Zealand Pharma - Interim report for the first nine months of 2018
Company announcement - No. 28 / 2018
Copenhagen, November 15, 2018 - Zealand Pharma A/S ("Zealand") (Nasdaq: ZEAL) (Company reg. No. 20 04 50 78), a Copenhagen-based biotechnology company focused on the discovery and development of innovative peptide-based medicines, today announced its financial results for the first nine months of 2018.
"The third quarter was transformative for Zealand. With the sale of future royalties and milestones, we became a financially stronger company with the funding and focus to bring our fully owned late-stage candidates to market," said Britt Meelby Jensen, the Company's President and Chief Executive Officer. "We gained even more confidence in dasiglucagon as a potential best-in-class rescue treatment for severe hypoglycemia after receiving the strong results from the pivotal Phase 3 trial. In addition, three Phase 3 trials were initiated, including the pivotal trial for glepaglutide as treatment for short bowel syndrome. Our focus is now to ensure that the clinical trials are progressing with high speed and quality and on entering into selected partnerships in line with our strategy."
Financial results for the first nine months of 2018
- Revenue of DKK 24.9 million / USD 3.9 million1 (DKK 125.8 million / USD 20.0 million2 in the first nine months of 2017).
- There was no milestone revenue in first nine months of 2018 as compared to DKK 101.0 million / USD 16.0 million2 in first nine months of 2017.
- Net operating expenses3 of DKK 330.6 million / USD 51.3 million1 (DKK 252.2 million / USD 40.0 million2 in the first nine months of 2017).
- Other operating income of DKK 1,099.2 million / USD 170.6 million1 (DKK 0.5 million / USD 0.1 million2 in the first nine months of 2017)
- In September, Zealand entered into an agreement to sell future royalties and USD 85 million of potential commercial milestones for Soliqua® 100/33/ Suliqua® and Lyxumia®/Adlyxin®. Zealand received DKK 1,310.2 million / USD 205.0 million upon closing of the transaction. The net gain from the transaction amounted to DKK 1,098.9 million / USD 170.6 million.
- Net result of DKK 704.3 million / USD 109.4 million1 (DKK -164.6 million / USD -26.1 million2 in the first nine months of 2017).
- Cash and cash equivalents, restricted cash and securities amounted to DKK 1,478.6 million / USD 229.6 million1 as of September 30, 2018 (December 31, 2017: DKK 669.7 million / USD 107.9 million4).
Business highlights from the third quarter of 2018 and the period thereafter
- Dasiglucagon for severe hypoglycemia achieved all primary and key secondary endpoints in the pivotal Phase 3 trial:
- 99% of patients on dasiglucagon recovered from low blood glucose within 15 minutes.
- Median time to plasma glucose recovery of 10 minutes with dasiglucagon.
- Phase 3 trial initiated with dasiglucagon for treatment of severe hypoglycemia in children
- First patients enrolled in pivotal Phase 3 trial with Glepaglutide, a long-acting GLP-2 analog for treatment of short bowel syndrome (SBS)
- GLP-1/Glucagon dual agonist for once-weekly treatment of obesity/Type 2 diabetes successfully completed Phase 1a trial and was advanced into Phase 1b by Boehringer Ingelheim
- Once-weekly amylin analog lead molecule for treatment of obesity/Type 2 diabetes has been replaced by a stronger back-up candidate, anticipated to enter Phase 1 in H1 2019 by Boehringer Ingelheim
- GLP-1/GLP-2 dual agonist selected to advance into Phase 1 development in 2019, with potential in SBS and other gastrointestinal diseases
- Expansion of rare disease pre-clinical pipeline, with potent and selective inhibitors of Complement C3 for the treatment of complement mediated diseases
- Appointment of Marino Garcia as Senior Vice President of Corporate and Business Development
Full-year guidance for 2018
Zealand maintains its financial guidance for full-year 2018 as announced in the Company's 2017 Annual Report.
Net operating expenses3 in 2018 are still expected to be within the range of DKK 475-495 million (USD 73-77 million1). Most of the spend is related to the increased clinical development costs associated with Phase 3 trials of the Company's glepaglutide and dasiglucagon programs.
As the Company has sold future royalties and milestones from Sanofi for sales of Soliqua® 100/33/ Suliqua® and Lyxumia®/Adlyxin® no further royalties or milestones are expected in 2018.
Glepaglutide (GLP-2 analog for short bowel syndrome)
Glepaglutide is a long-acting GLP-2 analog with an effective half-life of approximately 50 hours. The pivotal Phase 3 trial was initiated in early October 2018. The trial is a randomized, double-blind and placebo-controlled study, with both once- and twice-weekly dosing regimens. The trial is expected to enroll 129 patients at multiple sites across the United States, Europe and Canada.
The U.S. FDA has granted orphan drug designation for glepaglutide for the treatment of SBS. The preceding glepaglutide Phase 2 trial in patients with SBS demonstrated increases in intestinal absorption following only 3 weeks of treatment.
Dasiglucagon (glucagon analog stable in liquid formulation)
Dasiglucagon is a potential first-in-class glucagon analog with a unique stability profile in liquid formulation. Zealand is pursuing several indications where a stable profile would provide new treatment options:
- Dasiglucagon HypoPal® rescue pen for severe hypoglycemia
The ready-to-use dasiglucagon rescue pen, the HypoPal®, is designed to offer people with diabetes a fast treatment solution for severe hypoglycemia. In the pivotal Phase 3 efficacy trial, all primary and key secondary endpoints were successfully achieved. 99% of patients on dasiglucagon recovered from low blood glucose within 15 minutes, and the median time to plasma glucose recovery was 10 minutes with dasiglucagon.
A pediatric trial was initiated in September 2018 with readout in H1 2019 and we anticipate a New Drug Application (NDA) filing Q4 2019.
- Dasiglucagon for congenital hyperinsulism (CHI)
We are developing dasiglucagon as a potential treatment option for CHI, a rare disease, which affects mainly newborns and toddlers with devastating consequences including brain damage and which often requires surgical intervention, pancreatectomy, to manage the condition. Initiation of the first Phase 3 trial is expected in Q4 2018. This is slightly later than earlier communicated due to additional comments from FDA, which Zealand believes will simplify and improve the program.
- Dasiglucagon dual-hormone pump therapy for diabetes
A next-generation artificial pancreas pump system, the iLetTM containing both insulin and glucagon (dasiglucagon) is in development by our partner Beta Bionics. The addition of dasiglucagon to the pump system provides the means to elevate blood sugar levels with potential to control these more accurately than with insulin alone.
In May 2018, Beta Bionics received an Investigational Device Exemption (IDE) approval from FDA, allowing them to use the iLetTM pump in clinical trials. In June, Zealand and Beta Bionics met with the FDA to discuss Phase 2b and the path towards Phase 3 initiation. As a consequence, the planned Phase 2b trial has been reduced in scope to provide bridging data in the iLet(TM) pump before potential Phase 3 initiation. The Phase 2b trial is expected to complete in H1 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. Based on encouraging Phase 1a clinical trial results, a Phase 1b trial with the once-weekly GLP1/Glu dual agonist for treatment of diabetes/obesity was initiated by Boehringer Ingelheim in August. Results from that trial are expected in H1 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 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 has been replaced by a stronger back-up candidate with improved pharmaceutical properties. This new lead is anticipated to enter Phase 1 clinical testing in H1 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.
GLP-1/GLP-2 dual agonist (ZP7570)
ZP7570 is a potential first-in-class dual agonist peptide therapeutic to treat patients with short bowel syndrome and/or other metabolic and gastrointestinal diseases. Rationale for the dual agonist builds upon clinical evidence indicating that combining the GLP-1 and GLP-2 mechanisms provides an improved outcome in some SBS patients over GLP-2 alone. The GLP-1 activity will impact gastric emptying and hyperglycemic events and could also improve the metabolism of the parenteral nutrition. Preclinical development has been completed and the candidate is ready to move into Phase 1 in 2019.
Complement C3 inhibitors
Altered activation of the complement cascade is implicated in many immune mediated diseases and in particular rare diseases such as paroxysmal nocturnal hemoglobinuria, cold agglutinin disease, myasthenia gravis and C3 glomerulopathy. We have identified novel peptides that are potent, selective, long-acting inhibitors of the complement cascade acting at factor C3. A clinical candidate is expected to be selected in 2019.
Conference call today at 4 pm CET / 10 am ET
Zealand's management will be hosting a conference call today at 4:00 p.m. CET / 10:00 a.m. ET to present the results for the first nine months of 2018. The call will be led by President and Chief Executive Officer Britt Meelby Jensen, and Executive Vice President and Chief Financial Officer Mats Blom, with the rest of management attending. 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 35 15 80 49
United Kingdom:............ +44 (0)330 336 9127
United States:................ +1 929-477-0448
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/wit9aekv, and also will be accessible on the Investor section of Zealand's website (www.zealandpharma.com). Participants are advised to register for the webcast approximately 10 minutes before the scheduled start.
A recording of the event and a transcript will be available on the Investor section of Zealand's website after the call.
For further information, please contact:
Britt Meelby Jensen, President and Chief Executive Officer
Tel.: +45 51 67 61 28, e-mail: firstname.lastname@example.org
Mats Blom, Executive Vice President, Chief Financial Officer
Tel.: +45 31 53 79 73, e-mail: email@example.com
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.
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.
1 Translated solely for convenience into U.S. dollars at an assumed exchange rate of DKK 6.44 per USD 1.00, which was the rounded official exchange rate
of such currencies at September 30, 2018.
2 Translated solely for convenience into U.S. dollars at an assumed exchange rate of DKK 6.30 per USD 1.00, which was the rounded official exchange rate of such currencies at September 30, 2017.
3 Net operating expenses consist of research, development and administrative expenses.
4 Translated solely for convenience into U.S. dollars at an assumed exchange rate of DKK 6.21 per USD 1.00, which was the rounded official exchange rate of such currencies at December 31, 2017.