Zealand Pharma continues to advance clinical programs and commercial launch capabilities and presents financial results for the first nine months of 2020
Interim report for
Financial results for the first nine months of 2020
- Revenue: DKK 290.0 million / USD 45.6 million (DKK 29.8 million / USD 4.4 million in the first nine months of 2019).
- Net operating expenses: DKK -714.5 million / USD -112.3 million (DKK -431.5 million / USD -62.9 million in the first nine months of 2019).
- Net operating result: DKK -449.1 million / USD -70.6 million (DKK -402.1 million / USD -58.7 million in the first nine months of 2019).
- Cash, cash equivalents, and marketable securities: DKK 1,528.6 million / USD 240.4 million as of September 30, 2020 (September 30, 2019: DKK 1,543.2 million / USD 225.0 million).
Business highlights for the third quarter of 2020 and subsequent events
- Completed phase 1a single-ascending dose trial of ZP7570 (pINN: dapiglutide) for short bowel syndrome (SBS), demonstrating safety and tolerability and a plasma half-life allowing for once weekly dosing. Today, Zealand Pharma announces the completion of a phase 1 single-ascending dose trial of dapiglutide in healthy subjects, our long acting GLP-1/GLP-2 dual agonist, as our next generation treatment of SBS. Dapiglutide was found to have a good safety and tolerability profile in the trial and we observed a plasma half-life allowing for once weekly dosing. Based on these results we initiated and dosed the first subjects in the phase 1b (multiple ascending dose) earlier this month. We plan to publish data from the phase 1 singe-ascending dose trial at a scientific conference in 2021.
- Operations in a COVID-19 world. During the COVID-19 pandemic, we have kept our research labs and major operations in Denmark and the United States running. We continue to progress with the regulatory process for the HypoPal® rescue pen, the buildout of Zealand Pharma US operations, the dasiglucagon phase 3-programs for congenital hyperinsulinism (CHI), the bi-hormonal artificial pancreas pump (BHAP) as well as the development work for our strategic partnerships. This progress has allowed us to maintain our timelines for the phase 3-data in CHI, which we are expecting this December. The impact in this environment is on the speed of recruitment of patients for the phase 3-trial of glepaglutide in SBS (EASE-1) meaning current timelines for the data readout are uncertain. While we may still see phase 3 results in 2021, once we have more clarity on the timing for the data readout of the phase 3 glepaglutide trial we will make an announcement.
- Build Global Medical Affairs function with world-renowned experts. In September, Zealand Pharma significantly enhanced its capabilities in medical affairs with the appointments of Dr. Danilo Verge as Head of Global Medical Affairs and Dr. David Kendall as Senior Global Advisor. Drs. Verge and Kendall each bring to Zealand Pharma decades of experience in the global diabetes space. This is expected to enhance our ability to interact with key stakeholders.
Emmanuel Dulac, President and Chief Executive Officer at Zealand Pharma, comments:
In discovery, we continue to leverage our innovative peptide platform as we advance the development of our pipeline. On the clinical front, we remain on track to report topline data for our first and largest phase 3-trial for dasiglucagon in congenital hyperinsulinism this December. We are also excited to announce favorable safety and tolerability results from our phase 1 single-ascending dose trial of dapiglutide, previously referred to as ZP7570, a GLP1/GLP2 dual peptide, which is our second asset being advanced for the treatment of short bowel syndrome. We have maintained the majority of the timelines for our programs throughout the COVID-19 pandemic, but we are seeing a slow recruitment of patients in our phase 3-trial for glepaglutide in SBS. We continue to work closely with investigators on moving the program forward and together with the many upcoming milestones across our several programs later this year and in 2021. We are also preparing for our first commercial launch of the dasiglucagon HypoPal® rescue pen, for which we expect to receive an approval decision from the Food and Drug Administration (FDA) in March 2021. I am very pleased with the way that we have continued to execute on our plans, kept our employees engaged, our labs open and trials running despite the pandemic.
Financial guidance for 2020
Net product revenue from the sales of the V-Go® wearable insulin delivery device is expected to be within the range of DKK 150 - 175 million for the period beginning on April 2, 2020 and ending on December 31, 2020.
In 2020, Zealand Pharma expects revenue from existing license agreements. However, since such revenue is uncertain in terms of size and timing, Zealand Pharma does not intend to provide guidance on such revenue.
Net operating expenses in 2020 are expected to be within the range of DKK 950-1,000 million and remains unchanged from the operating expense guidance announced on August 13, 2020.
Update regarding COVID-19
Zealand Pharma continues to monitor the COVID-19 pandemic and take precautions to keep our employees, patients, business and clinical partners safe. This is an ongoing exercise in monitoring the effects of the pandemic on all of our key stakeholders and responding appropriately. We maintain compliance with guidance from applicable government and health authorities. We have adapted the way we work to support our community’s efforts to reduce the transmission of COVID-19 and protect our employees, while continuing to provide patient care and maintain business continuity.
Zealand Pharma has taken measures to secure its discovery activities, which remain ongoing, while work in laboratories and offices has been organized to reduce the risk of COVID-19 transmission. The impact of COVID-19 on our research activities has thus far been minimal. Employees who can work from home have been doing so, while those needing to work in laboratory facilities are divided into shifts to reduce the number of people gathered at one time. Business travel has been minimized and online and teleconference technology is used to meet virtually rather than in person. We have continued our clinical trials while working with authorities, investigators, trial sites and contract research organizations to minimize site visits and ensure optimal trial follow-up.
The recent worsening of the pandemic has so far not affected our phase 3-program for dasiglucagon in congenital hyperinsulinism (CHI) and we expect topline data from the first phase 3-trial in December. The regulatory process for the HypoPal® rescue pen also progresses as planned and we currently do not anticipate changes to the timelines for the bi-hormonal artificial pancreas pump phase 3-program. However, the pandemic continues to compromise the speed of recruitment of patients for our phase 3-trial with glepaglutide for treatment of short bowel syndrome meaning timelines for data readout are uncertain.
Our research and development programs may be impacted if the pandemic continues to put increased pressure on hospital systems, slow recruitment of patients into the trials or cause lockdowns that affect our clinical trial sites if key external medical resources are diverted elsewhere.
Direct engagement with health care providers and patients has been reduced and transformed by leveraging virtual meetings, training, and support. Commercial activities in the U.S. are focused on continuing to support the business for the V-Go® wearable insulin delivery device, while ensuring a continued high level of service and support for existing patients.
Pipeline as of September 30, 2020
Dasiglucagon is Zealand Pharma’s lead drug in development to improve the treatment of metabolic diseases. Dasiglucagon is a stable glucagon analog being developed in four distinct indications:
Dasiglucagon HypoPal® rescue pen for severe hypoglycemia
The New Drug Application (NDA) with the U.S. FDA was filed in Q1 2020, and the NDA was accepted for review in May 2020. Under the Prescription Drug User Fee Act (PDUFA), the FDA has set a target action date of March 27, 2021. In addition to the hiring of the President of Zealand Pharma U.S., key leaders across sales, marketing, market access and medical affairs have been onboarded to prepare for the potential launch in the U.S. market in 2021.
The ready-to-use dasiglucagon rescue pen, the HypoPal®, is designed to offer diabetes patients fast and effective treatment for severe hypoglycemia. In the pivotal and confirmatory phase 3-trials in adults and children, primary and all key secondary endpoints were successfully achieved with a median time to blood glucose recovery of 10 minutes.
Dasiglucagon bi-hormonal artificial pancreas pump for automated diabetes management
Zealand Pharma is developing a 1 ml cartridge containing 4 mg/ml dasiglucagon, intended for use in bi-hormonal 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. Top-line results from a phase 2-trial in patients with Type 1 diabetes demonstrated that the bi-hormonal iLet using dasiglucagon provided superior glycemic control over the insulin-only iLet. During the bi-hormonal period, 90% of participants had a mean CGM glucose level of < 154 mg/dL, whereas only 50% of participants on the insulin-only iLet achieved this. Importantly these glycemic targets were achieved while time spent with blood glucose levels < 54 mg/dL was only 0.3% in the bi-hormonal and 0.6% in the insulin-only arm.
Beta Bionics has finalized screening of patients into a 440 patients insulin-only artificial pancreas pivotal trial with dosing of the first subjects expected in Q4 2020 (ClinicalTrials.gov identifier: NCT04200313). Following the completion of the insulin-only study the initiation of the bi-hormonal artificial pancreas pump phase 3-trial with dasiglucagon can commence, the timing for that initiation is expected in 2021.
Dasiglucagon for congenital hyperinsulinism (CHI)
The potential for 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.
Two phase 3-trials are ongoing with topline results from the first trial expected in December 2020. The first phase 3-trial is with 32 children with CHI aged 3 months to 12 years and enrollment was completed in August 2020. The second phase 3-trial in 12 children with CHI aged 7 days to one year of age is ongoing.
Dasiglucagon adjustable mini-dose
Post bariatric hypoglycemia phase 2a dose-finding clinical proof of concept trial reported results in March 2020 that demonstrate mini doses of dasiglucagon significantly reduced meal-induced hypoglycemia compared to placebo in individuals who have undergone gastric bypass bariatric surgery.
A phase 2a low-dose dasiglucagon trial for prevention of insulin-induced hypoglycemia in people with type 1 diabetes is ongoing.
Zealand Pharma is developing treatments for gastrointestinal diseases, with current focus on short bowel syndrome. One of the leading programs in Zealand Pharma’s pipeline is glepaglutide, a long-acting GLP-2 analog being developed in an auto-injector with potential for convenient weekly administration. The ongoing pivotal phase 3-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. Given renewed spike in COVID-19 and associated slow-down in recruitment data readout from the trial is uncertain. While we may still see phase 3 results in 2021, once we have more clarity on the timing for the data readout of the phase 3 glepaglutide trial we will make an announcement. The U.S. FDA granted orphan drug designation to glepaglutide for the treatment of Short Bowel syndrome (SBS).
Dapiglutide (pINN) is a potential first-in-class and long-acting GLP-1R/GLP-2R dual agonist designed to improve management of SBS beyond what is achievable with mono GLP-2 treatments. Dapiglutide may represent a next level of innovation for helping SBS patients to further realize their full potential for intestinal rehabilitation.
The phase 1a single-ascending dose, safety and tolerability trial in healthy volunteers was completed in Q3 2020 and dapiglutide was in the trial found to have a good safety and tolerability profile and we observed a plasma half-life allowing for once weekly dosing. Based on these results we have initiated and dosed the first subjects in the phase 1b (multiple ascending dose) safety and tolerability trial earlier in November 2020.
Zealand Pharma is pursuing multiple pre-clinical programs in inflammatory gastrointestinal and metabolic therapeutic areas.
Zealand Pharma regained the worldwide rights to a long-acting Amylin analog program from Boehringer Ingelheim, including the lead molecule that had been in development as a potential once-weekly treatment of obesity and Type 2 diabetes.
BI 456906: Long-acting GLP-1/GLU dual agonist for obesity and/or diabetes (with Boehringer Ingelheim)
The GLP-1/glucagon 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 BI 456906 is targeting treatment of diabetes, obesity and non-alcoholic steatohepatitis (NASH). Boehringer Ingelheim initiated a phase 2-trial on April 30, based on the safety, tolerability, and favorable weight loss potential in individuals with a BMI up to 40 kg/m2 observed in phase 1.
The phase 2-trial is a randomized, parallel group, dose-finding study of subcutaneously administered BI 456906, compared with placebo and open-label semaglutide in 410 patients with Type 2 diabetes mellitus. The main objective of the trial is to demonstrate a dose-relationship of BI 456906 on HbA1c from baseline to 16 weeks relative to placebo. Secondary objectives are to assess the effect of BI 456906 on change in body weight. An open-label comparator (semaglutide) will allow for comparison of the effects against a pure GLP-1R agonist.
Boehringer Ingelheim is funding all research, development and commercialization activities related to the treatment. Zealand Pharma is eligible to receive up to EUR 386 million in milestone payments, of which EUR 345 million is outstanding, and high-single to low-double digit royalties on global sales.
Complement inhibitors (with Alexion Pharmaceuticals)
Zealand Pharma and Alexion Pharmaceuticals announced in March 2019 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 Pharma entered 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 Pharma 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-trials.
For the lead target, Zealand Pharma 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. In addition, Alexion has the option to select up to three additional targets with Zealand Pharma eligible for USD 15 million upfront per target plus development/regulatory milestones for each target selected similar to the lead target with slightly reduced commercial milestones and royalties.
Conference call today at 4:00 pm CEST / 10:00 am EDT
Zealand Pharma’s management will host a conference call today at 4:00 pm CEST to present results through the first nine months of 2020. Participating in the call will be Chief Executive Officer Emmanuel Dulac, Chief Financial Officer Matt Dallas, and Chief Medical and Development Officer Adam Steensberg. 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 +33 (0) 176700794
Netherlands +31 (0) 207143545
A live audio webcast of the call, including an accompanying slide presentation, will be accessible from the Investor section of Zealand Pharma’s website. 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 Pharma’s website following the call.
Zealand Pharma plans to publish results for the fourth quarter and full year 2020 on March 11, 2021.
The Annual General Meeting 2021 is planned for April 15, 2021, subject to the appropriate official notification.
Total number of shares and voting rights in Zealand Pharma as of 30 September, 2020
Number of shares (nominal value of DKK 1 each): 39,778,961
Share capital (nominal value in DKK): 39,778,961
Number of voting rights: 39,778,961
About Zealand Pharma A/S
Zealand Pharma A/S (Nasdaq: ZEAL) ("Zealand") is a biotechnology company focused on the discovery, development and commercialization of innovative peptide-based medicines. More than 10 drug candidates invented by Zealand Pharma have advanced into clinical development, of which two have reached the market. Zealand Pharma’s robust pipeline of investigational medicines includes three candidates in late stage development, and one candidate being reviewed for regulatory approval in the United States. Zealand markets V-Go®, an all-in-one basal-bolus insulin delivery option for people with diabetes. License collaborations with Boehringer Ingelheim and Alexion Pharmaceuticals create opportunity for more patients to potentially benefit from Zealand Pharma-invented peptide therapeutics.
Zealand Pharma was founded in 1998 in Copenhagen, Denmark, and has presence throughout the U.S. that includes key locations in New York, Boston, and Marlborough (MA). For more information about Zealand Pharma’s business and activities, please visit www.zealandpharma.com.
HypoPal® and V-Go® are registered trademarks of Zealand Pharma A/S.
Safe Harbor / Forward-Looking Statement
The above information contains forward-looking statements that provide our expectations or forecasts of future events such as the impact of the global COVID-19 pandemic on our business, new product introductions, clinical development activities and anticipated results, product approvals, financial performance and integration of a recently acquired business. Zealand Pharma may, in some cases, use terms such as “predicts,” “believes,” “potential,” “proposed,” “continue,” “designed,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should” or other words or expressions referencing future events, conditions or circumstances that convey uncertainty of future events or outcomes to identify these forward-looking statements. 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 the impact of the global COVID-19 pandemic, 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 Pharma's products, introduction of competing products, Zealand Pharma'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, unexpected growth in costs and expenses, and Zealand Pharma’s ability to integrate businesses in varying geographies with different commercial and operating characteristics. You will find a more detailed assessment of these risks, uncertainties and other risks that could cause actual events or results to materially differ from our current expectations in the Company’s U.S. Securities and Exchange Commission filings and reports, including in the Company’s Annual Report on Form 20-F for the year ended December 31, 2019, as supplemented by risks described herein.
Certain assumptions made by Zealand Pharma 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 Pharma, promotion of unapproved uses is strictly prohibited.
NOTE: DKK/USD Exchange rates used: September 30, 2020 = 6.3598 and September 30, 2019 = 6.8566.
For further information, please contact:
Head of Investor Relations & Communication
Phone: +45 5060 3707
For U.S. Media
Key figures *
|INCOME STATEMENT AND COMPREHENSIVE INCOME||Note||Q3 2020||Q3 2019||Q1-Q3 2020|| |
|Research and development expenses||-139,332||-123,822||-430,991||-380,733||-561,423|
|Sales and marketing expenses||-97,429||0||-172,282||0||0|
|Net operating expenses||-277,328||-139,842||-714,505||-431,944||-628,860|
|Net financial items||-9,746||15,521||-18,748||20,315||11,265|
|Result before tax||-227,953||-114,541||-467,869||-381,820||-576,677|
|Net result for the period||-228,574||-113,228||-466,183||-377,866||-571,541|
|Comprehensive result for the period||-228,574||-113,228||-466,183||-377,866||-571,541|
|Earnings/loss per share – basic/diluted (DKK)||-5.76||-3.44||-12.39||-11.49||-16.91|
|STATEMENT OF FINANCIAL POSITION||September 30, 2020||September 30, 2019|| |
December 31, 2019
|Cash and cash equivalents||1,231,685||1,242,871||1,081,060|
|Cash, cash equivalents and Marketable securities||1,528,594||1,543,241||1,380,508|
|Share capital ('000 shares)||39,779||35,865||36,055|
|CASH FLOW||Q1-Q3 2020||Q1-Q3 2019|| |
|Cash used in operating activities||-411,628||-241,240||-409,455|
|Cash used in investing activities||-200,799||-48,454||-51,666|
|Cash flow from financing activities||780,826||656,011||674,480|
|Purchase of property, plant and equipment||-29,491||-14,569||-21,036|
|Net cash flow||(3)||-441,119||-255,809||-430,491|
|OTHER||September 30, 2020||September 30, 2019|
December 31, 2019
|Share price (DKK)||241.60||174.40||235.40|
|Market capitalization (MDKK)||(4)||9.588||6,255||8,487|
|Equity per share (DKK)||(5)||40.06||39.36||34.52|
|Average number of full time employees||322||166||173|
|Number of full time employees at the end of the period||329||176||179|
|* The acquisition of the business from Valeritas is only reflected in key figures covering the period since April 2, 2020 being the acquisition date.|
(1) Zealand expects to be eligible to receive up to DKK 5.5 million in Danish corporate tax benefit related to R&D expenses incurred for 2020, of which DKK 4.1 million has been recognized for the period ended September 30, 2020.
|(2) Equity ratio is calculated as equity at the balance sheet date divided by total assets at the balance sheet date.|
|(3) Free cash flow is calculated as the sum of cash flows from operating activities and purchase of property, plant and equipment.|
|(4) Market capitalization is calculated as outstanding shares at the balance sheet date times the share price at the balance sheet date.|
|(5) Equity per share is calculated as shareholders' equity divided by total number of shares less treasury shares.|
Comparative figures for the corresponding period in 2019 are shown in brackets except for the financial position, which expresses the comparative figures as of December 31, 2019.
The condensed interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB) and as adopted by the EU, and additional requirements of the Danish Financial Statements Act. The interim condensed consolidated financial statements are presented in DKK, which is also the functional currency of the Company.
Revenue, cost of goods sold, and gross margin reported for V-Go are as of the closing of the Valeritas Asset Purchase on April 2, 2020 and do not include figures from the first quarter of 2020.
|DKK thousand||September |
|?||? in percent|
|Sale of goods||103,968||0||103,968||100%|
|License and milestone revenue||185,990||29,840||156,150||523%|
Revenue for the nine months was driven by net sales of the V-Go wearable insulin delivery device, the phase 2 milestone payment triggered in June 2020 from our partnership agreement with Boehringer Ingelheim and revenue recognition related to our collaboration with Alexion.
|DKK thousand||September |
|?||? in percent|
The increase in gross margin is due to V-Go sales in 2020 and the revenue incurred as a result of the Boehringer Ingelheim phase 2 milestone.
Research and development expenses
|DKK thousand||September |
|?||? in percent|
|Research and development expenses||430,991||380,733||50,258||13%|
The increase in research and development expenses mainly relates to the regulatory efforts to support the NDA filing for the dasiglucagon HypoPal rescue pen, the ongoing clinical development of the dasiglucagon and glepaglutide programs, as well as pre-clinical and research activities for the Zealand early stage pipeline.
Sales and marketing expenses
|DKK thousand||September |
|?||? in percent|
|Sales and marketing expenses||172,282||0||172,282||100%|
Zealand’s commercial activities commenced in 2020 with the acquisition of the Valeritas business in April 2020.
|DKK thousand||September |
|?||? in percent|
The primary increase in administrative expenses is a result of the expansion of the company through the Valeritas acquisition including consulting and legal costs related to the transaction, new compensation expenses for employees brought on board as part of the acquisition, and administrative support for the V-Go program.
|DKK thousand||September |
|?||? in percent|
The operating result reflects gross margin, research and development expenses, sales and marketing and administrative expenses, as discussed above and other operating expenses explained in note 3.
Financial income and financial expenses
|DKK thousand||September |
|?||? in percent|
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