Company Announcement No. 34 / 2022
Interim report for H1 2022
Zealand Pharma Announces Financial Results for the First Half of 2022
Copenhagen, DK and Boston, MA, U.S. August 11, 2022 – Zealand Pharma A/S (Nasdaq: ZEAL) (CVR-no. 20045078) a biotechnology company focused on the discovery and development of innovative peptide-based medicines, today announced financial results for the first half of 2022 and provided a corporate update.
Key strategic objectives achieved
Adam Steensberg, President and Chief Executive at Zealand Pharma said: “Zealand has achieved key objectives in executing the strategy we announced at the end of March to prioritize investment in R&D and seek partnerships for the company’s commercial products and late-stage assets. In May, we completed the sale of V-Go® to MannKind. In the second quarter, we strengthened our balance sheet through proceeds from a private placement and by amending an existing financing agreement. Finally, to further streamline our operating efficiency, we announced the decision this week to end a non-liquid ADS program. With our R&D focus, Zealand is now positioned well to leverage the value of our most advanced assets through business development efforts and develop new peptide-based therapies through 2022 and beyond.
“Zealand’s R&D pipeline continues to advance in 2022, with our Phase 3 trial readout in CHI completed, our Phase 3 readout in short bowel syndrome approaching, and a portfolio of peptides targeting obesity that is building strong momentum. For our late-stage pipeline, we announced positive results from a Phase 3 trial of dasiglucagon in children with congenital hyperinsulinism, which we anticipate submitting as part of a New Drug Application, or NDA, to the U.S. Food and Drug Administration. At the recent ADA Scientific Sessions, we presented initial Phase 1 data for dapiglutide, our dual GLP-1/GLP-2 agonist, showing encouraging weight-loss in healthy volunteers that supports advancing into Phase 2 in obesity. Looking ahead, we have just achieved last-patient-last-visit for the Phase 3 trial with glepaglutide, our long-acting GLP-2 analogue, with expected top-line results in patients with SBS at the end of this quarter. We also anticipate initial Phase 1 clinical data for our amylin analogue and expect our partner, Boehringer Ingelheim, to present Phase 2 data for the dual GCGR/GLP-1R agonist BI 456906 in patients with type 2 diabetes.”
Financial results for the first half of 2022
- Revenue: DKK 43.5 million / USD 6.1 million (DKK 42.3 million / USD 6.8 million in the first six months of 2021).
- Net operating expenses: DKK -502.6 million / USD -70.2 million (DKK -582.4 million / USD -93.1 million in the first six months of 2021).
- Net operating result: DKK -539.2 million / USD -75.3 million (DKK -551.9 million / USD -88.2 million in the first six months of 2021).
- Net financial items: DKK -61.8 million / USD -8.6 million (DKK 5.5 million / USD 0.9 million in the first six months of 2021).
- Net result from Discontinued Operations Related to Restructuring: DKK -97.9 million / USD -13.7 million (DKK 0.6 million / USD 0.1 million in the first six months of 2021).
- Cash, cash equivalents, and marketable securities: DKK 864.4 million / USD 120.7 million as of June 30, 2022 (June 30, 2021: DKK 1,282.9 million / USD 205.0 million).
Highlights in the second quarter 2022
- Completed sale of V-Go® insulin delivery device to MannKind Corporation. The Asset Purchase Agreement included an upfront payment of $10 million USD to Zealand and sales-based milestones, as well as sale of certain inventory related to V-Go® and transfer of selected employees.
- Announced that the Phase 3 trial of dasiglucagon in pediatric patients with congenital hyperinsulinism (CHI) met the primary endpoint with statistical significance. Dasiglucagon reduced the requirement for intravenous glucose by 55% compared to placebo in children ages 7 days to 12 months enrolled in the trial. An abstract describing these results has been accepted for presentation at a scientific congress in the third quarter. Zealand expects data from this Phase 3 trial, together with data from a previously reported Phase 3 trial in older children with CHI, to form the basis of a new drug application (NDA) with the U.S. Food and Drug Administration (FDA) for dasiglucagon treatment in the management of CHI. The company anticipates a submission in the first quarter of 2023.
- Received gross proceeds of DKK 274.8 million from a directed issue and private placement. Zealand issued a total of 2,892,368 new shares at a subscription price of DKK 95 per share.
- Appointed David M. Kendall, M.D., as Chief Medical Officer. Dr. Kendall has more than 35 years of experience in diabetes and metabolic disease, with a broad career in research, education, clinical care, and the pharmaceutical industry.
- Presented data from the Phase 1 trial of dapiglutide at the 82nd American Diabetes Association Scientific Sessions and announced dapiglutide to move into Phase 2 trial for obesity. The Phase 1 results of dapiglutide, a dual GLP-1R/GLP-2R agonist, demonstrated dose dependent weight loss of up to 4.3% of baseline body weight after only four weeks of treatment. The pharmacokinetic profile was predictable with a half-life suitable for once-weekly dosing.
- Amended Note Purchase Agreement with Oberland Capital. Zealand repurchased $50.0 million of note principal with a 1.2x prepayment premium. The agreement includes potential for a further $75 million incremental capital following specific events and removes the liquidity covenant.
Events after the reporting date
- Announced intention to voluntarily remove its American Depositary Shares (ADSs) from listing on the New York-based Nasdaq Global Select Market. One ADS currently represents one ordinary share in Zealand and today the company’s ADSs account for less than 1.5% of the total share capital. Zealand will consolidate trading to Nasdaq Copenhagen, the company’s primary and most liquid stock exchange. The decision is part of Zealand’s refocused strategy to prioritize R&D and streamline corporate operations.
Events anticipated in 2022
- Top-line results from the Phase 3 trial of glepaglutide, a long-acting GLP-2 analog, in patients with short bowel syndrome (SBS)
- Scientific congress presentation of results from the Phase 2 trial with BI 456906, a long-acting dual GCGR/GLP-1R agonist developed in collaboration with Boehringer Ingelheim, in patients with type 2 diabetes
- Initiation of Phase 1b multiple ascending dose trial of ZP8396, a long-acting amylin analogue in development for obesity
- Financial results for the third quarter of 2022 expected on November 10, 2022
Financial guidance for 2022
Net product revenue from the sales of Zegalogue is expected to be DKK 11.5 million +/- 10%. This is a reduction of DKK 7.5 million from our updated guidance issued on May 12, 2022, reflecting the completion of the Asset Purchase Agreement for V-Go with MannKind Corporation. The company will no longer provide guidance on net product revenue associated with sales from that program.
In 2022, Zealand expects revenue from existing license agreements. 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 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 CET / 10 AM ET
Zealand’s management will host a conference call today at 4 PM CET / 10 AM ET to present results through the first six months of 2022 followed by a Q&A session. Participating in the call will be Chief Executive Officer Adam Steensberg, Chief Financial Officer Matt Dallas, and Chief Medical Officer David Kendall. The conference call will be conducted in English.
Telephone dial-in information and a unique personal access PIN will be provided upon registration at https://register.vevent.com/register/BI0687000737bf4bdda7d667f72d07be30. A live listen-only audio webcast of the call, including an accompanying slide presentation, will be accessible at https://edge.media-server.com/mmc/p/xmmfib4z. Participants are advised to register for the call or webcast approximately 10 minutes before the start. A recording of the event will be available following the call on the Investor section of Zealand’s website at https://www.zealandpharma.com/events-cal.
Total number of shares and voting rights in Zealand Pharma as of June 30, 2022
Number of shares (nominal value of DKK 1 each): 46,526,510 which is an increase of 2,892,368 from 43,643,142 as reported on December 31, 2021.
Therefore, the current Share capital is (nominal value in DKK): 46,526,510
Number of voting rights: 46,526,510
About Zealand Pharma A/S
Zealand Pharma A/S (Nasdaq: ZEAL) (“Zealand”) is a biotechnology company focused on the discovery and development of peptide-based medicines. More than 10 drug candidates invented by Zealand have advanced into clinical development, of which two have reached the market and three candidates are in late-stage development. In addition, license collaborations with Boehringer Ingelheim and AstraZeneca create opportunities for more patients to potentially benefit from Zealand-invented peptide investigational agents currently in development.
Zealand was founded in 1998 and is headquartered in Copenhagen, Denmark, with a presence in the U.S. that includes Boston. For more information about Zealand’s business and activities, please visit www.zealandpharma.com.
Safe Harbor / Forward-Looking Statements
This press release and interim report contains “forward-looking statements”, as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended, that provide Zealand Pharma’s expectations or forecasts of future events regarding the research, development and commercialization of pharmaceutical products, the timing of the company’s clinical trials and the reporting of data therefrom and the company’s Events Anticipated in and Financial Guidance for 2022. These forward-looking statements may be identified by words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “possible,” “potential,” “will,” “would” and other words and terms of similar meaning. You should not place undue reliance on these statements, or the scientific data presented. The reader is cautioned not to rely on these forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions, which may cause actual results to differ materially from expectations set forth herein and may cause any or all of such forward-looking statements to be incorrect, and which include, but are not limited to, unexpected costs or delays in clinical trials and other development activities due to adverse safety events or otherwise; unexpected concerns that may arise from additional data, analysis or results obtained during clinical trials; our ability to successfully market both new and existing products; changes in reimbursement rules and governmental laws and related interpretation thereof; government-mandated or market-driven price decreases for our products; introduction of competing products; production problems; unexpected growth in costs and expenses; our ability to effect the strategic reorganization of our businesses in the manner planned; failure to protect and enforce our data, intellectual property and other proprietary rights and uncertainties relating to intellectual property claims and challenges; regulatory authorities may require additional information or further studies, or may reject, fail to approve or may delay approval of our drug candidates or expansion of product labeling; failure to obtain regulatory approvals in other jurisdictions; exposure to product liability and other claims; interest rate and currency exchange rate fluctuations; unexpected contract breaches or terminations; political uncertainty, including due to the ongoing military conflict in Ukraine; and the direct and indirect impacts of the ongoing COVID-19 pandemic on our business, results of operations and financial condition. If any or all of such forward-looking statements prove to be incorrect, our actual results could differ materially and adversely from those anticipated or implied by such statements. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. All such forward-looking statements speak only as of the date of this press release and are based on information available to Zealand Pharma as of the date of this release. We do not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Information concerning pharmaceuticals (including compounds under development) contained within this material is not intended as advertising or medical advice.
NOTE: DKK/USD Exchange rates used: June 30, 2022 = 7.163 and June 30, 2021 = 6.257
Anna Krassowska, PhD
Vice President, Investor Relations & Corporate Communications
David Rosen (U.S. Media)