HONG KONG – New York and San Diego-based Zentalis Pharmaceuticals Inc. has gained $20 million in a series A financing round to support a Chinese joint venture called Zentera Therapeutics.
The Shanghai-based biopharmaceutical company, Zentera, will be the sole licensee of three Zentalis-discovered therapies for development and commercialization in China. The proceeds from the series A will be used to develop and commercialize those cancer candidates, as well as potential future candidates in China.
“The funds will be used for operations and the initiation of clinical trials in China for Zentera's pipeline, which includes Zentalis' oral SERD [ZN-c5], WEE1 inhibitor [ZN-c3] and BCL-2 inhibitor [ZN-d5],” Anthony Sun, CEO of Zentalis, told BioWorld.
Sun, who will also serve as the CEO of Zentera, added that its Chinese development priorities have not been formalized as of press time. But he confirmed Zentera will begin activities based on the initial three compounds brought in from Zentalis, which address both solid and liquid tumors in large patient populations.
Sun described ZN-c5 as an oral selective estrogen receptor degrader being developed for the treatment of ER-positive/HER2-negative advanced or metastatic breast cancer. Zn-c3 is an oral inhibitor of WEE1 for the treatment of advanced solid tumors, and ZN-d5 is an oral selective inhibitor of B-cell lymphoma 2 in development initially for the treatment of hematologic malignancies.
In April, the U.S. FDA cleared Zentalis’ IND application for ZN-d5 for the treatment of hematologic malignancies.
“BCL-2 is as an important mediator in restoring the normal apoptotic process in tumor cells, making this protein a vital target for the treatment of cancer,” Sun explained. “ZN-d5, a BCL-2 inhibitor, may offer patients with hematologic and epithelial malignancies a differentiated therapy option, both as a monotherapy and in combination with other agents, including our oral selective estrogen receptor degrader, ZN-c5.”
ZN-c5 and ZN-c3 are being studied in advanced phase I/II trials.
Hong Kong-based global investment manager Tybourne Capital Management will be leading the round of financing. Another investor joining the round is Orbimed Asia. However, Zentalis, through its wholly owned subsidiaries, remains the majority shareholder of Zentera.
“As the second-largest pharmaceutical market in the world, establishing a joint venture in China is the first step toward advancing our product candidates on a global scale,” Sun said. “Furthermore, we are building a management team in China of seasoned professionals who are passionate about improving cancer treatment.”
Progress despite pandemic
News of the deal comes after a strong first quarter, Sun said. “2020 has already proven to be a pivotal year for Zentalis. We achieved numerous important corporate and clinical milestones, including the completion of our initial public offering, positioning Zentalis for continued success.”
In April, the company completed an IPO that brought in net proceeds of about $165 million, selling about 10.6 million shares of common stock at a public offering price of $18 per share for gross proceeds of approximately $190 million..
Zentalis revealed its IPO in March. However, given the complications from the COVID-19 pandemic, it became the first company to hold an all-virtual IPO roadshow and Nasdaq bell ringing ceremony.
The move was still a gamble as IPO research firm Renaissance Capital estimates that as many as 20 companies had made a U-turn in their IPO plans given the coronavirus complications.
“Becoming a public company during these unprecedented times would not have been possible without the hard work and dedication from our team as well as the continuous support from our new and existing shareholders,” Sun said. “From its inception, Zentalis has been passionate about improving the lives of cancer patients through the discovery of potential breakthrough medicines, clearing four INDs in just five years.
“In addition, we look forward to reporting top-line data on our oral SERD, ZN-c5, in the second half of 2020 as well as continuing to advance our broad oncology pipeline,” he added.
The company’s progress has not gone unnoticed, as evidenced by the successful series A financing round.
“Over the past few years, we have watched Zentalis’ remarkable clinical progress in developing potentially best-in-class candidates for patients with cancer. We are pleased to work with Zentera, as we believe these therapies will greatly benefit patients internationally,” said Bosun Hau, the managing director and co-head of private equity at Tybourne Capital Management.