Company announcement - No. 25 / 2019
Zealand Pharma delivers strong clinical results during the first half of 2019 and accelerates commercial build-up in the U.S.
Copenhagen, August 15, 2019 - Zealand Pharma A/S ("Zealand") (Nasdaq:ZEAL) (CVR No. 20 04 50 78), a Copenhagen-based biotechnology company focused on the discovery and development of next generation peptide medicines, today announced financial results for the first half of 2019.
Emmanuel Dulac, President and Chief Executive Officer at Zealand Pharma, comments:
"We continue to advance our research and clinical development programs, and are accelerating the first steps in building commercial operations in the U.S. Our dasiglucagon franchise was strengthened by positive clinical results for both hypoglycemia rescue and the dual hormone bionic pancreas. We initiated clinical trials for both glepaglutide and ZP7570, expanding our development of potential treatments for people living with short bowel syndrome. Zealand Pharma delivered on plan during the first six months of 2019, and we expect to achieve rapid progress throughout our clinical development programs."
Financial results for the first half of 2019
- Revenue of DKK 19.9 million / USD 3.0 million (DKK 24.9 million / USD 3.9 million in the first six months of 2018).
- Net operating expenses of DKK 292.1 million / USD 44.5 million (DKK 225.3 million / USD 35.2 million in the first six months of 2018).
- Net operating result of DKK -272.1 million / USD -41.5 million (DKK -203.5 million / USD -31.8 million in the first six months of 2018).
- Cash including marketable securities amounted to DKK 1,142.1 million / USD 174.1 million as of June 30, 2019 (June 30, 2018: DKK 461.3 million / USD 72.2 million).
Business highlights for the second quarter of 2019 and subsequent events
- Primary and all key secondary endpoints achieved in confirmatory Phase 3 study with dasiglucagon HypoPal® rescue pen. Accelerated build-up of U.S. operations to prepare for commercialization.
- Unprecedented glycemic control demonstrated in first Phase 2 home-use clinical trial testing the iLet™ bionic pancreas with dasiglucagon for autonomous management of Type 1 diabetes.
- Significant progress in Phase 3 program with dasiglucagon for the treatment of congenital hyperinsulinism in children.
- Continued good progress in Phase 3 program with glepaglutide for short bowel syndrome, with first patients rolling into the long-term extension trial.
- Phase 1 study initiated with ZP7570 as a potential next-generation novel treatment for short bowel syndrome.
- Emmanuel Dulac appointed as President and Chief Executive Officer, effective April 22, 2019.
- Andrew Parker leaves the role of Executive Vice President and Chief Scientific Officer, effective August 31, 2019.
Financial guidance for 2019
In 2019, Zealand expects revenue from existing license agreements. However, since such revenue is uncertain in terms of size and timing, Zealand does not guide on such revenue.
Net operating expenses in 2019 are now expected to be within DKK 580-600 million, changed from previous DKK 550-570 million. Change in guidance is mainly related to strong clinical progress resulting in additional spend on ZP7570 and dasiglucagon CHI programs, and accelerated build-up in the U.S. to prepare for commercialization of glepaglutide and dasiglucagon.
Short bowel syndrome
Zealand is developing treatments for gastrointestinal diseases, with current focus on short bowel syndrome (SBS). One of the leading programs in Zealand's pipeline is glepaglutide, a long-acting GLP-2 analog being developed in an auto-injector with potential for convenient weekly administration. The Phase 3 program was initiated in 2018 and results from the pivotal Phase 3 trial are expected in 2020. The trial seeks to establish the efficacy and safety of once- and twice-weekly administration of glepaglutide in patients with SBS. The primary endpoint is to evaluate the reduction in weekly parenteral support volume from baseline to week 24. Orphan drug designation is granted in the U.S.
ZP7570 is a potential first-in-class and long-acting GLP-1R/GLP-2R dual agonist. ZP7570 is designed to improve management of SBS beyond what is achievable with mono GLP-2 treatments, and may represent a next level of innovation for helping SBS patients to further realize full potential for intestinal rehabilitation. The Phase 1 clinical study was initiated in June 2019.
Diabetes / Obesity
Dasiglucagon is Zealand's lead drug in development to improve the treatment of metabolic diseases. Dasiglucagon is a stable glucagon analog being developed in three distinct forms and indications:
- Dasiglucagon HypoPal® rescue pen for severe hypoglycemia
The ready-to-use dasiglucagon rescue pen, the HypoPal®, is designed to offer people with diabetes fast and effective treatment for severe hypoglycemia. In the pivotal Phase 3 trial, primary and all key secondary endpoints were successfully achieved. Results from a confirmatory Phase 3 study announced in May 2019 demonstrate that the median time to blood glucose recovery was 10 minutes for dasiglucagon, which was superior to placebo (median: 35 min; p<0.001) and identical to a median time to rescue of 10 minutes observed in the pivotal Phase 3 trial. Likewise, the dasiglucagon pharmacokinetic profiles were consistent between the two trials.
A pediatric trial is ongoing with results expected in September 2019. The submission of the New Drug Application (NDA) with the U.S. FDA is planned for early 2020. Build-up of U.S. operations has been accelerated to prepare for commercialization, and recruitment for key leadership positions has begun.
- Dasiglucagon dual-hormone artificial pancreas for automated diabetes management
Zealand is developing a 1 ml cartridge containing dasiglucagon, intended for use in dual-hormone artificial pancreas pumps.
We are collaborating with Beta Bionics, developer of the iLet™, a pocket-sized, dual-chamber, autonomous, glycemic control system. The iLet mimics a biological pancreas by calculating and dosing insulin and/or glucagon (dasiglucagon) as needed, based on data from the diabetic person's continuous glucose monitor. Zealand has invested USD 5 million in Beta Bionics.
Top-line results from the first ever home-use, out-patient Phase 2 trial in patients with Type 1 diabetes with dasiglucagon in the iLet were announced in June 2019. The preliminary data analysis demonstrated that the bihormonal iLet using dasiglucagon provided superior glycemic control over the insulin-only iLet. During the bihormonal period, 90% of participants had a mean CGM glucose level of < 154 mg/dL, a level that corresponds to an HbA1c level of 7%, the therapeutic goal for adults with Type 1 Diabetes recommended by the American Diabetes Association. In the insulin-only period only 50% of participants had a mean CGM glucose level < 154 mg/dL. Importantly these glycemic targets were achieved while time spent with blood glucose levels < 54 mg/dL was only 0.3% in the bihormonal and 0.6% in the insulin only arm.
- Dasiglucagon for congenital hyperinsulism (CHI)
The potential of chronic dasiglucagon infusion delivered via a pump to prevent hypoglycemia in children with CHI is being evaluated in a Phase 3 program. The aim is to reduce or eliminate the need for intensive hospital treatment, reduce the frequency of dangerous low blood glucose and need for constant feeding, and to potentially delay or eliminate the need for pancreatectomy. The U.S. FDA and the European Commission both granted orphan drug designation to dasiglucagon for the treatment of CHI, and the U.S. FDA approved Zealand's investigational new drug (IND) application.
The first Phase 3 trial with children aged three months to 12 years was initiated in May 2019 and six children have been randomized as of July. The second Phase 3 trial with children from 7 days up to one year of age is expected to start later in 2019. The first children were enrolled in the long-term Phase 3 extension study in May 2019.
Long-acting GLP1-GLU dual agonist for obesity and/or diabetes (with Boehringer Ingelheim)
The glucagon/GLP-1 dual agonist activates two key gut hormone receptors simultaneously and may offer better blood sugar and weight-loss control than current single-hormone receptor agonist treatments. The lead molecule is targeting treatment of diabetes and obesity, and based on encouraging Phase 1a clinical trial results, the molecule is currently being evaluated in a multiple-ascending dose Phase 1b trial with the once-weekly dosing. Results from that trial and subsequent decision on Phase 2 are expected in 2019.
Boehringer Ingelheim is funding all research, development and commercialization activities related to the treatment. Zealand is eligible to receive up to EUR 386 million in milestone payments (of which EUR 365 million is outstanding) and high-single to low-double digit royalties on global sales.
Long-acting amylin analog for obesity and/or diabetes (with Boehringer Ingelheim)
The current once-weekly amylin analog lead molecule for treatment of diabetes/obesity is anticipated to enter Phase 1 clinical testing in 2019. In pre-clinical studies, Zealand and Boehringer Ingelheim observed that the novel, long-acting amylin analog may prevent the development of obesity in pre-clinical models, suggesting its potential use in treating obesity and obesity-related comorbidities.
Boehringer Ingelheim is funding all research, development and commercialization activities related to the treatment. Zealand is eligible to receive up to EUR 295 million in milestone payments (of which EUR 283 million is outstanding) and royalties on global sales.
Complement inhibitors (with Alexion Pharmaceuticals)
Zealand and Alexion Pharmaceuticals announced in March that they will collaborate on the discovery and development of novel peptide therapies for complement-mediated diseases. Under the terms of the agreement, Alexion and Zealand entered into an exclusive collaboration for the discovery and development of subcutaneously delivered peptide therapies directed to up to four complement pathway targets. The lead program is a long-acting inhibitor of Complement C3 which has the potential to treat a broad range of complement mediated diseases. Zealand will lead the joint discovery and research efforts through the preclinical stage, and Alexion will lead development efforts beginning with IND filing and Phase 1 studies. Zealand received an immediate upfront payment of USD 25 million for the first target, with Alexion making a concurrent USD 15 million equity investment in Zealand Pharma at a premium to the market price. For the lead target, Zealand is eligible to receive up to USD 610 million in development and sales milestone payments, plus royalties on global sales in the high single to low double digits. Each of the three subsequent targets can be selected for an option fee of USD 15 million and has potential for additional development and sales milestones, and royalty payments at a reduced level to the lead target. For the accounting treatment please refer to Note 2 of the condensed consolidated interim financial statements.
Expanding on our GLP-1 experience, we have discovered potent selective analogs of gastric inhibitory peptide (GIP) and extended this to single peptides that have dual activity at both GIP and GLP-1 receptors as well as single peptides with triple activity at GIP, GLP-1 and glucagon receptors. These peptides have therapeutic potential to treat metabolic diseases such as type 2 diabetes and obesity with early clinical validation of GIP/GLP-1 dual agonist provided by a Phase 2 study reported in 2018 (Frias et al, The Lancet 392:2180-2193).
Ion Channel Blockers
We have identified novel peptides that are potent and selective blockers of ion channels that may play roles in gastrointestinal inflammation. Further optimization is required and we expect these programs to contribute to the clinical pipeline in the future.
Conference call today at 4:00 pm CET / 10:00 am ET
Zealand's Management will host a conference call today at 4:00 pm CET to present results through the first half year of 2019. Participating in the call will be Chief Executive Officer Emmanuel Dulac, Chief Medical and Development Officer Adam Steensberg, with the corporate management team in attendance. The presentation will be followed by a Q&A session.
The conference call will be conducted in English, and the dial-in numbers are:
Denmark: +45 32 72 80 42
United Kingdom: +44 (0) 844 571 8892
United States: +1 631 510 7495
France, Paris +33 (0) 176700794
Netherlands, Amsterdam +31 (0) 207143545
A live audio webcast of the call, including an accompanying slide presentation, will be available via the following link, https://edge.media-server.com/m6/p/dzhe5vjk, also accessible from the Investor section of Zealand's website (www.zealandpharma.com). Participants are advised to register for the webcast approximately 10 minutes before the start.
A recording of the event will be available on the Investor section of Zealand's website following the call.
For further information, please contact:
Emmanuel Dulac, President and Chief Executive Officer
Tel: +45 50 60 36 36, e-mail: email@example.com
Lani Pollworth Morvan, Investor Relations and Communication
Tel: +45 50 60 37 78, e-mail: firstname.lastname@example.org
NOTE: DKK/USD Exchange rates used: June 30, 2019 = 6.5585 and June 30, 2018 = 6.3926
About Zealand Pharma A/S
Zealand Pharma A/S (Nasdaq Copenhagen and New York:ZEAL) ("Zealand") is a biotechnology company focused on the discovery and development of innovative peptide-based medicines. More than 10 drug candidates invented by Zealand have advanced into clinical development, of which two have reached the market. Zealand's current pipeline of internal product candidates focus on specialty gastrointestinal and metabolic diseases. Zealand's portfolio also includes two clinical license collaborations with Boehringer Ingelheim and pre-clinical license collaboration with Alexion Pharmaceuticals.
Zealand is based in Copenhagen (Glostrup), Denmark. For further information about the Company's business and activities, please visit www.zealandpharma.com or follow Zealand on LinkedIn or Twitter @ZealandPharma.
Safe Harbor/Forward-Looking Statements
The above information contains forward-looking statements that provide our expectations or forecasts of future events such as new product introductions, clinical development activities and anticipated results, product approvals and financial performance. Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions. This may cause actual results to differ materially from expectations and it may cause any or all of our forward-looking statements here or in other publications to be wrong. Factors that may affect future results include interest rate and currency exchange rate fluctuations, delay or failure of clinical trials and other development activities, production problems, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Zealand's products, introduction of competing products, Zealand's ability to successfully market both new and existing products, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws and related interpretation thereof, and unexpected growth in costs and expenses.
Certain assumptions made by Zealand are required by Danish Securities Law for full disclosure of material corporate information. Some assumptions, including assumptions relating to sales associated with a product that is prescribed for unapproved uses, are made taking into account past performances of other similar drugs for similar disease states or past performance of the same drug in other regions where the product is currently marketed. It is important to note that although physicians may, as part of their freedom to practice medicine in the United States, prescribe approved drugs for any use they deem appropriate, including unapproved uses, at Zealand, promotion of unapproved uses is strictly prohibited.
Source: Zealand Pharma