Zealand Pharma H1 2024 slides: Promising obesity data and billion-dollar capital raise

Introduction & Market Context

Zealand Pharma A/S (NASDAQ:ZEAL) presented its H1 2024 results on August 15, 2024, highlighting significant progress in its obesity pipeline and a transformative capital raise. The company is positioning itself as a serious contender in the rapidly growing obesity treatment market, currently dominated by GLP-1 receptor agonists from companies like Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY).

Zealand’s strategy focuses on developing alternative obesity treatments with potentially improved tolerability profiles compared to existing GLP-1 therapies, which despite their effectiveness, face high discontinuation rates due to gastrointestinal side effects.

Obesity Pipeline Highlights

Zealand’s obesity pipeline is led by Petrelintide, an amylin analog being developed as an alternative to GLP-1RA-based therapies. The company presented encouraging topline data from its Phase 1b multiple ascending dose (MAD) trial, showing weight loss of up to 8.6% from baseline after 16 weeks of treatment.

As shown in the following weight loss results from the Phase 1b trial, all participants treated with Petrelintide lost weight during the trial, with dose-dependent responses:

A key differentiator for Petrelintide appears to be its tolerability profile. Zealand reported that all gastrointestinal adverse events were mild and predominantly transient, with only one participant discontinuing treatment due to moderate nausea and vomiting. This contrasts with GLP-1RA therapies, which Zealand notes have discontinuation rates of up to 30% within one month and 60-70% within 12 months.

The following safety and tolerability data demonstrates Petrelintide’s favorable profile:

Zealand is planning to initiate a Phase 2b trial for Petrelintide in H2 2024, which will evaluate multiple doses in approximately 400 adults with obesity or overweight with comorbidities.

The company’s obesity pipeline also includes Survodutide, a dual GCG/GLP-1 receptor agonist licensed to Boehringer Ingelheim. The Phase 2 trial in metabolic dysfunction-associated steatohepatitis (MASH) showed impressive results, with 83% of participants showing improvement in MASH without worsening of fibrosis compared to 18.2% with placebo.

The following chart illustrates Survodutide’s significant improvement in liver fibrosis:

Financial Performance

Zealand reported revenue of DKK 49.2 million for H1 2024, more than double the DKK 24.0 million reported in H1 2023. However, operating expenses also increased, with R&D expenses rising to DKK 402.5 million from DKK 297.8 million, reflecting increased investment in the company’s pipeline.

The company’s profit and loss statement for H1 2024 shows:

The most significant financial development was Zealand’s capital raise in June 2024, which generated gross proceeds of DKK 7 billion (approximately USD 1 billion). This substantially strengthened the company’s cash position to approximately DKK 9.7 billion as of June 2024, compared to DKK 1.6 billion at the end of 2023.

The following chart shows the evolution of Zealand’s cash position:

Zealand updated its 2024 financial guidance, increasing its expected net operating expenses to DKK 1,250-1,350 million from the previous guidance of DKK 1,100-1,200 million, reflecting increased investments in R&D following the capital raise.

Rare Disease Programs

While obesity represents Zealand’s primary focus, the company continues to advance its rare disease programs. Two key regulatory decisions are expected in the US in 2024:

1. Dasiglucagon in congenital hyperinsulinism (CHI): PDUFA date of October 8, 2024, for NDA Part 1 (up to three weeks of dosing), with submission of NDA Part 2 (use beyond three weeks) expected in H2 2024.

2. Glepaglutide in short bowel syndrome with intestinal failure (SBS-IF): PDUFA date of December 22, 2024, with the mid-cycle meeting with the FDA already completed.

Forward-Looking Statements

Zealand has made significant progress against its 2024 priorities, particularly with the Petrelintide Phase 1b data and the Survodutide Phase 2 MASH trial results. The company is now focused on initiating the Petrelintide Phase 2b trial and generating data from the Dapiglutide Phase 1b dose-titration trial in H2 2024.

The following chart shows Zealand’s progress against its 2024 priorities:

With its strengthened financial position following the USD 1 billion capital raise, Zealand is well-positioned to advance its obesity pipeline and compete in the growing market for obesity treatments. The company’s strategy of developing alternatives to GLP-1RA therapies with potentially improved tolerability profiles could provide a competitive advantage if clinical development continues to show promising results.

Zealand’s stock price remained stable at $17.59 per share, suggesting investors are taking a measured view of the company’s progress while awaiting further clinical data and regulatory decisions in the coming months.

Full presentation:

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