Q1 2021 Zealand Pharma A/S Earnings Call
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Good day and thank you first time buy won't come for the Zealand pharma results for Q1, 2021 conference call. At this time all participants are in a listen only mode I'll forgive speaker presentation. There will be a question and answer session and to ask a question. During the session you will need to press star and one on your telephone.
And he pretty quiet any further assistance. Please press star zero. Please be advised that today's conference is being recorded I would now.
The conference up and first and speaker today, Matt Dallas. Thank you. Please go ahead.
Thank you operator, welcome and thank you for joining us today to discuss Zealand first quarter results for 2020, one and Matt Dallas Senior Vice President and Chief Financial Officer, and Zealand with me Today are Zealand, President and Chief Executive Officer, Manuel Dubai and.
Chief Medical Officer, Adam seats for after the prepared remarks, we will open the call to take your questions. You can find the related company announcement and additional supporting information on our website at Zealand pharma and Dot com.
I'd like to point out that we will be making forward looking statements that are subject to risks and uncertainties. These statements are valid only as of today and the company assumes no obligation to update that as except as required by law. Please refer to recent filings for more complete picture of risks and other factors with that I will turn the call over to president and CEO Manuel to back.
Thank you Matt.
And thanks to everyone for joining today.
The first quarter brought one of the most significant milestones and Zealand pharma as victory. The U S. FDA approval of Zynga log indicated for the treatment of people with diabetes or at risk of teed, it up and as seen yet.
Our first FDA approval as a company and our first approval in the desert and franchise.
This marks a key turning point in our evolution from a research and development focused organization to a fully integrated biopharmaceutical company with a goal of five commercial products by 2020 five.
Turning to slide four and five.
And as the leadership of Frank centers.
For instance, our fleet and pharma U S. We have been steady D optimizing our commercial organization over the last year in preparation for the launch of as they get locked in late June.
Through established relationships with Kols, and itchy Pes as well as high prescriber coverage. We are on track with our launch readiness preparation and believe this initial launch would put us in a strong position to further build out our commercial organization.
To ensure a successful launch we have for strategic objectives for.
First as to establish a clear and distinct product position with hcp's patients and caregivers.
Second.
We will focus on the back to school season to execute a focused launch that target and prioritize high volume pistol and the segments.
Third we are working closely with national and regional payers and pharmacy benefits managers and health systems to establish market access and make it simple for patients and providers to acquire product.
And fourth.
We are committed to providing a patient support program to ensure education and access for patients and caregivers.
Turning to slide six and seven.
There is a significant unmet medical need and the treatment of T D Appalachia and with the arrival of newcomers, we have seen and increasing utilization of rescue therapies.
For your reference we have indication and important safety information for Zika log.
A copy of the food P I he's available on Zillow Dot com.
Slash prescribing information.
We believe there will be an important new option for people with diabetes to consider and the management of potential consequences of their disease.
Turning to slide eight.
In parallel we've they've got to get approval and upcoming launch we continue to make exciting progress across our pipeline.
And so it's really a build out the organization I'm excited to announce that we have strengthened our internal team with the appointment of Christina So and then bogs bread out to a newly created role of head of people and organization and.
And your role.
Will it bring Denmark and U S HR functions and internal communications together in a single innovative global function.
And be instrumental as we continue to attract and retain the most talented employees.
I will now turn it over to our head of research and development at M. C distinct groups to discuss our pipeline in greater detail.
Adam.
Thank you and I know.
Peace Central Slide nine.
And as just mentioned.
Bye.
And of all our preparations for the Sega logs late June zone.
And while in parallel and continue to advance our pipeline programs, which range from and late stage preclinical candidate and a variety.
He also make it public and he eye indications.
Turning to slide 10.
We continue to pursue other indications for that keep you up and among the most advanced and we've got programs and as the study evaluating continuous infusion of Bassi grew up on and children with congenital hyperinsulinism a C H.
Which is an ultra rare disease caused by a defect and the pancreatic beta cells.
And later this year, we expect the results from the second phase III trial initiation and children age seven days to one year.
Please turn to slide 11.
And collaboration with beta bionics and plans to initiate the pivotal phase three trial program for the time from a little island Bionic pancreas device, which utilized as best you can go up on and the second half of this year.
We plan to enroll approximately 350, addle and she and her and 50 children with type one diabetes.
And randomized and into the trial.
And then.
And these trials are expected to form the basis for an NDA submission for the U S. S. T. A cause us, especially you can work on and buy a hormonal artificial pancreas systems.
Keith tend to slide 12.
As you Manuel mentioned earlier, we have also broadened our pipeline of metabolic therapies, tathagata, PCT and non alcoholic hepatitis.
Hematite as.
How soon it goes above and partner up there and in English.
And recently initiated two additional phase two trials for the tier one who work on dwell Ekland and Yeah, 45, 60 906 in adults, who are either overweight or obese all for adults with Nash.
And we believe that our tool aggregate tested with centers to achieve and increased weight loss, we had improvements the patients and metabolism and also has the potential to alleviate mess.
And upstream hepatic steatosis.
And we expect.
And to complete the phase two trial and people with type two diabetes and to communicate the results from the 16 week phase one for each signed later this year.
Turning to slide 13.
We also have two assets and preclinical development and saw the ECT gross of which have shown attitude wait those effects when co infected with tier one analogs in preclinical models.
And we anticipate starting a phase one trial with dialog and the long acting and then an analog set the 80 396 later in the year and expect to bring our long I can keep and alike.
And 65 19 into phase one size and 'twenty 'twenty two.
In addition to the continued advancement of harmony as a product candidates. We have also made significant progress and the clinical development of our Guestroom and sit and the programs and recently announced nuclear and preclinical candidates and this space. Please turn to slide 14.
Get Peck retired as our long acting Kid and two analog for the half life of approximate and 50 hours, which is being developed and a disposable auto injector.
We are progressing with patient enrollment and the pivotal phase III trial, which will evaluate once and twice weekly dosing as a good path with address as placebo or.
And just six weeks and we expect the results from the sign and 'twenty two.
Please turn to slide 15.
We're making good progress and also with our long acting <unk> 212, dual ekland and that he could size.
Where do you expect results from the phase one for each side later this year.
Waikiki and consume mainly stimulates intestinal absorption capacity can't be too jetty, one slows down and system on the CVT, thereby potentially contributing positively to enhance absorption.
And I would now turn and Ora to our CFO, Matt Dallas to walk us through our first quarter financials.
Net.
Thanks, Adam on for.
Slide 16, and you'll see Zealand's income statement for the first quarter of 2021 and how it compares to the same period and 2020 total.
Total revenue for the quarter was $47 8 million Danish kroner were $7 5 million USD. This was driven by net product revenue of the bigger wearable insulin delivery device as well as partnership revenue from our collaboration with what I see on the.
The net operating result for the quarter was a loss of 269 million Danish kroner were $41 1 billion USD.
Sales and marketing costs, mainly relate to the commercial infrastructure and the U S. As scored Vigo and the upcoming Z Galore and watch while R&D costs relate to our late stage clinical programs.
Slide 17 illustrates our strong financial position and ability to support our growing business through continued investments net operating expenses for the first quarter for $284 8 million Danish kroner for $44 9 million USD at the end of the quarter, we had a cash position of $1 6 billion, Danish kroner or $252 9 million USD funding.
The company through several key upcoming milestones and during the quarter. We also successfully completed the largest financing in company history by raising 750 million Danish kroner.
Turning to our financial guidance on slide 18 for 2020, one day or no changes to our financial guidance from what was announced in March net.
Product revenue from the sales of our commercial products as expected to be 220 billion and Danish kroner, plus or minus 10% net operating expenses in 2020 one for export.
It would be 1.25 billion Tam as kroner, plus and minus 10%, we expect revenue from existing license agreements. However.
However, since such revenue as uncertain because of the size and timing, we do not intend to provide guidance on such revenue and.
With that.
I'll turn it back to them and well.
Thanks, Matt.
Turning to slide 19.
As much as laid out we aren't as strong financial position to execute on the upcoming launches and take a look while continuing to advance our pipeline programs and invest in building out and the organization with the best and brightest talent to bring forward new peptide therapeutics aimed at meeting unmet health needs.
Our continued progress would not be placebo without a research and development and gene.
The clinical then regrets for it teams, who worked tirelessly to advance our program and the members of our growing commercial organization, who are working to bring treatment options like zika leg to the patients who need it most.
I am grateful and proud.
Of all the hard work design and team has done to get as to this point and look forward to continuing to work together to deliver on our vision of offering five commercialized products by 2025.
Thank you all I will now turn it over to the operator for questions.
Operator.
As a reminder to ask a question you will need to press star and one on your telephone and COVID-19. Joel. Your question. Please press the pound key once again is for this should ask a question. Please press star and one and your first question comes from the line of David Leibowitz from Morgan Stanley. Your line is open please ask.
Your question.
Thank you very much for taking my question could you just I guess speak to the.
The.
And eclipse <unk> trial, and and how I guess enrollment has continued and that study have.
Have things stabilized in recent months. After I guess, you know certainly the pandemic has had and.
These challenges over the last year or so.
And as well do you take this question.
Yes, thanks, and thanks for the question, yes, they have and we are continuing to see a good progress as we also communicated as our at our full year, so and so.
So we are you can say positive.
Gotcha, I receive a coupon and right now and.
So.
So far it it's it as.
Coming out as we had hoped for all here with the vaccinations being rolled out across the U S and Europe.
That's good to hear and with respect to the the upcoming launch.
Hum market dynamics and been changing and I guess, how how as your your launch been been evolving as you prep for June.
Yeah, I'll take this one but the market as clearly signal a shift away from the legacy products to innovative new products for the patients and caregivers.
And and the shift is still underway.
So I think based on current trends there is plenty of room to convert and I guess she chairs.
And for all of the you know what do you know where these products that's actually one side of the story. The other side of the stories that we have seen with the launch of the recently approved products.
And expansion of the market by 6% as you know and 2019 and 10 per cent in 2020, even though it was.
And have any you know market impacted by COVID-19 and by you know.
No return back to school, which again and.
Accounts for around 60% of the total year. So we believe that <unk> will be attractive a very attractive new options with <unk> and patients alike and the launch a sequence right. Now is ongoing. So that's you know we are confident that we will be actually ready to launch a product a mid.
Through late June radio and time for the back to school season.
Excellent. Thank you for taking my questions.
And as your next question comes from the line of Greg <unk> from Goldman Sachs Sharla and yourself interest ask your question.
Oh, hi, Thanks, Nick Carter for Greg here.
And as.
First question, if I may on regard and take a look and get into the launch as being timed for the back to school season.
How should we be thinking about the progression as quarterly sales and they can be.
And to be a high watermark and <unk>.
One because of the past several quarters as sales or are we more likely to see a more steady steady rise on a quarter on gross basis, and then a follow up on nine six and with you.
As expected phase, two and compassion and type two diabetes and.
Third quarter of this year and.
Is it reasonable as expected we might see some data from B I or should we and yet but the most more sites for <unk> and 'twenty two.
I'll take the first stop and take a look and Adam will talk to you about the collaboration and input so <unk> 2021 guidance as he's on a total combined revenue. So we are not providing any guidance on the product level, then and definitely not phased and gets by quarter.
That said our field operating model is really well positioned to continue to support both you know the Vigo and does he kellogg and and regarding the.
I would say the launch and Andi and the plan for for launch our plants are and could around ensuring that we can execute the full for this launch in late June coinciding with the annual market opportunity on the back to school season, and so we are on track to achieving these objectives in fact.
Market access teams have.
Already.
And Oh, a key as you know engaging with national and regional payers and P D and around the clinical value of the Kellogg.
Discussions with formularies and drug formulary decisions makers has been favorable and we expect broad market access and actually we haven't seen any management or and you Barry as you know for these products by payers and put in place until now.
So to be able to for the first so we'll continue to build this momentum and over the next two quarters and and it took photos of lunch and our sales teams in place and present with Keystone just two day as.
And so we'll peel out in late June to dig into exactly the launch ahead of the Mexico. That's good for back to school season.
The market peaked.
Adam do you want to talk about the DIY.
Yes, thanks for thanks for that question and as well so as.
Yeah as you know truly excited about this collaboration that we had with the eye and the progress that they are making almost as starting two new studies what.
We do expect as as I mentioned to see the that they reported face. They want the 16 week data, which was conducted and overweight patients a day.
Data. This year, we also hopeful that day, we'll share the data and type two diabetes and that is expected to read out later this year.
And that they will do that this year, but we cannot comment on it.
And if they will release these data and this year over the next year.
And as you you ought to be I, and we don't have a firm commitments and it.
Communication from them and this as possible so I cannot be more precise here and the type one and I saw you on their study and type two diabetes.
Yes.
Okay. That's appreciate and thank you.
And.
Next question comes from the line of Lucy Codrington from Jefferies. Your line's open. Please ask your question.
Hi, there thanks for taking my questions as a couple and just on the data for that.
And as quota.
And so as they see that and as a sensible run rate for that for the rest of the year or were there any and any kind of one offs within within the quarter that we should be factoring in and secondly, and.
And the artificial pancreas, they say and this might be.
And this Guy day question given.
Given that the time is that and.
So as the majority of the patients and the incident and the trial will roll over into the day and.
So the whole nine trials.
Well those patients and be stratified.
Given that it's likely that those patients that have already been on and insulin and the pump will have better control and therefore will that be.
And then and you.
And Youll Jugal main trial. Thank you.
So I guess, the first question and on the financial quarter and we'll go to.
To our CFO, Matt Dallas, and then and then we'll take the next 100 dual arm and thumb.
And by AUM and old power.
Yes, so for the run rate I mean, right now what we do have as we have a large amount of.
Launch costs and activities ahead of <unk>.
As we prepare for that late June launch those costs will normalize as we head into as.
The drug as being.
So, but it'll be offset with additional clinical spending as we'll have as we approach the.
The behalf and.
Obviously, we got the studies.
Our ongoing as well as Chr.
And I'll run rate should be relatively consistent within the year.
With that I'll turn it over to Adam.
Yeah.
And.
So you are correct that the instantly know and the.
The patients who participated and the incident, one day and can't be I thought you also enrolled into the.
Biomarker and the study that we need and as.
And that we purchase that it will not be a direct rollover and.
And so a so but.
And and you asked about the stratification and I think that's a very reasonable relative to that.
And he wants to make sure that there is an equal number of patients who comes from the actually nowadays and studies.
As to treat groups that we are going to ship.
And the Bible mono.
Start here as well.
And but it's not a direct role and what that will be a time between they exit that study and then they enter and firewall on and stuff.
Okay. Thanks, and then just back on the first one and I just in terms of the V go sales day.
Is that a good run rate for the recipe and rather than that and when might as.
Okay.
Well I would rather and I mean for both for both revenue and Opex, we don't provide guidance on a quarterly basis, it's more within the annual.
Number and that's kind of refer to you.
To those targets versus cash.
Providing quarterly.
And thank you.
And.
And next question comes from the line of as Serge <unk> from Guggenheim Securities. Your line is open. Please ask your question.
Great. Thanks for taking our questions here I guess.
Couple here, so I guess, maybe first wonder wondering what youre learning from the pivotal trial for the instrument only but.
And Chris, particularly anything you could kind of provide in terms of in terms of performance of the pump.
And as you prepare for the buyer hormonal phase III launch later this year. So first question.
And then do you want to say thanks, Yeah, Yeah, I can I can take that thanks for that question and I think it's a very important figure as yeah.
We have to remember that for beta bionics, and the ILEC and particularly as the first time that day commercial island, as actually being tested and a notch clinical setting and the insulin only study.
Of course, there are issues that are being solved.
And especially in the status and that study so and basically this is something that we consider it as a significant upside for when we as do the biomarker study because it's really a and b.
And you can see it's.
And with technical risks hockey and reduced significantly and so what I.
You can say so in our mind it it's really helpful that weekend and and the large Spider man and the study which includes both adults and children and sit around and 700 patients for that with a device that has already been tested.
For six months at cross flow onto and and 42 patients.
With the only difference being that day.
As you work on you can say Tampa has been activated so so that of course, you can say risk reduce our studies significantly from a device perspective.
So.
So we are extremely happy with the progress that beta bionics, I'm, making an incident one day.
We look very much for what to have them complete the insulin only study and then.
The results from that study.
And that should hopefully provide some guidance also for what we can expect for the biomarker and all.
Study.
And when we then correlate back to what has been seen and phase two trials and so on and so it's for US also a very cold and milestone to have beta for ice to complete the engineering.
Studies.
Great. Thanks for that and maybe Adam just on sort of the two phase the phase II trials for it for the best buy as many dose if you could just maybe provide a little bit more color on sort of the trials that are playing in.
I guess from the press release from this quarter and.
Any further details you could provide would be great.
Yeah, I mean, there as well.
And you can say Polk and type one diabetes and many of those kinds of diet for exercise induced hypoglycemia, but really getting smaller doses and what we use for rescue therapy that concept. We have tested we know that smaller doses basically go up and it works.
And for for correcting and.
My Tomorrow, and hypoglycemia and similarly in patients with post bariatric hypoglycemia, who cannot tolerate eating without getting hyperglycemia that we've also done and in clinic study to show that basket. If you will and can actually correct. The situation. So they don't get as hypoglycemic as.
And when they can't take receivable so but these are studies conducted in the clinics and their studies that we plan to as.
Starting this quarter.
And your outpatient studies, so and we have.
Actual pin.
That can't be the ultimate device in the hands of patients to see how they will utilize this in the type one setting to correct.
And mild and moderate hypoglycemia and exercise savings and type one diabetes, and then for patients with Postbank and hyper.
<unk> seen and how they will utilize that as such a pin and realize.
So it's really going from in clinic study as into the real life, setting and and thereby also you can say with positive results setting the scene for moving into phase III. So we are <unk>.
Extremely happy to see the progress that we're making here.
And look forward to see the results and dose these are all good.
So as these opportunities.
And once they are finalized.
Great. Thank you and congrats on all the progress.
Once again, if you wish to ask a question. Please press the star Enron and as your next question comes from the line of Joseph Stringer from E Com and company. Your line is open. Please ask your question.
Hi, everyone. Thanks for taking our question.
General question on the five by 'twenty five strategy here and you recently announced pronounce that.
Right.
And you could potentially have these byproducts coming online, but just curious if there as a goal of.
Sort of a first year.
Your profitability or at least maybe.
And idea of.
Perhaps a peak operating loss here and.
You know what what are the lever as in terms of not only R&D, but just opex in general that ABB.
Pulled it over the next several years.
To get there and thanks for taking my question.
Matt would you take this one.
Yeah. So Joey Great question, you know one area.
We focus on we've got the five by 'twenty five strategy, but behind that.
Not kind of in that five grouping as all of the research and the early stage candidates that we have.
And those kind of five late stage and commercial candidates we have now.
Our goal as we continue to fund those programs. So that beyond 25, there's a lot more than five that are coming to market and so with that and we don't provide any guidance on <unk>.
Profitability, because it's all going to be determined based on the success of the early stage pipeline.
Yeah.
That makes sense.
Okay.
And also and I know for your question at this time. Please continue.
Yeah.
Okay.
Okay.
Okay.
Well I guess, if theres no more questions and then we will actually.
Completely schooled and.
Yes.
Operator.
I think you can potentially close the line now.
Thank you everyone for joining the school and thank you for actually participating and listening to US we remain available.
For any additional questions as you have.
And again talk to you soon.
This.
Today's conference call. Thank you for participating you may now disconnect speakers. Please standby.
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