Zealand Pharma Announces Financial Results for the First Nine Months of 2022

Company announcement No. 51 / 2022

Zealand Pharma Announces Financial Results for the First Nine Months of 2022

Copenhagen, Denmark November 10, 2022 – Zealand Pharma A/S (Nasdaq: ZEAL) (CVR-no. 20045078) a biotechnology company focused on the discovery and development of innovative peptide-based medicines, today announced the interim report for the three and nine months ended September 30, 2022 and provided a corporate update.

Key strategic objectives achieved

Adam Steensberg, President and Chief Executive at Zealand Pharma said: “Zealand has continued to execute and deliver on key objectives in the third quarter. In September, we completed our stated objective of securing partnerships for our marketed products through a license and development agreement with Novo Nordisk, a global leader in diabetes, to commercialize Zegalogue®.

“Within our R&D pipeline of investigational therapeutic peptides we have seen further positive clinical data. In September we reported topline results from the Phase 3 EASE-1 trial showing that treatment of short bowel syndrome patients with twice weekly glepaglutide, our long-acting GLP-2 analogue, resulted in a statistically significant 5.13 liters/week reduction from baseline in the volume of parenteral support required. Importantly, approximately 1 in 8 patients treated with glepaglutide weaned off parenteral support within 24 weeks, while no placebo treated patients were able to wean off parenteral support, which we believe is differentiating from current treatments. We look forward to seeing the results of the ongoing glepaglutide EASE-2 and 3 long term extension trials and engaging with the regulatory authorities in preparation for an NDA submission. In obesity, our partner Boehringer Ingelheim, presented Phase 2 data for the dual GCGR/GLP-1R agonist BI 456906 in patients with type 2 diabetes, showing encouraging glycemic control through a reduction in HbA1c, as well as body weight loss. We are encouraged by these results and look forward to seeing the results from Boehringer’s ongoing Phase 2 trial in patients with obesity, which we expect next year. We also made progress with our own early-stage clinical candidates in obesity.

“Finally, we strengthened our balance sheet with gross proceeds of DKK 786 million from a directed issue and private placement resulting in an adjusted cash position of DKK 1,515 million in early October.”

Financial results for the first nine months of 2022

• Revenue: DKK 80.1 million (DKK 95.1 million in the first nine months of 2021).
• Net operating expenses: DKK -675.7 million (DKK -652.8 million in the first nine months of 2021).
• Net operating result: DKK -596.2 million (DKK -568.7 million in the first nine months of 2021).
• Net financial items: DKK -53.4 million (DKK 21.5 million in the first nine months of 2021).
• Net result from Discontinued Operations: DKK -215.1 million (DKK -193.7 million in the first nine months of 2021).
• Cash, cash equivalents, and marketable securities: DKK 729.9 million as of September 30, 2022 (September 30, 2021: DKK 1,049.0 million).

Highlights in the third quarter 2022

• Announced positive topline results from the pivotal Phase 3 EASE-1 trial of glepaglutide, a long-acting GLP-2 analogue designed for subcutaneous delivery via auto-injector, in patients with short bowel syndrome (SBS). Glepaglutide treatment met the primary endpoint with twice weekly dosing achieving a statistically significant reduction in weekly parenteral support volume by 5.13 Liters/week from baseline at 24 weeks. 66% of patients in the twice weekly group had a clinically meaningful response (>20% reduction in parenteral support volume). In total 9 of 70 patients treated with glepaglutide were weaned off parenteral support, while no placebo treated patients were able to wean off parenteral support. Glepaglutide treatment appeared to be safe and was well-tolerated in the trial.
• Reported results from the Boehringer Ingelheim-sponsored Phase 2 clinical trial of BI 456906, a glucagon receptor/glucagon-like peptide-1 receptor (GCGR/GLP-1R) dual agonist, in patients with type 2 diabetes (T2D) at the 58th Annual Meeting of the European Association for the Study of Diabetes (EASD). Treatment with BI 456906 resulted in dose dependent HbA1c reductions, with a mean of up to -1.88% at Week 16 compared with -0.25% seen with placebo. Treatment with open-label weekly semaglutide at 1.0 mg led to a decrease in HbA1c of -1.47%. The safety and tolerability profile, which included gastrointestinal disorders (such as nausea and vomiting) as the most frequently reported adverse events, was as is expected with higher increasing doses of GLP-1 receptor agonists. Most adverse events were reported during the dose-escalation phase of the trial, and therefore slower escalation schemes may mitigate the frequency of such events.
• Presented results from the Phase 3 clinical trial of dasiglucagon in congenital hyperinsulinism (CHI) at the 60th Annual Meeting of the European Society for Paediatric Endocrinology (ESPE). Dasiglucagon significantly reduced the requirement for intravenous glucose to maintain glycemia in newborns and infants with CHI (Part 1 of Phase 3 trial). Dasiglucagon reduced time in hypoglycemia and enabled discontinuation of intravenous glucose in most infants and limited the need for pancreatectomy (Part 2 of Phase 3 trial). Results support the potential for dasiglucagon to be a novel, effective, and well tolerated treatment for infants with CHI dependent on intravenous glucose.
• Completed dose escalation in the ongoing Phase 1a single ascending dose (SAD) trial of ZP8396, a long-acting amylin analogue. In this Phase 1 SAD trial, subcutaneous ZP8396 appeared to be well tolerated with no unexpected side effects and the single administration maximum tolerated dose (MTD) was reached. The pharmacokinetic (PK) profile is suitable for once weekly dosing. Zealand expects to initiate dosing in a Phase 1b multiple ascending dose (MAD) trial of ZP8396 by the end of 2022.
• Announced a global license and development agreement with Novo Nordisk to commercialize ZEGALOGUE® (dasiglucagon) for injection. Agreement includes an upfront payment, development, regulatory, manufacturing and sales-based milestones of up to DKK 290 million to Zealand in addition to high-single to low-double digit royalties on worldwide net sales by Novo Nordisk. Zealand will be responsible for certain planned development, regulatory, and manufacturing activities to support approval outside the U.S. to be reimbursed by Novo Nordisk.
• Appointed Henriette Wennicke as Chief Financial Officer. Henriette Wennicke brings broad finance and business experience at large organizations, including in healthcare, where she has led financial planning, R&D portfolio management and investor relations.
• Completed voluntary delisting of its American Depositary Shares (ADSs) from the New York-based Nasdaq Global Select Market. One ADS currently represents one ordinary share in Zealand and on suspension of trading the company’s ADSs accounted for less than 1.5% of the total share capital. Trading in Zealand shares is consolidated to Nasdaq Copenhagen, the company’s primary and most liquid stock exchange. The decision is part of Zealand’s strategy to prioritize R&D and streamline corporate operations.

Events after the reporting date

• Presented preclinical data at the Annual Meeting of the Obesity Society (Obesity Week) on Zealand’s amylin analogue (ZP8396); its first-in-class GLP-1R/GLP-2R dual agonist (dapiglutide); and the GIP analogue (ZP6590).
• Reported results from the Boehringer Ingelheim-sponsored Phase 2 clinical trial of BI 456906 (GCGR/GLP-1R) in patients with T2D at Obesity Week. BI 456906 resulted in dose-dependent bodyweight reductions of up to -9% at Week 16.
• Phase 2 trial of BI 456906 in patients with non-alcoholic steatohepatitis (NASH) conducted by Boehringer Ingelheim has completed patient enrollment.
• Received gross proceeds of DKK 786 million from a directed issue and private placement. Zealand issued a total of 4,975,000 new shares at a subscription price of DKK 158 per share.

Upcoming events

• Initiate Phase 1b MAD trial of ZP8396, a long-acting amylin analogue in development for obesity by the end of the fourth quarter 2022.
• Interim Phase 3 data from EASE-SBS 2 and 3 long term extension trials of glepaglutide expected by the end of the fourth quarter 2022, and first quarter of 2023, respectively.
• Potential submission of new drug application (NDA) with the U.S. Food and Drug Administration (FDA) for dasiglucagon treatment in the management of CHI in the first half of 2023, based on data from the full Phase 3 program.

Financial guidance for 2022

The company will no longer provide guidance on net product revenue, reflecting the completion of the asset purchase agreement for V-Go® with MannKind Corporation and the completion of the global license and development agreement for Zegalogue® with Novo Nordisk.

In 2022, Zealand expects revenue from existing license agreements. However, since such revenue is uncertain in terms of size and timing, Zealand does not intend to provide guidance on such revenue.

Net operating expenses in 2022 are expected to be DKK 1,000 million +/-10%*. This is unchanged from our updated guidance issued on March 30, 2022.

^{*Excluding discontinued operations}

Conference call today at 4 PM CET / 10 AM ET

Zealand’s management will host a conference call today at 4 PM CET / 10 AM ET to present results through the first nine months of 2022 followed by a Q&A session. Participating in the call will be Chief Executive Officer Adam Steensberg, Chief Financial Officer Henriette Wennicke, and Chief Medical Officer David Kendall. The conference call will be conducted in English.

Telephone dial-in information and a unique personal access PIN will be provided upon registration at https://register.vevent.com/register/BI2233344c2eff4f40be51448707df4e03. A live listen-only audio webcast of the call, including an accompanying slide presentation, will be accessible at https://edge.media-server.com/mmc/p/untoz3rk. Participants are advised to register for the call or webcast approximately 10 minutes before the start. A recording of the event will be available following the call on the Investor section of Zealand’s website at https://www.zealandpharma.com/events-cal.

Total number of shares and voting rights in Zealand Pharma A/S as of September 30, 2022

Number of shares (nominal value of DKK 1 each): 46,538,186 which is an increase of 2,895,044 from 43,634,142 as reported on December 31, 2021.

Therefore, the current share capital is (nominal value in DKK): 46,538,186.

Number of voting rights: 46,538,186.

On October 4, 2022, The Group announced that a directed issue and private placement of 4,975,000 new shares had been completed. Please refer to note 17 for further information.

About Zealand Pharma A/S

Zealand Pharma A/S (Nasdaq: ZEAL) (“Zealand”) is a biotechnology company focused on the discovery and development of peptide-based medicines. More than 10 drug candidates invented by Zealand have advanced into clinical development, of which two have reached the market and three candidates are in late-stage development. The company has development and partnerships with a number of blue-chip pharma companies as well as commercial partnerships for its marketed products.
Zealand was founded in 1998 and is headquartered in Copenhagen, Denmark, with a presence in the U.S. that includes Boston. For more information about Zealand’s business and activities, please visit www.zealandpharma.com.

Safe Harbor / Forward-Looking Statements

This press release and interim report contains “forward-looking statements”, as that term is defined in the Private Securities Litigation Reform Act of 1995 in the United States, as amended, even though no longer listed in the United States this is used as a definition to provide Zealand Pharma’s expectations or forecasts of future events regarding the research, development and commercialization of pharmaceutical products, the timing of the company’s preclinical and clinical trials and the reporting of data therefrom and the company’s Upcoming Events and Financial Guidance for 2022. These forward-looking statements may be identified by words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “possible,” “potential,” “will,” “would” and other words and terms of similar meaning. You should not place undue reliance on these statements, or the scientific data presented. The reader is cautioned not to rely on these forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions, which may cause actual results to differ materially from expectations set forth herein and may cause any or all of such forward-looking statements to be incorrect, and which include, but are not limited to, unexpected costs or delays in clinical trials and other development activities due to adverse safety events or otherwise; unexpected concerns that may arise from additional data, analysis or results obtained during clinical trials; our ability to successfully market both new and existing products; changes in reimbursement rules and governmental laws and related interpretation thereof; government-mandated or market-driven price decreases for our products; introduction of competing products; production problems; unexpected growth in costs and expenses; our ability to effect the strategic reorganization of our businesses in the manner planned; failure to protect and enforce our data, intellectual property and other proprietary rights and uncertainties relating to intellectual property claims and challenges; regulatory authorities may require additional information or further studies, or may reject, fail to approve or may delay approval of our drug candidates or expansion of product labeling; failure to obtain regulatory approvals in other jurisdictions; exposure to product liability and other claims; interest rate and currency exchange rate fluctuations; unexpected contract breaches or terminations; inflationary pressures on the global economy; political uncertainty, including due to the ongoing military conflict in Ukraine; and the direct and indirect impacts of the ongoing COVID-19 pandemic on our business, results of operations and financial condition. If any or all of such forward-looking statements prove to be incorrect, our actual results could differ materially and adversely from those anticipated or implied by such statements. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. All such forward-looking statements speak only as of the date of this press release and are based on information available to Zealand Pharma as of the date of this release. We do not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Information concerning pharmaceuticals (including compounds under development) contained within this material is not intended as advertising or medical advice.

NOTE: DKK/USD Exchange rates used: September 30, 2022 = 7.629 and September 30, 2021 = 6.422

V-Go® is a registered trademark of MannKind Corporation and Zegalogue® is a registered trademark of Novo Nordisk A/S

Contacts:

Attachment

• Zealand Pharma Q3 2022 – Interim Report