Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of financial condition and operating results together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. As a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. For convenience of presentation some of the numbers have been rounded in the text below.

A discussion regarding our financial condition and results of operations for the years ended December 31, 2022 and 2021, including a year-to-year comparison between 2022 and 2021, is presented below. For a discussion regarding our financial condition and results of operations for the year ended December 31, 2020, including a year-to-year comparison between 2021 and 2020, refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on 10-K for the year ended December 31, 2021 filed on February 24, 2022.

Overview

We are a clinical-stage biopharmaceutical company focused on discovering and developing small molecule therapeutics targeting fundamental biological pathways of cancers. We are developing a focused pipeline of potentially best-in-class oncology candidates. Our product candidates are:

•Azenosertib (ZN-c3), a potentially first-in-class Wee1 inhibitor for advanced solid tumors and hematological malignancies;

•ZN-d5, a B-cell lymphoma 2, or BCL-2, inhibitor for hematological malignancies and related disorders; and

•A heterobifunctional degrader of BCL-xL, a member of the anti-apoptotic BCL-2 proteins, for solid tumors and hematological malignancies.

We are currently evaluating azenosertib and ZN-d5 in multiple ongoing clinical trials and conducting studies to enable an Investigational New Drug, or IND, application for our BCL-xL product candidate. We also continue to use our extensive drug discovery experience and capabilities across cancer biology and medicinal chemistry, which we refer to as our Integrated Discovery Engine, to advance our ongoing research on protein degraders of undisclosed targets. We believe our product candidates are differentiated from current programs targeting similar pathways and, if approved, have the potential to significantly impact clinical outcomes of patients with cancer.

Our Pipeline

We are developing a focused pipeline of oncology product candidates with the potential to address significant unmet medical need for cancer patients. Two of our product candidates are currently in multiple ongoing clinical trials: azenosertib, an inhibitor of Wee1, a protein tyrosine kinase, and ZN-d5, a selective inhibitor of BCL-2. To date, azenosertib has been well tolerated and has demonstrated monotherapy anti-tumor activity across multiple tumor types in clinical trials. In addition, ZN-d5 has been well tolerated in clinical trials to date. We have also declared a development candidate for our BCL-xL degrader program, for which we are conducting IND-enabling studies.

We currently exclusively in-license worldwide development and commercialization rights to azenosertib, ZN-d5, and our BCL-xL product candidate. We out-licensed azenosertib and ZN-d5 development and commercialization rights in select Asian countries, including China, to our joint venture, Zentera Therapeutics, or Zentera. As of December 31, 2022, we held a 40.3% equity interest in Zentera. For more information about our joint venture with Zentera, see Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—License Agreements and Strategic Collaborations" and Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

The following table summarizes our product candidate pipeline.

Our Development Programs

Azenosertib (Wee1 Inhibitor)

Azenosertib is a potentially best-in-class and first-in-class oral, small molecule Wee1 inhibitor. As illustrated in the figure below, the inhibition of Wee1, a DNA damage response kinase, drives cancer cells into mitosis without being able to repair damaged DNA, resulting in cell death and thereby preventing tumor growth and potentially causing tumor regression. Currently, there are no Wee1 inhibitors approved by the U.S. Food and Drug Administration, or FDA. We have designed azenosertib to have advantages over other investigational therapies targeting Wee1, including superior selectivity and PK properties. Azenosertib is currently being evaluated in the clinic for advanced solid tumors and hematological malignancies in the following three therapeutic settings of high unmet medical need:

•as a monotherapy,

•in combination with traditional chemotherapy and DNA damaging agents, and

•in combination with molecularly targeted agents.

Two key components of our azenosertib clinical development strategy are our dose optimization activities and our pursuit of Cyclin E1 as a patient enrichment strategy.

Azenosertib is being evaluated in multiple current or planned clinical trials, including the following:

•Monotherapy - Phase 2 Clinical Trial in Recurrent or Persistent Uterine Serous Carcinoma (USC) (ZN-c3-004). Azenosertib is currently being evaluated as a monotherapy in a Phase 2 clinical trial in adult women with USC. As of a September 14, 2022 data cutoff, a total of 43 patients were enrolled and dosed. Azenosertib was well tolerated. The most common treatment related adverse events, or AEs, were nausea (60.5% all grades/9.3% grade 3 or higher), fatigue (46.5% all grades/9.3% grade 3 or higher), diarrhea (37.2% all grades/7.0% grade 3 or higher) and vomiting (32.6% all grades/7.0% grade 3 or higher). We anticipate declaring an azenosertib monotherapy RP2D in the first half of 2023, and we plan to update the timeline of this USC study thereafter. The FDA granted Fast Track designation in November 2021 to azenosertib in patients with advanced or metastatic USC who have received at least one prior platinum-based chemotherapy regimen for management of advanced or metastatic disease. We believe that the study design in this patient population has the potential to support registration in the United States.

•Monotherapy - Phase 1 Dose Optimization Clinical Trial in Solid Tumors (ZN-c3-001). We are currently evaluating azenosertib as a monotherapy in a Phase 1 dose optimization clinical trial for the treatment of solid tumors. We announced preliminary efficacy data from this trial with a data cutoff of May 15, 2021 from 34 patients, where we showed five confirmed partial responses, or cPRs, to azenosertib in monotherapy across several tumor types, including ovarian cancer (-69% cPR), colorectal cancer (-51% cPR), NSCLC (-49% cPR), and USC (-49% cPR) and (-43% cPR). We announced preliminary safety data from this trial at the 2022 American Association of Cancer Research, or AACR, Annual Meeting in April 2022. As of a January 21, 2022 data cutoff, there were 32 patients evaluated for safety and azenosertib was well tolerated. The most common treatment related AEs were nausea (71.9% all grades/3.1% grade 3 or higher), fatigue (53.1% all grades/18.8% grade 3 or higher), diarrhea (46.9% all grades/6.3% grade 3 or higher) and vomiting (46.9% all grades/0% grade 3 or higher). We also announced preliminary efficacy data from the Phase 1 monotherapy expansion cohort in USC from this trial at the 2022 AACR Annual Meeting. As of a January 21, 2022 data cutoff, there were 11 evaluable patients in the USC cohort, with 27.3% demonstrating an objective response rate, or ORR, and 90.9% demonstrating a disease control rate, or DCR.

•Monotherapy - Phase 2 Clinical Trial in Cyclin E1 Driven High-Grade Serous Ovarian Cancer, Fallopian Tube, or Primary Peritoneal Cancer (HGSOC) (ZN-c3-005). We are evaluating azenosertib as a monotherapy in a Phase 2 clinical trial in patients with Cyclin E1 driven HGSOC. Our Cyclin E1 enrichment strategy is supported by preclinical data that showed that high Cyclin E1 protein expression sensitized cancer cells to the anti-tumor effects of azenosertib as well as preliminary retrospective clinical data that Cyclin E1 protein levels may be associated with clinical benefit from Wee1 inhibition.

•Combination - Phase 1/2 Clinical Trial of Azenosertib and PARPi in Platinum-Resistant Ovarian Cancer (ZN-c3-006). We are evaluating azenosertib in combination with GSK's PARP inhibitor, niraparib (ZEJULA®), in a Phase 1/2 clinical trial in platinum-resistant ovarian cancer patients who have failed PARP inhibitor, or PARPi, maintenance treatment as part of a clinical collaboration with GSK. This study is currently enrolling two cohorts — one with concurrent dosing of the two drugs, and one with azenosertib and niraparib administered on a dose escalating, alternating schedule of one week of azenosertib followed by one week of niraparib. This clinical study is supported by preclinical data that showed that combining azenosertib and niraparib resulted in synergistic cell killing in ovarian in vivo models.

•Combination - Phase 1b Clinical Trial of Azenosertib and Chemotherapy in Platinum-Resistant Ovarian, Peritoneal or Fallopian Tube Cancer (ZN-c3-002). Azenosertib is currently being evaluated in combination with each of paclitaxel, carboplatin, pegylated liposomal doxorubicin (PLD) and gemcitabine in four separate cohorts in a Phase 1b clinical trial in patients with platinum-resistant ovarian, peritoneal or fallopian tube cancer. We provided a preliminary efficacy and safety update at the 2022 AACR Annual Meeting in April 2022, highlighting that azenosertib in combination with chemotherapy demonstrated strong anti-tumor activity in a heavily pretreated population and was well tolerated. As of the January 28, 2022 data cutoff, there were 43 evaluable patients for efficacy, with an ORR of 30.2% across all evaluable chemotherapy cohorts (paclitaxel, carboplatin and PLD). In the paclitaxel cohort, there were 8 evaluable patients and an ORR of 62.5%; in the carboplatin cohort, there were 11 evaluable patients and an ORR of 45.5%; and in the PLD cohort, there were 24 evaluable patients and an ORR of 12.5%. As of the January 28, 2022 data cutoff, there were 56 evaluable patients for safety. The most common treatment related AEs were nausea (48.2% all grades/5.4% grade 3 or higher), neutropenia (41.1% all grades/32.1% grade 3 or higher), thrombocytopenia (37.5% all grades/17.9% grade 3 or higher), vomiting (30.4% all grades/7.1% grade 3 or higher) and anemia (26.8 all grades/7.1% grade 3 or higher).

•Combination - Phase 1/2 Clinical Trial of Azenosertib and Chemotherapy in Relapsed or Refractory Osteosarcoma (ZN-c3-003). Azenosertib is currently being evaluated in combination with gemcitabine, in a Phase 1/2 clinical trial in adult and pediatric patients with R/R osteosarcoma. We reported initial results from this trial at the 2022 Connective Tissue Oncology Society, or CTOS, Annual Meeting in November 2022. As of a October 24, 2022 data cutoff, there were 12 patients evaluable for efficacy, with approximately 33% of patients demonstrating event-free survival, or EFS, at 18 weeks (compared to approximately 12% at 18 weeks for this indication historically). As of the October 24, 2022 data cutoff, there were 17 patients evaluable for safety. Azenosertib demonstrated a manageable safety profile with 82.4% experiencing treatment related AEs of which 52.9% were grade 3 or higher. The most common treatment related AEs were platelet count decreased/thrombocytopenia (47.1% all grades/35.3% grade 3 or higher), fatigue (29.4% all grades/5.9% grade 3 or higher), nausea (29.4% all grades/0% grade 3 or higher) and rash (29.4% all grades/5.9% grade 3 or higher). We received orphan drug designation and rare pediatric disease designation from the FDA for azenosertib in osteosarcoma.

•Combination - Phase 1/2 Clinical Trial of Azenosertib with Encorafenib and Cetuximab (BEACON Regimen) in BRAF V600E Mutant Metastatic Colorectal Cancer (mCRC) (ZN-c3-016). We are collaborating with Pfizer to evaluate azenosertib in combination with encorafenib and cetuximab, an FDA-approved standard of care known as the

BEACON regimen, in patients with BRAF V600E mutant mCRC in a Phase 1/2 clinical trial. In preclinical studies, Wee1 inhibition has shown synergy with many targeted agents in mutationally driven cancers, and the addition of azenosertib to the BEACON regimen enhanced anti-tumor activity in a cell-line-derived xenograft model. We initiated enrollment in this clinical trial in the first quarter of 2023.

•Combination - Phase 1/2 Clinical Trial of Azenosertib and Chemotherapy in Pancreatic Cancer. We have also agreed to support the Dana Farber-sponsored Phase 1/2 clinical trial evaluating azenosertib and chemotherapy, gemcitabine, in platinum-resistant pancreatic cancer patients.

ZN-d5 (BCL-2 Inhibitor)

ZN-d5 is a potentially best-in-class selective, oral small molecule inhibitor of BCL-2. BCL-2 is a protein that plays a critical role in the regulation of cell death, known as apoptosis. The overexpression of BCL-2 is frequently detected in numerous cancer types, which prevents apoptosis of cancer cells. Utilizing our medicinal chemistry expertise, we have designed ZN-d5 to have best-in-class potency, selectivity and PK properties. ZN-d5 is currently being evaluated in the clinic in patients with hematological malignancies in both the monotherapy and combination settings.

ZN-d5 is being evaluated in the following monotherapy and combination clinical trials:

•Monotherapy - Phase 1/2 Clinical Trial in Relapsed or Refractory Light Chain Amyloidosis (R/R AL Amyloidosis) (ZN-d5-003). ZN-d5 is being evaluated as a monotherapy in a Phase 1/2 clinical trial in R/R AL amyloidosis. BCL-2 inhibition has demonstrated clinical activity in R/R AL amyloidosis; however, there are currently no FDA-approved BCL-2 inhibitors for the treatment of R/R AL amyloidosis. This Phase 1/2 study in patients with R/R AL amyloidosis consists of a dose escalation phase to establish the monotherapy RP2D in this setting, and an expansion phase to further assess the safety and efficacy of ZN-d5 in this population. The study is expected to enroll up to approximately 140 patients.

•Monotherapy - Phase 1 Clinical Trial in Non-Hodgkin Lymphoma (NHL) (ZN-d5-001). We are evaluating ZN-d5 as a monotherapy in a Phase 1 dose escalation clinical trial in patients with NHL. As of the database cutoff date of November 3, 2021, 23 patients with NHL were evaluable for safety. At our R&D Day in December 2021, we reported preliminary interim data from the NHL patients in this study. As of the November 3, 2021 database cutoff date, ZN-d5 was well tolerated, with 73.9% of the NHL patients having experienced AEs (30.4% grade 3 or higher), not all of which were related ZN-d5. Anemia (21.7% all grades/8.7% grade 3 or higher), diarrhea (13.0% all grades/4.3% grade 3 or higher), and nausea and vomiting (8.7% each all grades/0% grade 3 or higher) comprise the most commonly experienced AEs. Investigator-reported responses using the Lugano 2014 classification among 11 patients with diffuse large B-cell lymphoma included a complete response, an unconfirmed PR, and two subjects with stable disease, as of the database cutoff date of November 3, 2021.

•Combination - Phase 1/2 Clinical Trial of ZN-d5 and Azenosertib in Relapsed or Refractory Acute Myeloid Leukemia (R/R AML) (ZN-d5-004C). ZN-d5 is being evaluated in combination with azenosertib in a Phase 1/2 dose escalation clinical trial in patients with R/R AML. The Phase 1 portion of this trial will escalate the doses of both drugs to identify the RP2D for the combination, which will be assessed in Phase 2 expansion cohort(s). This study is expected to enroll up to approximately 100 patients. This clinical trial is supported by preclinical models that showed that the combination of ZN-d5 with azenosertib yielded a significant enhancement of activity in several indications, including R/R AML, as compared to activity shown with either of these product candidates as a single agent. Preclinical models also showed that the combination of ZN-d5 with azenosertib was well tolerated in mice. We believe we are the only company to have both a Wee1 inhibitor and a BCL-2 inhibitor in clinical development.

BCL-xL Heterobifunctional Degrader

In November 2022, we announced that we identified a BCL-xL protein degrader candidate and initiated IND-enabling studies. We are developing a BCL-xL heterobifunctional degrader based on non-functional or dysfunctional E3 ubiquitin ligase complex in platelets, allowing for the potential mitigation of dose-limiting thrombocytopenia historically associated with BCL-xL inhibitors.

Liquidity Overview

regulatory approval for, and commercialize one or more of our product candidates. We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy.

Since inception, we have incurred significant operating losses. Our net losses were $237.1 million for the year ended December 31, 2022. We had an accumulated deficit of $596.4 million as of December 31, 2022. We had cash, cash equivalents and marketable securities of $437.4 million as of December 31, 2022. We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2022 will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2025. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect.

Impact of COVID-19 Pandemic and Global Macroeconomic Environment

We continue to monitor how the COVID-19 pandemic is affecting our employees, business, preclinical studies and clinical trials. Our employees are working based on a hybrid work model, in which they work both from our offices and remotely. Disruptions caused by the COVID-19 pandemic have resulted in difficulties including delays in initiating new trial sites and certain supply chain activities, suspension of enrollment at some of our existing trial sites, and the incurrence of additional costs as a result of preclinical study and clinical trial delays and adjustments and supply chain delays. Limited operations at our laboratory facilities during quarantine periods resulted in delays in our research-stage programs. As a result, we expect that the COVID-19 pandemic will continue to impact our business, results of operations, clinical development timelines and financial condition. At this time, there is continuing uncertainty relating to the trajectory of the COVID-19 pandemic and impact of related responses.The impact of COVID-19 on our future results will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence. See “Risk Factors —The COVID-19 pandemic has adversely impacted and we expect will continue to adversely impact our business, including our preclinical studies and clinical trials.” in Part I, Item 1A. of this Annual Report on Form 10-K.Further, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. All of these factors could impact our liquidity and future funding requirements, including but not limited to our ability to raise additional capital when needed on acceptable terms, if at all. The duration of this economic slowdown is uncertain and the impact on our business is difficult to predict. See “Risk Factors — Unfavorable global, political or economic conditions could adversely affect our business, financial condition or results of operations.” in Part I, Item 1A. of this Annual Report on Form 10-K.

License Agreements and Strategic Collaborations

Recurium IP Holdings, LLC License Agreement

In December 2014, our wholly owned subsidiary, Zeno Pharmaceuticals, Inc., entered into the Recurium Agreement with Recurium IP, which was subsequently amended, under which Zeno Pharmaceuticals, Inc. was granted an exclusive worldwide license to certain intellectual property rights owned or controlled by Recurium IP to develop and commercialize pharmaceutical products for the treatment or prevention of disease, other than for providing pain relief. Following certain corporate restructuring disclosed elsewhere in this Annual Report on 10-K, our wholly owned subsidiary, ZMI, became the Zentalis contracting party to the Recurium Agreement. The intellectual property rights exclusively licensed by ZMI under the Recurium Agreement include certain intellectual property covering azenosertib, ZN-d5 and our BCL-xL product candidate. ZMI has the right to sublicense its rights under the Recurium Agreement, subject to certain conditions. ZMI is required to use commercially reasonable efforts to develop and commercialize at least one product that comprises or contains a compound modulating one of ten specific biological targets and to execute certain development activities.

Under the terms of the Recurium Agreement, ZMI is obligated to make development and regulatory milestone payments, pay royalties on net sales, and make certain sublicensing payments with respect to products that comprise or contain a compound modulating one of ten specific biological targets, including azenosertib, ZN-d5, our BCL-xL product candidate and two licensed products for which we discontinued clinical development in 2022, ZN-c5 and ZN-e4. ZMI is obligated to make development and regulatory milestone payments for each such licensed product of up to $44.5 million. In addition, ZMI is obligated to make milestone payments up to $150,000 for certain licensed products used in animals. ZMI is also obligated to pay royalties on sales of such licensed products at a mid- to high-single digit percentage. In addition, if ZMI chooses to sublicense or assign to any third parties its rights under certain patents exclusively in-licensed under the Recurium Agreement, ZMI must pay to Recurium IP 20% of certain sublicensing income received in connection with such transaction.

The Recurium Agreement will expire on the later of December 21, 2032 and, on a country-by-country basis, on the date of expiration of the last-to-expire royalty term for all licensed products in such country, unless earlier terminated by either party for cause or a bankruptcy event.

Pfizer Development Agreement

In April 2022, we entered into a development agreement with Pfizer to collaborate to advance the clinical development of azenosertib. We did not grant Pfizer any economic ownership or control of azenosertib or the rest of our pipeline. In October 2022, we announced our first clinical development collaboration with Pfizer to initiate a Phase 1/2 dose escalation study of azenosertib, in combination with encorafenib and cetuximab (an FDA-approved standard of care known as the BEACON regimen) in patients with BRAF V600E-mutant mCRC.

GlaxoSmithKline Clinical Trial Collaboration and Supply Agreement

In April 2021, we entered into a clinical trial collaboration and supply agreement with GSK under which we are evaluating the combination of azenosertib and niraparib, GSK’s poly (ADP-ribose) polymerase (PARP) inhibitor, in patients with platinum-resistant ovarian cancer. Pursuant to this agreement, we are responsible for the conduct and cost of the relevant studies, under the supervision of a joint development committee made up of our representatives and representatives of GSK that meets quarterly. GSK is supplying niraparib for use in the collaboration, at no cost to us. We are required to provide to GSK clinical data and other reports upon completion of the study.

This agreement does not grant any right of first negotiation to participate in future clinical trials, and neither party granted the other any additional right or ability to evaluate their respective compounds in any other clinical studies, either as monotherapy or in combination with any other product or compound, in any therapeutic area.

The agreement with GSK will expire upon completion of all obligations of the parties thereunder or upon termination by either party. We and GSK each have the right to terminate the agreement for material breach by the other party. In addition, the agreement may be terminated by either party due to safety considerations or if either party decides to discontinue development of its own compound for medical, scientific, legal or other reasons or if a regulatory authority takes any action preventing that party from supplying its compound for the study or in the event the other party is subject to specified bankruptcy, insolvency or similar circumstances. GSK also has the right to terminate this agreement if it notifies us in writing that it reasonably and in good faith believes that niraparib is being used in an unsafe manner, and we fail to incorporate changes to address such issue, and the issue is unable to be resolved following elevation to appropriate parties.

Zentera Therapeutics

In May 2020, each of our wholly owned subsidiaries Zeno Alpha, Inc., K-Group Alpha, Inc. and K-Group Beta, Inc. entered into a collaboration and license agreement with our joint venture, Zentera, which we refer to as the “Zentera Sublicenses”, pursuant to which we collaborate with Zentera on the development and commercialization of ZN-c5, ZN-d5 and azenosertib, respectively, whether alone or in a licensed product, which we collectively refer to as the "Collaboration Products", in each case for the treatment or prevention of disease, other than for pain, which is referred to as the "Zentera Field", in the People’s Republic of China, Macau, Hong Kong and Taiwan, which is referred to as the “Zentera Collaboration Territory”. As disclosed in August 2022, we have discontinued clinical development of ZN-c5. Under each Zentera Sublicense, Zentera will lead development, and upon regulatory approval, the commercialization, of the Collaboration Products in the Zentera Collaboration Territory. On May 19, 2020, Zentera issued an aggregate of 60.2% of its issued shares of common stock to Zeno Alpha, Inc., K-Group Alpha, Inc., K-Group Beta, Inc., Zeno Management, Inc. and Zeno Beta, Inc. In July 2021, Zentera entered into a Series B Preference Shares Purchase Agreement, pursuant to which it raised $75.0 million in gross proceeds. As of December 31, 2022, we hold a 40.3% equity interest in Zentera. Kevin D. Bunker, Ph.D., our Chief Scientific Officer, serves as a member of the Board of Directors of Zentera.

Under each Zentera Sublicense, we granted Zentera an exclusive, royalty-bearing license under certain of our technology, including technology licensed from Recurium IP under the Recurium Agreement, to develop and commercialize the Collaboration Products in the Zentera Field in the Zentera Collaboration Territory, subject to certain rights that we retain, and upon a successful manufacturing transfer, a non-exclusive license under certain of our manufacturing technology to manufacture Collaboration Products in the Zentera Field in the Zentera Collaboration Territory. Zentera has the right to sublicense its rights under the Zentera Sublicenses subject to certain conditions.

Under the terms of the Zentera Sublicenses, Zentera is generally responsible for the costs of developing the Collaboration Products in the Zentera Collaboration Territory, and we are generally responsible for the costs of developing the Collaboration Products outside the Zentera Collaboration Territory, provided that Zentera will reimburse us for a portion of its costs for global data management, pharmacovigilance, safety database management, and chemistry, manufacturing and controls activities with respect to each Collaboration Product. Under the Zentera Sublicenses, we will be eligible to receive future development and regulatory milestones of up to $4.45 million per Collaboration Product. Zentera will pay us royalties on net

sales of Collaboration Products in the Zentera Collaboration Territory at a mid- to high-single digit percentage, subject to certain reductions. In addition, if Zentera or its affiliate chooses to sublicense or assign to any third parties its rights under the Zentera Sublicenses with respect to any Collaboration Product, Zentera must pay to us 20% of certain sublicensing income received by Zentera or its affiliates in connection with such transaction.

Zentera’s royalty obligations will expire on a Collaboration Product-by-Collaboration Product and region-by-region basis upon the later of the date on which such product is no longer covered by a valid claim of a licensed patent and the 15th anniversary of the first commercial sale of such product in such region.

Components of Our Results of Operations

Revenue

To date, we have not generated any revenue, and we do not expect to generate any revenue in the foreseeable future from product sales. We have generated, and may in the future generate, revenue from payments received under our collaboration agreements, which includes payments of upfront fees, license fees, milestone-based payments and reimbursements for research and development efforts.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include:

•salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;

•expenses incurred under agreements with third parties, including CROs and other third parties that conduct research, preclinical activities and clinical trials on our behalf as well as CMOs that manufacture drug material for use in our preclinical studies and clinical trials;

•costs of outside consultants, including their fees, stock-based compensation and related travel expenses;

•the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;

•license payments made for intellectual property used in research and development activities; and

•allocated expenses for rent and maintenance of facilities and other operating costs.

We expense research and development costs as incurred. Reimbursed research and development costs under government grants and certain collaborative arrangements are recorded as a reduction to research and development expenses and are recognized in the period in which the related costs are incurred.

We track external development costs by product candidate or development program, but we do not allocate personnel costs, general license payments made under our licensing arrangements or other internal costs to specific development programs or product candidates. These costs are included in unallocated research and development expenses in the table below.

The following table summarizes our research and development expenses by product candidate or development program:

Year Ended December 31,

(in thousands)

Unallocated research and development expenses 94,667 91,110

1 As disclosed previously, in August 2022, we announced that we were discontinuing the clinical development of ZN-c5 and ZN-e4.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have a higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to increase substantially for the foreseeable future and will comprise a larger percentage of our total expenses as we complete our ongoing clinical trials, initiate new clinical trials, continue to discover and develop additional product candidates and prepare regulatory filings for any product candidates that successfully complete clinical development.

The successful development of our product candidates is highly uncertain. At this time, we cannot determine with certainty the duration and costs of our existing and future clinical trials of our product candidates or any other product candidate we may develop or if, when, or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of our product candidates and any other product candidate we may develop in the future will depend on a variety of factors, including:

•per patient trial costs;

•the number of patients who enroll in each trial;

•the number of trials required for approval;

•the number of sites included in the trials;

•the countries in which the trials are conducted;

•the length of time required to enroll eligible patients;

•the drop-out or discontinuation rates of patients;

•any delays in clinical trials as a result of the COVID-19 pandemic;

•potential additional safety monitoring requested by regulatory agencies;

•the duration of patient participation in the trials and follow-up;

•the phase of development of the product candidate;

•the efficacy and safety profile of the product candidate.

•uncertainties in clinical trial design and patient enrollment rates;

•the actual probability of success for our product candidates, including the safety and efficacy, early clinical data, competition, manufacturing capability and commercial viability;

•significant and changing government regulation and regulatory guidance;

•the timing and receipt of any marketing approvals;

•the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and

•our ability to attract and retain skilled personnel.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, business development and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support research and development activities relating to our clinical stage programs, and any other product candidate we may develop. We also expect to incur increased expenses associated with being a public company, particularly now that we are no longer an emerging growth company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements; director and officer insurance costs; and investor and public relations costs.

Interest Income

Interest income consists of interest earned on cash, cash equivalents and available-for-sale marketable securities.

Income Taxes

Since our inception, we and our corporate subsidiaries have generated cumulative federal, state and foreign net operating loss in certain jurisdictions for which we have not recorded any net tax benefit due to uncertainty around utilizing these tax attributes within their respective carryforward periods.

Results of Operations

Comparison of Years Ended December 31, 2022 and 2021

The following table summarizes our results of operations for the years ended December 31, 2022 and 2021, together with the changes in those items in dollars:

Year Ended December 31,

(in thousands)

Operating Expenses

Gain on deconsolidation of Zentera — 51,582 (51,582)

Income tax expense (benefit) (469) (297) (172)

Net loss attributable to noncontrolling interests (307) (7,368) 7,061

Revenue

We did not generate any revenue for the years ended December 31, 2022 and 2021.

Research and Development Expenses

Research and development, or R&D, expenses for the year ended December 31, 2022 were $172.7 million, compared to $175.6 million for the year ended December 31, 2021. The decrease of $2.9 million was primarily due to non-recurring charges incurred in 2021 of $10.0 million for milestone payments and an impairment charge of $8.8 million for in-process R&D. Other reductions in R&D expenses in 2022 as compared to 2021 included $14.0 million of decreased manufacturing costs, $2.7 million of decreased collaborative and consulting costs and a $5.7 million increase in R&D expense reimbursements from Zentera. These reductions were partially offset by increases in clinical trial related expenditures of $19.8 million, increases in personnel costs of $14.4 million and increases in facility, overhead allocations and other costs of $4.1 million.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2022 were $54.6 million, compared to $40.9 million during the year ended December 31, 2021. The increase of $13.6 million was primarily attributable to an increase of $8.5 million in employee-related costs, $5.5 million of which represents non-cash stock-based compensation. Other increases in 2022 as compared to 2021 include $7.2 million of higher facilities, software and supplies costs, $6.0 million of which related to rent and common area maintenance expenses, $1.5 million of higher consulting services and $1.3 million of increased legal

expenses. These amounts were partially offset by a reduction of $1.4 million for permits, fees and other expenses and increased allocations to R&D from G&A of $3.5 million.

Investment and Other Income, Net

Investment and other income was $6.0 million for the year ended December 31, 2022, compared to $0.4 million for the year ended December 31, 2021. The increase of $5.6 million was primarily the result of higher rates of return from our invested marketable securities.

Gain on Deconsolidation of Zentera

During the year ended December 31, 2021, Zentera was deconsolidated, resulting in a gain of $51.6 million. There was no comparable event during the corresponding period in 2022.

Liquidity and Capital Resources

Since our inception, our operations have been limited to organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development of our product pipeline. We do not have any products approved for commercial sale and have not generated any revenues from product sales and we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our research programs and product candidates. We expect that our research and development and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future research programs and product candidates, contracting with CMOs to support preclinical studies and clinical trials, expanding our intellectual property portfolio, and providing general and administrative support for our operations.

As a result, we will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through the sale of equity, debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly in light of the economic downturn and ongoing uncertainty related to the evolving COVID-19 pandemic, the conflict in the Ukraine, ongoing global supply chain issues and increased inflation and interest rates. The COVID-19 pandemic and related global events have resulted in an economic downturn that could adversely affect our operations, our ability to conduct our clinical trials, our ability to raise additional funds through public offerings and the volatility of our stock price and trading in our stock. Even after the COVID-19 pandemic has subsided, we expect we will continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future. If we are unable to secure adequate additional funding as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with developing and commercializing therapeutics, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

We do not currently have any approved products and have never generated any revenue from product sales. To date, we have financed our operations primarily through the sale of equity securities. From inception through December 31, 2022, we raised a total of $975.9 million in gross proceeds from the sale of shares of our common stock and convertible preferred units. As of December 31, 2022, we had $43.1 million in cash and cash equivalents, $394.3 million in marketable securities, and an accumulated deficit of $596.4 million. We had no indebtedness as of December 31, 2022.

ATM Program

In May 2021, we entered into a sales agreement, or the Sales Agreement, with SVB Leerink LLC, or SVB Leerink, as sales agent, pursuant to which we may, from time to time, issue and sell common stock with an aggregate value of up to $200.0 million in “at-the-market” offerings, or the ATM, under our Registration Statement on Form S-3 (File No. 333-255769) filed with the SEC on May 4, 2021. Sales of common stock, if any, pursuant to the Sales Agreement, may be made in sales deemed

to be an “at the market offering” as defined in Rule 415(a) of the Securities Act, including sales made directly through The Nasdaq Global Market or any other existing trading market for our common stock. During the quarter ended December 31, 2022, we sold 2,210,500 shares of common stock under the Sales Agreement at a volume weighted-average price of $22.50 per share, raising aggregate gross proceeds of $49.7 million, before fees and expenses of $1.1 million. As of December 31, 2022 there was $140.3 million of our common stock remaining available for sale under the Sales Agreement and our Registration Statement on Form S-3 (File No. 333-255769).

Direct Offering of Common Stock

On April 29, 2022, pursuant to our Registration Statement on Form S-3 (Registration No. 333-255769), we completed a direct offering of our common stock to Pfizer. We issued and sold 953,834 shares of our common stock at an offering price of $26.21 per share. The total gross proceeds for the offering were approximately $25.0 million, before deducting offering expenses of $0.3 million payable by us. We and Pfizer have entered into an agreement to collaborate to advance the clinical development of azenosertib. We did not grant Pfizer any economic ownership or control of azenosertib or the rest of our pipeline of product candidates.

Follow-on Offering of Common Stock

On May 18, 2022, we completed a follow-on offering pursuant to our Registration Statement on Form S-3 (File No. 333-255769), in which we issued and sold 10,330,000 shares of common stock at a public offering price of $19.38 per share. The total gross proceeds for the offering were approximately $200.2 million, before deducting offering expenses of $11.4 million payable by us.

Cash Flows

The following table summarizes our sources and uses of cash for the period presented:

Year Ended December 31,

(in thousands)

Net cash used in operating activities $ (163,751) $ (154,093)

Net cash used in investing activities (114,180) (18,115)

Operating Activities

We have incurred losses since inception. Net cash used in operating activities for the year ended December 31, 2022 was $163.8 million, consisting primarily of our net loss of $237.1 million as we incurred expenses associated with research activities for our lead product candidates and incurred general and administrative expenses, as well as changes in operating assets and liabilities of $13.3 million, partially offset by non-cash adjustments of $60.1 million.

Net cash used in operating activities for the year ended December 31, 2021 was $154.1 million, consisting primarily of our net loss of $166.1 million as we incurred expenses associated with research activities for our lead product candidates and incurred general and administrative expenses, and partially offset by changes in operating assets and liabilities of $16.6 million and non-cash adjustments of $4.6 million.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2022 of $114.2 million was attributable to the investment of excess cash of $533.2 million and the purchases of property and equipment of $2.5 million, partially offset by proceeds from maturities of marketable securities of $421.5 million.

Net cash used in investing activities for the year ended December 31, 2021 of $18.1 million was attributable to the investment of excess cash of $363.5 million and the purchases of property and equipment of $6.1 million, partially offset by proceeds from marketable securities of $365.8 million and the deconsolidation of Zentera cash of $14.3 million.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2022 of $261.0 million primarily relates to the May 2022 follow-on offering, which provided net cash of $188.8 million, the April 2022 direct offering to Pfizer, which provided net cash of $20.5 million, and shares sold under the Sales Agreement which provided net proceeds of $48.6 million. Of the $25.0 million gross proceeds received from Pfizer, $4.2 million of the proceeds represented a premium in excess of the fair value of our common stock on the date of the investment. An additional $3.1 million was provided from the issuance of common stock under equity incentive plans.

Net cash provided by financing activities in the year ended December 31, 2021 of $178.5 million primarily relates to the July 2021 follow-on offering and shares sold during December 2021 under the Sales Agreement which provided net proceeds of $162.2 million and $9.7 million, respectively. An additional $7.7 million was provided from the issuance of common stock under equity incentive plans.

Funding Requirements

Our operating expenses are expected to increase substantially in the future in connection with our ongoing activities.

Specifically, our expenses will increase as we:

•advance the clinical development of azenosertib and ZN-d5 for the treatment of oncology indications;

•pursue the preclinical and clinical development of other current and future research programs and product candidates and companion diagnostics for biomarkers associated with our product candidates and future product candidates;

•in-license or acquire the rights to other products, product candidates or technologies;

•maintain, expand and protect our intellectual property portfolio;

•hire additional personnel in research, manufacturing and regulatory and clinical development as well as management personnel;

•seek regulatory approval for any product candidates and, if needed, companion diagnostics for biomarkers associated with such product candidates, that successfully complete clinical development; and

•expand our operational, financial and management systems and increase personnel, including personnel to support our operations as a public company.

As of December 31, 2022, we have $2.2 million and $45.2 million in current and long-term lease liabilities, respectively. We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2022 will be sufficient to fund our operating expenses and capital expenditure requirements into the second quarter of 2025. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical drugs, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including:

•the progress, costs and results of our clinical trials for our programs for azenosertib and ZN-d5;

•the progress, costs and results of additional research and preclinical studies in other research programs we initiate in the future and of companion diagnostics for biomarkers associated with our product candidates and future product candidates;

•the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development;

•our ability to establish and maintain strategic collaborations, licensing or other agreements and the financial terms of such agreements;

•the extent to which we in-license or acquire rights to other products, product candidates or technologies; and

•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against any intellectual property-related claims.

In addition, the magnitude and duration of the COVID-19 pandemic and its impact on our liquidity and future funding requirements is uncertain as of the filing date of this Annual Report on Form 10-K, as the pandemic continues to evolve

globally. See “Impact of COVID-19 Pandemic” and “Risk Factors — The COVID-19 pandemic has adversely impacted and we expect will continue to adversely impact our business, including our preclinical studies and clinical trials."

Further, our operating results may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through the sale of equity, debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions.

We currently have no credit facility or committed sources of capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Critical Accounting Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Research and Development Expenses - Clinical Trial Accruals

Share-Based Payments

Recent Accounting Pronouncements

See Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information on certain accounting standards that have been adopted during 2022 or that have not yet been required to be implemented and may be applicable to our future operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities and inflation. We held cash and cash equivalents of $43.1 million and $59.7 million as of December 31, 2022 and 2021, respectively. We generally hold our cash in interest-bearing money market accounts. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term maturities of our cash equivalents and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents.

Item 8. Financial Statements and Supplementary Data.

The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15 of Part IV of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Inherent Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2022.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation under this framework, our principal executive officer and our principal financial officer have concluded that our internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of our internal control over financial reporting at December 31, 2022 has also been audited by Ernst & Young LLP, our independent registered public accounting firm, as stated in their report included below.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Opinion on Internal Control Over Financial Reporting

We have audited Zentalis Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC) (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, theconsolidated statements of operations, comprehensive loss, changes in convertible preferred units and members’ / stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated March 1, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be

independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

San Diego, California

March 1, 2023

Item 9B. Other Information.

On February 28, 2023, our wholly owned subsidiary, Zeno Management, Inc., and each of Dr. Blackwell, Mr. Gallagher, Dr. Bunker, Dr. Brownstein, Ms. Epperly and Ms. Paul entered into an amended and restated employment agreement primarily to provide that, in the event a change in control occurs and an excise tax is imposed by reason of the application of Sections 280G and 4999 of the Internal Revenue Code as a result of any compensatory payments made to such executive officer in connection with such change in control, such executive will be entitled to an additional payment in an amount that will offset on an after tax basis, the effect of any excise tax imposed upon such executive.

The foregoing description of the amended and restated employment agreements does not purport to be complete and is qualified in its entirety by reference to the complete text of the amendments, copies of which are filed as exhibits to this Annual Report on Form 10-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Part III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

The information required by this item will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and incorporated herein by reference.

Part IV

Item 15. Exhibits and Financial Statement Schedules.

(a)(1) Financial Statements.

The following documents are included on pages F-1 through F-29 attached hereto and are filed as part of this Annual Report on Form 10-K.

Index to Consolidated Financial Statements

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID:42) F-1

Consolidated Financial Statements

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statements of Comprehensive Loss F-5

Consolidated Statements of Cash Flows F-9

Notes to Consolidated Financial Statements F-11

(a)(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.

(a)(3) Exhibits.

The following is a list of exhibits filed as part of this Annual Report on Form 10-K.

ExhibitNumber Description Incorporated by Reference

Form File No. Exhibit Filing Date Filed/Furnished Herewith

ExhibitNumber Description Incorporated by Reference

Form File No. Exhibit Filing Date Filed/Furnished Herewith

10.3# Non-Employee Director Compensation Program *

ExhibitNumber Description Incorporated by Reference

Form File No. Exhibit Filing Date Filed/Furnished Herewith

21.1 List of Subsidiaries of Zentalis Pharmaceuticals, Inc. *

101.SCH Inline XBRL Taxonomy Extension Schema Document *

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document *

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *

ExhibitNumber Description Incorporated by Reference

Form File No. Exhibit Filing Date Filed/Furnished Herewith

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document *

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *

* Filed herewith.

** Furnished herewith.

# Indicates management contract or compensatory plan.

† Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).

Item 16. Form 10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ZENTALIS PHARMACEUTICALS, INC.

Date: March 1, 2023 By: /s/ Kimberly Blackwell, M.D.

Kimberly Blackwell, M.D.

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name Title Date

Kimberly Blackwell, M.D.

Melissa B. Epperly

/s/ David M. Johnson Chairperson March 1, 2023

David M. Johnson

/s/ Cam S. Gallagher President and Director March 1, 2023

Cam S. Gallagher

/s/ Enoch Kariuki Director March 1, 2023

Enoch Kariuki

/s/ Jan Skvarka Director March 1, 2023

Jan Skvarka

/s/ Karan S. Takhar Director March 1, 2023

Karan S. Takhar

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC) (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, changes in convertible preferred units and members’ / stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 1, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-1

Accrued clinical trial expenses

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2019.

San Diego, California

March 1, 2023

F-2

Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Consolidated Balance Sheets

(In thousands, except share amounts and par value)

December 31,

ASSETS

Current assets

Prepaid expenses and other current assets 14,562 10,640

Restricted cash — 243

Prepaid expenses and other assets 9,723 7,040

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Other long-term liabilities 2,620 —

Commitments and contingencies (see Note 10)

EQUITY

Accumulated other comprehensive loss (1,353) (125)

Noncontrolling interests 221 528

Total liabilities and stockholders' equity $ 539,310 $ 454,507

See accompanying notes to consolidated financial statements.

F-3

Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Consolidated Statements of Operations

(In thousands, except per share amounts)

Year endedDecember 31,

Operating Expenses

Other Income (Expense)

Gain on deconsolidation of Zentera — 51,582 —

Loss on equity method investment 16,282 1,831 —

Net loss attributable to noncontrolling interests (307) (7,368) (707)

See accompanying notes to consolidated financial statements.

F-4

Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Consolidated Statements of Comprehensive Loss

(In thousands)

Year endedDecember 31,

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities, net (1,228) (161) 36

Comprehensive loss attributable to noncontrolling interests (307) (7,368) (707)

See accompanying notes to consolidated financial statements.

F-5

Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Consolidated Statements of Changes in Convertible Preferred Units and Members’/Stockholders' Equity (Deficit)

(In thousands, except per unit amounts)

Zentalis Stockholders

Units Amount Units Amount Units Amount Units Amount Shares Amount

Cancellation of profit interest awards, net — — — — — — (64) — — — — — — — —

Share-based compensation expense — — — — — — — 329 — — 22,817 — — — 23,146

Cancellation of restricted stock awards — — — — — — — — (8) — — — — — —

Other comprehensive income — — — — — — — — — — — 36 — — 36

Net loss attributable to Zentalis — — — — — — — — — — — — (117,841) — (117,841)

F-6

Zentalis Stockholders

Shares Amount

Share-based compensation expense — — 35,737 — — — 35,737

Issuance of common stock upon exercise of options 232 — 7,149 — — — 7,149

Issuance of common stock under employee stock purchase plan 15 — 545 — — — 545

Cancellation of restricted stock awards (4) — — — — — —

Other comprehensive income (loss) — — — (161) — — (161)

Net loss attributable to non-controlling interest — — — — — (7,368) (7,368)

Net loss attributable to Zentalis — — — — (158,725) — (158,725)

F-7

Zentalis Stockholders

Shares Amount

Share-based compensation expense — — 46,840 — — — 46,840

Issuance of common stock upon exercise of options 122 — 2,246 — — — 2,246

Issuance of common stock under employee stock purchase plan 30 — 874 — — — 874

Cancellation of restricted stock awards (17) — — — — — —

Other comprehensive income (loss) — — — (1,228) — — (1,228)

Net loss attributable to non-controlling interest — — — — — (307) (307)

Net loss attributable to Zentalis — — — — (236,806) — (236,806)

See accompanying notes to consolidated financial statements.

F-8

Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

Consolidated Statements of Cash Flows

(in thousands)

Year Ended December 31,

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

IPR&D impairment — 8,800 —

Recognized tax gain on IPR&D impairment — (2,462) —

Gain on deconsolidation of Zentera, net of tax — (49,930) —

Loss on disposal of equipment 56 15 —

Loss on equity method investment 16,282 1,831 —

Changes in operating assets and liabilities:

Operating lease right-of-use assets and liabilities, net 4,330 1,347 (667)

Investing activities:

Deconsolidation of Zentera cash — (14,320) —

Purchases of property and equipment (2,548) (6,107) (758)

Financing activities:

Net-settlement of restricted stock unit vesting — (1,146) —

Contributions from noncontrolling interest owners, net — — 18,424

Supplemental disclosure of cash flow information:

Income taxes paid $ 12 $ 20 $ 18

Supplemental disclosure of non-cash investing and financing activities:

Accrued capital expenditures $ — $ (1,510) $ —

F-9

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows for the periods presented:

Year Ended December 31,

Restricted cash, current — 243 —

See accompanying notes to consolidated financial statements.

F-10

Zentalis Pharmaceuticals, Inc. (Successor to Zentalis Pharmaceuticals, LLC)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business

Organization

Zentalis Pharmaceuticals, Inc. (“Zentalis”, “We” or the “Company”) is a clinical-stage biopharmaceutical company focused on discovering and developing small molecule therapeutics targeting fundamental biological pathways of cancer. The Company is developing a focused pipeline of potentially best-in-class oncology candidates. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. All of the Company’s tangible assets are held in the United States.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and include our wholly-owned subsidiaries and variable interest entities (“VIEs”) for the periods in which we determined we were the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, we apply a qualitative approach that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE.

We will continuously assess whether we are the primary beneficiary of a VIE, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of such VIE. During the periods presented, we have not provided any other material financial or other support to our VIE that we were not contractually required to provide.

Noncontrolling Interests

Noncontrolling interests represent interests held by third parties in our consolidated subsidiaries. We reflect noncontrolling interest attributable to the other owners in a separate line in our consolidated statements of operations and a separate line within stockholders' equity in our consolidated balance sheets.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates.

Though the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use the best information available to inform our critical accounting estimates.

Cash and Cash Equivalents

Cash equivalents are comprised of short-term, highly-liquid investments with maturities of 90 days or less at the date of purchase. As of December 31, 2022 and 2021, our cash equivalents consisted of money market funds and corporate debt securities.

Marketable Securities

Marketable securities are investments with original maturities of more than ninety days from the date of purchase that we have the ability to liquidate to fund current operations. Accordingly, those investments with contractual maturities greater than

F-11

one year from the date of purchase are classified as short-term investments on the accompanying consolidated balance sheets. Marketable securities are considered available-for-sale and are carried at fair value with unrealized gains and losses recorded in other comprehensive income (loss) and included as a separate component of stockholders' equity. The cost of marketable securities is adjusted for amortization of premiums or accretion of discounts to maturity, and such amortization or accretion is included in investment and other income, net through an allowance account. We use the specific identification method for calculating realized gains and losses on marketable securities sold. Realized gains and losses on marketable securities, if any, are included in investment and other income, net in the consolidated statements of operations.

Restricted Cash

Under the terms of our office leases, we are required to maintain a letter of credit as a security deposit during the term of such leases. At December 31, 2022 and 2021, restricted cash of $2.6 million and $2.9 million, respectively, was pledged as collateral for the letters of credit.

Fair Value of Financial Instruments

The authoritative guidance defines fair value and requires us to establish a framework for measuring fair value and disclosure about fair value measurements using a three-tier approach. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Our financial instruments include cash equivalents, marketable securities, prepaid expenses and other assets, accounts payable and accrued expenses. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision.

The fair value of marketable securities is determined using proprietary valuation models and analytical tools, which utilize market pricing or prices for similar instruments that are both objective and publicly available, such as matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities and bids and offers.

The carrying amount of cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective values because of the short-term nature of those instruments.

Concentrations of Credit Risk and Sources of Supply

We are subject to credit risk from our portfolios of cash equivalents and marketable securities. We maintain our cash and cash equivalent and marketable securities balances with major commercial banks. Deposits held with the financial institutions exceed the amount of insurance provided on such deposits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash and cash equivalents and marketable securities to the extent recorded on the consolidated balance sheets. We have also established guidelines to limit our exposure to credit risk by diversifying our marketable securities portfolio and placing them in investments with maturities that maintain safety and liquidity.

We rely on third-party manufacturers for the supply of active pharmaceutical ingredients.

Property and Equipment, Net

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Equipment is depreciated using the straight-line method over its estimated useful life ranging from three to five years and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter. Repair and maintenance costs are expensed as incurred.

Leases

We have entered into operating leases for real estate. We determine if an arrangement is a lease at inception and evaluate each lease agreement to determine whether the lease is an operating or finance lease. For leases where we are the lessee, right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent

F-12

an obligation to make lease payments arising from the lease. Liabilities from operating leases are included in accrued expenses and long-term lease liabilities on our consolidated balance sheet. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any prepaid lease payments, lease incentives received, and costs which will be incurred in exiting a lease. Our leases often include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. As of December 31, 2022, it is not reasonably certain that these options will be exercised and they are not included within the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components which are accounted for as a single lease component for all of our leases.

Impairment of Long-Lived Assets

We account for long-lived assets in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable.

Goodwill

Our goodwill, which has an indefinite useful life, represents the excess of the cost over the fair value of net assets acquired from its business combination. The determination of the value of goodwill and intangible assets arising from business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including capitalized in-process research and development (“IPR&D”).

Goodwill is reviewed for impairment at least annually, or more frequently if an event occurs indicating the potential for impairment. During the impairment review process, we consider qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount, including goodwill. If we determine that it is not more likely than not that the fair value of our reporting unit is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair values of the reporting units with the carrying values, including goodwill. If the carrying amounts of the reporting units exceed the fair values, we record an impairment loss based on the difference. We completed our most recent annual evaluation for impairment for goodwill as of December 31, 2022 using the qualitative assessment and determined that no impairment existed, and no charges were recorded.

Equity Method Accounting

We have significant influence, but not a controlling interest, in our affiliate Zentera. From the deconsolidation of Zentera during July 2021 prospectively, this investment is accounted for using the equity method. Our share of earnings or losses of the investment entity are reported on the consolidated statement of operations, with a corresponding increase or decrease to the equity investment carried on the statement of financial position. This information is generally not received sufficiently timely for us to record our portion of earnings or loss in the current financial statements, and therefore we report our portion of earnings or loss on a one quarter lag. The maximum exposure to loss as a result of our investment in Zentera is directly associated with the carrying amount of the equity method investment on our consolidated balance sheet.

Research and Development Expenses

Research and development expenses include salaries and benefits, facilities and other overhead expenses, external clinical trial expenses, research-related manufacturing services, contract services and other outside expenses. Research and development expenses are charged to operating expenses as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. Reimbursed research and development costs under government grant arrangements are recorded as a reduction to research and development expenses and are recognized in the period in which the related costs are incurred.

We are obligated to make upfront payments upon execution of certain research and development agreements. Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are deferred. Such amounts are recognized as expense as the related goods are delivered or the related services are performed, or such time when we do not expect the goods to be delivered or services to be performed.

F-13

Clinical Trial Expenses

We make payments in connection with our clinical trials under contracts with contract research organizations that support conducting and managing clinical trials. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Generally, these agreements set forth the scope of work to be performed at a fixed fee, unit price or on a time and materials basis. A portion of our obligation to make payments under these contracts depends on factors such as the successful enrollment or treatment of patients or the completion of other clinical trial milestones.

Expenses related to clinical trials are accrued based on our estimates and/or representations from service providers regarding work performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials. Other incidental costs related to patient enrollment or treatment are accrued when reasonably certain. If the amounts we are obligated to pay under our clinical trial agreements are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly. Revisions to our contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain.

Share-Based Compensation

We record share-based compensation expense associated with equity instruments in accordance with the authoritative guidance for stock-based compensation. The cost of employee services received in exchange for an award of an equity instrument is measured at the grant date based on the estimated fair value of the award and is recognized as expense on a straight-line basis over the requisite service period of the award. Share-based compensation expense for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized, and any previously recognized compensation expense is reversed. Forfeitures are recognized as a reduction of share-based compensation expense as they occur.

Income Taxes

Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A provision has been made for income taxes due on taxable income and for the deferred taxes on temporary differences. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization of the deferred income tax asset is dependent on gathering sufficient taxable income in future years.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the combination of the tax payable for the period and the change during the period in deferred tax assets and liabilities. We follow the accounting guidance on accounting for uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income is the result of unrealized gains and losses on marketable securities.

Net Loss per Common Share Outstanding

Basic net loss per common share outstanding is computed by dividing net loss, after adjusting for dividends, if declared, by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share outstanding is computed using the weighted-average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential common shares. Potential common shares consist of unvested restricted stock awards, unvested restricted stock units and common shares issuable upon the exercise of stock options.

3. Significant Transactions

F-14

Zentera Therapeutics

In May 2020, we became a majority common shareholder of Zentera Therapeutics a Shanghai-based clinical-stage biopharmaceutical company focused on developing cancer therapeutics (“Zentera”), concurrent with its Series A convertible preferred stock offering. The financial position and results of operations of Zentera were included in our consolidated financial statements from the date of the initial investment as a result of our control of the entity and our determination that we were the primary beneficiary of Zentera. In July 2021, Zentera completed a Series B convertible preferred stock offering which diluted our investment to a position of less than majority owned. Upon review of the facts and circumstances, together with the authoritative accounting literature, we determined that while Zentera is a variable interest entity ("VIE"), consolidation of Zentera is no longer appropriate. After the July 2021 Series B convertible preferred offering in which we did not participate, our review concluded that we ceased to be the primary beneficiary of Zentera as our equity ownership was reduced to 40.3% and changes were made to the corporate governance of Zentera. As a result, we no longer individually have the ability to direct the activities that most significantly impact Zentera's economic performance.

Beginning in July 2021, the financial position and results of operations of Zentera are no longer included in our consolidated financial statements. During the period of deconsolidation we measured the fair value of our retained investment in Zentera using the backsolve method with consideration for a lack of marketability. An equity method investment of $21.2 million is recorded on our balance sheet at December 31, 2022. This amount represents our maximum exposure to loss as a result of our investment in Zentera. A deferred tax liability of $4.5 million representing the tax impact of the unrealized gain on deconsolidation is recorded on our balance sheet at December 31, 2022. A gain of $51.6 million, measured as the difference between the fair value of our retained noncontrolling interest together with the carrying amount of the Zentera noncontrolling interest, and the carrying amount of Zentera’s assets and liabilities was recognized during the year ended December 31, 2021. The difference between the carrying amount of our investment in Zentera and our portion of the Zentera net assets was $5.1 million as of December 31, 2022. This difference is accounted for in our equity method investment analogous to in-process research and development.

In May 2020, each of our subsidiaries Zeno Alpha, Inc., K-Group Alpha, Inc. and K-Group Beta, Inc. entered into a collaboration and royalty-bearing license agreement with Zentera, which we refer to as the “Zentera Sublicenses,” pursuant to which we collaborate with Zentera on the development and commercialization of ZN-c5, ZN-d5 and azenosertib, respectively (each a "Collaboration Product"), in the People’s Republic of China, Macau, Hong Kong and Taiwan, which is referred to as the “Zentera Collaboration Territory.” Under each Zentera Sublicense, Zentera will lead development, and upon regulatory approval, the commercialization, of the Collaboration Products in the Zentera Collaboration Territory.

Under the terms of the Zentera Sublicenses, Zentera is generally responsible for the costs of developing the Collaboration Products in the Zentera Collaboration Territory, and we are generally responsible for the costs of developing the Collaboration Products outside the Zentera Collaboration Territory, provided that Zentera will reimburse us for a portion of the costs for global data management, pharmacovigilance, safety database management, and chemistry, manufacturing and controls activities with respect to each Collaboration Product. Prior to the deconsolidation of Zentera, these costs were eliminated in consolidation. For the years ended December 31, 2022 and 2021, the amounts incurred under this arrangement totaled $11.0 million and $5.3 million, respectively and are presented as contra-research and development expense in the consolidated statement of operations. A corresponding receivable is recorded within prepaid expenses and other current assets on the consolidated balance sheet.

4. Business Combinations

Kalyra Pharmaceuticals, Inc.

On December 21, 2017, we acquired $4.5 million of Kalyra Pharmaceuticals, Inc.’s ("Kalyra") Series B Preferred Stock representing a 25% equity interest in Kalyra for purposes of entering the analgesics therapeutic research space. The acquisition price was paid entirely in cash.

In accordance with the authoritative guidance, we concluded that Kalyra is a business consisting of inputs, employees, intellectual property and processes capable of producing outputs. Additionally, we have concluded that Kalyra is a VIE, we are the primary beneficiary and have the power to direct the activities that most significantly affect Kalyra’s economic performance through common management and our board representation. Prior to December 21, 2017, the Company and Kalyra transacted for the delivery of research and development services and support. The financial position and results of operations of Kalyra have been included in our consolidated financial statements from the date of the initial investment.

Pursuant with authoritative guidance, we have recorded the identifiable assets, liabilities and noncontrolling interests in the VIE at their fair value upon initial consolidation. The identified goodwill is comprised of the workforce and expected

F-15

synergies from combining the entities. During the year ended December 31, 2021, Kalyra determined that they will no longer pursue the development of Kalyra's lead product candidate and ceased the associated clinical trial. The in-process research and development costs ("IPR&D") recorded on Kalyra's balance sheet exclusively relates to this candidate. Management recorded an impairment charge of $8.8 million within the research and development expense line item on the consolidated statement of operations during the year ended December 31, 2021, which resulted in a reduction of the IPR&D asset from $8.8 million to zero. The impairment of IPR&D resulted in a reversal of the associated deferred tax liability of $2.5 million during the year ended December 31, 2021. Total assets and liabilities of Kalyra as of December 31, 2022 and 2021 are immaterial.

The liabilities recognized as a result of consolidating Kalyra do not represent additional claims on our general assets. Pursuant to the authoritative guidance, the equity interest in Kalyra not owned by Zentalis is reported as a noncontrolling interest on our consolidated balance sheets.

The following is a reconciliation of equity (net assets) attributable to the noncontrolling interest (in thousands):

December 31,

Noncontrolling interest at beginning of period $ 528 $ 24,795

Net loss attributable to noncontrolling interest (307) (7,368)

Deconsolidation of Zentera — (16,899)

Noncontrolling interest at end of period $ 221 $ 528

5. Fair Value Measurement

Available-for-sale marketable securities consisted of the following (in thousands):

As of December 31, 2022, fifty-three of our available-for-sale debt securities with a fair market value of $280.1 million were in a gross unrealized loss position of $1.4 million. When evaluating an investment for impairment, we review factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, our intent to sell or the likelihood that we would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of December 31, 2022, because we do not intend to sell these securities, and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis.

Contractual maturities of available-for-sale debt securities are as follows (in thousands):

Estimated Fair Value

After one but within five years —

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at

F-16

the measurement date. Fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. The Company determines the fair value of financial assets and liabilities using three levels of inputs as follows:

Level 1—Inputs which include quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted market prices included in Level 1) that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life.

Level 3—Unobservable inputs for assets or liabilities and include little or no market activity.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

Cash equivalents:

Available-for-sale marketable securities:

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2022. We had no instruments that were classified within Level 3 as of December 31, 2022 or 2021.

F-17

6. Prepaid Expenses and Other Assets

Prepaid expenses and other assets consisted of the following (in thousands):

December 31,

Prepaid software licenses and maintenance 958 403

Prepaid research and development expenses 15,002 11,204

Total prepaid expenses and other current assets 24,285 17,680

Total prepaid expenses and other assets, current $ 14,562 $ 10,640

7. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

December 31,

Office equipment and furniture 2,065 2,123

Construction in process 37 34

Accumulated depreciation and amortization (2,060) (792)

Property and equipment, net $ 7,705 $ 8,148

Depreciation and amortization expense was approximately $1.4 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively.

8. Accrued Expenses

Accrued expenses consist of the following (in thousands):

F-18

December 31,

Accrued research and development expenses $ 32,310 $ 18,531

Accrued general and administrative expenses 662 1,480

Less long-term portion 2,620 —

9. Stockholders' Equity

Direct Offering of Common Stock

On April 29, 2022, pursuant to our Registration Statement on Form S-3 (Registration No. 333-255769), filed with the SEC on May 4, 2021, we completed a direct offering of common stock to Pfizer Inc. (“Pfizer”). We issued and sold 953,834 shares of our common stock at an offering price of $26.21 per share. The total gross proceeds for the offering were approximately $25.0 million, before deducting offering expenses of $0.3 million payable by us. The parties have entered into an agreement to collaborate to advance the clinical development of azenosertib (ZN-c3), a selective Wee1 inhibitor designed to induce synthetic lethality in cancer cells. We did not grant Pfizer any economic ownership or control of azenosertib or the rest of our pipeline. The gross offering proceeds received from Pfizer exceeded the fair value of our common stock on the date of the investment. As of December 31, 2022, $3.8 million has been recorded as accrued research and development expense on the consolidated balance sheet and will be recognized as a reduction of research and development expense over the term of the collaboration agreement.

Follow-on Offering of Common Stock

On May 18, 2022, pursuant to our Registration Statement on Form S-3 (Registration No. 333-255769), we completed a follow-on offering in which we issued and sold 10,330,000 shares of common stock at a public offering price of $19.38 per share. The total gross proceeds for the offering were approximately $200.2 million, before deducting offering expenses of $11.4 million payable by us.

In May 2021, the Company entered into a sales agreement, or the Sales Agreement, with SVB Leerink LLC, or SVB Leerink, as sales agent, pursuant to which the Company may, from time to time, issue and sell common stock with an aggregate value of up to $200.0 million in “at-the-market” offerings, or the ATM, under the Company's Registration Statement on Form S-3 (File No. 333-255769). Sales of common stock, if any, pursuant to the Sales Agreement, may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a) of the Securities Act, including sales made directly through The Nasdaq Global Market or any other existing trading market for the Company's common stock. During the quarter ended December 31, 2022, the Company sold 2,210,500 shares of common stock under the Sales Agreement at a volume weighted-average price of $22.50 per share, raising aggregate gross proceeds of approximately $49.7 million before fees and expenses of approximately $1.1 million. As of December 31, 2022 there was $140.3 million of common stock remaining available for sale under the Sales Agreement.

Share-based Compensation

In April 2020, the Company’s Board of Directors adopted, and the Company’s stockholders approved the 2020 Incentive Award Plan (the "2020 Plan"), which allows for grants to selected employees, consultants and non-employee members of the Board of Directors. We currently grant stock options and restricted stock units (“RSUs”), under the 2020 Plan. Awards may be made under the 2020 Plan covering up to the sum of (1) 5,600,000 shares of common stock; plus (2) any shares forfeited from the unvested restricted shares of our common stock issued upon conversion of unvested Class B common units (up to 1,250,000 shares); plus (3) an annual increase on the first day of each fiscal year beginning with the fiscal year ending December 31, 2021 and continuing to, and including, the fiscal year ending December 31, 2030, equal to the lesser of (a) 5% of the shares of

F-19

common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by our Board of Directors.

In July 2022, the Company’s Board of Directors approved the Zentalis Pharmaceuticals, Inc. 2022 Employment Inducement Incentive Award Plan (the “2022 Inducement Plan”), which is used exclusively for the grant of equity awards to new employees as an inducement material to the employees’ entering into employment with the Company. The Board of Directors has initially reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to awards granted under the 2022 Inducement Plan.

As of December 31, 2022, 7,517,610 shares were subject to outstanding awards under the 2020 Plan and 980,553 shares were available for future grants of share-based awards under the 2020 Plan. As of December 31, 2022, 1,456,750 shares were subject to outstanding awards under the 2022 Inducement Plan and 43,250 shares were available for future grants of share-based awards under the 2022 Inducement Plan.

In connection with the corporate conversion, each outstanding profits interest award unit was converted into a number of shares of common stock and restricted common stock based upon the IPO price. The restricted common stock issued in respect of profits interest award units continues to be subject to vesting in accordance with the vesting schedule that was applicable to such profits interest award units. In conjunction with our IPO on April 2, 2020, all unvested profit interest awards were converted into restricted stock awards ("RSAs").

During 2022, we issued an aggregate of 122,082 shares of common stock in connection with the exercises of stock options for cash in the aggregate amount of approximately $2.2 million. We did not issue any shares of common stock in connection with grants of RSA's. We issued 158,671 shares of common stock, upon vesting of RSU's.

Total share-based compensation expense related to share-based awards was comprised of the following (in thousands):

Year ended December 31,

Share-based compensation expense by type of share-based award (in thousands):

Year ended December 31,

Profits interest award units $ — $ — $ 329

Employee Stock Purchase Plan 427 321 —

F-20

Prior to the deconsolidation of Zentera during the third quarter of 2021, total share-based compensation expense includes $138 thousand of share-based compensation expense for employees, consultants and directors of Zentera, for the twelve months ended December 31, 2021, compared to $187 thousand for the same period in 2020.

Total unrecognized estimated compensation cost by type of award and the weighted average requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted):

UnrecognizedExpense Remaining Weighted-Average Recognition Period(Years)

Stock Options:The following table summarizes option activity for the year ended December 31, 2022. The amounts include stock options granted to both employees and non-employees:

The weighted average grant date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $20.45 and $33.27, respectively. The total intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was approximately $2.0 million and $8.8 million, respectively.

The exercise price of stock options granted is equal to the closing price of the Company's common stock on the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company estimates expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company uses the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not issued any dividends and does not expect to issue dividends over the life of the options. As a result, the Company has estimated the dividend yield to be zero. The fair value of the stock options granted during the year ended December 31, 2022 was determined with the following assumptions:

Year ended December 31,

Average expected term (in years) 6.0 - 6.5 5.2 - 6.1

Risk-free interest rate 1.5% - 4.2% 0.5% - 1.3%

Expected dividend yield —% —%

F-21

Restricted Stock Awards: RSAs are shares of our common stock subject to forfeiture restrictions that lapse based on the awardee's continued employment or service. The shares covered by a RSA cannot be sold, pledged or otherwise disposed of until the awards vest, and any unvested shares will be forfeited following the awardee's termination of service.

The following table summarizes RSA activity for the year ending December 31, 2022. The amounts include RSAs granted to both employees and non-employees:

Number of Shares Weighted Average Grant DateFair Value

The fair value of RSAs issued upon conversion of the unvested profit interest award units was based on a Black-Scholes pricing model. The estimated fair value of the RSAs for any future grants will be based on the closing market value of our common stock on the date of grant. The total grant date fair value of RSAs vested during the years ended December 31, 2022, 2021 and 2020 was approximately $1.0 million, $1.7 million and $1.1 million, respectively. The fair value of RSAs vested during the years ended December 31, 2022, 2021 and 2020, was approximately $8.3 million, $21.0 million and $14.3 million, respectively.

Restricted Stock Units: A RSU is a promise by us to issue a share of our common stock upon vesting of the unit.

The following table summarizes RSU activity for the year ending December 31, 2022. The amounts include RSUs granted to both employees and non-employees:

Number of Shares Weighted Average Grant DateFair Value

The estimated fair value of the RSUs was based on the closing market value of our common stock on the date of grant. The total grant date fair value of RSUs vested during the years ended December 31, 2022, 2021 and 2020 was approximately $4.6 million $12.7 million and $10.1 million, respectively. The fair value of RSUs vested during the years ended December 31, 2022, 2021 and 2020 was approximately $7.3 million, $26.4 million and $21.8 million, respectively.

Employee Stock Purchase Plan

In April 2020, the Company’s Board of Directors adopted, and the Company’s stockholders approved the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which became effective upon the corporate conversion. The number of common shares initially available for issuance under the 2020 ESPP was the sum of (1) 450,000 shares of common stock; plus (2) an annual increase on the first day of each fiscal year beginning with the fiscal year ending December 31, 2021 and continuing to, and including, the fiscal year ending December 31, 2030, equal to the least of (a) 1% of the shares of common stock outstanding on the final day of the immediately preceding calendar year, (b) 1,500,000 shares and (c) such smaller number of shares as determined by our Board of Directors. The 2020 ESPP was amended and restated effective March 15, 2021 to provide for a share reserve of 2,000,000 shares and the elimination of the evergreen provision.

The weighted average assumptions used to estimate the fair value of stock purchase rights under the 2020 ESPP are as follows:

F-22

Year ended December 31,

ESPP

Expected term (years) 0.5 0.5

Risk free rate 1.6 % 0.1 %

Expected dividend yield — % — %

Under the terms of the 2020 ESPP, the Company’s employees may elect to have up to 20% of their compensation, up to a maximum of $21,250 per calendar year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of the Company’s common stock on (i) the first trading day of a six-month offering period, or (ii) the applicable purchase date, defined as the last trading day of the six-month offering period.

10. Commitments and Contingencies

ZNTL US Equity

ZNTL · 10-K · period ended 2022-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

ZNTL US Equity☆

ZNTL · 10-K · period ended 2022-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

ZNTL US Equity