June 18 (Reuters) - The U.S. health regulator has placed

three studies of Zentalis Pharmaceuticals' ( ZNTL ) cancer drug

on partial clinical hold following the death of two trial

participants, the company said on Tuesday.

Shares of the drug developer slumped about 26% to $6.22 in

early trading.

The drug candidate, azenosertib, was being tested against

solid tumors in an early-stage study and in patients with a type

of ovarian and uterine cancer in two mid-stage studies.

"We don't think this is the end for azenosertib,"

Oppenheimer analyst Matthew Biegler said, adding that the hold

is resolvable with enhanced patient monitoring and

preventatives.

While dosing for participants already enrolled will

continue, further enrollments in the mid-stage studies have been

paused, the company said.

The resolution of the partial clinical hold is necessary to

continue the development of azenosertib as a monotherapy, CEO

Kimberly Blackwell said on a conference call, adding that other

studies testing the drug in combination can continue.

The regulator's decision comes after two patients in the

ovarian cancer study died due to presumed blood-related

infection associated with the treatment, the company said.

Azenosertib belongs to a class of drugs that inhibit a

protein called WEE1, which may be found in higher-than-normal

amounts in some types of cancer cells.

Zentalis said it plans to share additional efficacy and

safety data for azenosertib from the ovarian cancer trial later

this year, adding that it is working with the Food and Drug

Administration to resolve the clinical hold.