Q3 2022 Zealand Pharma A/S Earnings Call
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Good day and thank you for standing by welcome to Zealand Pharma results for third quarter 2022 Conference calls.
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I would now like to hand, the conference over to your speaker today on OCA. So Scott. Please go ahead.
Thank you operator, welcome and thank you for joining us today to discuss Zealand's third quarter results for 2022.
Microsoft <unk>, Vice President of Investor Relations and corporate Communications at Zealand with me today to review the items on slide two of the following members of Zealand's management team Adam <unk>, The President and Chief Executive Officer, Henry identical Chief Financial Officer, and David Kendall Chief Medical Officer Hugh.
Can also find the related company announcements and supporting information on our website at Zealand pharma Dot com.
Would like to point out as described on slide three that we will be making forward looking statements that are subject to risks and uncertainties with that I will turn the call over to Adam <unk>, President and CEO Adam.
Thank you, Rob and thanks for everyone for joining today.
I'll begin on slide four.
So it has been another busy quarter.
I'm very happy with the progress made to deliver on the key priority that we set in March when we announced our decision to prioritize investment in peptide research and development, which is our core strength.
In September we completed our objective are powering our Margaret Karr.
We are very pleased to announce a global license and development partnership with Novo Nordisk, a global leader in diabetes, so commercial seek it out.
Yeah.
Youngest unnatural churn there are two key elements of this agreement.
The first is.
We have a commercial partner with a global reach.
The percentage of bringing this product to many more patients around the world.
The second is.
And we will continue to contribute and support normal under the agreement we are responsible for certain development regulatory and manufacturing activities to support approval of singular outside U S.
As you consider further partnerships for other pack on method one coordinated by far is our ability to continue to contribute across the value chain.
We have core strength at the bedside R&D company and we have unique expertise and insights gained through our development program.
Therefore seek to maximize the value of our assets by both fully and strategically leveraging those strengths.
In the last six months, our rich pipeline has delivered two positive phase III trial Readouts, a two separate programs aimed at changing the lives of people living with rare.
Diseases.
The third or sabbatical and congenital hyperinsulinism the results of the phase III trial that I think you are on an infant with Chr with the dividend at center. We believe these results support the potential for basically the amount to be a novel safe and well tolerated treatment for children with this rare disease.
Condition.
The second was the impact of time, our long acting <unk> two analog design for subcutaneous delivery by an auto injector and patients with short bowel syndrome.
In September we were excited to report positive top line results from this pivotal phase.
One side is a buck results.
A tremendous milestone with <unk> pharma and <unk>.
People living with short bowel syndrome.
We now look forward engaging regulators regarding both programs as we prepare for potential submission of new drug applications with the U S food and drug administration.
Our PCC portfolio has continued to advance <unk> hundred presented results from the phase two clinical study of Ipi 569, or six if you look on CSF one receptor.
And few of type two diabetes.
Yes.
And then <unk>.
We are extremely encouraged by the early data from this program and look forward to seeing the results of the ongoing phase III trials in obesity.
Next year.
We're also pleased to note that the phase II trial of <unk>.
$45 6900, <unk> and people with non alcoholic hepatitis or Nash has completed enrollment in the last quarter.
For our long acting amylin analogue safety 80, 396, we have completed dose escalation in the phase one single ascending dose trial in the last quarter and expect to dose the first subjects in our.
Phase one.
Multiple ascending dose study later this month.
So building on the positive momentum we were happy to announce a rate of almost $800 million daily Corona in October was significantly strengthened our cash position as we progressed towards yet another pivotal year for <unk>.
Finally, im excited to welcome humiliated visited our new Chief financial officer to see them.
She will join us on the call today.
Yes, it brings broad financing business experienced some large organizations, including in health care and I look very much forward working with them.
<unk> financial results for the period I'll turn over the call to our Chief Medical Officer, David Kendall to discuss our pipeline.
David.
Thank you very much Adam.
Turning to slide five I would like to begin with <unk>, our long acting GOP two analog currently being studied for the potential treatment of short bowel syndrome or Sps.
Does that have as already mentioned in September we were extremely pleased to release positive topline results from the he's one pivotal phase III trial of <unk> and SBS patients as we reported in this randomized double blind placebo controlled study.
What type of treatment significantly reduced the volume of parental support required compared to placebo when administered to patients with SBS and intestinal failure.
Baseline <unk> twice weekly treatment resulted in both rapid and continued reductions in peripheral support with an average reduction of $5 one three liters per week.
The 24 week study this compared with a reduction of $2 85 liters per week for those treated with placebo.
There was also a numeric reduction in the total parenteral support required among patients treated with the once weekly go Peglow time. This reduction was not statistically different as compared to placebo.
Importantly, approximately one in eight patients treated with <unk> over the course of the study were able to completely wean off parental support.
Coded patients from both the twice weekly in one week.
Once weekly calls hydroxide dose groups as well as SBS patients with Soma and colon and continuity no placebo treated patients where we adopt parental support.
<unk> was this has to be safe and was well tolerated in the trial. The most frequently reported adverse events were injection site reactions and gastrointestinal events in total 100 to 106 participating patients completed the trial of which 96 continued into the ongoing extension trials east.
<unk> three <unk>.
<unk> safety will continue to be assessed in an ongoing fashion for up to 104 weeks of treatment.
We anticipate interim results from east to before the end of the year and <unk> three in the first quarter of 2023, and we look forward to engaging with regulatory authorities as we plan for submission of our new drug application with the FDA.
I would like to now turn to slide six in our second phase III program investigating <unk> glucagon.
Treatment in patients with congenital hyperinsulinism.
CACI is an ultra rare pediatric disease in which patients suffered from recurrence and persistent hypoglycemia due to excess insulin release with.
We've previously announced topline results from part one of the phase III trial of newborns and infants up to 12 months of age who required IV glucose for maintenance of normal glucose levels.
As shown on the left panel in part one of this study does it glucagon treatment over 48 hours significantly reduce the requirement for IV glucose to maintain glycemia when compared to placebo.
We recently presented detailed data from both part one and part two of this trial at the 2022 European Society for Paediatric Endocrinology meeting in.
In addition to the results of part one and the primary endpoint just discussed additional data from part two of this study showed that does include <unk>.
Reduced time in hypoglycemia enabled periodic or permanent discontinuation of IV glucose infusion and the majority of patients and overall seven of the 12 individuals who did not require pancreatectomy, we're completely weaned off IV glucose with the completion of the trial all of this shown on the right side of the slide.
Does it glucagon was observed to be well tolerated and no serious adverse events were reported in either part of this trial.
The positive findings of our second phase III trial in these additional data deepened our understanding of that as a group against potential as an innovative treatment for <unk> patients who have significant unmet need managing this challenging disease. We anticipate the data from this phase III trial, along with data from the previous phase III trial in older chilled.
As well as the information derived from the safety extension trial will form the basis of an NDA for <unk> glucagon and Chr.
We look forward to engaging with regulatory authorities and submitting a new drug application for <unk>, glucagon and CACI and the first half of 2023.
Turning to our obesity portfolio. We are excited to continue to advance a number of novel and exciting assets on.
On the pipeline chart on slide seven you can see that the most advance of these assets is the long acting dual glucagon GOP one receptor agonist by $456 million six which is being developed in partnership with very very hard.
Our wholly owned the diabetes obesity assets in clinical studies include a first in class GOP, one GOP two receptor dual agonist <unk>, which will be advanced into phase II early next year and the long acting amylin analogue.
<unk> hundred 96 currently in phase one.
We recently completed dose escalation in the phase one single ascending dose trial that would be a 396 with the maximum tolerated dose reached.
<unk> hundred 96 delivered subcutaneously appears to be well tolerated with no unexpected side effects and demonstrates a PK profile profile suitable for once weekly dosing.
We have received regulatory clearance and have initiated participants' screening in the phase <unk> multiple ascending dose trial and we expect the first participants to be dosed in the coming weeks.
Moving to slide eight positive clinical results from Phase III studies of <unk> at 456 900 <unk> in type two diabetes were reported at two recent scientific meetings the.
The results presented at <unk> in September demonstrated that treatment with <unk> 456, 906 led to.
Dose dependent lowering of hemoglobin <unk> by up to 188% at 16 weeks, while treatment with open label <unk> used in the same trial resulted in a reduction in AMC of 147%.
More recent results of the weight <unk> observed with <unk> at $45 $6 million of six treatments in this type two diabetes cohort were presented over the past week at the obesity week meetings, which you can see on slide nine.
In the same study treatment with this novel Glucagon GOP one receptor agonist for 16 weeks resulted in dose dependent reductions in body weight of up to 9% after treatment with <unk> 456, <unk> six while those treated with open label <unk> at a five 4% decline in body weight and.
In addition, there were dose dependent reductions in waist circumference observed in those treated with the compound with decreases of up to nearly 13 centimeters at 16 weeks in the highest dose group compared with the decrease in waist circumference 195 centimeters seen with placebo.
Treatment with open label <unk>, one milligram led to a decrease of $3 63 centimeters.
Safety and Tolerability profile were consistent with that anticipated with a <unk> one receptor agonist with gastro entitled gastrointestinal side effects being the most commonly reported.
It is anticipated that slower dose escalations over a longer duration will.
We'll mitigate both the frequency and severity of Gi adverse events and longer follow up beyond 16 weeks will be needed to more formally assess the full impact of body weight.
This is an exciting time for our pipeline and a strong push towards potential NDA filings and advancement of our obesity portfolio assets and we look forward to continuing to build upon this momentum for the remainder of 2022 and into 2023.
I will now turn the call over to our CFO Henriette IDENTIKEY to review the nine months financial results Henrietta.
As David and Hello, everybody great to meet you all virtually today.
I am truly excited to join this team and I look for.
What's the one thing that all of you and my colleagues Cynthia to fully leverage scenario risk Puebla and constitutes a strong momentum of the company.
Let's move to slide 10, and the income statement.
Revenue for the first nine months, plus 80 million DKK driven by the development agreement.
The new agreement.
So you don't receive an upfront payment.
Mkay came from normal medical ultimately up to 45.
K E development milestone.
So you guys also eligible to receive up to 200.
KK and sales based milestones and royalties.
You have already been expensive.
Thanks, so much.
Teekay Kate this is slightly above last year, we'll take a question our research and development activities.
Specialty our late stage clinical programs.
These sales modestly expenses and the administration expenses is increasing compared to last year the amount of restructuring.
Yes.
For the period.
So 53 million PKK compared to $22 million, we can pay for the same period last year.
These costs are primarily related to the loan.
As a result of the announced the swaps on all income and expenses related to the commercial activities of igo.
Discontinued operations.
Net result from discontinued operations for the nine months.
Nine months in terms of expenditure to undertake.
Let's move to slide 11, and the cash position.
Cash cash equivalents and mindful.
That's approximately one 5 billion DKK after the third quarter and the successful private placement.
Yes.
Private placements on almost $5 million new share is comprised of 158 DKK per share resulting in loss.
I'm almost 800 million DKK.
Awesome.
Let's turn to the financial guidance on slide 12.
And then to keep this short and this guidance is unchanged from our updated guidance issued on March 30. This year.
We still expect net operating expenses.
Hey, just tended to be $1 billion plus.
Plus or minus 10% excluding discontinued operations.
With these brief remarks, I would like to turn the call Opex item.
Thank you Dan.
The third quarter has delivered several important milestones and we believe <unk> is well positioned to continue to build momentum and leverage the value of our pipeline.
So with that I would thank all of you and I'll now turn over to <unk>.
So the other way to ask the questions.
Thank you Steve.
Yeah participants as a reminder to ask a question you will need to press star one on your tower.
Thank you Pat and Mike for a name to be announced.
Please Tim Barber will compile the Q&A roster this wood.
Take a few moments.
Now we're going to take our first question.
And the first question comes from the line of Joseph <unk> from Needham <unk> Company. Your line is open. Please ask your question.
Hi, Thanks for taking my questions two from US wondering if you could comment on both.
Our regulatory and also the commercial risk of.
A broad label for <unk> and Sps in terms of.
Yes differentiation between stuff.
<unk> only patients versus CIC patients.
How do you see that playing out from regulatory perspective, but also commercial.
Do you think that payers would need to see.
Sort of the effect in both of those types of patients for commercial success and then the second question is on is SBS for.
Can you remind.
Remind us again of the goal of this trial.
Is it is it possible that the data from this trial could be sufficient or used to expand the.
<unk> SBS label to include patients.
Without or who are not on parental support.
Thank you.
I will just I will start and then maybe David wants to add something so our nib.
The first.
Question on the regulatory and commercial risk regarding storm and keep pace.
So something that gets a lot of attention.
Due to the history.
Both the development of the.
<unk>.
Essex, but.
And then also you can say it's had.
And these two patient groups over the year.
As David Paul If we have actually seen index, we have reported before we have seen.
Robust.
<unk> with its <unk> dosing in both patient groups posted Soma and to keep patients and David also mentioned to you on the call that.
So patients with Soma and the peak weakening or completely. So we do think we have a strong data set to expect to have to address the potential benefits of <unk>.
With that in both patient groups.
We think that the.
Overall, they are actually quite similar we think some of the findings from prior programs have perhaps not been been over exaggerated a little bit and at least the dataset that we know that and we feel very comfortable that we have.
Pennacchio, both potential benefit in both patient groups on EPS.
So I think the main purpose of this product as we slip question initially.
Differentiate us <unk> in this patient group and then of course, it will be interesting to potentially.
As we did this molecule could also consider expanding into.
Patient statements who are not.
To answer the support but that would not be the primary purpose of this study.
We could get additional information around the potential benefit of labor in these patients.
As we allow them to connect Substations.
David do you want to add something.
Yes.
Thank you Adam and Joseph Thanks for the question I think Adam is clearly described what we see.
We believe the <unk> population.
Kick in stone.
Variety of etiologies of their shortfall is a very representative population of.
Group with Sps and intestinal failure.
Obviously, the study was powered primarily to demonstrate the reduction in.
Parental support needed across the population not in specific subgroups, but to Adam's point.
We feel we have robust.
Data that obviously will be.
Be part of the submission to the FDA for them to consider what is this population represents the minimum rate that would be represented ultimately in the label from.
I learned long ago, not to speculate as to what.
Maybe the regulatory response to that but suffice it to say that both stomach kick.
Allergies.
SBS, we feel we have.
A very important and broad representation of the disease States.
Add to Adam's comments on expanding the label.
I think we now have clear evidence from this trial, we believe that this is a effective GOP two agonist.
And where it may play beyond those with <unk>.
Documented intestinal failure like.
Those who entered the trial.
It is exciting to consider but.
First and foremost our goal is to bring those force for the intestinal failure.
Patients in population with again, the encouraging finding that number of individuals' on active treatment.
Treatment were able to completely discontinue that approach will support which we believe is.
A significant part of this dataset.
I hope that touches on.
Each of your questions Joseph.
Yes, that's very helpful. Thank you for taking our questions.
Thank you.
Now we're going to take over next question.
And the next question comes from the line of Brian <unk> from Jefferies. Your line is open. Please ask your question.
Hi, Thanks for taking my question just have the one just hoping you can speak to the differentiation between your politically.
Yeah.
I think we lost the connection.
Operator can you hear us.
Yes.
Jim.
Brian is also going back to Chuck.
Okay, we cannot tell you Brian .
Okay.
We can still Nokia Brian .
Excuse me, Brian So is it your line.
Okay, I believe Brian has been disconnected so dear participants.
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