View:
February 6, 2020
Anthony Y. Sun, M.D.
Chief Executive Officer
Zentalis Pharmaceuticals, LLC
530 Seventh Avenue, Suite 2201
New York, New York 10018
Re: Zentalis Pharmaceuticals, LLC
Draft Registration Statement on Form S-1
Submitted January 8, 2020
CIK No. 0001725160
Dear Dr. Sun:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Overview, page 1
1. We note your statements throughout the prospectus that your product
candidates have the
potential to have a "best-in-class" product profile. This term suggests
that your product
candidates are effective, likely to be approved and compare favorably to
competitive
products. It is premature and inappropriate for you to make such
statements or
implications. Accordingly, please delete all references throughout your
registration
statement to best-in-class product profiles. If you wish to distinguish
your product
candidates from other treatments that are marketed or are being
developed for your target
indications, such disclosure should be accompanied by cautionary
language that the
Anthony Y. Sun, M.D.
Zentalis Pharmaceuticals, LLC
February 6, 2020
Page 2
statements are not intended to give any indication that your product
candidate has been
proven effective or that it will receive regulatory approval.
2. We note the your statement that you are developing "clinically
differentiated"
therapeutics. Please explain this term. Please also clarify your
reference to oncology
targets that have been "validated clinically." Please also define
"SERD," "BCL-2,"
"EGFR," "NCE," and "third generation inhibitor" where they are first
used.
ZN-e4 (EGFR Inhibitor), page 3
3. We note statements comparing ZN-e4 to osimertinib. As this comparison
is not based on
head-to-head studies, please tell us why you believe it is appropriate
to include
this comparison. In your response, please tell us whether you expect
to be able to rely on
such comparison to support marketing approval for ZN-e4 from the FDA
or other
comparable regulators.
Risk Factors
There is currently no FDA-approved oral SERB, page 15
4. We note your statement here that the data collected in preclinical and
clinical trials
demonstrated "promising results" and similar disclosure throughout
your prospectus, such
as your statement that "compelling" data was observed in the clinical
trials to date
including "high potency and selectivity." As safety and efficacy
determinations are solely
within the FDA's authority and they continue to be evaluated
throughout all phases of
clinical trials, please remove these references. In the Business
section, you may present
objective data resulting from your trials without including
conclusions related to efficacy.
We are an "emerging growth company," and we cannot be certain if the reduced
reporting
requirements applicable to emerging growth companies, page 64
5. Please revise the last paragraph to reflect, if true, that you have
elected to take advantage
of the extended transition period for complying with new or revised
accounting standards.
Use of Proceeds, page 71
6. Please revise your disclosure in this section to indicate how far the
proceeds from the
offering will allow you to proceed in the Phase 1/2 clinical trials
for ZN-c3 and ZN-e4 and
in the Phase 1 trial for ZN-d5. Please also disclose the amount and
sources of other funds
needed to complete these clinical trials. Refer to Instruction 3 to
Item 504 of Regulation
S-K.
Corporate Conversion, page 78Y. Sun, M.D.
FirstName LastNameAnthony
Comapany NameZentalis Pharmaceuticals, LLCof common stock will be issued for
each class of
7. Please revise to clarify how many shares
common and preferred units.
February 6, 2020 Page 2
FirstName LastName
Anthony Y. Sun, M.D.
FirstName LastNameAnthony Y. Sun, M.D.
Zentalis Pharmaceuticals, LLC
Comapany NameZentalis Pharmaceuticals, LLC
February 6, 2020
February 6, 2020 Page 3
Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Use of Estimates
Determination of the Fair Value of Class B Common Units, page 92
8. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the units underlying your equity
issuances and the reasons for
any differences between the recent valuations of your units leading up
to the IPO and the
estimated offering price. This information will help facilitate our
review of your
accounting for equity issuances including equity compensation and
beneficial conversion
features.
Business
Our History and Team, page 96
9. Please explain the role of your scientific advisory board and business
advisory board and
clarify, here or in the appropriate section of your filing, how
members are compensated.
ZN-c5, an Oral SERD for the Treatment of ER+/HER2- Breast Cancer, page 99
10. We note your comparisons to fulvestrant and RAD1901 on on pages
99-105, as well as to
additional products in the graphic on page 111. We note similar
comparative disclosures
in the discussions of ZN-c3, ZN-d5 and ZN-e4. As these results were
not based on head-
to-head studies, please tell us why you believe it is appropriate to
include this comparison.
In your response, please tell us whether you expect to be able to rely
on such comparisons
to support marketing approval for any of the product candidates from
the FDA or other
comparable regulators.
Phase 1/2 Clinical Trial of ZN-c5
Interim and Preliminary Efficacy Results, page 109
11. Here and elsewhere in the document where you discuss results of
studies demonstrating
complete response and partial response, please clarify how you defined
these terms.
Licensing Agreements and Strategic Collaborations
Recurium IP Holdings, LLC, page 129
12. Please revise to include the ownership percentage of Recurium Equity
LLC at the time the
offering closes, along with the corresponding development and
regulatory milestone
payments and royalties.
Mayo Foundation for Medical Education and Research, page 130
13. Please disclose when the last-to-expire licensed patent is currently
scheduled to expire.
For the SciClone agreement, please revise to clarify the duration of
the royalty
obligation and the term of the agreement. Please also revise to
clarify the duration of the
Pfizer agreement.
Anthony Y. Sun, M.D.
FirstName LastNameAnthony Y. Sun, M.D.
Zentalis Pharmaceuticals, LLC
Comapany NameZentalis Pharmaceuticals, LLC
February 6, 2020
Page 4
February 6, 2020 Page 4
FirstName LastName
SciClone Pharmaceuticals International (Cayman) Development Ltd., page 130
14. The disclosure of your accounting policy for revenue under
collaborative arrangements on
page F-11 suggests you may be eligible to receive additional milestone
payments as well
as the reimbursement of research and development expenses under your
collaboration and
license agreement with SciClone. Please revise to disclose the total
aggregate milestone
payments you may become eligible to receive as well as a discussion of
potential
reimbursements of research and development expenses.
Executive Compensation
Director Compensation, page 163
15. Please provide the compensation information for the compensation
received by Mr.
Gallagher in fiscal year 2019.
Certain Relationships and Related Party Transactions, page 164
16. Please disclosure the nature of the affiliation between Kalyra
Pharmaceuticals and
Recurium IP Holdings, LLC and the executive officers and directors
listed in this section.
Basis of Presentation, page F-8
17. Please provide your analysis supporting the determination that Kalyra
Pharmaceuticals,
Inc. is a variable interest entity, that you hold a variable interest
in Kalyra, and that you
are the primary beneficiary.
2. Summary of Significant Accounting Policies
Revenue under Collaborative Agreements, page F-11
18. Please revise to disclose your determination of performance
obligations under the
agreement, including judgements made concerning the timing of
satisfaction and in the
allocation of the transaction price, if any. Refer to ASC 606-10-50-12
and 606-10-50-17.
In addition, include disclosure of your policies for recognizing
revenues from milestone
payments and future royalties.
Exhibits
19. Please file the agreements with Mayo Foundation for Medical Education
and
Research, SciClone Pharmaceuticals International and Pfizer, Inc., or
tell us why those
agreements are not required to be filed.
General
20. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Anthony Y. Sun, M.D.
Zentalis Pharmaceuticals, LLC
February 6, 2020
Page 5
You may contact Rolf Sundwall at 202-551-3105 or Daniel Gordon at
202-551-3486 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Chris Edwards at 202-551-6761 or Mary Beth Breslin at 202-551-3625 with
any other
questions.
Sincerely,
FirstName LastNameAnthony Y. Sun, M.D.
Division of
Corporation Finance
Comapany NameZentalis Pharmaceuticals, LLC
Office of Life
Sciences
February 6, 2020 Page 5
cc: Nathan Ajiashvili
FirstName LastName