Zentalis Narrows Q3 Loss Amidst R&D Cuts, Cash Position Improves

TL;DR

**ZNTL is burning cash on a single drug, and while losses are shrinking, they'll need more money to get azenosertib to market.**

AI Summary

Zentalis Pharmaceuticals, Inc. (ZNTL) reported a net loss of $26.691 million for the three months ended September 30, 2025, a decrease from the $40.158 million net loss in the same period of 2024. For the nine months ended September 30, 2025, the net loss was $101.844 million, an improvement from $118.395 million in the prior year, primarily due to a significant reduction in operating expenses. Research and development expenses decreased to $22.950 million for the quarter from $36.824 million year-over-year, and general and administrative expenses fell to $10.784 million from $14.608 million. The company recorded no license revenue in 2025, compared to $40.560 million in the first nine months of 2024. Cash and cash equivalents increased to $39.072 million as of September 30, 2025, from $33.901 million at December 31, 2024, but total assets declined from $430.337 million to $327.250 million over the same period. The company's accumulated deficit grew to $1.156 billion, indicating continued reliance on external funding for its operations and clinical development of azenosertib.

Why It Matters

Zentalis's continued significant net losses and reliance on a single clinical-stage product, azenosertib, make this filing critical for investors. The substantial reduction in R&D expenses, while narrowing losses, could signal a more focused pipeline or potential delays in other programs, impacting long-term growth prospects. For employees, this could imply a leaner operational structure. Customers and the broader market are impacted by the slow, capital-intensive nature of drug development, especially in competitive oncology spaces like platinum-resistant ovarian cancer, where Zentalis aims to position azenosertib. The company's ability to secure additional capital will dictate its competitive viability.

Risk Assessment

Risk Level: high — Zentalis has an accumulated deficit of $1.156 billion as of September 30, 2025, and has incurred significant net losses since inception, including $101.844 million in the first nine months of 2025. The company explicitly states it will require substantial additional capital to finance operations and is 'substantially dependent on the success of azenosertib, which is currently our only product candidate in clinical development,' indicating high operational and financial risk.

Analyst Insight

Investors should exercise extreme caution and consider ZNTL a highly speculative investment. Monitor the progress of azenosertib's clinical trials, particularly DENALI Part 2 and the planned Phase 3 study, and any announcements regarding future capital raises. Without successful clinical outcomes and significant additional funding, the company's long-term viability is questionable.

Financial Highlights

debt To Equity

0.29

revenue

$0

operating Margin

-337.3%

total Assets

$327.250M

total Debt

$74.376M

net Income

-$101.844M

eps

-$1.42

gross Margin

N/A

cash Position

$39.072M

revenue Growth

-100.0%

Revenue Breakdown

Key Numbers

• $101.844M — Net Loss (for the nine months ended September 30, 2025, an improvement from $118.395 million in 2024)
• $26.691M — Net Loss (for the three months ended September 30, 2025, down from $40.158 million in 2024)
• $77.807M — Research and Development Expenses (for the nine months ended September 30, 2025, a decrease from $134.795 million in 2024)
• $39.072M — Cash and Cash Equivalents (as of September 30, 2025, up from $33.901 million at December 31, 2024)
• $1.156B — Accumulated Deficit (as of September 30, 2025, indicating significant historical losses)
• $327.250M — Total Assets (as of September 30, 2025, down from $430.337 million at December 31, 2024)
• 72,250,779 — Common Shares Outstanding (as of November 1, 2025)

Key Players & Entities

• Zentalis Pharmaceuticals, Inc. (company) — registrant
• SEC (regulator) — filing authority
• FDA (regulator) — U.S. Food and Drug Administration
• Nasdaq Stock Market LLC (company) — exchange for ZNTL common stock
• azenosertib (drug) — company's only product candidate in clinical development
• DENALI Part 2 (project) — ongoing clinical trial for azenosertib
• Cyclin E1-positive platinum-resistant ovarian cancer (medical_condition) — lead indication for azenosertib
• Bloomberg (company) — publisher for the analysis

FAQ

Risk Factors

• Continued Operating Losses and Accumulated Deficit [high — financial]: The company has consistently incurred net losses, with an accumulated deficit of $1.156 billion as of September 30, 2025. This indicates a substantial reliance on external funding to sustain operations and clinical development, posing a financial risk if such funding becomes unavailable.
• Clinical Development and Regulatory Approval Risks [high — operational]: Zentalis is focused on the clinical development of azenosertib. Delays in clinical trials, failure to demonstrate efficacy or safety, or inability to obtain regulatory approval from bodies like the FDA represent significant operational and financial risks that could impede commercialization.
• Declining Asset Base [medium — financial]: Total assets decreased from $430.337 million at December 31, 2024, to $327.250 million as of September 30, 2025. This decline, particularly in marketable securities, suggests a drawdown of resources to fund operations, which could impact future financial flexibility.
• Dependence on Investment Income [medium — financial]: While operating expenses have decreased, the company's net loss is partially offset by investment and other income, which was $13.571 million for the nine months ended September 30, 2025. A significant reduction in this income could exacerbate net losses.
• Evolving Regulatory Landscape [medium — regulatory]: The pharmaceutical industry is subject to stringent and evolving regulatory requirements. Changes in regulatory standards or interpretations could impact the development timelines, approval processes, and market access for Zentalis's drug candidates.
• Competition in Oncology Market [medium — market]: The oncology market is highly competitive, with numerous companies developing novel therapies. Zentalis faces competition from established pharmaceutical companies and emerging biotechs, which could affect market share and pricing power if azenosertib is approved.

Industry Context

Zentalis Pharmaceuticals operates in the highly competitive and capital-intensive biotechnology sector, specifically focusing on oncology. The industry is characterized by long development cycles, significant R&D investment, and high failure rates. Success hinges on innovation, clinical trial outcomes, and navigating complex regulatory pathways. Key trends include the development of targeted therapies, immunotherapies, and personalized medicine approaches.

Regulatory Implications

As a clinical-stage biopharmaceutical company, Zentalis is subject to rigorous oversight by regulatory bodies like the FDA. The development and potential approval of azenosertib will require extensive clinical data demonstrating safety and efficacy. Any delays, adverse findings, or changes in regulatory requirements could significantly impact the company's timeline and commercial prospects.

What Investors Should Do

1. Monitor clinical trial progress and data readouts for azenosertib.
2. Assess cash burn rate and future financing needs.
3. Evaluate competitive landscape and market potential for azenosertib.
4. Review changes in operating expenses and R&D spending.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net loss of $26.691 million and accumulated deficit of $1.156 billion. Cash and cash equivalents stood at $39.072 million.
• 2024-09-30: End of Q3 2024 — Reported net loss of $40.158 million for the quarter and $118.395 million for the nine months. License revenue was $40.560 million for the nine-month period.
• 2024-12-31: End of Fiscal Year 2024 — Total assets were $430.337 million and cash and cash equivalents were $33.901 million.

Glossary

Accumulated deficit

The cumulative net losses of a company since its inception, minus any cumulative net income. It represents the total losses that have not been offset by profits. (Indicates Zentalis's history of operating at a loss, requiring ongoing external financing for its development activities.)

Marketable securities, available-for-sale

Investments in debt or equity securities that are not classified as trading or held-to-maturity. They are reported at fair value, with unrealized gains and losses included in other comprehensive income. (A significant component of Zentalis's assets, providing a source of liquidity and investment income, but subject to market fluctuations.)

Operating lease right-of-use assets

An asset representing the right to use an underlying leased asset for the lease term. It is recognized under ASC 842 for leases longer than 12 months. (Represents Zentalis's long-term commitments for facilities or equipment, impacting its balance sheet and cash flows.)

Noncontrolling interests

The portion of equity interest in a subsidiary that is not attributable to the parent company. It is presented separately in the consolidated financial statements. (Indicates if Zentalis has any consolidated subsidiaries where a portion of ownership is held by external parties.)

Net loss per common share outstanding

The net loss of the company allocated to each outstanding share of common stock. It is calculated by dividing the net loss by the weighted-average number of common shares outstanding. (A key metric for investors to assess the company's profitability on a per-share basis, showing a trend of increasing losses per share over time.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Zentalis Pharmaceuticals has significantly reduced its net loss from $118.395 million to $101.844 million, primarily driven by a substantial decrease in operating expenses, particularly R&D which fell from $134.795 million to $77.807 million. However, this improvement comes alongside a complete absence of license revenue, which contributed $40.560 million in the prior year. Total assets have also declined from $430.337 million to $327.250 million, reflecting the ongoing use of capital for operations.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share ZNTL The Nasdaq St

Filing Documents

• zntl-20250930.htm (10-Q) — 1500KB
• zentalis-q3xex101apaulrele.htm (EX-10.1) — 106KB
• zentalis10-qq32025ex311.htm (EX-31.1) — 10KB
• zentalis10-qq32025ex312.htm (EX-31.2) — 11KB
• zentalis10-qq32025ex321.htm (EX-32.1) — 5KB
• zentalis10-qq32025ex322.htm (EX-32.2) — 5KB
• image_4a.jpg (GRAPHIC) — 1KB
• 0001725160-25-000161.txt ( ) — 6824KB
• zntl-20250930.xsd (EX-101.SCH) — 39KB
• zntl-20250930_cal.xml (EX-101.CAL) — 76KB
• zntl-20250930_def.xml (EX-101.DEF) — 186KB
• zntl-20250930_lab.xml (EX-101.LAB) — 555KB
• zntl-20250930_pre.xml (EX-101.PRE) — 390KB
• zntl-20250930_htm.xml (XML) — 850KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 3

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 4 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Comprehensive Loss 6 Condensed Consolidated Statements of Cash Flows 7 Condensed Consolidated Statement of Stockholders' Equity 9 Notes to Condensed Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 39

Controls and Procedures

Item 4. Controls and Procedures 39

OTHER INFORMATION

PART II. OTHER INFORMATION 41

Legal Proceedings

Item 1. Legal Proceedings 41

Risk Factors

Item 1A. Risk Factors 41

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 96

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 96

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 96

Other Information

Item 5. Other Information 96

Exhibits

Item 6. Exhibits 96

Signatures

Signatures 98 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements within the meaning of the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "believe," "estimate," "predict," "potential," "design," "support," "advance," "strive," "opportunity," "upcoming," or "continue" or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about: our competitive position; our expectations, projections and estimates regarding our capital requirements, need for additional capital, financing our future cash needs, costs, expenses, revenues, capital resources, cash flows, financial performance, profitability, tax obligations, liquidity, growth, contractual obligations, the period of time our cash resources will fund our current operating plan, our internal control over financial reporting and disclosure controls and procedures; our prioritization of azenosertib (ZN-c3) and the potential for azenosertib to be first-in-class and best-in-class; the ability of our clinical trials to demonstrate safety and efficacy of azenosertib and other positive results; the global macroeconomic environment, inflation levels and interest rates; our plans for, including the timing and focus of, our ongoing and future clinical trials of azenosertib, including the

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION 3

Financial Statements

Item 1. Financial Statements. Zentalis Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share amounts and par value) September 30, December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 39,072 $ 33,901 Marketable securities, available-for-sale 239,219 318,009 Marketable equity securities 2,406 19,174 Contracts receivable — 5,000 Prepaid expenses and other current assets 7,605 9,982 Total current assets 288,302 386,066 Property and equipment, net 2,927 4,699 Operating lease right-of-use assets 30,188 32,528 Prepaid expenses and other assets 3,206 4,417 Restricted cash 2,627 2,627 Total assets $ 327,250 $ 430,337 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 7,031 $ 7,438 Accrued expenses 30,137 45,287 Total current liabilities 37,168 52,725 Long-term lease liability 36,708 39,577 Other long-term liabilities 500 849 Total liabilities 74,376 93,151 Commitments and contingencies EQUITY Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2025 and December 31, 2024 — — Common stock, $ 0.001 par value; 250,000,000 shares authorized; 72,245,529 and 71,282,400 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 72 71 Additional paid-in capital 1,408,855 1,390,952 Accumulated other comprehensive income 186 558 Accumulated deficit ( 1,156,239 ) ( 1,054,395 ) Total stockholders' equity 252,874 337,186 Total liabilities and stockholders' equity $ 327,250 $ 430,337 See notes to condensed consolidated financial statements. 4 Zentalis Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 License Revenue $ — $ — $ — $ 40,560 Operating Expenses Research and development 22,950 36,8

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