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United States securities and exchange commission logo
May 12, 2022
Anthony Y. Sun, M.D
Chief Executive Officer, President and Chairman
Zentalis Pharmaceuticals, Inc.
1359 Broadway
Suite 1710
New York, New York 10018
Re: Zentalis
Pharmaceuticals, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed February 24,
2022
File No. 001-39263
Dear Mr. Sun:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comment. In our comment, we may ask
you to provide us
with information so we may better understand your disclosure.
Please respond to the comment within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to the comment, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2021
Consolidated Financial Statements
Notes to Consolidated Financial Statements
3. Significant Transactions, page F-16
1. You disclose that after
Zentera's July 2021 Series B convertible preferred offering and
changes to its
corporate governance, you no longer individually have the ability to direct
the activities that
most significantly impact Zentera's economic performance, and explain,
that beginning in July
2021, the financial position and results of operations of Zentera are
no longer included in
your consolidated financial statements. Please address the
following:
Provide us with a
comprehensive accounting analysis relating to your deconsolidation
of Zentera that
includes the terms of and your assessment of the contractual
arrangements and
corporate governance of Zentera prior to and subsequent to the July
Anthony Y. Sun, M.D
Zentalis Pharmaceuticals, Inc.
May 12, 2022
Page 2
2021 convertible preferred offering.
Provide us an analysis of the significance of Zentera to your
operations prior to and
after deconsolidation. Please address the collaboration and
license agreements each of
your subsidiaries have entered into with your joint venture,
Zentera.
Explain to us the purpose and design of Zentera, the terms and
characteristics of your
financial interest in Zentera, and your business purpose for
holding the financial
interest.
Tell us if there are any contractual arrangements subsequent to
deconsolidation that
would allow you to increase your interest or control in Zentera
in the future, and if so,
the terms of any agreements that would give you those rights and
your assessment of
how those terms affected your determination to deconsolidate
Zentera.
Clarify what your initial investment amount was in this joint
venture as well as how
you determined this amount. In this regard, tell us if you formed
Zentera.
Tell us whether you identified any related parties for purposes
of your consolidation
analysis under ASC 810. If so, tell us how you considered these
related parties when
concluding it was appropriate to deconsolidate Zentera. In this
respect, we note on
page 106 that your President and Chief Executive Officer serves
as Chief Executive
Officer and a member of the board of directors of Zentera and
your Chief Operating
Officer serves as a member of the board of directors of Zentera.
Tell us how many
board members are on Zentera's board of directors.
In your response, address which paragraphs within the
authoritative accounting
guidance you relied upon to support your accounting.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Ibolya Ignat at 202-551-3636 or Mary Mast at
202-551-3613 with any
questions.
FirstName LastNameAnthony Y. Sun, M.D Sincerely,
Comapany NameZentalis Pharmaceuticals, Inc.
Division of
Corporation Finance
May 12, 2022 Page 2 Office of Life
Sciences
FirstName LastName