Zentalis Pharmaceuticals Inc Expected To Post A Loss Of 91 Cents A Share - Earnings

It was a busy week for the biotech sector with a lot of important data readouts at the European Society for Medical Oncology (“ESMO”) by several companies. Other updates were also in focus. Among these, shares of Gilead Sciences GILD and Nuvalent NUVL surged after the companies reported positive data on their important pipeline candidates.

Recap of the Week’s Most Important Stories:

GILD Stock Soars on HIV Drug Data: Gilead’s shares gained after the company announced upbeat results from an interim analysis of a second late-stage study evaluating the use of the company’s twice-yearly injectable HIV-1 capsid inhibitor, lenacapavir, for the prevention of HIV.

The double-blind, multicenter, randomized study phase III study, PURPOSE 2, is evaluating the safety and efficacy of twice-yearly subcutaneous lenacapavir for pre-exposure prophylaxis (PrEP) versus once-daily oral Truvada and background HIV incidence (bHIV) in more than 3,200 cisgender men, transgender men, transgender women and gender non-binary individuals aged 16 years or older.

Results showed that 99.9% of the participants did not acquire HIV infection in the lenacapavir group. Only two tested positive among 2,180 participants.

The results also demonstrated the superiority of twice-yearly lenacapavir over bHIV, with 96% relative risk reduction. Nine cases were reported among 1,087 individuals in the Truvada group. Twice-yearly lenacapavir was 89% more effective than once-daily Truvada.

The PURPOSE 2 study met its key efficacy endpoint of the superiority of twice-yearly lenacapavir over both bHIV (primary endpoint) and once-daily oral Truvada (secondary endpoint) for PrEP. The success of the study was confirmed by the independent Data Monitoring Committee (“DMC”) in its interim analysis.

Consequently, the DMC recommended Gilead to stop the blinded phase of the trial and offer open-label lenacapavir to all participants. The strong results increase the probability of lenacapavir’s approval that should further solidify GILD’s HIV franchise.

REGN’s Dupixent Update: Regeneron Pharmaceuticals, Inc. REGN announced that the FDA has approved blockbuster drug Dupixent (dupilumab) for the indication of chronic rhinosinusitis with nasal polyps (CRSwNP) for a broader population.

The regulatory body approved the drug as an add-on maintenance treatment for adolescent patients aged 12 to 17 years with inadequately controlled CRSwNP. The latest FDA approval expands the initial one (granted in June 2019) in CRSwNP for patients aged 18 years and older.

The company has a collaboration agreement with Sanofi for Dupixent. The FDA evaluated Dupixent for this expanded indication under Priority Review.

The approval is supported by data from two positive pivotal trials, SINUS-24 and SINUS-52, in adults with inadequately controlled CRSwNP. Data from the studies demonstrated that Dupixent significantly improved nasal congestion/obstruction severity, nasal polyp size and sense of smell, while also reducing the need for systemic corticosteroids or surgery at 24 weeks compared to placebo.

The approval is also supported by pharmacokinetic data from adult and adolescent patients aged 12 years and older with moderate-to-severe asthma and adult patients with inadequately controlled CRSwNP, along with the safety data for Dupixent in adolescents aged 12 years and older with moderate-to-severe asthma.

REGN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MRNA Down on Updates: Moderna MRNA stock was down after the company provided its business outlook for the next four years and gave pipeline.

MRNA reduced its overall R&D budget for the next four years (2025 to 2028) by nearly 20% to $16 billion. As a result, the company will discontinue five pipeline programs as part of this prioritization program (a preclinical vaccine candidate against the four endemic human coronaviruses and four early-stage programs — a study on RSV vaccine in infants, a KRAS-targeting cancer vaccine, a cancer drug and a drug for congestive heart failure).

Moderna plans to submit three regulatory filings seeking FDA’s approval prior to 2024-end. This includes fresh regulatory filings for mRNA-1283 (next-generation COVID-19 vaccine) and mRNA-1083 (COVID-19 and influenza combination vaccine). Management also plans to file a regulatory filing for RSV vaccine mResvia seeking label expansion for use in high-risk adults aged between 18 and 59 years.

To accelerate the regulatory timeline for these three filings, MRNA intends to support each of these filings with a priority review voucher (PRV). In this regard, management updated its R&D budget for 2024, increasing it to $4.8 billion from $4.5 billion (previous projection). This rise is primarily driven by the purchase of these PRVs. For 2025,

MRNA expects R&D expenses to be between $4.2 billion and $4.5 billion. Management expects to start saving costs in 2027. It anticipates R&D costs to be between $3.6 billion and $3.8 billion in the year.

Moderna expects to generate revenues in the range of $2.5-$3.5 billion in 2025. For 2026-2028, management expects sales to witness a CAGR of more than 25%, driven by new product launches. This revised sales guidance is lower than the one issued by MRNA last year.

NUVL Up on Lung Cancer Data: Nuvalent stock soared in the past week owing to encouraging updates on its two investigational therapies for non-small cell lung cancer (NSCLC). These updates were announced at the ESMO Congress 2024 meeting.

Management presented updated data from the early-stage portions of two separate phase I/II studies — ARROS-1 and ALKOVE-1. While the ARROS-1 study evaluates zidesamtinib in patients with advanced ROS1-positive NSCLC, the ALKOVE-1 study evaluates NVL-655 in patients with advanced ALK-positive NSCLC.

Data from the ARROS-1 study showed that 44% of patients who received zidesamtinib responded to treatment. In the ALOVE-1 study, 38% of patients responded to treatment with NVL-655.

The patient population was heavily pre-treated in both studies. The data impressed investors as it supported the company’s claims that both drugs could be the best-in-class therapies in their respective categories.

Alongside results, management also provided updates on its plans and development strategies for both candidates. Currently, NUVL is evaluating both drugs in the phase II portions of the ARROS-1 and ALKOVE-1 studies.

These mid-stage portions have been designed with registrational intent. If successful, management could seek accelerated approval from the FDA for the drugs. Data from these portions are expected next year.

Zentalis Up on Positive Update: Zentalis Pharmaceuticals ZNTL stock gained after the company announced that the FDA has lifted the partial clinical hold, which was previously imposed on three studies of its lead product candidate, azenosertib, for three different cancer indications.

The decision was based on the regulatory body’s review of Zentalis’ complete response package, which included a comprehensive safety assessment of the azenosertib program.

Zentalis’ azenosertib, a potentially first-in-class oral WEE1 inhibitor, is currently being studied as a monotherapy and in combination with other therapies for treating different types of cancer indications, including solid tumors and ovarian cancer.

Per Zentalis, the FDA has given the green light to resume enrollment in all ongoing azenosertib clinical studies with no changes in the clinical development plan.

In June 2024, the FDA placed a partial clinical hold on several azenosertib studies — the phase I ZN-c3-001 dose-escalation for solid tumors, the phase II ZN-c3-005 DENALI study for platinum-resistant ovarian cancer (PROC) and the phase II ZN-c3-004 TETON study for uterine serous carcinoma.

This action was taken by the regulatory body after two patients in the DENALI study died due to presumed sepsis.

Performance

The Nasdaq Biotechnology Index has gained 1.26% in the past five trading sessions and GILD’s shares have risen 4.61%. In the past six months, shares of AMGN have rallied 24.63%. (See the last biotech stock roundup here: Biotech Stock Roundup: TERN, SMMT Stocks Surge on Study Data, GSKs Vaccine Study Fails & More)

What's Next in Biotech?

Stay tuned for more pipeline updates.

Zacks Investment Research

Shares of Zentalis Pharmaceuticals ZNTL gained 13.6% on Monday after it announced that the FDA has lifted the partial clinical hold previously imposed on three studies of the company’s lead product candidate, azenosertib, for three different cancer indications. The decision was based on the regulatory body’s review of Zentalis’ complete response package, which included a comprehensive safety assessment of the azenosertib program.

Zentalis’ azenosertib, a potentially first-in-class oral WEE1 inhibitor, is currently being studied as a monotherapy and in combination with other therapies for treating different types of cancer indications, including solid tumors and ovarian cancer.

Per Zentalis, the FDA has given the green light to resume enrollment in all ongoing azenosertib clinical studies with no changes in the clinical development plan. The company is gearing up to resume study activities across the azenosertib development program at the earliest.

Year to date, shares of Zentalis have plunged 75.7% against the industry’s 0.5% growth.

Monday, the FDA lifted the partial clinical hold on studies of Zentalis Pharmaceuticals, Inc.’s azenosertib, the company’s novel, selective, and orally bioavailable inhibitor of WEE1.

The FDA has cleared the company to resume enrollment in all ongoing azenosertib clinical studies with no changes in the clinical development plan.

Zentalis will be working with clinical trial investigators to resume study activities across the azenosertib development program as quickly as possible.

Also Read: Zentalis Gears Up for Phase 3 Study of Azenosertib after Positive Phase 1b Outcomes.

“We are grateful to the FDA for their collaboration and review of our complete response package, which included a comprehensive safety assessment of the azenosertib program,” said Kimberly Blackwell, Chief Executive Officer.

At a corporate event later this year, Zentalis will present azenosertib monotherapy data and provide additional updates to azenosertib clinical development and other data presentation timelines.

The company remains on track to meet all previously disclosed data guidance for the remainder of 2024.

In June this year, the FDA issued a partial on three azenosertib studies for solid tumors, platinum-resistant ovarian cancer, and uterine serous carcinoma.

The update followed two recent deaths due to presumed sepsis in the Phase 2 ZN-c3-005 DENALI study in platinum-resistant ovarian cancer.

Price Action: ZNTL stock is up 41.7% at $4.59 during the premarket session at last check Monday.

Photo via Shutterstock

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By Don Nico Forbes

Shares in Zentalis Pharmaceuticals rose after the company said the U.S. Food and Drug Administration lifted a partial clinical halt on studies of its cancer treatment azenosertib.

Shares were up 41% in premarket trading at $4.57.

The company said Monday that the regulator cleared the drug's enrollment in all continuing clinical studies, with no changes to its clinical development plan.

Azenosertib is an orally-ingested inhibitor of WEE1--a protein linked with various forms of cancer--currently being tested in monotherapy and combination clinical studies for ovarian cancer and additional tumor types.

Zentalis said it remains on track to meet all previously-disclosed data guidance for 2024, and that it will present data for azenosertib as a monotherapy later this year.

Write to Don Nico Forbes at don.forbes@wsj.com