstanding awards under the 2020 Plan and 973,778 shares were available for future grants of share-based awards under the 2020 Plan. In July 2022, the Company’s Board of Directors approved the Zentalis Pharmaceuticals, Inc. 2022 Employment Inducement Incentive Award Plan (the “2022 Inducement Plan”), which is used exclusively for the grant of equity awards to new employees as an inducement material to the employees’ entering into employment with the Company. The Board of Directors has initially reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to awards granted under the 2022 Inducement Plan. At June 30, 2023, 1,360,975 shares were subject to outstanding awards under the 2022 Inducement Plan and 139,025 shares were available for future grants of share-based awards under the 2022 Inducement Plan. Total share-based compensation expense related to share based awards was comprised of the following (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development expense $ 5,985 $ 5,155 $ 11,858 $ 10,197 General and administrative expense 7,357 11,609 15,217 16,714 Total share-based compensation expense $ 13,342 $ 16,764 $ 27,075 $ 26,911 Share-based compensation expense by type of share-based award (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Stock Options $ 10,205 $ 12,524 $ 20,814 $ 20,302 Employee Stock Purchase Plan 111 110 216 212 RSAs and RSUs 3,026 4,130 6,045 6,397 $ 13,342 $ 16,764 $ 27,075 $ 26,911 Stock Options and Restricted Stock Units The exercise price of stock options granted is equal to the closing price of the Company’s common stock on the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company estimates expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company uses the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not issued any dividends and does not expect to issue dividends over the life of the options. As a result, the Company has estimated the dividend yield to be zero. The fair value of the stock options granted during the six months ended June 30, 2023 and June 30, 2022 was determined with the following assumptions: June 30, 2023 June 30, 2022 Expected volatility 77.5% - 80.8% 73.6% - 80.5% Average expected term (in years) 5.5 - 6.1 6.0 - 6.5 Risk-free interest rate 3.4% - 4.2% 1.5% - 3.2% Expected dividend yield — % — % Employee Stock Purchase Plan Effective April 2020, the Company’s Board of Directors adopted, and the Company’s stockholders approved the Zentalis Pharmaceuticals, Inc. 2020 Employee Stock Purchase Plan (the “ESPP”), which was subsequently amended and restated effective March 15, 2021. The maximum aggregate number of shares of the Company’s common stock available for issuance under the ESPP at June 30, 2023 was 1,929,891. Under the terms of the ESPP, the Company’s employees may elect to have up to 20% of their compensation, up to a maximum value of $25,000 per calendar year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of the Company’s common stock on (i) the first trading day of a six-month offering period, or (ii) the applicable purchase date, defined as the last trading day of the six-month offering period. The weighted average assumptions used to estimate the fair value of stock purchase rights under the ESPP during the period ended are as follows: Ended June 30, 2023 ESPP Volatility 94.2 % Expected term (years) 0.5 Risk free rate 4.9 % Expected dividend yield — Compensation Expense Summary Total unrecognized estimated compensation cost by type of award and the weighted average requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted): June 30, 2023 Unrecognized Remaining Stock options $ 113,266 3.02 RSAs 101 0.28 RSUs 31,227 2.88 ESPP $ 110 0.25 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Contingencies From time to time, we may be involved in various disputes, including lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. Any of these claims could subject us to costly legal expenses. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss to the extent necessary to make the consolidated financial statements not misleading. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in our consolidated financial statements. While we do generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage, or our policy limits may be inadequate to fully satisfy any damage awards or settlement. If this were to happen, the payment of any such awards could have a material adverse effect on our consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. We are currently not a party to any legal proceedings that require a loss liability to be recorded. Leases Our commitments include payments related to operating leases. Approximate annual future minimum operating lease payments as of June 30, 2023 are as follows (in thousands): Year Operating Leases 2023 (remaining) $ 3,257 2024 6,486 2025 6,799 2026 7,278 2027 7,451 Thereafter 38,778 Total minimum lease payments: 70,049 Less: imputed interest (23,687) Total operating lease liabilities 46,362 Less: current portion (2,335) Lease liability, net of current portion $ 44,027 The weighted-average remaining lease term of our operating leases is approximately 9.3 years. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share Basic and diluted net loss per common share were calculated as follows (in thousands except per share amounts): Three Months Ended Six Months Ended 2023 2022 2023 2022 Numerator: Net loss attributable to Zentalis $ (112,527) $ (68,357) $ (175,746) $ (127,434) Denominator: Weighted average number of common shares outstanding, basic and diluted 60,790 51,117 60,038 48,197 Net loss per common share $ (1.85) $ (1.34) $ (2.93) $ (2.64) Our potential and dilutive securities, which include outstanding stock options, unvested RSAs and unvested RSUs have been excluded from the computation of diluted net loss per common share as the effect would be anti-dilutive. The following common stock equivalents have been excluded from the calculations of diluted net loss per common share because their inclusion would be antidilutive (in thousands). June 30, 2023 2022 Outstanding stock options 10,085 7,828 Unvested RSAs 42 222 Unvested RSUs 1,499 472 11,626 8,522 |
Related Party Disclosures
Related Party Disclosures | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures | Related Party Disclosures Tempus Kimberly Blackwell, M.D., our Chief Executive Officer and a member of our Board of Directors, was previously employed by Tempus Labs, Inc. ("Tempus") and served as an advisor of Tempus until June 2023. The Company entered into a Master Services Agreement with Tempus in December 2020 to provide data licensing and research services. There were $0.5 million and immaterial fees incurred for services performed by Tempus for the six months ended June 30, 2023 and 2022, respectively. Zentera Kevin D. Bunker, Ph.D., our Chief Scientific Officer, served as a member of the Board of Directors of Zentera until June 2023, when Dr. Bunker resigned in connection with the termination of our Collaboration and License Agreements with Zentera and the sale of our 40.3% equity stake in Zentera back to Zentera. For additional information, please see Note 3. Accordingly, the Company identified Zentera as a related party. In May 2020, each of our wholly owned subsidiaries, Zeno Alpha, Inc., K-Group Alpha, Inc. and K-Group Beta, Inc., entered into Collaboration and License Agreements, pursuant to which we collaborated with Zentera on the development and comm ercialization of the Zentera Collaboration Products, in Greater China. Under the terms of the Collaboration and License Agreements with Zentera, Zentera was responsible for the costs of developing the Zentera Collaboration Products in Greater China, and we were responsible for the costs of developing the Zentera Collaboration Products outside Greater China, provided that Zentera was obligated to reimburse us for a portion of its costs for global data management, pharmacovigilance, safety database management, and chemistry, manufacturing and controls activities with respect to each Zentera Collaboration Product. For the six months ended June 30, 2023 and 2022, the amounts incurred under this arrangement totaled $3.5 million and $5.1 million, respectively, and are presented as contra-research and development expense in the consolidated statement of operations. As disclosed above, these Collaboration and License Agreements were terminated in June 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss attributable to Zentalis | $ (112,527) | $ (68,357) | $ (175,746) | $ (127,434) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Melissa Epperly [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On May 19, 2023, Melissa Epperly, the Company’s Chief Financial Officer, terminated a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c), originally adopted on August 15, 2022, for the sale of up to 55,227 shares of the Company’s common stock until August 15, 2023. | |
Name | Melissa Epperly | |
Title | Chief Financial Officer | |
Adoption Date | August 15, 2022 | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | May 19, 2023 | |
Aggregate Available | 55,227 | 55,227 |
Kevin Bunker [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 6, 2023, Kevin Bunker, the Company’s Chief Scientific Officer, terminated a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c), originally adopted on September 16, 2021 and modified on August 18, 2022 by Sundog Ranch, Inc. on behalf of the Bunker Family Protection Trust, the sole shareholder of Sundog Ranch, Inc., for the sale of up to 95,000 shares of the Company’s common stock until July 31, 2023. | |
Name | Kevin Bunker | |
Title | Chief Scientific Officer | |
Adoption Date | September 16, 2021 | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | June 6, 2023 | |
Aggregate Available | 95,000 | 95,000 |
Interim Unaudited Financial S_2
Interim Unaudited Financial Statements (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements but do not include all disclosures required by U.S. GAAP. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operation for the periods presented, with such adjustments consisting only of normal recurring adjustments. Certain reclassifications have been made to the prior period condensed consolidated balance sheet to conform to the current period presentation. |
Consolidation | The accompanying interim unaudited condensed consolidated financial statements include our wholly-owned subsidiaries and a variable interest entity (“VIE”), for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. We evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, we apply a qualitative approach that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE. We will continuously assess whether we are the primary beneficiary of a VIE, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of such VIE. During the periods presented, we have not provided any other material financial or other support to our VIE that we were not contractually required to provide. The equity method is used to account for investments in which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded on the balance sheet, and the share of net income or losses of equity investments is recognized on a one quarter lag in investment and other income (expense), net. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates. |
Acquisitions and Contingent Consideration | Acquisitions and Contingent Consideration The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting as indicated in ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquired entity and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquired entity based on the fair value estimates as of the date of acquisition. In accordance with Accounting Standards Codification (ASC) 805, Business Combinations, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss. Contingent consideration liabilities expected to be |
Acquisitions and Contingent Consideration | Acquisitions and Contingent Consideration The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting as indicated in ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquired entity and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquired entity based on the fair value estimates as of the date of acquisition. In accordance with Accounting Standards Codification (ASC) 805, Business Combinations, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss. Contingent consideration liabilities expected to be |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Reconciliation of Equity Attributable to Noncontrolling Interest | The following is a reconciliation of equity (net assets) attributable to the noncontrolling interest (in thousands): June 30, December 31, 2023 2022 Noncontrolling interest at beginning of period $ 221 $ 528 Net loss attributable to noncontrolling interest (80) (307) Noncontrolling interest at end of period $ 141 $ 221 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Components of Available-for-sale Marketable Securities | Available-for-sale marketable securities consisted of the following (in thousands): June 30, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper $ 171,816 $ 12 $ (200) $ 171,628 Corporate Debt Securities — — — — US Government Agencies 85,248 28 (112) 85,164 US Treasury 29,702 — (66) 29,636 $ 286,766 $ 40 $ (378) $ 286,428 December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper $ 296,309 $ 71 $ (587) $ 295,793 Corporate Debt securities 7,472 — (26) 7,446 US Government Agencies 23,970 — (182) 23,788 US Treasury securities 67,904 — (629) 67,275 $ 395,655 $ 71 $ (1,424) $ 394,302 |
Contractual Maturities of Available-for-sale Debt Securities | Contractual maturities of available-for-sale debt securities are as follows (in thousands): June 30, 2023 December 31, 2022 Estimated Fair Value Due within one year $ 264,470 $ 394,302 After one but within five years 21,958 — $ 286,428 $ 394,302 |
Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following table summarizes the financial assets and liabilities that are measured on a recurring basis at fair value as of June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 Level 1 Level 2 Level 3 Total estimated fair value Financial assets: Cash equivalents: Money market funds $ 261,994 $ — $ — $ 261,994 Commercial paper — — — — Total cash equivalents: 261,994 — — 261,994 Available-for-sale marketable securities: Commercial paper — 171,628 — 171,628 Corporate Debt Securities — — — — US Government Agencies — 85,164 — 85,164 US Treasury securities 29,636 — — 29,636 Total available-for-sale marketable securities: 29,636 256,792 — 286,428 Total assets measured at fair value $ 291,630 $ 256,792 $ — $ 548,422 Financial Liabilities: Contingent consideration $ — $ — $ 500 $ 500 Total financial liabilities $ — $ — $ 500 $ 500 December 31, 2022 Level 1 Level 2 Level 3 Total estimated fair value Financial assets: Cash equivalents: Money market funds $ 26,811 $ — $ — $ 26,811 Commercial paper 1,998 — — 1,998 Total cash equivalents: 28,809 — — 28,809 Available-for-sale marketable securities: Commercial paper — 295,793 — 295,793 Corporate Debt Securities — 7,446 — 7,446 US Government Agencies — 23,788 — 23,788 US Treasury securities 67,275 — — 67,275 Total available-for-sale marketable securities: 67,275 327,027 — 394,302 Total assets measured at fair value $ 96,084 $ 327,027 $ — $ 423,111 Financial Liabilities: Contingent consideration $ — $ — $ — $ — Total financial liabilities $ — $ — $ — $ — |
Measurement Inputs for Contingent Consideration Liability | The following significant unobservable inputs were used in the valuation of the contingent consideration payable to Zentera pursuant to the Termination Agreement at June 30, 2023. Contingent Consideration Liability Fair Value as of June 30, 2023 Valuation Technique Unobservable Input Range (in thousands) Milestone payment $ 500 Discounted cash flow Likelihood of occurrence 1.0% - 2.4% Discount rate 40% Expected term Perpetuity |
Activity for Contingent Consideration | The following table reflects the activity for the Company’s contingent consideration, measured at fair value using Level 3 inputs (in thousands): Contingent consideration at December 31, 2022 $ — Issuance of contingent consideration to Zentera 500 Changes in the fair value of contingent consideration — Contingent consideration at June 30, 2023 $ 500 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consisted of the following (in thousands): June 30, December 31, 2023 2022 Prepaid insurance $ 1,322 $ 1,018 Prepaid software licenses and maintenance 574 958 Foreign R&D credit refund 911 659 Prepaid research and development expenses 13,872 15,002 Interest receivable 878 508 Sublease assets 932 — Zentera receivable — 5,874 Other prepaid expenses 372 266 Total prepaid expenses and other assets 18,861 24,285 Less long-term portion 7,918 9,723 Total prepaid expenses and other assets, current $ 10,943 $ 14,562 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, net | Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2023 2022 Lab equipment $ 2,754 $ 2,622 Leasehold improvements 4,432 4,891 Office equipment and furniture 1,854 2,065 Computer equipment 150 150 Construction in progress 224 37 Subtotal 9,414 9,765 Accumulated depreciation and amortization (2,764) (2,060) Property and equipment, net $ 6,650 $ 7,705 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following (in thousands): June 30, December 31, 2023 2022 Accrued research and development expenses $ 28,783 $ 32,310 Accrued employee expenses 7,992 11,246 Accrued legal expenses 602 1,256 Accrued general and administrative expenses 996 662 Lease liability 2,335 2,162 Contingent consideration 500 — Taxes payable 622 384 Total accrued expenses 41,830 48,020 Less long-term portion 2,376 2,620 Total accrued expenses $ 39,454 $ 45,400 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Share-based Compensation Expense | Total share-based compensation expense related to share based awards was comprised of the following (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development expense $ 5,985 $ 5,155 $ 11,858 $ 10,197 General and administrative expense 7,357 11,609 15,217 16,714 Total share-based compensation expense $ 13,342 $ 16,764 $ 27,075 $ 26,911 Share-based compensation expense by type of share-based award (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Stock Options $ 10,205 $ 12,524 $ 20,814 $ 20,302 Employee Stock Purchase Plan 111 110 216 212 RSAs and RSUs 3,026 4,130 6,045 6,397 $ 13,342 $ 16,764 $ 27,075 $ 26,911 |
Schedule of Valuation Assumptions | The fair value of the stock options granted during the six months ended June 30, 2023 and June 30, 2022 was determined with the following assumptions: June 30, 2023 June 30, 2022 Expected volatility 77.5% - 80.8% 73.6% - 80.5% Average expected term (in years) 5.5 - 6.1 6.0 - 6.5 Risk-free interest rate 3.4% - 4.2% 1.5% - 3.2% Expected dividend yield — % — % |
Schedule of Valuation Assumptions, ESPP | The weighted average assumptions used to estimate the fair value of stock purchase rights under the ESPP during the period ended are as follows: Ended June 30, 2023 ESPP Volatility 94.2 % Expected term (years) 0.5 Risk free rate 4.9 % Expected dividend yield — |
Share-based Compensation Expense by Type of Share-based Award | Total unrecognized estimated compensation cost by type of award and the weighted average requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted): June 30, 2023 Unrecognized Remaining Stock options $ 113,266 3.02 RSAs 101 0.28 RSUs 31,227 2.88 ESPP $ 110 0.25 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Operating Lease Payments | Approximate annual future minimum operating lease payments as of June 30, 2023 are as follows (in thousands): Year Operating Leases 2023 (remaining) $ 3,257 2024 6,486 2025 6,799 2026 7,278 2027 7,451 Thereafter 38,778 Total minimum lease payments: 70,049 Less: imputed interest (23,687) Total operating lease liabilities 46,362 Less: current portion (2,335) Lease liability, net of current portion $ 44,027 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Unit | Basic and diluted net loss per common share were calculated as follows (in thousands except per share amounts): Three Months Ended Six Months Ended 2023 2022 2023 2022 Numerator: Net loss attributable to Zentalis $ (112,527) $ (68,357) $ (175,746) $ (127,434) Denominator: Weighted average number of common shares outstanding, basic and diluted 60,790 51,117 60,038 48,197 Net loss per common share $ (1.85) $ (1.34) $ (2.93) $ (2.64) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Unit | The following common stock equivalents have been excluded from the calculations of diluted net loss per common share because their inclusion would be antidilutive (in thousands). June 30, 2023 2022 Outstanding stock options 10,085 7,828 Unvested RSAs 42 222 Unvested RSUs 1,499 472 11,626 8,522 |
Significant Transactions (Detai
Significant Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 15, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Loss on equity method investment | $ 13,704 | $ 5,338 | $ 16,014 | $ 7,089 | |||
Contingent consideration | $ 500 | 500 | 500 | $ 0 | |||
In-process research and development | $ 45,568 | $ 0 | $ 45,568 | $ 0 | |||
Zentera | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Total consideration transferred | $ 45,600 | ||||||
Fixed consideration | 30,000 | ||||||
Forgiveness of outstanding receivables | 9,400 | ||||||
Acquisition-related costs | 500 | ||||||
In-process research and development | $ 45,600 | ||||||
Zentera | Variable consideration of a change in control milestone payment | Minimum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Contingent consideration | 0 | ||||||
Zentera | Variable consideration of a change in control milestone payment | Maximum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Contingent consideration | 15,000 | ||||||
Zentera | Discounted cash flow | Milestone payment | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Contingent consideration | $ 500 | ||||||
Zentera | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage sold | 40.30% |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - Kalyra Pharmaceuticals, Inc. $ in Millions | Dec. 21, 2017 USD ($) |
Variable Interest Entity [Line Items] | |
Cash payments to acquire interest | $ 4.5 |
Ownership percentage | 25% |
Business Combinations - Reconci
Business Combinations - Reconciliation of Equity (Net Assets) Attributable to Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Noncontrolling interest at beginning of period | $ 221 | ||||
Net loss attributable to noncontrolling interests | $ (37) | $ (35) | (80) | $ (195) | |
Noncontrolling interest at end of period | 141 | 141 | $ 221 | ||
VIE, Primary Beneficiary | |||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||||
Noncontrolling interest at beginning of period | 221 | $ 528 | 528 | ||
Net loss attributable to noncontrolling interests | (80) | (307) | |||
Noncontrolling interest at end of period | $ 141 | $ 141 | $ 221 |
Fair Value Measurement - Compon
Fair Value Measurement - Components of Available-for-sale Marketable Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 286,766 | $ 395,655 |
Gross Unrealized Gains | 40 | 71 |
Gross Unrealized Losses | (378) | (1,424) |
Estimated Fair Value | 286,428 | 394,302 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 171,816 | 296,309 |
Gross Unrealized Gains | 12 | 71 |
Gross Unrealized Losses | (200) | (587) |
Estimated Fair Value | 171,628 | 295,793 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 0 | 7,472 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (26) |
Estimated Fair Value | 0 | 7,446 |
US Government Agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 85,248 | 23,970 |
Gross Unrealized Gains | 28 | 0 |
Gross Unrealized Losses | (112) | (182) |
Estimated Fair Value | 85,164 | 23,788 |
US Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 29,702 | 67,904 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (66) | (629) |
Estimated Fair Value | $ 29,636 | $ 67,275 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) | Jun. 30, 2023 USD ($) potential_milestone_payment security | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Number of available-for-sale securities in unrealized loss position | security | 42 | |
Debt securities fair market value | $ 193,700,000 | |
Fair market value of available-for-sale securities in unrealized loss position | $ 400,000 | |
Number of available-for-sale securities in unrealized loss position for less than one year | security | 38 | |
Gross unrealized loss position for less than one year | $ 400,000 | |
Number of available-for-sale securities in unrealized loss position for more than one year | security | 4 | |
Gross unrealized loss position for more than one year | $ 25,900 | |
Contingent consideration | 500,000 | $ 0 |
Zentera | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration | $ 500,000 | |
Number of potential milestone payments | potential_milestone_payment | 1 |
Fair Value Measurement - Contra
Fair Value Measurement - Contractual Maturities of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Due within one year | $ 264,470 | $ 394,302 |
After one but within five years | 21,958 | 0 |
Total | $ 286,428 | $ 394,302 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Cash equivalents | $ 261,994 | $ 28,809 |
Marketable securities, available-for-sale | 286,428 | 394,302 |
Total assets measured at fair value | 548,422 | 423,111 |
Financial Liabilities: | ||
Contingent consideration | 500 | 0 |
Total financial liabilities | 500 | 0 |
Level 1 | ||
Financial assets: | ||
Cash equivalents | 261,994 | 28,809 |
Marketable securities, available-for-sale | 29,636 | 67,275 |
Total assets measured at fair value | 291,630 | 96,084 |
Financial Liabilities: | ||
Contingent consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 2 | ||
Financial assets: | ||
Cash equivalents | 0 | 0 |
Marketable securities, available-for-sale | 256,792 | 327,027 |
Total assets measured at fair value | 256,792 | 327,027 |
Financial Liabilities: | ||
Contingent consideration | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 3 | ||
Financial assets: | ||
Cash equivalents | 0 | 0 |
Marketable securities, available-for-sale | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Financial Liabilities: | ||
Contingent consideration | 500 | 0 |
Total financial liabilities | 500 | 0 |
Commercial paper | ||
Financial assets: | ||
Marketable securities, available-for-sale | 171,628 | 295,793 |
Commercial paper | Level 1 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
Commercial paper | Level 2 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 171,628 | 295,793 |
Commercial paper | Level 3 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
Corporate Debt Securities | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 7,446 |
Corporate Debt Securities | Level 1 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
Corporate Debt Securities | Level 2 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 7,446 |
Corporate Debt Securities | Level 3 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
US Government Agencies | ||
Financial assets: | ||
Marketable securities, available-for-sale | 85,164 | 23,788 |
US Government Agencies | Level 1 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
US Government Agencies | Level 2 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 85,164 | 23,788 |
US Government Agencies | Level 3 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
US Treasury securities | ||
Financial assets: | ||
Marketable securities, available-for-sale | 29,636 | 67,275 |
US Treasury securities | Level 1 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 29,636 | 67,275 |
US Treasury securities | Level 2 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
US Treasury securities | Level 3 | ||
Financial assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
Money market funds | ||
Financial assets: | ||
Cash equivalents | 261,994 | 26,811 |
Money market funds | Level 1 | ||
Financial assets: | ||
Cash equivalents | 261,994 | 26,811 |
Money market funds | Level 2 | ||
Financial assets: | ||
Cash equivalents | 0 | 0 |
Money market funds | Level 3 | ||
Financial assets: | ||
Cash equivalents | 0 | 0 |
Commercial paper | ||
Financial assets: | ||
Cash equivalents | 0 | 1,998 |
Commercial paper | Level 1 | ||
Financial assets: | ||
Cash equivalents | 0 | 1,998 |
Commercial paper | Level 2 | ||
Financial assets: | ||
Cash equivalents | 0 | 0 |
Commercial paper | Level 3 | ||
Financial assets: | ||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measurement - Measur
Fair Value Measurement - Measurement Inputs for Contingent Consideration Liability (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration | $ 500 | $ 0 |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration | $ 500 | $ 0 |
Level 3 | Discounted cash flow | Likelihood of occurrence | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.010 | |
Level 3 | Discounted cash flow | Likelihood of occurrence | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.024 | |
Level 3 | Milestone payment | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.40 | |
Level 3 | Milestone payment | Discounted cash flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration | $ 500 |
Fair Value Measurement - Activi
Fair Value Measurement - Activity for Contingent Consideration (Details) - Contingent Consideration Liability $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Contingent consideration, beginning balance | $ 0 |
Issuance of contingent consideration to Zentera | 500 |
Changes in the fair value of contingent consideration | 0 |
Contingent consideration, ending balance | $ 500 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 1,322 | $ 1,018 |
Prepaid software licenses and maintenance | 574 | 958 |
Foreign R&D credit refund | 911 | 659 |
Prepaid research and development expenses | 13,872 | 15,002 |
Interest receivable | 878 | 508 |
Sublease assets | 932 | 0 |
Zentera receivable | 0 | 5,874 |
Other prepaid expenses | 372 | 266 |
Total prepaid expenses and other assets | 18,861 | 24,285 |
Less long-term portion | 7,918 | 9,723 |
Total prepaid expenses and other assets, current | $ 10,943 | $ 14,562 |
Property and Equipment, net - S
Property and Equipment, net - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 9,414 | $ 9,765 |
Accumulated depreciation and amortization | (2,764) | (2,060) |
Property and equipment, net | 6,650 | 7,705 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 2,754 | 2,622 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 4,432 | 4,891 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,854 | 2,065 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 150 | 150 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 224 | $ 37 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization | $ 344 | $ 348 | $ 704 | $ 692 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued research and development expenses | $ 28,783 | $ 32,310 |
Accrued employee expenses | 7,992 | 11,246 |
Accrued legal expenses | 602 | 1,256 |
Accrued general and administrative expenses | 996 | 662 |
Lease liability | 2,335 | 2,162 |
Contingent consideration | 500 | 0 |
Taxes payable | 622 | 384 |
Total accrued expenses | 41,830 | 48,020 |
Less long-term portion | 2,376 | 2,620 |
Total accrued expenses | $ 39,454 | $ 45,400 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Jun. 15, 2023 | Jan. 31, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jul. 31, 2022 | |
Class of Stock [Line Items] | |||||
Issuance of common stock upon exercise of options, net (in shares) | 51,500 | ||||
Shares issued upon vesting of certain RSAs (in shares) | 73,500 | ||||
Follow On Offering | |||||
Class of Stock [Line Items] | |||||
Gross proceeds from issuance of common stock | $ 250,000,000 | ||||
Expenses and fees from the issuance of common stock | $ 14,300,000 | ||||
Stock Options | |||||
Class of Stock [Line Items] | |||||
Generally expected vesting term of the option contract (in years) | 10 years | ||||
Expected dividend yield | 0% | 0% | |||
Options outstanding (in shares) | 10,100,000 | ||||
Employee Stock Purchase Plan | |||||
Class of Stock [Line Items] | |||||
Number of shares reserved for future issuance (in shares) | 1,929,891 | ||||
Expected dividend yield | 0% | ||||
ESPP maximum percent of compensation to contribute | 20% | ||||
Maximum contribution amount | $ 25,000 | ||||
ESPP purchase price of common stock, percent of market price | 85% | ||||
Offering period (in months) | 6 months | ||||
RSAs | |||||
Class of Stock [Line Items] | |||||
Non-option equity instruments, outstanding (in shares) | 47,700 | ||||
RSUs | |||||
Class of Stock [Line Items] | |||||
Non-option equity instruments, outstanding (in shares) | 1,500,000 | ||||
The 2020 Plan | |||||
Class of Stock [Line Items] | |||||
Non-option equity instruments, outstanding (in shares) | 10,223,133 | ||||
Number of shares available for future grants (in shares) | 973,778 | ||||
2022 Inducement Plan | |||||
Class of Stock [Line Items] | |||||
Non-option equity instruments, outstanding (in shares) | 1,360,975 | ||||
Number of shares available for future grants (in shares) | 139,025 | ||||
Number of shares reserved for future issuance (in shares) | 1,500,000 | ||||
Common Stock | Follow On Offering | |||||
Class of Stock [Line Items] | |||||
Number of shares issued and sold (in shares) | 11,032,656 | ||||
Share price (in dollars per share) | $ 22.66 | ||||
Common Stock | The 2020 Plan | |||||
Class of Stock [Line Items] | |||||
Shares authorized to be issued under plan (in shares) | 5,600,000 | ||||
Percent of common stock outstanding used as threshold to calculate shares available for issuance | 5% | ||||
Common Class B | The 2020 Plan | Maximum | |||||
Class of Stock [Line Items] | |||||
Shares authorized to be issued under plan (in shares) | 1,250,000 |
Stockholders_ Equity - Share-ba
Stockholders’ Equity - Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 13,342 | $ 16,764 | $ 27,075 | $ 26,911 |
Research and development expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 5,985 | 5,155 | 11,858 | 10,197 |
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 7,357 | $ 11,609 | $ 15,217 | $ 16,714 |
Stockholders_ Equity - Share-_2
Stockholders’ Equity - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 13,342 | $ 16,764 | $ 27,075 | $ 26,911 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 10,205 | 12,524 | 20,814 | 20,302 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 111 | 110 | 216 | 212 |
RSAs and RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 3,026 | $ 4,130 | $ 6,045 | $ 6,397 |
Stockholders_ Equity - Fair Val
Stockholders’ Equity - Fair Value Assumptions for Stock Options (Details) - Stock Options | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected volatility, minimum | 77.50% | 73.60% |
Expected volatility, maximum | 80.80% | 80.50% |
Risk-free interest rate, minimum | 3.40% | 1.50% |
Risk-free interest rate, maximum | 4.20% | 3.20% |
Expected dividend yield | 0% | 0% |
Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average expected term (in years) | 5 years 6 months | 6 years |
Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average expected term (in years) | 6 years 1 month 6 days | 6 years 6 months |
Stockholders_ Equity - Fair V_2
Stockholders’ Equity - Fair Value Assumptions for ESPP (Details) - Employee Stock Purchase Plan | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Volatility | 94.20% |
Expected term (years) | 6 months |
Risk free rate | 4.90% |
Expected dividend yield | 0% |
Stockholders_ Equity - Unrecogn
Stockholders’ Equity - Unrecognized Compensation Cost (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized expense, stock options | $ 113,266 |
Remaining Weighted-Average Recognition Period (years) | 3 years 7 days |
RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized expense, other than stock options | $ 101 |
Remaining Weighted-Average Recognition Period (years) | 3 months 10 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized expense, other than stock options | $ 31,227 |
Remaining Weighted-Average Recognition Period (years) | 2 years 10 months 17 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized expense, other than stock options | $ 110 |
Remaining Weighted-Average Recognition Period (years) | 3 months |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 (remaining) | $ 3,257 | |
2024 | 6,486 | |
2025 | 6,799 | |
2026 | 7,278 | |
2027 | 7,451 | |
Thereafter | 38,778 | |
Total minimum lease payments: | 70,049 | |
Less: imputed interest | (23,687) | |
Total operating lease liabilities | 46,362 | |
Less: current portion | (2,335) | $ (2,162) |
Lease liability, net of current portion | $ 44,027 | $ 45,166 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease, weighted-average remaining lease term (in years) | 9 years 3 months 18 days | |
Operating lease right-of-use asset and fixed asset impairment | $ 4,953 | $ 0 |
Sublease income | $ 200 |
Net Loss Per Common Share - Cal
Net Loss Per Common Share - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net loss attributable to Zentalis | $ (112,527) | $ (68,357) | $ (175,746) | $ (127,434) |
Denominator: | ||||
Weighted average number of common shares outstanding, basic (in shares) | 60,790 | 51,117 | 60,038 | 48,197 |
Weighted average number of common shares outstanding, diluted (in shares) | 60,790 | 51,117 | 60,038 | 48,197 |
Net loss per common share, basic (in dollars per share) | $ (1.85) | $ (1.34) | $ (2.93) | $ (2.64) |
Net loss per common share, diluted (in dollars per share) | $ (1.85) | $ (1.34) | $ (2.93) | $ (2.64) |
Net Loss Per Common Share - Ant
Net Loss Per Common Share - Antidilutive Securities (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per unit (in shares) | 11,626 | 8,522 |
Outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per unit (in shares) | 10,085 | 7,828 |
Unvested RSAs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per unit (in shares) | 42 | 222 |
Unvested RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per unit (in shares) | 1,499 | 472 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 15, 2023 | |
Zentera | |||
Related Party Transaction [Line Items] | |||
Ownership percentage sold | 40.30% | ||
Contra-research and development expense | $ 3.5 | $ 5.1 | |
Related Party | Master Services Agreement | |||
Related Party Transaction [Line Items] | |||
Due to related parties | $ 0.5 | $ 0 |