On May 12, 2022 Zealand Pharma A/S (Nasdaq: ZEAL) (CVR-no. 20045078) a biotechnology company focused on the discovery and development of innovative peptide-based medicines, reported financial results for the first three months of 2022 (Press release, Zealand Pharmaceuticals, MAY 12, 2022, View Source [SID1234614594]).
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Financial results for the first three months of 2022
·Revenue: DKK 15.1 million / USD 2.3 million (DKK 5.7 million / USD 0.9 million in the first three months of 2021).
·Net operating expenses: DKK -314.2 million / USD -46.9 million (DKK -266.7 million / USD -42.0 million in the first three months of 2021).
·Net operating result: DKK -302.0 million / USD -45.1 million (DKK -261.1 million / USD -41.2 million in the first three months of 2021).
.Net financial items: DKK 133.0 million / USD 19.9 million (DKK 19.8 million / USD 3.1 million in the first three months of 2021).
·Net result from Discontinued Operations Related to Restructuring: DKK -41.8 million / USD -6.2 million (DKK 0.0 million / USD 0.0 million in the first three months of 2021).
·Cash, cash equivalents, and marketable securities: DKK 1,123.2 million / USD 167.6 million as of March 31, 2022 (March 31, 2021: DKK 1,604.1 million / USD 252.9 million).
Business highlights to date for 2022
·Appointed new Chief Executive Officer, refocused strategy to prioritize research & development and streamlined operations. Zealand announced a corporate restructuring intended to leverage its peptide platform by prioritizing investment in its research and development pipeline programs and streamline its commercial operations. The changes will refocus the company’s resources by reducing expenses while investing in strategic development and commercialization partnerships of pipeline assets. Dr. Adam Steensberg has assumed the position of Chief Executive Officer, refocusing Zealand to better leverage its next-generation peptide platform to address unmet medical needs of patients. The Company’s commercial operations have been restructured to pursue partnerships for Zegalogue, V-Go and the glepaglutide and dasiglucagon late-stage clinical portfolio. With the change, annual operating expense reductions are expected to be at least 35% from 2021 levels.
·Announced Amendment to Note Purchase Agreement with Oberland Capital. Zealand to repurchase $50.0 million of note principal with a 1.2x prepayment premium. Agreement includes potential for a further $75 million incremental capital following specific events and removes the liquidity covenant. The amendment with Oberland Capital reinforces Zealand’s commitment to its refocused strategy by prioritizing research and development programs and together with the restructuring extends the company’s cash runway into 2023, beyond significant pipeline milestones.
·Completion of patient enrollment in the second Phase 3 Trial (17103) of dasiglucagon for the treatment of Congenital hyperinsulinism (CHI) in neonates up to 12 months old. Top-line results are expected in the second quarter of 2022. This Phase 3 study is the last in the program which constitute the largest clinical development program ever conducted in CHI.
·Completion of patient enrollment in the pivotal Phase 3 trial (EASE-SBS 1) of glepaglutide in patients with short bowel syndrome (SBS). Full results of the EASE-SBS 1 pivotal Phase 3 trial are expected in the third quarter of 2022.
Adam Steensberg, President and Chief Executive Officer at Zealand Pharma, comments:
"Zealand Pharma has undergone a transformational first quarter in 2022. We have transitioned the company into a more focused and cost-effective organization that plays to our strengths as a company. We are executing on the restructuring of our commercial organization in the United States and are seeking strategic partnerships in order to maximize the value of V-Go and Zegalogue. We look forward to partnering our commercial programs as well our late-stage clinical pipeline programs as we look to further leverage our exciting peptide platform though strategic collaborations," said Adam Steensberg, President and Chief Executive Officer of Zealand Pharma.
"By improving our operational efficiency and targeting business development efforts, we will be in a position to fully leverage the value of our most advanced assets and develop new peptide-based therapies through 2022 and beyond. As an R&D focused organization with a strong late-stage pipeline, we are excited about our upcoming milestones for the remainder of the year. Later this year we expect Phase 3 data for dasiglucagon in CHI in the second quarter, glepaglutide in SBS in the third quarter and Phase I data for our Amylin analogue targeting obesity later this year."
Financial guidance for 2022
On March 30, 2022 Zealand updated the guidance for net product revenue from the sales of commercial products to be DKK 115 million +/- 10%. This was a decrease of 120 million Danish kroner from the guidance issued on March 10, 2022. Combined sales of V-Go and Zegalogue in Q1 were 39.2 million Danish kroner and in line with the updated guidance.
Following the company’s announced intent to exit its V-Go activities, net product revenue for the device is to be accounted for as discontinued operations and no longer reported as net product revenue. As such, net product revenue reported in the Q1 earnings release only reflects sales of Zegalogue, which were 4.1 million Danish kroner with full year net product revenue projected to be 19 million Danish kroner excluding any potential partnerships or licensing agreements.
In 2022, 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 2022 are expected to be DKK 1,000 million +/-10%. This is unchanged from our updated guidance issued on March 30, 2022 and is a decrease of DKK 200 million from the guidance issued on March 10, 2022.
Conference call today at 4 pm CEST / 10 am EDT
Zealand Pharma’s management will host a conference call today at 4 pm CEST to present results through the first three months of 2022. Participating in the call will be Chief Executive Officer Adam Steensberg and Chief Financial Officer Matt Dallas. The presentation will be followed by a Q&A session with the presenters.
The conference call will be conducted in English, and the dial-in numbers are:
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.
Refocused Strategy
On March 30th the company announced a refocused strategy prioritizing research and development programs. As part of this strategy, commercial operations were restructured to pursue partnerships for Zegalogue, V-Go and the glepaglutide and dasiglucagon late-stage clinical portfolio. The global cost base will be reduced by approximately 35% from 2021 levels with the US workforce to be reduced by approximately 90% by the third quarter of this year. Approximately 65% of the reductions in the US workforce were effective in April.
As a consequence of the changes to Zealand Pharma’s strategic focus, by mutual agreement, Chief Financial Officer (CFO) Matthew Dallas will leave the company on August 31st 2022. Since joining the company in 2019 Matthew Dallas has provided valuable financial leadership with pre-commercial and commercial financial planning and has built a robust and experienced Finance Department at the company. A search for a new CFO is underway and we will communicate further on progress with the search when we can.
Progress for Commercialized Products
Zegalogue (dasiglucagon) injection
Zegalogue launched in the U.S. in late June 2021. The Company’s primary goal in the initial phase of launch was to establish favorable market access coverage working with Pharmacy Benefit Managers (PBMs), Managed Care Organizations (MCOs), and state Medicaid agencies to add Zegalogue to their respective formularies. In the second quarter of 2022 we expect to initiate a clinical study in children aged 1 to 6 years to explore the safety and effectiveness of 0.6 mg/0.6mL dasiglucagon injection in this age group.
Zegalogue net revenue for the first three months of 2022 was DKK 4.1 million / USD $0.6 million.
V-Go wearable insulin delivery device
The V-Go series of Wearable Insulin Delivery Devices are indicated for continuous subcutaneous infusion of either 20 Units of insulin (0.83 U/hr), 30 Units of insulin (1.25 U/hr) or 40 Units of insulin (1.67 U/hr) in one 24-hour time period and on-demand bolus dosing in 2-Unit increments (up to 36 Units per one 24-hour time period) in adults requiring insulin.
V-Go net revenue for the first three months of 2022 was DKK 35.7 million / USD $5.3 million.
Pipeline Update
Type 1 Diabetes Management
Dasiglucagon for Bihormonal Artificial Pancreas systems
Zealand Pharma is developing a pre-filled dasiglucagon cartridge intended for use in Bihormonal Artificial Pancreas systems, which holds potential to improve the management of type 1 diabetes (T1D).
Zealand is collaborating with Beta Bionics, developer of the Bihormonal iLet bionic pancreas system, a pocket-sized, dual chamber (insulin and glucagon), autonomous, glycemic control system. The iLet bionic pancreas is an investigational device, limited by federal (or United States) law to investigational use only. The iLet bionic pancreas intends to mimic a biological pancreas by calculating and dosing insulin and/or glucagon (dasiglucagon) as needed, based on input data from a continuous glucose monitor (CGM) worn by a person with diabetes.
Zealand’s partner, Beta Bionics, and the study sponsor, the Jaeb Center for Health Research, initiated screening into the Phase 3, Bihormonal iLet Bionic Pancreas Pivotal Program, utilizing insulin and dasiglucagon in late 2021 with dosing of the first participants in the study are expected in later in 2022. The Phase 3 program includes three sub-trials, which are anticipated to provide the clinical data necessary to support the market application for the bihormonal iLet bionic pancreas and the new-drug application (NDA) for the use of dasiglucagon in bihormonal Artificial Pancreas systems. The first of these three sub-trials is a three-month single-arm, bihormonal-only safety and test-run trial that will enroll two participants at each of the approximately 30 clinical sites. After 20 pediatric participants and 20 adult participants have been successfully treated for a minimum of 3 weeks in this trial, the two randomized controlled trials (RCTs) will begin – one enrolling ~ 350 pediatric participants (6–17 years of age) and the other enrolling 350 adult participants (≥ 18 years of age) with T1D.
The primary outcome measure in the RCTs is superiority in HbA1c of the bihormonal iLet bionic pancreas using dasiglucagon relative to the insulin-only iLet system after 26 weeks of therapy on the two interventions. The bihormonal iLet bionic pancreas performance will also be compared to intensified usual care using CGM therapy in a third arm in both the pediatric and adult RCTs.
On April 30th Beta Bionics announced the results of the insulin-only bionic pancreas pivotal trial results. The pivotal trial was designed to test the safety and efficacy of the iLet Bionic Pancreas relative to a standard of care control group over a 13-week study period. The standard of care group was comprised approximately one-third each on automated insulin delivery (AID) systems, insulin-pump therapy with continuous glucose monitoring (CGM), and multiple daily injection therapy with CGM. The trial was conducted in a home-use setting and enrolled 440 adults and children aged 6 years and older with type 1 diabetes. The primary analysis of the trial compared the iLet, using Humalog or Novolog, versus standard of care in 326 adults and children; the remaining 114 adult participants used the iLet with Fiasp.
The iLet Bionic Pancreas met all key endpoints in the trial with improved outcomes over standard of care in the following: significant reduction in HbA1c, no increased risk of hypoglycemia, and increased time in range.
Dasiglucagon mini-dose pen
Zealand is developing a dasiglucagon mini-dose pen for potential treatment of exercise-induced hypoglycemia in people living with type 1 diabetes and for people who suffer from meal-induced hypoglycemia following gastric bypass surgery.
Clinical studies conducted in hospital settings have shown the potential for using low doses of dasiglucagon to correct moderate hypoglycemia. Top-line results from a Phase 2a dose-finding trial in people with type 1 diabetes were presented at the American Diabetes Association congress in June 2021, and top-line results of a post bariatric hypoglycemia Phase 2a trial were reported in 2020.
In 2022, Zealand expect to present data from out-patient Phase 2 trials, utilizing the dasiglucagon mini-dose pen in in people with type 1 diabetes and for people that suffer from meal-induced hypoglycemia following gastric bypass surgery (ClinicalTrials.gov Identifier: NCT04764968 and NCT04836273).
Rare Diseases
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 FDA and the European Commission both granted orphan drug designation to dasiglucagon for the treatment of CHI.
Data from the first Phase 3 trial in the program, trial 17109, were reported in December 2020. This trial evaluated children aged 3 months to 12 years old with more than three hypoglycemic events per week despite previous near-total pancreatectomy and/or maximum medical therapy. Dasiglucagon on top of standard of care (SOC) did not significantly reduce the rate of hypoglycemia compared to SOC alone when assessed by the primary endpoint, intermittent self-measured plasma glucose. However, hypoglycemia was reduced by 40–50% with dasiglucagon as compared to SOC alone when assessed by blinded continuous glucose monitoring. Dasiglucagon treatment was assessed to be well tolerated in the study and 31 out of 32 patients continued into the long-term extension study.
We have completed enrollment into the second Phase 3 trial, 17103, in neonates up to 12 months old with CHI Trial results are expected in the second quarter of 2022 and if positive we expect to submit an NDA to the US FDA based on data from both Phase 3 trials and the ongoing long-term extension trial, 17106.
Glepaglutide for short bowel syndrome (SBS)
Glepaglutide is a long-acting GLP-2 analog, being investigated for the potential treatment of short bowel syndrome with the primary endpoint of reducing or eliminating the need for parenteral support in people living with SBS, as further detailed below. Phase 2 data have shown the potential of glepaglutide to increase intestinal absorption in people with SBS.
The EASE-SBS Phase 3 program includes 4 trials. EASE-SBS 1 is the pivotal Phase 3 trial with enrolment of up to 108 patients with SBS that seeks to establish the efficacy and safety of once- and twice-weekly administration of glepaglutide. The initial trial duration is six months, whereafter trial participants are able to enroll in the extension trials, EASE-SBS 2 and 3. A Phase 3b trial, EASE-SBS 4, was initiated in Q3 2021 and will assess long-term effects of glepaglutide on intestinal fluid and energy uptake.
Enrollment has been completed in the EASE-SBS 1 trial and we expect to have results in Q3 2022. The primary endpoint in the trial is the absolute reduction in parenteral support and in the event of positive trial results we expect to submit an NDA with the FDA based on efficacy and safety data from the full EASE-SBS trial program. The FDA granted orphan drug designation to glepaglutide for the treatment of SBS.
Dapiglutide
Dapiglutide (pINN) is a long-acting GLP-1R/GLP-2R dual agonist. The Phase 1b multiple-ascending dose, safety and tolerability trial investigating dapiglutide in healthy volunteers was completed in November 2021 and dapiglutide was found to have an acceptable safety and tolerability profile. Results showed a plasma half-life allowing for once weekly dosing and effects on several biomarkers suggest clinically relevant exposures of dapiglutide were achieved. Zealand expects to present data from the Phase 1b trial at scientific conferences and to initiate the next development steps in 2022.
ZP8396 is a potent long-acting amylin analogue designed to improve solubility and allow for co-formulation with other peptides, including GLP1 analogues. Amylin analogues hold potential as both mono and combination therapies for obesity and type 2 diabetes. Preclinical data on ZP8396 was presented at The Obesity Society Annual Meeting, which showed anti-obesity effects of ZP8396 in in-vivo models, with up to 20% weight loss when combined with GLP1 analogue semaglutide.
The Phase 1a clinical trial with ZP8396 for potential treatment of obesity was initiated in November 2021. This First-in-Human, randomized, single ascending dose trial will assess the safety, tolerability, pharmacokinetics, and pharmacodynamics of ZP8396 administered to healthy subjects. Zealand expects to initiate the Phase 1b multiple ascending dose trial of ZP8396 later in 2022.
BI 456906 for obesity, diabetes and non-alcoholic steatohepatitis (with Boehringer Ingelheim)
The dual glucagon (GCGR)/GLP1 receptor agonist, BI 456906, activates two key gut hormone receptors simultaneously and may offer better efficacy than current single-hormone receptor agonist treatments. The lead molecule BI 456906 is targeting treatment of obesity and associated metabolic diseases. At Obesity Week in November 2021, Boehringer Ingelheim presented data from the Phase 1b trial, demonstrating up to 13.7% weight loss and no unexpected safety findings following 16 weeks of dosing in people with overweight/obesity.
The molecule is being assessed across three parallel Phase 2 trials. The Phase 2 trial in people with diabetes is completed and we are planning to present data from the trial at scientific conferences later in 2022. The trial evaluated dose-relationship of BI 456906 on HbA1c from baseline to 16 weeks relative to placebo in 410 people with diabetes (ClinicalTrials.gov Identifier: NCT04153929). Secondary objectives were to assess the effect on change in body weight. The second Phase 2 randomized double-blind placebo-controlled dose-finding trial evaluating BI 456906 in people with overweight/obesity has reached its randomization target (ClinicalTrials.gov Identifier: NCT04667377). We expect trial results later this year with the primary endpoint being the percentage change in body weight at week 46 compared to placebo. The third Phase 2 randomized double-blind placebo-controlled dose-finding trial is evaluating BI 456906 in people with NASH and liver fibrosis (F2/F3) (ClinicalTrials.gov Identifier: NCT04771273). The primary endpoint of this trial is the histological improvement of steatohepatitis without worsening of fibrosis after 48 weeks of treatment. Participants will receive a weekly subcutaneous injection of either different doses of BI 456906 or placebo for the duration of the trial. The NASH program has received Fast Track Designation from the U.S. FDA.
Boehringer Ingelheim is funding all research, development and commercialization activities related to the treatment. Zealand Pharma is eligible to receive up to EUR 345 million in outstanding milestone payments, and high-single to low-double digit royalties on global sales.
Inflammation
Zealand Pharma is pursuing multiple pre-clinical programs in inflammatory diseases which will be detailed more as they progress through development.
Complement inhibitors (with Alexion, AstraZeneca Rare Disease)
Zealand Pharma and Alexion are collaborating on the discovery and development of novel peptide therapies for complement-mediated diseases. Under the terms of the agreement, Alexion and Zealand Pharma 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 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.
Research
Research collaboration with Iktos to develop Artificial Intelligence technology for peptide drug design
Iktos, a company specialized in Artificial Intelligence for new drug design, and Zealand Pharma, are collaborating to develop generative modelling artificial intelligence (AI) technology for application to peptide drug design. Under the collaboration agreement, Zealand will evaluate the application of Iktos AI technology to the peptide space, and Iktos and Zealand will co-develop generative and predictive AI technology for peptide drug design, leveraging both Iktos’ proprietary generative modelling technologies and capabilities in machine learning and AI, and Zealand’s expertise in peptide drug discovery know-how.
Additional Updates
None
Upcoming events
Zealand Pharma plans to publish results for the second quarter of 2022 on August 11, 2022.
Total number of shares and voting rights in Zealand Pharma as of March 31, 2022
Number of shares (nominal value of DKK 1 each): 43,634,142 which is unchanged from 43,643,142 as of March 31, 2021.
Therefore, the current Share capital is (nominal value in DKK): 43,634,142.
Number of voting rights: 43,634,142
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. We maintain compliance with guidance from applicable government and health authorities as appropriate.
Update regarding Russia and Ukraine
Zealand has reviewed its business operations in light of the geopolitical instability in Europe and concluded that employees, clinical studies, or product supply are not affected or at material risk at this time