Q2 2021 Zealand Pharma A/S Earnings Call
[music].
Thank you for standing by please continue to hold.
We'll begin in approximately one minute please continue to hold.
Okay.
[music].
Good morning, and good afternoon, everyone and welcome to Zealand pharma has in first half 'twenty 'twenty One financial results Conference call. Today's call is being recorded at this time I would like to turn the call over to <unk> Senior Vice President and Chief Financial Officer. Please go ahead Sir.
Thank you operator, welcome and thank you for joining us today to discuss <unk> first half results for 2021.
Dallas Senior Vice President Chief Financial Officer with me Today are Zealand's President and Chief Executive Officer, Emmanuel Dulac, Chief Medical Officer, and head of development Adam Steinberg. After the prepared remarks, we will open the call to take your questions. Our President of Zealand Pharma U S. Frank's standards will also be available to take your questions during the Q&A session.
Finally related company announcements and additional supporting information on our website at Zealand pharma Dot com.
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 them, except as required by law.
These 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 Emmanuel Dulac.
Thank you, Matt and thanks to everyone for joining today.
Please now turn to title III.
This first half of 2021 was transformational for xenon.
The FDA approval, followed by the <unk> commercial launch in the treatment of <unk> for people with diabetes age six and above we have two historical milestones.
And two firsts for the company.
In parallel during the same period.
We continue to drive sustained progress across our pipeline and toward our vision of becoming a fully integrated independent biotech company.
Turning to slide four.
Adams Keansburg, a CMO will detail the progress made on the pipeline intermediate.
While I will discuss now in more detail the improvements made to our organization and strategy.
This progress allows us to focus our attention on key strategic priorities for the second half of the year and reinforces our confidence in the goal of having five commercialized products by 2025.
Regarding the launch of the Kellogg, let me start with slide five.
Which illustrates some of <unk> key attributes.
Research indicates that these patients face the challenge of avoiding <unk> events and that they and their loved ones often leave in the sphere of one of these events materializing.
Rescue solutions, such as <unk> provide an attractive treatment option for patients and providers alike, who can feel confident that they are prepared to address the potential TV I forget sneak events.
Okay.
Throughout the summer.
Initial team in the U S has it worked tirelessly with national and regional payers pharmacy benefit managers and health systems to ensure that patients across the country and access options particular.
We have established a strong presence and presented new data at several medical meetings, we are launching more than a drug which they kellogg. We are also launching a company.
All of our employees are excited and highly engaged behind the challenge.
Slide six is for your reference on the indication and important safety information particular, a copy of the full Ti is available on www dot com slash prescribing information.
And I am delighted to show you on slide seven some background related to the patients who pulp capabilities deployed by Zealand to ensure patient access we take a look at the point of launch.
In support of our commitment to patient access.
We initiated didn't format connected care.
The comprehensive patient support program designed to offer.
<unk> key reimbursements and educational resource to help address the diverse needs of patients and caregivers.
The program includes components, such as inevitable copay saving costs for eligible commercially insured patients and the opportunity to receive home prescription delivery.
We believe as they go along as an important treatment option.
For people with diabetes.
Potential <unk> events, and we look forward to continuing this work to ensure that particular is available to the people who need it.
Finally, slide eight east.
It's showing how profound and rapidly the company's continued growth.
In the first half of the year, we have seen strong momentum within our pipeline.
And progress across multiple clinical development programs.
So there's always a pipeline they will appreciate the continued progress of pipeline candidates shown on this slide.
We now have full pipeline focused areas, which makes our potential reach wider.
And allows us to improve the depth of our expertise in each therapeutic area and to help us better manage our portfolio.
Before.
Our focus are type one diabetes with two marketed drugs and to need late stage programs.
Rare disease, we have two late stage and one mid stage programs.
Our newly defined obesity franchise, which includes the collaboration with di and our <unk> and <unk> programs.
We're expecting to see data readouts and initiation of new clinical activities ability in the second half of this year.
And finally, our inflammation franchise, which with early but potentially promising assets.
The acceleration in the build of our pipeline within this fall focused areas is a reflection of how predictive are researches and clearly shows how we plan to prioritize our investments going forward.
I'll now turn it over to our CMO and head of research and development at <unk> to discuss our pipeline in greater details.
Hi, Dan.
Thank you Emmanuel.
And I'm really pleased with the progress we're making across the pipeline programs that you see here and I look forward to share more updates on the next slide. So please go to slide nine.
Our medical Affairs organization has been busy engaging with the medical community ahead of the launch of <unk>.
And I am pleased with the early feedback building further confidence that <unk> is well positioned to allow more people and need to be equipped with rescue solutions for severe hypoglycemia.
The introduction of Seigler, However, only marks the beginning of our mission to create a paradigm shift in type one diabetes management.
While we have seen many improvements over the last decade with the introduction of integrating CGM and insulin pumps.
<unk> suggests that on average only 20% of patients achieved at glycemic targets in the U S and the burden of disease management remains very high.
And we believe that the unique features of basically work on allowing its use in either a low dose pen all in the Biosimilar artificial pancreas system holds great potential to help patients achieve these guys Didnt goes and also improve their quality of life.
In our view and it's now time to start looking at the other end of the glycemic equation windows.
Which drives a lot of anxiety among patients and can be addressed by the I think you work on.
In the last quarter, we initiated an outpatient phase III side with basically work on low dose pen.
Aimed at investigating exercise induced hypoglycemia, which we believe with us in an area of significant unmet medical needs.
And the final model Akathisia pancreas front, we completed the end use compatibility test aesthetics in the ILEC Tom last quarter.
And we are happy to see that beta bionics remains in effect for initiating the phase III trial program later this year.
Following our end of phase II meeting for this program continuous to positive dialogue with FDA and believe we have a good alignment on expectations.
Altogether, we look forward.
Adding further updates on our efforts in diabetes as we progress into the next quarters.
Please turn to slide 11.
And our rare rare.
<unk> programs and congenital hyperinsulinism and short bowel syndrome.
Both indications represent areas of large unmet medical need and reflect <unk> commitment to make a difference in the lives of people suffering from these conditions.
For both programs, we are concluding the phase III development.
If you go to slide 12.
You can see the phase III program investigating <unk> Bionic CACI is on track to generate results from the trial in neonates later this year.
If this study meets its primary endpoint, we expect to utilize the results from the full phase III program to support a potential NDA submission to the FDA.
Slide 14 provides an overview of our ongoing phase III program for <unk> with results from the pivotal phase III trial on track to read out in 2022.
In the second quarter of this year, we initiated FDA three.
We have yet to utilize the ultra injector pen for once weekly dosing.
This study and those patients who are already completed is SBS, one and two and as a result up to four five years <unk> safety and efficacy data will be.
We generated from the <unk>.
Nader and this quarter, we expect to dose the first patients in SBS fall, which will evaluate long term effects of <unk> on intestinal absorption and.
Our fluids and energy.
On slide 14.
You can see our long acting <unk>, one and two towards the equity type, which is being investigated as a potential treatment for SBS as slow at a wider range of gastrointestinal diseases.
In the last quarter, we completed dosing of default and that cohort in the phase <unk> trial and results from the study remains on track for later this year.
At that time, we also expect to announce the next development steps for the molecule.
Please go to slide 16.
And our efforts to address obesity, which is a growing and global condition.
While medical medical treatments for PCT had left behind People's aspirations for weight loss and what surgical innovations can provide we're not seeing a change with recently approved medical treatments and achieved weight loss into the mid teens percentages.
However, since obesity is a complex metabolic disorder. We believe the combination of multiple targets are needed to take weight loss treatment to the next level.
At CN.
Our approach centered around building two functions into a single molecule like by $45.69 or <unk>.
All by designing single acting peptide agonist that may be co formulated with other peptide agonist.
On slide 17.
Excited to announce that our partner <unk>.
<unk> has completed enrollment into the first of three phase III trials.
Supporting our share and strong commitment towards subarctic diseases.
And we look forward to the PC TV conference in November.
I will present, the outcome of the phase <unk> trial.
We believe this molecule, which is both the <unk> and if you look on the setup is a strong candidate to potentially address future medical needs in obesity Nash and type two diabetes.
Please go to slide 18.
And we changed our focus to Emily as a promising new target in obesity.
We expect to win our imaging analog CPE 80, 396 into phase one clinical development later this year.
This molecule has been designed with a ph then that allows the co formulation with a number of known <unk> and DSP one containing molecules.
It has a long plasma half life and have shown weight loss potential in preclinical models.
In this regard we have been excited to see the weight of those potential of another amylin analogue Catalina sites in phase III and one trials, both as a monotherapy and as combination therapy with <unk> as presented.
The left of this slide.
I will now turn over to our CFO, Matt Dallas to walk us through our first half financials Matt.
On Slide 20, you will see Zealand's income statement for the first half of 2021 and Hello compares to the same period in 2020 total revenue for the half was $132.1 million Danish kroner were $21.1 million USD.
<unk> was driven primarily by net product revenue the depot wearable insulin delivery device as well as partnership revenue from our collaborations with vaccines.
The net operating result of the hub was a loss of $550.8 million Danish kroner were $88 million USD.
Sales and marketing costs, mainly related to the commercial infrastructure in the U S to support the ziegel at in vivo commercial programs, while R&D costs, primarily related to our late stage clinical programs.
Slide 21 illustrates our strong financial position and ability to support our growing businesses through continued investments net operating expenses for the first half was $616.6 million Danish kroner were $98.5 million USD at the end.
For the quarter, we had cash cash equivalents in marketable securities $1.3 billion, Danish kroner or 205 million USD funding the company through several key upcoming milestones.
Turning to our financial guidance on Slide 22 for 2021, there are no changes to our financial guidance from what was announced in March net product revenue from the sales of our commercial products is expected to be 220 million Danish kroner in plus or -10% net operating expenses in 2021 are expected to be $1.2 billion, Danish kroner plus or minus.
10%.
We expect revenue from existing license agreements. However, such revenue is uncertain because of size with time and we do not intend to provide guidance on such revenue.
With that I will now turn it back from Honeywell.
Thanks, Matt Thanks, Adam.
Before talking taking your questions and looking ahead I want to reiterate that we are confident that we are well positioned to build on the momentum. We established in this first half of the year as we continue to bring <unk> to the patients who need it most advanced our pipeline of next generation peptide therapeutics across <unk>.
Guess transition obligations and work to achieve our goal of offering five commercialized products by 2025.
Thank you all I will now turn it over to the operator for questions.
Thank you Sir.
If you wish to ask a question. Please press star one on your telephone keypad, if you wish to cancel your request.
Okay.
One if you wish to ask a question.
Your first question today comes from the line of Chris <unk>.
Thank you Mikael.
Hi, everyone. Thanks for taking my question.
A couple.
For my first one.
Second log I know, it's early on in the launch, but just curious if you could.
Give us some initial insight.
And in terms of.
Patients that are switching from marketed products are they switching from the source.
So range kits or.
Other auto injector products.
And then the second question is.
Ryan.
Sorry. The second question is on <unk>, just wondering if you could kind of.
Yes.
I'll outline what you're thinking what your current thinking is based on your discussions with regulators on.
Manuel you mentioned, if the trial is positive.
Nasal trial.
It could be considered a core core registrational.
Trial in conjunction with the with the.
Prior trial is that does that still you're thinking or is it.
The situation where.
And Youre doing some additional analysis from the.
Previous phase III trial would you need to run any additional studies or what's your current thinking on this thank you.
Thank you Joseph.
Maybe for the first question related to <unk>.
<unk>.
Launch.
Have the opportunity to have Frank centers online with the president of the U S operation and so.
Frank will take these questions and then Adam will actually take the hitchhiker related questions.
Discussions with the regulators.
Frank.
Thank you Emmanuel.
Joseph Thank you for the question and giving us the opportunity to talk about the launch as you had said I mean, it's early days, we're just adjusting month and a half in but we're very pleased with where we stand I mean I wanted to start by saying that we're very proud of the teams here at Zealand for doing what they said that we said we would do which is executing on.
We will launch in late June and your question in particular was around a bit around the sources of business and I wanted to start by saying that the feedback from hcp's and patients across the board around the clinical profile of <unk> has been consistently favorable as it relates to the rapid reliable recovery and meaningful.
Across all segments of patients and while it's very early we are seeing the source of business coming from several areas in some of these are bringing new patients into the rescue rescue therapy category and some of these patients are also coming from conversions.
Legacy rescue therapy cats over into.
The Newton two newer products like <unk> and Theres a lot of room to continue to grow and maneuver. There just a data point that is important is that the total prescription share of legacy kits is still 55% in the market as of the second quarter of 2021, So there's plenty of room to continue too much.
Establish cycle within the broader market, but to continue to convert share from legacy cat. So we're off to a strong start pleased with where we are and look forward to be able to report more data as we move forward with the launch.
Okay, and then maybe I will this is Adam I'll follow up on your question on CSI.
And you can take.
My comment to this is that our confidence in this approach that actually increased our confidence that we can utilize the data from.
The first study to support a full NDA if we meet the primary endpoint in the second phase III trial is very strong.
Right now we of course need to see the data how they come out in the second phase III study, but at this moment, we do not anticipate that we would need additional trials. If it comes out positive and I would also say we would expect the data from the first phase III trial contributes to a five.
It is a meaningful dataset.
Okay.
Great. Thanks, so much for taking my questions.
Thank you next.
Our next question comes from the line of Greg <unk> from Goldman Sachs.
Alright, guys.
Great.
Thank you for taking our questions.
Just a quick one from me on the lead times are you able to offer us any update on charter Craig that's that.
And how are you seeing current enrollment rates versus what youre seeing in one key bearing in mind the.
Ongoing covid environment.
Perhaps then when when might we expect an update on that program.
Got it thank you.
Thanks, Greg This is Adam again, so we got to the recruitment and we are where we also discussed.
At the last call we have extra pre covid.
Recruitment that we're really pleased with this.
<unk>.
You can expect to have updates on the program data in the year and then we basically just maintain our guidance for results as mixed.
Next year, which we are confident in but that is our view.
Can expect again, our phase <unk> data in the year.
Which will be more precise.
Okay. Thank you.
Thank you next.
Your next question comes from the line of extra Darrin.
Thanks.
Great. Thanks for taking my question just Adam if you could help a little bit on sort of the glib. One glucagon we saw some recent data.
From a different program that looked pretty encouraging.
For weight loss and I know this is going to be presented in November with with partner, but just if you could comment at all on.
The data that you've seen.
Any read throughs that you see to sort of the partnered program that we'll get data on in November.
Thanks, Doug.
And then I wish I could give you a very straight answer, but I can't as you know it's a partnered program.
I will release the data at the obesity week.
We can reiterate here.
We see a lot of excitement.
We see a very strong commitment with that.
Three ongoing phase III studies, one, which they basically completed enrollment.
Earlier in the quarter.
<unk>.
You can say.
We also noticed the data from some of these earlier competing program, which of course is encouraging to see but.
We remain very encouraged on our own approach so.
I cannot see ammo. Unfortunately, you will have to hang in and then look forward to in November.
Great. Thanks sounds good alright.
Hey, Gary.
Ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone keypad.
Your next question comes from the line of David Olympics from Morgan Stanley.
Thank you very much for taking my question.
When you look towards the <unk> data for next year, you gave 2022.
As timing.
Is there.
Lack of visibility at this point on what time of year in 2022, it would be or could you, possibly steer as to when women during the year that might come.
We've got to maintain the.
Yeah of 'twenty, two because we want to have absolute clarity before we specify that even though.
So.
Later this year later this year with most of that with you in the incentive fee.
Okay. That's helpful.
And when.
When we look at the launch of <unk>.
Are there any comps that we should look at.
To help guide us on what the cadence might be going forward.
Yes.
Frank centers, but Emmanuel if I can take that one.
Yeah. Please take it.
So I'm assuming specifically the question is around <unk>, So and I think that there is a couple of things that obviously to look at first of all we.
We believe that we are launching.
And unique and well positioned product.
And the market that stands along with a strong profile that said there are a couple of things that provide.
Provide leading signals of the performance of <unk> in one of those is the recent launch of other products in the category and the rescue therapy category. So I think it's important to be able to.
Look at the performance of other recent launches in the category.
But it's also important to lots of what share of the the progression of the market share growth as we emerge.
Overall market volume growth as we emerge from Covid for example.
Symphony.
Symphony <unk> data suggests that the <unk> market continues to grow.
Approximately 10% year over year as if as we emerge from Covid. So I think there's a combination of factors that will be important.
To look at and one is the progressive pro.
<unk> recent secondary second generation of launches as well as how the market growth continues to progress.
Quarter over quarter as we emerge.
From Covid, but the big picture here is.
Is that there are approximately 4 million patients in the us that are on multiple daily doses of insulin and despite that only 540000 or 15% are on rescue therapies. So there is plenty of room in this category.
Sure.
For us to be able to to enter a market that's growing but with a lot of opportunity. So.
Much is in play and to watch them, we'll be able to report more as we progress throughout our first quarter of launch.
Got it. Thank you very much for taking my question.
Yeah.
Thank you Ashley we have no further questions at this time I would like to hand the call.
<unk> for any closing comments, thank you Sir.
Okay.
Thank you. Thank you and we thought we would like to thank you all for attending and for your insightful questions.
If you have any follow up questions. Please don't hesitate to contact US we will make sure to reply to you quickly.
And.
I wanted to finish by saying that I am.
I'm really proud of the team.
And to the commitments of the execution of the launch.
We are actually on track with our Hi Fi strategy, we chose.
Confidence and progress in our launch in our partnerships with <unk> and Astrazeneca.
The ongoing phase III for CHP, and <unk> and with the partnerships, we have as well we've been <unk> on the bio moloch tissue pump pump on crafts. So.
Again, thank you for coming in today, and we look forward to connecting on future announcements that debate and.
And thank you again to Houston.
Thank you, ladies and gentlemen that does conclude your call for today. Thank you all for participating and you may now disconnect.
Okay.
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Okay.
Okay.
Okay.
Thanks.
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Okay.
Yes.
Yes.
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Sure.
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Yes.
Okay.
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Yes.
Yes.
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Thank you operator, welcome and thank you for joining us today to discuss <unk> first half results for 2021 and.
Matt Dallas, Senior Vice President and Chief Financial Officer with me today are <unk>, President and Chief Executive Officer, Manuel <unk>, Chief Medical Officer, and head of development Adam Steinberg. After the prepared remarks, we will open the call to take your questions. Our President of Zealand Pharma U S. Frank's standards will also be available to take your questions during the Q&A session.
You can find the related company announcement and additional supporting information on our website at Zealand pharma Dot com.
I should point out that we will be making forward looking statements that are subject to risks and uncertainties. These statements about only as of today and the company assumes no obligations to update them, 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 July thank.
Thank you, Matt and thanks to everyone for joining today.
Please now turn to slide three.
This first half of 2021 was transformational for <unk> nine.
The FDA approval, followed by the <unk> commercial launch in the treatment of CDI, particularly for people with diabetes H 600 bonds were two historical milestones.
And two firsts for the company.
In parallel during the same period, we continue to drive sustained progress across our pipeline and toward our vision of becoming a fully integrated independent biotech company.
Turning to slide four.
I don't Keansburg, a CMO will detail the progress made on the pipeline in a minute.
While I will discuss now in more detail the improvements made to our organization and strategy.
These progress allows us to focus our attention on key strategic priorities for the second half of the year and reinforces our confidence in the goal of having five commercialized products by 2025.
Regarding the launch of the Kellogg.
Let me start with slide five.
Which illustrates some of Zynga those key attributes.
Research indicates that these patients face the challenge of avoiding hypoglycemic events and that they and their loved ones often leave in the fear of one of these events materializing.
Rescue solutions, such as regular provide an attractive treatment option for patients and providers alike, who can feel confident that they are prepared to address the potential TV I forget sneak event.
Yeah.
Throughout this summer our commercial team in the U S has it worked tirelessly with national and regional payers pharmacy benefit managers and health systems to ensure that patients across the country.
Less options for <unk>.
We have established a strong presence and presented new data at several medical meetings, we are launching more than a drug. We think we are also launching a company.
And all of our employees are excited and highly engaged behind the challenge.
Slide six is for your reference on the indication and important safety information to take along a copy of the full pie is available on www dot com slash prescribing information.
Okay.
And I am delighted to show you on slide seven some background related to the patient support capabilities deployed by Zealand to ensure patient access we take a look at the point of launch.
In support of our commitment to patient access.
We initiated inform our connected care.
A comprehensive patient support program designed to offer.
Portability reimbursements and educational resource to help address diverse needs of patients and caregivers.
The program includes components, such as inevitable copay saving costs for eligible commercially insured patients and the opportunity to receive home prescription delivery.
We believe they got along with an important treatment option.
For people with diabetes.
<unk> potential <unk> events, and we look forward to continuing this work to ensure that they get a lot is available to the people who need it.
Finally, slide eight east.
It's showing how profound and rapidly the company's continued growth.
In the first half of the year, we have seen strong momentum within our pipeline and progress across multiple clinical development programs.
So there's always a pipeline they will appreciate the continued progress of pipeline candidates shown on this slide.
We now have full pipeline focused areas, which makes our potential reach wider.
And allows us to improve the depth of our expertise in each therapeutic area and to help us better manage our portfolio.
Before.
Our focus are type one diabetes with two marketed drugs and to meet late stage programs.
Rare disease, we have two late stage and one mid stage programs.
Our newly defined obesity franchise, which includes the collaboration with di and are adding in good programs.
We're expecting to see data readouts and indication of mute equal activities ability in the second half of this year.
And finally, our inflammation franchise, which with early EBIT potentially promising assets.
The exploration in the build of our pipeline within this four focused areas is a reflection of how predictive are researches and clearly shows how we plan to prioritize our investments going forward.
I'll now turn it over to our CMO and head of research and development at <unk> to discuss our pipeline in greater detail.
Adam.
Thank you Emmanuel.
And I'm really pleased with the progress, we're making across our pipeline programs that you see here and I look forward to share more updates on the next slides. So please go to slide nine.
Our medical Affairs organization has been busy engaging with the medical community ahead of the launch of <unk>.
And I'm pleased with the early feedback building further confidence that singular is well positioned to allow more people and need to be equipped with rescue solutions for severe hypoglycemia.
The introduction of <unk>, However, only marks the beginning of our mission to create a paradigm shift in type one diabetes management.
While we have seen many improvements over the last decade with the introduction of integrating CGM and insulin pumps.
That would suggest that on average only 20% of patients achieved at glycemic targets in the U S and the burden of disease management remains very high.
And we believe that the unique features of basically work on allowing its use in either a low dose pen all in the Bible artificial pancreas system holds great potential to help patients achieve these guys and it goes and also improve their quality of life.
In our view it is now time to start looking at the other end of the glycemic equation windows.
Which drives a lot of anxiety among patients and can be addressed by basically work on.
In the last quarter, we initiated an outpatient phase III trial with basically work on low dose pen.
Aimed at investigating exercise induced hypoglycemia, which we believe with us in an area of significant unmet medical needs.
On the Panama artificial pancreas front, we completed the end use compatibility test aesthetic.
The ILEC, Tom last quarter, and then and we are happy to see that beta bionics remains on track for initiating the phase III trial program later this year.
Following our end of phase II meeting for this program. The continued positive dialogue with FDA and believe we have a good alignment on expectations.
Altogether, we look forward, providing further updates on our efforts in diabetes as we progressed into the next quarters.
Please turn to slide 11.
And are there, Nick Radices programs, and congenital hyperinsulinism and short bowel syndrome.
Both indications represent areas of large unmet medical need and reflect <unk> commitment to make a difference in the lives of people suffering from these conditions.
For both programs, we are concluding the phase III development.
If you go to slide 12.
You can see the phase III program investigating basically about CACI is on track to generate results from the trial in neonates later this year.
If this study meets its primary endpoint, we expect to utilize the results from the full phase III program to support a potential NDA submission to the FDA.
Slide 13 provides an overview of our ongoing phase III program for <unk>.
Results from the pivotal phase III trial.
Track to read out in 2022.
In the second quarter of this year, we initiated FDA three well.
We have utilized the ultra injector pen for once weekly dosing.
This study and those patients who are already completed is SBS, one and two and as a result up to four five years <unk> safety and efficacy data will be.
We generated from the <unk> trial.
Later in this quarter, we expect to dose the first patient Ae's SBS fall, which will evaluate long term effects of <unk> on intestinal absorption and.
Our fluids and energy.
On slide 14.
You can see our long acting <unk>, one and two dual agonist and <unk>, which is being investigated as a potential treatment for SBS as well as a wider range of gastrointestinal diseases.
In the last quarter, we completed dosing of default and that cohort in the phase <unk> trial and results from the study remains on track for later this year.
At that time, we also expect to announce the next development steps for the molecule.
Please go to slide 16.
And our efforts to address obesity, which is a growing and global condition.
While medicine medical treatment for obesity head neck behind People's aspirations for weight loss and surgical interventions can provide we're not seeing a change with recently approved medical treatments and achieved weight loss into the mid teens percentages.
I will let states obesity is a complex metabolic disorder, we believe the combination of multiple targets and needed to take weight loss treatment to the next level.
At CN.
Our approach centered around building two functions into a single molecule like by $45.69 or six.
All by designing single acting peptide agonist that may be co formulated with other peptide agonist.
On slide 17.
Excited to announce that our partner <unk>.
<unk> has completed enrollment into the first of three phase III trials.
Supporting our share and strong commitment towards metabolic diseases.
And we look forward to the PC TV conference in November.
We'll present the outcome of the phase <unk> trial.
We believe this molecule, which acts as both lithia, everyone and if you look on the sector is a strong candidate to potentially address future medical needs in obesity Nash and type two diabetes.
Please go to slide 18.
While we changed our focus to emulation as a promising new target in obesity.
We expect to win our amylin analogue CPE 80, 396 into phase one clinical development later this year.
This molecule has been designed with a P. H band that allows the co formulation with a number of known DSP, one antibody one containing molecules.
It has a long patent hotline and have shown weight loss potential in preclinical models.
In this regard we have been excited to see the weight of those potential of another amylin analogue <unk> and phase III and one class.
Both as a monotherapy and as combination therapy with <unk> as presented to the left of this slide.
I will now turn over to our CFO, Matt Dallas to what was through our first half financials.
Matt.
On Slide 20, you will see Zealand's income statement for the first half of 2021 and Hello comparison in the same period in 2020 total revenue for the half was $132.1 million Danish kroner were $21.1 million USD. This was driven primarily by net product revenue the depot wearable insulin delivery device as well as partnership revenue.
From our collaborations with the Brexit uncertainty.
The net operating result of the health was a loss of $550.8 million Danish kroner were 88 million USD.
Sales and marketing costs, mainly related to the commercial infrastructure in the U S to support the ziegel at in vivo commercial programs, while R&D costs, primarily related to our late stage clinical programs.
Slide 21 illustrates our strong financial position and ability to support our growing businesses through continued investments net operating expenses for the first half were $616.6 million Danish kroner were $98.5 million USD at the end of the quarter, we had cash cash equivalents in marketable securities $1.3 billion Danish kroner.
For 205 million USD funding the company through several key upcoming milestones.
Turning to our financial guidance on Slide 22 for 2021, there are no changes to our financial guidance from what was announced in March net product revenue from the sales of our commercial products is expected to be 220 million Danish kroner, plus or -10% net operating expenses in 2021 are expected to be $1.2 billion, Danish kroner plus or minus.
10%.
We expect revenue from existing license agreements. However, since such revenue is uncertain because of the size and timing, we do not intend to provide guidance on Suntrust.
With that I will now turn the document.
Thanks, Matt Thanks, Adam.
Before talking taking your questions and looking ahead I want to reiterate that we are confident that.
We are well positioned to build on the momentum we established in this first half of the year as we continue to bring <unk> to the patients who need it most advanced our pipeline of next generation peptide therapeutics with cross Metallica, and Guestroom 15 obligations and work to achieve our goal of offering five commercialized products by 2025.
Thank you all I will now turn it over to the operator for questions.
Thank you Sir.
If you wish to ask a question. Please press star one on your telephone keypad and wait for name to be announced if you wish to cancel your request.
So that one if you wish to ask a question.
Your first question today comes from the line of Joseph Stringer from Needham and co.
Hi, everyone. Thanks for taking my question.
A couple.
For me first one on.
Second long I know, it's early on in the launch, but just curious if you could.
Give us some initial insight.
And in terms of.
Patients that are switching from marketed products or are they switching from.
So range kits or.
Other auto injector products.
Then the second question is.
On.
Sorry. The second question is on <unk>, just wondering if you could kind of.
I'll outline what you think what your current thinking is based on your discussions with regulators on.
Manuel you mentioned, if the trial is positive and this nasal trial.
It could be considered a core core registrational.
Ah trial in conjunction with the split.
Prior trial is that is that still your thinking or is it.
The situation where.
And Youre doing some additional analysis from the <unk>.
The previous phase III trial would you need to run any additional studies or what's your current thinking on.
<unk>.
Thank you Joseph.
Maybe for the first question related to <unk>.
Launch.
Have the opportunity to have Frank centers online with the president of the U S operation and so.
Frank will take these questions and then Adam will actually take the <unk> related questions.
Discussion with the regulators.
Frank.
Thank you Manuel.
Joseph Thank you for the question and giving us the opportunity to talk about the launch as you had said I mean, that's it's.
It's early days, we're just adjusting month and a half in but we're very pleased with where we stand.
To start by saying that we're very proud of the teams here at Zealand for doing what they said that we said we would do which is executing on.
We will launch in late June and your question in particular was around a bit around the sources of business and I wanted to start by saying that the feedback from hcp's and patients across the board around the clinical profile of <unk> has been consistently favorable as it relates to the rapid reliable recovery and meaningful.
Across all segments of patients and while it's very early we are seeing the source of business coming from several areas in some of these are bringing new patients into the rescue rescue therapy category and some of these patients are also coming from conversions of.
Legacy rescue therapy cats over into.
The Newton two newer products like <unk> and Theres a lot of room to continue to grow and maneuver. There just a data point that's important is that the.
Total prescription share of legacy kits is still 55% in the market as of the second quarter of 2021, So there's plenty of room to continue too much.
With established cycle within the broader market, but to continue to convert share from legacy cat. So we're off to a strong start pleased with where we are and look forward to be able to report more data as we move forward with the launch.
Okay, and then maybe I'll. This is Adam I'll follow up on your question on <unk>.
You can take.
My comment to this is that our confidence in this approach is actually increase our confidence that we can utilize the data from the.
The first study to support a full NDA, if we need to come in and fund in the second phase III trial is very strong.
Right now with coffee to see the data how they come out in the second phase III study, but at this moment, we do not anticipate that we would need.
Additional trials if it comes out positive and I would also say we would expect the data from the first phase III trial contributes to a five.
As a meaningful dataset.
Okay.
Great. Thanks, so much for taking my questions.
Thank you next.
Our next question comes from the line of Greg <unk> from Goldman Sachs.
Hi, Mike.
Great.
Thank you for taking our questions.
Just a quick one from me on traffic lead times are you able to work for us any update on charter Craig that's that.
And how are you seeing current enrollment rates versus what youre seeing in one key bearing in mind the.
Ongoing covid environment.
And perhaps then when when might we expect an update on that program.
The guidance with you. Thank you.
Thanks, Greg This is Adam again, so we got to.
Recruitment than we are we also discussed.
At the last call we have extra pre covid.
Recruitment that we are really pleased with this.
You can expect to have updates on the program data in the year and then we basically just maintain our guidance for results mixed.
Next year, which we are confident in but that is <unk>.
Can expect again, our phase <unk> data in the year.
Which will be more precise.
Okay. Thank you.
Thank you next.
Your next question comes from the line of extra Darrin.
Hi.
Great. Thanks for taking my question just Adam if you could help a little bit on sort of <unk>. One glucagon, we saw some recent data.
From a different program that looked pretty encouraging.
For weight loss and I know this is going to be presented in November with with partner, but just if you could comment at all on.
On the data that you've seen any any read throughs that you see to sort of the the partnered program that we'll get data on in November.
Okay. Thanks for the.
Question.
I wish I could give you a very straight answer, but I can't as you know it's a partnered program.
We will release the data at the obesity week.
We can reiterate here that we see a lot of excitement.
We see a very strong commitment with that.
Three ongoing phase III studies, one, which basically completed enrollment.
Earlier in the quarter.
<unk>.
You can say.
We also noticed the data from some of these earlier competing program, which of course is encouraging to see.
We remain very encouraged on our own.
Approach so.
I cannot see ammo. Unfortunately, you will have to hang in and then look forward throughout November.
Great. Thanks sounds good alright.
Thank you.
Once again, ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone keypad.
Question comes from the line of David <unk> from Morgan Stanley.
Thank you very much for taking my question.
When you look towards the <unk> type data for next year, you gave 2022.
It's timing.
Is there.
Lack of visibility at this point on what time of year in 2022, it would be or could you, possibly steer as to when women during the year that might come.
We've got to maintain the.
Yeah.
Yeah of 'twenty, two because we want to have absolute clarity before we specify that even though.
So.
Later this year Naval Asia, Europe mortality when in 2020.
Okay. That's helpful.
And.
When we look at the the launch of Desert glucagon.
Yes.
Are there any comps that we should.
Should look at.
Help guide us on what the cadence might be going forward.
Yes.
This is Frank centers, but Emmanuel if I can take that one.
Yeah. Please take it yes.
So I'm assuming specifically the question was around <unk>, So and I think that there is a couple of things that obviously to look at first of all we.
We believe that we are launching.
And unique and well positioned.
And the market that stands along with a strong profile that said there are a couple of things that.
Provide leading signals of the performance of <unk> in one of those is the recent launch of other products in the category and the rescue therapy category. So I think it's important to be able to.
Look at the performance of other recent launches in the category.
But it's also important to lots of watch here the progression of the market share growth as we emerge.
Overall market volume growth as we emerge from Covid for example.
Recent symphony.
Symphony <unk> data suggests that the <unk> market continues to grow.
Approximately 10% year over year as if as we emerge from Covid. So I think there's a combination of factors that will be important.
To look at and one is the progressive.
Performance of recent secondary second generation launches as well as how the market growth continues to progress.
Quarter over quarter as we emerge.
Covid, but the big picture here.
Is that there are approximately 4 million patients in the us that are on multiple daily doses of insulin and despite that only 540000 or 15% are on rescue therapies. So there is plenty of room in there.
This category.
<unk>.
For us to be able to to enter a market that's growing but with a lot of opportunity. So so much is in play and to watch them, we'll be able to report more as we progress throughout our first quarter of launch.
Got it. Thank you very much for taking my question.
Thank you.
We have no further questions at this time I would like to hand the call back.
Ross for any closing comments, thank you Sir.
Thank you. Thank you and with that we would like to thank you all for attending and for your insightful questions.
If you have any follow up questions. Please don't hesitate to contact US we will make sure to reply to you quickly.
And.
I wanted to finish by saying that I am.
I'm really proud of the team and to the commitment of the execution of the launch.
We are actually on track with our Hi Fi strategy, we chose.
Confidence and progress in our launch in our partnerships with <unk> and Astrazeneca.
The ongoing phase III for <unk>.
And with the partnerships, we have as well we've been <unk> on the.
<unk> artificial pump pump.
Chris So.
Again, thank you for coming in today, and we look forward to connecting on future announcements that debate and.
And thank you again to Houston.
Thank you, ladies and gentlemen that does conclude your call for today. Thank you all for participating and you may now disconnect.
Yeah.