Zealand Pharma A/S (NASDAQ:ZEAL) (CVR No. 20045078), a biotechnology company changing lives with innovative peptide-based medicines, today announced financial results for the first quarter of 2020.
Emmanuel Dulac, President and Chief Executive Officer at Zealand Pharma, comments:
"Zealand Pharma continues to deliver on our commitments, as demonstrated by the achievements made in the first quarter of 2020. We submitted the New Drug Application to the U.S. FDA for the dasiglucagon HypoPal® rescue pen on schedule and reported positive topline results from a Phase 2 trial evaluating dasiglucagon in treating post bariatric surgery hypoglycemia. Our team continues to deliver despite the highly challenging circumstances created globally by the COVID-19 pandemic, which we continue to monitor and adapt to accordingly. From the continuation of our ongoing clinical trials, to the acquisition of a commercial-stage business in order to accelerate our plans for U.S. operations, we remain dedicated on transforming the lives of patients by delivering novel peptide therapeutics."
Financial results for the first quarter of 2020
- Revenue: DKK 12.4 million / USD 1.8 million (DKK 0.0 million / USD 0.0 million in the first three months of 2019).
- Net operating expenses: DKK 189.7 million / USD 27.8 million (DKK 135.9 million / USD 20.4 million in the first three months of 2019).
- Net operating result: DKK –177.2 million / USD –26.0 million (DKK -135.8 million / USD -20.4 million in the first three months of 2019).
- Cash, cash equivalents, and marketable securities: DKK 1,290.6 million / USD 189.4 million as of March 31, 2020 (March 31, 2019: DKK 1,263.3 million / USD 190.1 million).
Business highlights for the first quarter of 2020 and subsequent events
- Filed the company’s first New Drug Application (NDA) to the U.S. FDA for the dasiglucagon HypoPal® rescue pen to treat severe hypoglycemia
- Announced positive topline results from a Phase 2 clinical trial using mini-doses of dasiglucagon in individuals who have undergone gastric bypass bariatric surgery
- Regained worldwide rights to Amylin analog program from Boehringer Ingelheim
- Secured DKK 137 million through a private placement and direct issue of shares to a U.S.-based investor
Subsequent to the interim period
- Establishing U.S. commercial operations was accelerated by acquiring substantially all of the business assets of Valeritas Holdings, Inc., including the marketed V-Go® wearable insulin delivery device, and transferring 110 employees as well as supporting systems, processes and the majority of established contracts, in a cash transaction of USD 23.0 million on April 2.
- Presented positive clinical data and health economic outcome data with use of regular human insulin delivered by the V-Go® in adults with type 2 diabetes
- Boehringer Ingelheim initiated a Phase 2 trial in late April with BI 456906, a long-acting GLP-1/Glucagon dual agonist, for treatment of Type 2 diabetes and obesity. Dosing of the first patient in the Phase 2 trial will trigger a EUR 20 million milestone payment to Zealand. Boehringer Ingelheim has also informed Zealand that they intend to expand development of BI 456906 to also include treatment of non-alcoholic steatohepatitis (NASH).
Financial guidance for 2020
In 2020, Zealand expects revenue from existing license agreements and the product sales of the V-Go® wearable insulin delivery device. However, since such revenue is uncertain in terms of size and timing, Zealand 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. The increase in guidance compared to the prior guidance for 2020 of DKK 790-810 million is due to the completion of the asset purchase agreement for Valeritas, which closed on April 2, 2020. The acquisition increased Zealand Pharma’s personnel by 110 employees in the United States and added the V-Go program to the Zealand commercial portfolio.
Update regarding COVID-19
Zealand continues to monitor the COVID-19 pandemic and take precautions to keep our employees, patients, business and clinical partners safe. 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 has taken measures to secure its discovery activities, which remain ongoing, while work in laboratories and facilities 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 together at one time. Business travel has been suspended, and online and teleconference technology is used to meet virtually rather than in person.
Consistent with our announcement on April 2, 2020, we have continued our clinical trials while working with authorities, investigators, trial sites and CROs to minimize site visits and ensure optimal trial follow-up. Specifically, there has been minimal impact to patients currently enrolled in the ongoing studies for congenital hyperinsulinism and short bowel syndrome, due to the high unmet medical need of their treatments and the availability of innovative tools to digitally monitor and manage patients.
Several clinical sites paused enrollment of new patients into trials to accommodate the pressure on hospital systems caused by the initial phase of the COVID-19 outbreak. However, we are starting to see some of these sites opening for new patient enrollment and expect this positive development to continue over the coming months assuming that the pressure on hospital systems is reduced in accordance with reduced incidence of the pandemic in affected jurisdictions.
Direct engagement with health care providers and patients has reduced and has been 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 (acquired on April 2, 2020), while ensuring a continued high level of service and support for patients who have already been prescribed the device.
Pipeline as of March 31, 2020
Dasiglucagon is Zealand’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. An integrated commercial team was on boarded to support a 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, the primary and all key secondary endpoints were successfully achieved with a median time to blood glucose recovery of 10 minutes. Results from a pediatric Phase 3 study announced in September 2019 demonstrate that the median time to blood glucose recovery was 10 minutes for dasiglucagon also in children.
Dasiglucagon dual-hormone artificial pancreas for automated diabetes management
Zealand is developing a 1 ml cartridge containing 4 mg/ml 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. Top-line results from a Phase 2 trial in patients with Type 1 diabetes 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, 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 bihormonal and 0.6% in the insulin-only arm.
In late March 2020, Beta Bionics initiated screening of patients into the insulin-only bionic pancreas pivotal trial (details available on https://clinicaltrials.gov/ct2/show/NCT04200313), and Zealand and Beta Bionics continue the positive dialogue with the FDA regarding the bi-hormonal bionic pancreas Phase 3 trial with expected initiation in late 2020.
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.
Two Phase 3 trials are ongoing with results expected in 2020. The first Phase 3 trial is with 32 CHI children aged 3 months to 12 years, and the second Phase 3 trial is with 12 CHI children from 7 days up to one year of age.
Dasiglucagon for post bariatric surgery hypoglycemia
A Phase 2 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.
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 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. Due to the impact of COVID-19 on new patient enrollment, trial results are now expected H2 2021 (previously H1 2021). 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. Results from the Phase 1a single-ascending dose, safety and tolerability trial are expected in 2020, and we now plan to initiate the Phase 1b multiple-ascending dose, safety and tolerability trial in 2021 (previously late 2020).
ZP10000: Integrin a4b7 Inhibitor
Zealand is developing a pre-clinical lead asset ZP10000 as an orally-delivered peptide drug to target integrin a4b7, which is involved in the pathogenesis of inflammatory bowel disease (IBD). The target’s mode of action has been clinically validated in IBD by vedolizumab, an approved, infusion-only a4b7 integrin inhibitor. The asset was acquired in 2019 from a unique platform technology that enables the rapid synthesis of macrocyclic peptides exhibiting enhanced drug-like properties.
Ion Channel Blockers
We have identified novel peptides that are potent and selective blockers of ion channels that may play roles in several inflammatory diseases. Further optimization is required and we expect these programs to contribute to the clinical pipeline in the future.
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).
Long-acting Amylin analog
Zealand regained the worldwide rights to the 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. In pre-clinical studies, the novel, long-acting Amylin analog was observed to potentially prevent the development of obesity in pre-clinical models, suggesting its potential use in treating obesity and obesity-related comorbidities. Potential development of Amylin within the Zealand pipeline is being assessed.
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. Additional details about the study are available at https://clinicaltrials.gov/ct2/show/NCT04153929.
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. Zealand will receive a milestone payment of EUR 20 million related to dosing of first patient in the Phase 2 trial.
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.
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.
Conference call today at 4:00 pm CEST / 10:00 am EDT
Zealand’s management will host a conference call today at 4:00 pm CEST to present results through the first quarter 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 available via the following link, https://edge.media-server.com/mmc/p/if6x6hq7, 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.
Zealand Pharma plans to publish results for the first half 2020 on August 13, 2020.