Zealand Pharma A/S

CSE:ZEAL

Earnings Call Analysis

Zealand Pharma's Strong Start to 2024 with Promising Trial Results and Financial Position

Zealand Pharma showcased robust performance in the first half of 2024. The company reported a revenue of DKK 49 million, mainly from their agreement with Novo Nordisk. A successful equity raise of DKK 7 billion strengthened their financial position, allowing them to update their expense guidance to DKK 1.25-1.35 billion. Zealand presented positive trial results for petrelintide, targeting obesity and rare diseases, and highlighted ongoing regulatory advancements. Future investments will expand their obesity-related studies and support pre-commercial activities for key assets like dasiglucagon and glepaglutide.

Remarkable Growth and Robust Financial Position

The first half of 2024 has been highly successful for Zealand Pharma. Revenue was DKK 49 million, primarily from a licensing agreement with Novo Nordisk for Zegalogue. A substantial capital raise of DKK 7 billion has put the company in a strong financial position, marking the largest Nordic biotech offering ever. This influx of funds has allowed Zealand to revise its net operating expense guidance for the year to between DKK 1.25 billion and DKK 1.35 billion. This financial strength is pivotal for accelerating investments, particularly in their obesity assets.

Obesity Portfolio: The Strategic Focus

Zealand Pharma's main focus is on its obesity treatments, particularly petrelintide, developed as an alternative to GLP-1-based therapies. In the coming months, the company anticipates full results from a 16-week trial with petrelintide and the initiation of a Phase IIb trial. Additionally, higher dose trials with dapiglutide are underway, which could foreseeably achieve weight loss exceeding 20%. This demonstrates Zealand’s commitment to addressing obesity with innovative treatments and a differentiated mechanism of action.

Regulatory Milestones and Rare Disease Programs

Zealand Pharma looks forward to critical regulatory decisions in the U.S. for its rare disease treatments. Dasiglucagon for congenital hyperinsulinism has an FDA decision goal date of October 8, 2024, and glepaglutide for short bowel syndrome is expected to have a decision by December 22, 2024. These approvals could address significant unmet medical needs, particularly for newborns and children who have limited treatment options available today.

Broader Pipeline and Future Prospects

Alongside obesity treatments, Zealand Pharma’s pipeline includes promising assets targeting chronic inflammation and other metabolic diseases. The successful capital raise enables further preparation for studies and market readiness for dasiglucagon and glepaglutide upon potential approvals. The company’s strategic aim remains to form partnerships that maximize long-term value creation, and ongoing discussions with potential partners are progressing well.

Vision and Strategic Partnerships

Zealand Pharma seeks partnerships with large pharmaceutical companies, focusing on shared vision and ambition. The company emphasizes its commitment to developing petrelintide as a backbone therapy for weight management. To achieve this, substantial investments in development, manufacturing, and a global reach are necessary. Zealand aims to retain co-commercialization rights, especially in major markets like the U.S., and continues to pursue these ambitions through collaborative discussions.

Financial Outlook and Stability

Post the capital raise, Zealand Pharma extends its financial runway well beyond its previous projection into 2027. This strong position, bolstered by potential milestone payments from new partnerships, provides the company with the flexibility to advance its pipeline without urgent financial constraints. The stable financial outlook ensures the progression of growth and innovation within Zealand Pharma’s diverse portfolio.

Earnings Call Transcript 2024-Q2

[Operator]

Good day, and thank you for standing by. Welcome to the Zealand Pharma First Half Financial Results 2024 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Anna Krassowska. Please go ahead.

[Anna Krassowska, executive]

Thank you, operator. Welcome, and thank you for joining us today to discuss Zealand's results for the first 6 months of 2024. With me today are the following members of Zealand's management team. Adam Steensberg, President and Chief Executive Officer; Henriette Wennicke, Chief Financial Officer; and David Kendall, Chief Medical Officer.

You can also find the related company announcement and report on our website at zealandpharma.com. As described on Slide 2, I caution listeners that we will be making forward-looking statements that are subject to risks and uncertainties.

Moving to Slide 3, I will turn the call over to Adam Steensberg, President and CEO. Adam?

[Adam Steensberg, executive]

Thank you, Anna, and thanks to everyone for joining today. I'm very satisfied with our progress in the first 6 months of 2024. First of all, we are extremely pleased -- we were extremely pleased to report the positive top line data from the Phase Ib 16-week trial with petrelintide, our long-acting amylin analog, which we are developing as an alternative to GLP-1-based therapies for the management of overweight and obesity.

With the potential for GLP-1 like weight loss and a significantly more benign tolerability profile, we believe that petrelintide has the potential to become a future backbone therapy for weight management. At the EASL Congress in June, our partner, Boehringer Ingelheim, present impressive data with several type on liver fibrosis improvement from the Phase II trial in MACE. The Phase II program with Survodutide also included separate trials in both type 2 diabetes and obesity, from which Boehringer reported very strong results as well. Survodutide is now in Phase III for treatment of obesity and overweight, and expected to advance into Phase III trials in MACE later this year.

There is significant overlap between obesity and MACE and with the clinical data reported to date, we believe Survodutide potential as a leading incretin-based therapy for obesity and MACE in the future. Following our strong top line data reported with petrelintide, we did an upside and significantly oversubscribed equity offering raising core proceeds of DKK 7 billion. This is the largest ever European biotech offering with a development stage funding as a primary use of proceed. We are very grateful to both new and existing investors who share our view on the transformational potential of our differentiated BCT assets. The strengthened financial position now allows us to accelerate our investments into our BCT candidates, expanding both the depth and the breadth of our development program.

For dasiglucagon in congenital hyperinsulinism and glepaglutide in short bowel syndrome partnership discussions are progressing very well. With our strong capital preparedness, we remain focused on securing a commercial partnership that maximizes the long-term value creation for these assets. And for petrelintide we are now initiating dialogues with potential future partners as well. It will be important for us to find a truly committed and capable partner who shares our vision for developing petrelintide as an alternative to the GLP-1 based therapies and a potential future backbone therapy for weight management.

In this regard, I'm really pleased with the addition of Eric Cox to our management team in the role as Chief Commercial Officer. Eric brings 25 years of commercial and business development experience from biotech and leading global biopharma companies. He will be a very important capacity as we progress our development programs further and put ourselves in a strong position for partnerships.

Turning to Slide 4. I would like to remind everyone why we are so excited about the potential of patented. With the magnitude of the obesity pandemic and the global health care challenge that obesity and obesity-related comorbidities represent we believe there is a need for novel and alternative treatment options with a different mechanism of action than the GLP-1 based therapies approved today.

We have seen the impact of the first 2 once weekly GLP-1-based therapies to be approved. In Phase III clinical trials, they have demonstrated potential for 15% to 21% mean weight loss in patients with obesity and positive outcomes on several obesity-related comorbidities.

On the flip side, GLP-1-based therapies are associated with a number of gastrointestinal adverse events, including nausea, vomiting, diarrhea and constipation. Recent data suggest that up to 30% of patients with obesity on a GLP-1 treatment stopped within a month before reaching the target dose and that within 1 year, 60% to 70% of patients with obesity withdraw from treatment. Thus, we believe there is a need for treatments that can help patients who cannot tolerate the GLP-1 based therapies or who would be looking for an alternative solution to maintain a weight loss. With petrelintide, we are targeting GLP-1 like weight loss of 15% to 20%, with potential for high-quality weight loss implying increased preservation of lean body mass.

Importantly, petrelintide offers a differentiated mechanism of action, reducing food intake by increasing fatality for different and potentially better patient experience. We are also confident that petrelintide has potential for a significantly improved GI tolerability profile compared to GLP-1 receptor agonist, suggesting both lower frequency and [indiscernible] severity of gastrointestinal adverse events, which is an important point of potential future differentiation in weight maintenance.

And with that, let's move to Slide 5 as I will turn over the call to our Chief Medical Officer, David Kendall, to discuss our R&D pipeline. David?

[David Kendall, executive]

Thank you, Adam. Today, I would like to focus my remarks on the continued advancement of our obesity programs, beginning with our novel long-acting amylin analog petrelintide. Let's move to Slide 6. As we have recently reported, petrelintide was evaluated in a randomized, double-blind, placebo-controlled Phase Ib trial enrolling a total of 48 adults with over weight and obesity.

Participants were randomized into 1 of 3 dose cohorts assessing multiple ascending doses of petrelintide using a dose titration scheme or to match placebo. Study medication was administered weekly for 16 weeks in an outpatient setting, followed by a 9-week safety follow-up period. Note that study participants randomized to the 2 higher dose cohorts received the maximum assigned maintenance dose for a period of only 6 to 8 weeks. The starting dose in the cohort with maintenance for 6 weeks was higher than in the other -- 2 other cohorts. Importantly, in this trial, there was no specific lifestyle intervention provided.

Turning to Slide 7. Shown here is a summary of the key baseline characteristics of the participants enrolled in this trial. In contrast to many weight loss studies previously reported, approximately 80% of the participants in this trial were male. Median age was 49 years and median body weight was 92 kilograms, with a median BMI of 29 across the study cohorts. All groups were well matched for baseline characteristics.

Moving to Slide 8 and the changes in body weight observed. The reduction in mean body weight across the 3 dose cohorts was 4.8%, 8.6% and 8.3% from baseline after 16 weeks of treatment. While placebo treatment resulted in a mean body weight loss of 1.7%. Importantly, and consistent with our observation from earlier studies with petrelintide, every individual participant on active treatment lost weight during the 16 weeks of study and the weight loss appeared to be on a continued downward trajectory throughout the active treatment period.

In addition, a review of data from individual participants supports that separation at the higher doses is possible with longer treatment duration in a larger study population. We find these data to be even more compelling in light of the fact that the study population was predominantly male with a relatively low BMI, and these results were achieved in the absence of any background lifestyle modification, suggesting that the response observed may have been muted in this study.

Moving to Slide 9 and the tolerability profile. In this trial, petrelintide was assessed to be both safe and well tolerated. There were no severe adverse events and the safety profile observed that was consistent with earlier studies, all gastrointestinal or GI adverse events were mild, except for 2 moderate events of nausea and vomiting reported by 1 participant who discontinued treatment after the third dose cohort. This participant was randomized to the cohort with maintenance for 6 weeks that included a higher starting dose compared to the 2 other cohorts. Notably, no other participants discontinued treatment due to adverse events, and no other participants reported vomiting, and there were only 2 reports of diarrhea, both of which were mild.

Overall, nausea was reported by 19.6% to 33% for active treatment groups and 16.7% with placebo. In addition, only a low number of participants reported injection site reactions, all of which were mild and no antidrug antibodies were observed. The tolerability profile reported in this trial further demonstrates the potential for an improved patient experience as compared to that reported in both clinical trials and with the clinical use of incretin-based therapies. We strongly believe that the mechanism of action by which caloric intake is reduced with amylin agonism, increasing as opposed to reducing appetite along with leptin sensitization known to occur with amylin agonism can become an important differentiator in the treatment of overweight and obesity. We look forward to presenting the full results and detailed analyses from the trial at a scientific conference later this year.

Turning to Slide 10. These exciting and compelling data provide us with the confidence and necessary information to rapidly progress our plans for initiation of a comprehensive Phase IIb trial with petrelintide monotherapy in the second half of 2024. The draft Phase IIb trial study design is shown here. This larger trial with longer treatment exposure will enroll more than 400 adults with overweight or obesity and will compare multiple doses of petrelintide or placebo over an estimated 42 weeks of treatment with up to 5 dosing arms.

Consistent with other studies of treatments for overweight and obesity, the primary endpoint will be percentage change in body weight from baseline and the study plans include a number of key secondary and exploratory endpoints, including an assessment of body composition as measured by magnetic resonance imaging or MRI. We are pleased and excited to advance the development of this promising assets as we truly believe that petrelintide offers the unique opportunity to establish a new class of stand-alone therapies for the treatment of overweight and obesity.

At the same time, our strength and financial position allows us to invest further in this comprehensive development program. In addition to the Phase IIb study currently planned, we are developing plans for a Phase II trial, exploring weight loss in a population with type 2 diabetes and prediabetes, where data suggests that amylin agonism can potentially deliver weight loss comparable to that observed in non-diabetes populations, further differentiating this treatment from GLP-1 receptor agonist therapy. We are also developing plans for investigating petrelintide in combination with a GLP-1 receptor agonist. In addition, we are fully prepared to complete all of the Phase III enabling study in the coming months and years.

Turning to Slide 11, in June, at the European Association for the Study of the Liver Congress held in Milan, our partner, Boehringer Ingelheim, presented exciting and impressive data from the Survodutide Phase II trial in metabolic dysfunction associated steatohepatitis or MASH. In this trial, 64.5% of adults with moderate to advanced scarring that is fibrosis stages F2 and F3 achieved a biopsy-proven improvement in fibrosis without worsening of MASH after 48 weeks of Survodutide treatment compared to 25.8% of participants treated with placebo.

These data on fibrosis improvement, all of the top line results announced earlier this year, demonstrating that up to 83% of adults treated with Survodutide for 48 weeks, achieved a biopsy-proven improvement in MASH without worsening of fibrosis stages F1 to F3 compared to 18.2% with placebo. We believe that this is the strongest clinical data set on improvements in MASH and liver fibrosis published to date, positioning Survodutide as a potential best-in-class incretin-based therapy for the treatment of obesity and MASH. We are excited that Boehringer is anticipating to advance Survodutide into separate Phase III trials in MASH in the second half of this year.

Moving now to Slide 12 and turning to our [indiscernible] to dapiglutide, our first-in-class GLP-1-GLP-2 receptor dual agonist. Dapiglutide is designed as a potent GLP-1 agonist targeting significant weight reduction and offers the potential to also leverage GLP-2 pharmacology and improve gut barrier function, as well as address the low-grade inflammation associated with metabolic disease, representing a truly differentiated incretin asset. In obesity, low-grade inflammation is thought to further drive many common comorbidities and we believe that dual GLP-1, GLP-2 receptor agonism can play an important role, not only targeting weight loss but also by directly affecting a number of key obesity-related comorbid conditions, including liver disease, cardiovascular disease, inflammatory bowel disease and neurodegenerative diseases, including Alzheimer's disease.

In the second half of 2024, we expect to report top line results from the Phase Ib dose titration trial with dapiglutide, investigating the pharmacokinetic and pharmacodynamic effects of dapiglutide treatment with doses up to 13 milligrams, which represents 2x to 3x higher dosing than that utilized in prior clinical trials with dapiglutide. Based on the tolerability profile observed to date, we have amended the trial to include an additional cohort in the Phase Ib trial to investigate even higher doses up to 26 milligrams over a treatment duration of 28 weeks. Results from this added cohort will be reported in the first half of 2025.

The added cohort in the Phase Ib trial will have no impact on the timing for initiation of the Phase II trial in people with overweight and obesity, which we expect to initiate in the first half of 2025. But data will be used to inform the potential for even higher treatment doses in Phase II.

We will obtain valuable insights on the optimal doses and dose escalation steps to inform both the Phase IIb trial and additional studies investigating the potential of dapiglutide in obesity and selected obesity-related comorbidities.

Turning to Slide 13 for a few remarks on our rare disease programs rapidly approaching regulatory decisions by the U.S. FDA. Starting with dasiglucagon for congenital hyperinsulinism. We have a regulatory decision goal date of October 8 for the original 1 part of this new drug application which will evaluate dosing of dasiglucagon of up to 3 weeks duration. In the second half of 2024, we expect to submit the requested analyses from existing continuous glucose monitoring data sets that will support the original 2 component of the NDA assessing use of dasiglucagon infusion beyond the 3 weeks of dosing.

If approved, dasiglucagon would help address a substantial unmet medical need for newborns and children with congenital hyperinsulinism, who have had either no or very limited treatment options today. Additionally, the U.S. FDA has set a regulatory decision goal date of December 22 for our long-acting GLP-2 analog [ lopagltide ], which possesses best-in-class potential for the treatment of short bowel syndrome with intestinal failure. We are pleased to have had a successful and productive mid-cycle review meeting with the U.S. FDA earlier this year.

And with that, I would now like to turn the call over to our Chief Financial Officer, Henriette Wennicke to review our financial results for the first 6 months of 2024. Henriette?

[Henriette Wennicke, executive]

Thanks, David, and hello, everyone. Let's move on to Slide 14 and the income statement. Revenue for the first 6 months of 2024 was DKK 49 million. This was mainly driven by the license and development agreement with Novo Nordisk for Zegalogue. Other operating expenses for the period were DKK 559 million, driven by research and development, which represented 72% of the company's operating expenses. The research and development expenses are driven by the clinical advancement of our wholly owned obesity assets and activities supporting the regulatory review by the U.S. FDA of the late-stage rare disease assets.

Selling and marketing expenses primarily [ related ] to pre-commercial activities associated with our rare disease asset. The increase in admin expenses is a result of a strengthening of the IT infrastructure and organizational capabilities in selected corporate functions as well as legal expenses related to our patent portfolio.

Let's move to Slide 15 and the cash position. As of June 30, 2024, cash, cash equivalent and marketable securities were DKK 9.7 billion. In June, we successfully raised DKK 7 billion in gross proceeds from an upside and significantly oversubscribed equity offering. This rate represents the largest ever Nordic biotech offering, the largest ever European biotech offering focused on development state funding and the fifth largest biotech follow-on ever globally. I must say that we are very proud of this transaction and extremely pleased and grateful to both new and existing investors who decided to support us in this transition.

Clearly, Zealand has never been in a stronger financial position. And this takes me to Slide 16 and our financial guidance. This strong cash position enabled us to accelerate investments in our obesity assets. And consequently, we have today updated the guidance on net operating expenses for the year from between DKK 1.1 billion and DKK 1.2 billion to between DKK 1.25 billion and DKK 1.35 billion. We now have a unique opportunity to expand both the depth and the breadth of the development programs for our differentiated obesity assets.

In addition to comprehensive Phase IIb trials, the capital raise of DKK 7 billion enable us to invest further in preparing additional studies, including positioning studies and studies in related indications as well as associated CMC activities. At the same time, we are investing in pre-commercial activities for both dasiglucagon for CHI and glepa for SBS, so that we are ready to make these products available to patients after potential approvals. Our strategy remains to enter partnership for our assets, focusing on maximizing long-term value creation. Discussions with potential partners are progressing well but we are, at the same time, running the necessary pre-commercial activities.

And with that, I will move to Slide 17 and turn the call back to Adam for concluding remarks. Adam?

[Adam Steensberg, executive]

Thank you, Henriette. The first 6 months of 2024 have been remarkable for Zealand Pharma with impressive data across our pipeline of differentiated obesity candidates and an extraordinary capital raise, we are setting ourselves up to become a key player in the growing of obesity space. For petrelintide specifically, we have an opportunity to create a new class of medicines for weight management and thus play an important role in framing the future treatment landscape in obesity. In the near term, we also have an exciting 6 months ahead of us including full results and analysis from the 16-week trial with petrelintide as well as Phase IIb trial initiation. And top line results from the 13-week part of the dose titration trial exploring higher doses of dapiglutide.

Outside obesity, we have regulatory decisions in the U.S. for both of our rare disease programs in the second half. With both dasiglucagon for congenital hyperinsulinism and dapiglutide for short bowel syndrome, we have an opportunity to address a major unmet medical need for patients. Finally, the next wave of peptide innovation targeting chronic inflammation is expected to enter early clinical development.

Thank you all, and I will now turn over the call to the operator for questions.

[Operator]

[Operator Instructions] And the first question comes from the line of Rajan Sharma from Goldman Sachs.

[Rajan Sharma, analyst]

I've got a couple. Firstly, on dapiglutide. I just wanted to understand what drove the decision include the higher dose cohort in the Phase I rather than just kind of including that in the Phase II. And then given that you should expect the same time lines for the initiation of the Phase II, do you expect to use those higher doses in the Phase II, even if the data from the Part 2 of the Phase I are not available? And then just longer term, how high do you think you could actually go on dosing there?

And then maybe just staying on dapi, what do you think would constitute a good outcome from the initial Phase I data that we're expecting in the second half of the year? You kind of -- we're quite clear on how you were thinking about the petrelintide readout. So if you could just provide some color around that? And then should we expect any data on inflammation markers in the initial data set? Maybe if I could just follow up with one on petrelintide. So I think you said that you'll be using MRI to assess body composition in the Phase II. Just wanted to understand your rationale for that relative to using other measures. Do you think MRI will likely be the standard measurement across the space? And will you also be able to assess bone density in that trial?

[Adam Steensberg, executive]

Thank you, Rajan, for those questions. I'll just start, and then I'll hand over to you, David. And as you highlighted, I mean, we have included an even higher cohort into the 13-week trial. And I think it's important to mention that it will not impact, as David also said initiation of the Phase IIb trial, but it has the potential to actually ultimately be included in that trial, and David can share more on that thinking later. On the expectations for outcome again, remember that we are adding a higher dose. What we have said all the time, and that is still our position that dapiglutide we are aiming to achieve what we would see as petrelintide like we also at least crossing that -- continue to believe that we can cross that 20% bar for weight loss in longer-term studies.

And that's what we will be looking for in the upcoming data set, knowing that we are at 30-milligram there, and we will also go higher. But as long as we have confidence that we can achieve that bar, then we think we have a differentiated molecule with the true differentiation being on how well it addresses comorbidities.

And then David, I will hand over to you to -- for further light on dapi and perhaps also address the MRI question on petrelintide.

[David Kendall, executive]

Happy to, and Rajan, thanks for your question. I'll reiterate what Adam said, which is the higher dose as we have the appropriate tax coverage, you can add that to understand safety and tolerability in Phase I. So we do hope and anticipate that as the data from that amendment become available. We could amend and potentially include those doses, if well tolerated in the Phase ll program.

Markers of information, I'm speaking without the protocol here in front of me over 13 weeks. I do not recall the level of detail that the study protocol outlined clearly, markers of inflammation will be part of the clinical program for dapiglutide throughout the other clinical trials planned in the obesity Phase IIb and beyond. So I don't want to speak out of school without the protocol in front of me. But we would hope that we can demonstrate this, particularly in the larger cohorts in Phase II.

Your question about MRI, Rajan, I think, is spot on that MRI or the amylin device and technology has become the most widely used, and we will certainly have that in the next Phase II trial, and we believe that that's going to be both the most predictive and reproducible measures that allow us to look at body composition. And as for bone density, yes, that will be observed. So we have some understanding of the overall impact, but amylin will be the body comp measure of choice.

[Adam Steensberg, executive]

Does this answer your questions, Rajan?

[Rajan Sharma, analyst]

Yes.

[Operator]

And the next question comes from the line of Thomas Bowers from Danske Bank.

[Thomas Bowers, analyst]

So first of all, on -- in the slide presentation, you highlight that 30% discontinued BC treatment after 1 month. But how many do you believe actually discontinue due to tolerability issues and maybe I'm testing my luck, but how many of these patients would you think could have the needed tolerability improvement on namely to successfully stay on therapy, actually, I guess that's main goal, of course.

And then also a second question on petrelintide. So I remember in connection with the top line results that you argued for the expected 1-plus year rate reduction of 15% to 20%. So what data do you have to support the tail here? Because I -- to my understanding and also reading through some research material, one of the concerns with amylin as a stand-alone is that you will hit the ceiling quite early on. So is there anything I have missed here that actually proves the opposite that you will see a GLP-1 like curve going towards those 60 and 70 weeks. And then just lastly, just on the iron channel blocker that you're now moving into Phase 1.

I'm just wondering whether you're talking specific autoimmune diseases? Or is this something that you actually could see more could complement the obesity pipeline, so of course, improving potentially comorbilities given the link between the [indiscernible] and adipose tissue. So just a bit curious there.

[Adam Steensberg, executive]

Thank you, Thomas, for those questions. And I will start and then maybe David will again add some additions to this. On the tolerability profile, there are recent publications from real world used that should [indiscernible] 30% drops off within a month before they reach target dose. And within -- after a year, it's only 4% to -- 3% to 4% [indiscernible] treatment. Of course, there are different reasons why people do not stay on treatment. We -- our assessment is that the early dropoff, the 30% that you see early on a large extent of that is due to tolerability issues for the patients.

And when it comes to the loans stay on, there are several reasons why people go off and there's only, let's say, 30% on treatment after a year. I have to remind you also here, remember, we have now seen the first 2 medicines launched into space truly providing patients with the weight loss they're looking for, and there are no alternatives, so you see these dropout rates even in an environment where there's no alternatives.

So I think the key question for me is if there was a more tolerable and different alternative what would the dropout rates then be because we know how motivated people are to achieve their weight loss. So we speculate that you would see even larger degrees of drop out if there was an alternative because we know how motivated people are to achieve this and still they drop out in today's environment for alternative.

On the weight loss curve for longer-term exposure at least to our knowledge, you have data going out until 26 weeks and 32 weeks with petrelintide. Those are probably the most long-term exposure that have been reported for a long-acting amylin. And if you look into the study with the longest duration then in type 2 diabetes patients, then [indiscernible] at a lower dose, but the most effective dose as a monotherapy actually provided 40% more weights at 32 weeks than semaglutide that prove dose and probably [ govi ]. So I don't know which data you relate to when you say that there is no evidence that there's evidence suggesting that we will flatten the curve.

I acknowledge that we don't have a lot of evidence to suggest what data will look for -- look like at 1 year, but I don't think the evidence exists that there you hear a flattening of that curve. We speculate that we will see a continuous weight loss as that is what we have seen at least up to week 32 and we would not expect that to change in the subsequent weeks, especially not when you dose as high as we can do with petrelintide, where, as David also shared with the highest dose of petrelintide, we saw signs of continuous weight loss that would probably in a longer-term study result in more weight loss than the mid-dose.

And then lastly, on the Kv1.3 inhibitor. We have not disclosed which indications we are going for here, and we will not do it on this call either, but I can confirm that we are excited about this potential in different all-human diseases, and we are also you can say, of course, have observed that this target could also play a role in some metabolic diseases.

David, do you have further insights to share?

[David Kendall, executive]

No, Adam. I think just to reiterate what you stated, which is around the flattening of the curve with petrelintide. And as you noted, with petrelintide, presumably because of this effect on satiety that perhaps as a consequence of leptin sensitization, we do not at the higher doses we expect to utilize belief or data that would suggest this would plateau early on that is seen with rapid weight loss, but with a satiety signal, this gradual weight loss of 8.5% at 16 weeks, remembering that only 6 of those weeks were at -- 6 to 8 of those weeks were on the high dose.

So all evidence category, our own early in other studies would suggest that the weight loss range that we at least could hypothesize is supported by both the science and the literature.

[Operator]

And the next question comes from the line of Suzanne van Voorthuizen from Van Lanschot Kempen.

[Suzanne van Voorthuizen, analyst]

Team, this is Suzanne. Allow me to start off with on the exploratory partnering discussions that you are initiating on petrelintide. Can you elaborate what you wish to get out of these conversations? And give some context on those features you look for in finding, let's say, the right partner? And then my second question is on the full data for petrelintide that's coming in the coming months. Can you elaborate to what extent we can expect information on comobility biomarkers and the quality of weight loss, like which metrics will be reported on and which elements in there makes you most confident that your amylin is a best-in-class molecule.

[Adam Steensberg, executive]

Thank you, Suzanne. I will just add and then David, you can add again. On the partnership discussions, it is, you can say, we do, as we have shared also in this call, we believe that we have a very, very unique opportunity to actually frame the future management of obesity by progressing what we believe looks to be one of the first 2 alternatives to GLP-1. We also acknowledge that, of course, to build a new category with a potential best-in-class molecule that requires that you go all in, not just with speed but also with investments and a geographical reach.

What we will look for in the conversations that we will entertain in this second half is a large pharma company who shares our vision and ambition that petrelintide can become a backbone therapy for weight management in the future if we continue to generate data that we have seen this summer and you can say, as a minimum alternative to the GLP-1s, then we also recognize the opportunity to combine with other GLP-1 for those patients who need the highest degree weight loss. But we would really be looking for a partner who is ready to make commitments to developed petrelintide as a future backbone for weight management.

And that, of course, requires significant investments, not only into development, clinical activities such as Phase III studies in obesity, including cardiovascular outcome studies and associated comorbidities, but also willingness to do the appropriate investments into manufacturing at a stage where you will not be, you can say, hit by the same supply issues that we are currently seeing in the market.

And then ultimately, somebody who have a global reach, so we can get out to all areas. So it's a commitment that we are looking for. And of course, having said all this, it is -- it will have to be 1 of the largest pharma companies of this world that -- otherwise, the partnership will not be interesting for us. Within the partnership framework, we will also ask to have, you can say, development responsibilities to continue to have co-development responsibilities and also aim to have commercial rights, 50% commercial rights in the U.S. and other major markets.

We think it's incredibly important for our Zealand, and we think we have a lot to contribute with in such a relationship, and we are, you can say, so a co-development and co-commercialization partnership with a very complete partner who shares our vision and ambition for petrelintide. That will be the focus for these discussions. And on the full data set that we're going to present with petrelintide, David, will you share something there?

[David Kendall, executive]

Yes. Thank you, Adam. Thank you, Suzanne. The full data set, as we said, is anticipated to be presented in the last half of this year at a scientific congress. As to biomarkers, given that this was predominantly the safety and tolerability Phase Ib design that comes with most development programs. We do not have a comprehensive but have some biomarkers, some of the most important ones we're looking at are actually not biomarkers per se, but safety markers, but also effects on blood pressure, hard rate, et cetera. But rest assured that the plans for Phase IIb do include a more comprehensive biomarker assessment and the previously mentioned assessments with MR for the quality weight loss and evidence of lean tissue preservation.

I would say, Suzanne, what gives us the confidence in calling this a potential best-in-class, our preclinical data, the understanding that, as Adam has mentioned, we can and will go to these higher doses in Phase II, something that has not or -- has not been investigated it was not possible, for example, with petrelintide, animal data supporting preservation of lean mass and targeting of fat mass, which we believe not only will allow for weight loss in the 15% to 20% range, but also maybe a very effective maintenance therapy. So dosing exposure and the quality of weight loss that comes so we believe broadly with [ amonegonism ] for us, give us the confidence that this can and will be a best-in-class medicine.

[Operator]

The next question comes from the line of Lucy Codrington from Jefferies.

[Lucy-Emma Codrington-Bartlett, analyst]

I have a few, if I may. Just to jump on that. recent comment about the aspiration for co-development and co-commercialization rights. Are they -- is that an absolutely must have for you? And if that is not on the table, would that prevent any kind of future discussions with the possible partners. I'm just wondering, yes, the investment required on your behalf to commercialize in such key geographies and also the willingness of a potential partner to give up those rights just wanted to as a kind of hard and fast ambition of yours? And then just on some of the other kind of follow-ups.

You mentioned about the dapiglutide, Part 2 being based on the tolerability observed to date. Is that based primarily on the DREAM profile? Or also does that include blinded data from the Part 1 ongoing data set? And just related to that, I guess, is there anything to explain why the 6-milligram dose had the same degree of weight loss at 4 weeks as it did at 12 weeks in the DREAM study. .

Secondly, obviously, lots of quite rightly investment in expanding your -- the studies around your obesity program. I guess on that, it seems to me like the weight loss with amylin does seem to be largely assured now. I mean I know we need additional studies, but will that weight loss be relevant if you don't have the CV benefit along with it? And therefore, is that something you could consider to start evaluating sooner rather than later? Or is that only something that will be done once you start a Phase III trial?

And then also in terms of other -- your other obesity pipeline, I wonder when we might get some visibility on any nonclinical obesity assets that you may have in development and what your priorities are there? And then a final one, if I may, I appreciate -- but , you mentioned about the high percentage of male participants in the amylin data set you have. I just want to guess, understand your confidence that with a more balanced or potentially even female-dominant group, you might not risk a deterioration in the tolerability profile given there are some data to suggest that tolerability does tend to be worse in females than men at least for GLP-1s.

[Adam Steensberg, executive]

Thank you, Lucy-Emma. And I think it's probably the most challenging question today just due to the number. Basically we'll try to address them and let us know if missed out on some. If I'm going to start with one on the co-development and co-commercialization request, you can say from our end, it is actually a must that we have both and including co-commercialization opportunities in the major markets. You can, of course, drive such deals in many ways, and we will now entertain the discussions, but we think it's absolutely critical for Zealand to stay involved, not only in development phase, but also in the commercial rollout.

Of course, this will have to be alongside an already established as pharma company. So it is, you can say, something that we will ask for in these discussions. And we think it's absolutely important for us. If we look into dapi, and I will just start here to say, there's the 13-week of the blinded data observations from the 13 weeks study that has caused us to go for the higher dose. And then you can say adding allowing -- actually deciding to make a run for 28 weeks gives us the opportunity to understand the full potential of a little bit more and also get a very early data readout that can help us define and design the Phase III program.

So we actually think this is a major upside to the program that we also had, you can say, linked to this because it allows us to move faster forward, ultimately, while you can say as we get an early data readout. But it is really the blended observations on tolerability in the Phase III -- sorry, in the 13-week study that we are reporting later this year. As we have shared on the underway goes after 4 and 12 weeks with the 6-milligram dose, I think it is really down to small cohorts, but it's also, you can say, it's also because as we shared before, we are really at the lower end of the effective part. And we know there's a lot, you can say, more heterogeneity and how few respond if you are at the very low end of exposure response. So I think that's why you can expect more variability at that 6-milligram dose as compared to higher doses.

For amylin, it is going to -- and I would say this for any way, loss medication. It is going to be absolutely important that you also show the benefits on cardiovascular risk and other, you can say, comorbidities to obesity. We are not in this developing medicines just for weight loss, but actually to improve health. So of course, again, in the partnership discussions, it will be incredibly important that a partner is also ready to commit together with us to do CV outcome studies as early as possible.

And David, I think I'll have to let you see, if you can remember the last 2 questions.

[David Kendall, executive]

Lucy, I wrote them down. I may have missed some of the detail, but yes, question around CV benefit. As Adam said, a very important one for any obesity assets, certainly cardiovascular safety, the first bar to pass and then potential benefit. I think the preliminary data that's been seen with petrelintide and other analogs where blood pressure is lowered, heart rate does not increase markers of inflammation do go down and those suggest that it's at least less pro-inflammatory environment, which may that take the existing cardiovascular disease and make it more unstable as you well know.

So weight loss, yes. But to Adam's point, we're in the business of improving health. So these value adds or additional benefits are going to be important for us to both assess and demonstrate. Your question, I think, Lucy, about other assets in development. We have not disclosed our discovery phase assets in the obesity area. I will say we have commitment to what we call obesity plus, which is looking carefully for other assets or combinations of assets that can be employed for the management of overweight and obesity. As was previously asked, given the interest in pro-inflammatory markers and the inflammatory environment in obesity, not only looking at additional weight loss, further improving the quality of the way loss but targeting inflammation in unique ways is also on our list.

So more to come, but nothing disclosed beyond what we have in clinical development now. As for your question on male participants versus female participants, there actually are some data generated both in animal models and in humans. But tolerability at least in the GLP-1 class for females may actually be better, not what you described, but I'm happy to be the trade articles so we can have a look at those data, that data published from a collection of the clinical programs for semaglutide, tirzepatide and other assets, suggests that female can lose 2% to 3%, so more body weight on those pharmacologic interventions.

That's also been demonstrated in very low calorie diet to home and other approaches to weight management that women tend to respond by a few percentage points better than men. The tolerability profile, first off for petrelintide in particular, the tolerability profile we reported was in our opinion, so benign that we don't anticipate seeing a difference in genders depending what you see. But I think that to us is a very strong portion of this asset's benefits, which is a tolerability profile that is substantially different in our opinion than GLP-1s.

So I'll leave it there, Lucy, Adam, if you have any other points. Now that you know the questions again, happy to turn it back to you.

[Adam Steensberg, executive]

Lucy, did we answer your questions?

[Lucy-Emma Codrington-Bartlett, analyst]

You did. Sorry about that.

[Operator]

And the next question comes from the line of Julian Harrison from BTIG.

[Julian Harrison, analyst]

Congrats on all the recent progress. First, I'm wondering if you can maybe remind us of glepaglutide market opportunity in short bowel syndrome and how you're thinking about developments in competitive positioning from earlier this year.

[Adam Steensberg, executive]

Yes. thanks for that question, Julia. So yes, I mean we are, you can say, excited about the profile of dapiglutide. In particular, you can say, we have a long-acting molecule in developing an auto-injector. So it should be easy for the patients to take it. If it's approved and furthermore and perhaps more importantly, we think we have a very strong efficacy readout with significant reductions in the need for printer support and actually a very large amount of patients being able to completely get rid of that printer support needs. .

So we think we have a very strong competitive profile if the product is approved, not only, you can say, towards the existing product on the market, which is a once daily, GLP-1. But also when we compare to data presented by competing programs. So you can say, for sure, our confidence in the profile has improved significantly in the first half as well compared before we saw Phase III data from competing programs.

So as we have said for some time, we do plan to progress this asset into -- and if approved, into the hands of patients and with the potential for a best-in-class profile. When we look into the market, I think at least our observation is that it's a market that continues to increase, and we are north of, I think, USD 800 million or USD 900 million, now expanding both not only in U.S. but also Europe and Japan.

So there's clearly a market opportunity growth. And we would expect that with the entry of novel and longer action molecules, you will see even further growth. So it's definitely an attractive market. And as we also see a huge unmet medical need as many patients who still not offer treatments or actually drops are off early on for different reasons. So we actually see a significant opportunity to grow the market with these potential second-generation molecules.

[Julian Harrison, analyst]

Okay. Excellent. And then I guess, both for SBS and CHI, are these launches you're preparing for and can initiate internally if you need to? Or are you expecting partners to step in sooner than later?

[Adam Steensberg, executive]

You can say, I think they differ a little bit and perhaps at the next call when we have Eric in board, he can share more after our Q3, how we think about this, but what I can say is the CHI is, of course, a different animal than SBS because it's just -- you can see it's an ultra indication with very few centers handling these patients. And as we also shared last year, we are -- we believe completely ready to make this product available to patients.

I remind you that it's the 3-week indication that we get approved first and we still need to submit the chronic use. So we will -- we will be working diligently towards making the product available to patients as we also progress partner this -- partnership discusses and actually get the chronic label submitted as well. For SBS, we are also making all the prelaunch activities.

And if need be, we would also, as an organization, be ready to make it commercially available but it is a key focus for us to still as we have communicated all the time, have a partnership in place that we can say, drive the commercial rollout -- having said that, as we also shared today, we these discussions for us is really focused on long-term value creation. So we are not, you can say, in an urgent need to do something, but we will do the right thing when time being, but that, in our minds, is together with a partner as we do the commercial -- actual commercial rollout.

[Julian Harrison, analyst]

Okay. Excellent. And then finally, I just have a quick housekeeping question. Sorry if I missed it, but wondering if you have any updated cash runway guidance in light of the equity raise in June.

[Henriette Wennicke, executive]

Thank you for that question, Julian. So let me cover that. You can say before the capital raise, we guided for a run rate into '27 and clearly, with the cash position, we now have that has been extended. You can say when we also guided for the cost run rate, we did not include any potential milestones of runs from new or existing partnerships, which, of course, would add. So for the time being, we are not guiding, there is so many swing factors that can impact our cash run rate. But I think it's fair to say we are really well funded to progress the assets we have in the pipeline.

[Operator]

The next question comes from the line of Kerry Holford from Berenberg.

[Kerry Holford, analyst]

Kerry Holford, Berenberg. Two points of clarification for me, please, on petrelintide. First, in the context of your move to Phase II, did you mention earlier on the call that you plan to run a study looking at petrelintide combo with the GLP-1 or did I mishear that? Is it just more the concept of potentially being used in that way ultimately? And then secondly, on partnerships. I wonder if you can just clarify, do you have ongoing live discussions on this here today. And indeed, whether you would clarify whether you would be happy to consider a partnership ahead of the Phase IIb data readout.

[Adam Steensberg, executive]

Thank you for those questions. So the Phase IIb study that we will initiate here in the second half with petrelintide focus entirely on monotherapy, establishing the right dose range for using petrelintide as a monotherapy and developing it as an alternative to the GLP-1 class of medicines. What David said is that also next year, we are planning to start combination studies as well. But that is, you can say -- that is to address, you can say, potential -- those segments of patients who would need more than 25% weight loss and be kind of a sub study, not included in the Phase IIb study.

So we are doing that, and we are also planning to start a study in patients with type 2 diabetes because at least early data suggest that an amylin analog could actually provide potentially more weight loss than the GLP-1 in type 2. So this is part of expanding the scope of the program, but the main focus still is the monotherapy and creating this alternative and backbone. But we, of course, recognize the potential for combination therapies for those groups of patients who need the most weight loss. So that will be also addressed in separate studies next year.

On the partnering discussions, we have had dialogues for some time, and we have stepped those up now. And I will say, as we move into here, the second quarter, we will formalize them a little bit more. But -- and our ambition is, of course, to have a partnership in place before we start Phase III, but we don't necessarily need to wait until the Phase IIb study has reported that depends on the dialogue. So I would say we are open to engage in a partnership when we have the right framework and the right partner that shares the ambition and vision for petrelintide and those discussions will start here in the second half. So -- and I would say we would expect them to progress well into the next few months.

[Operator]

And the next question comes from the line of Prakhar Agrawal from Cantor Fitzgerald.

[Prakhar Agrawal, analyst]

Firstly, on petrelintide Phase IIb plants, the 5 doses in Phase IIb. Just wanted to confirm with the highest dose in Phase I is the highest you will go in Phase II or the protocol will have flexibility to go higher in dose and dosing like you did with dapiglutide. And if you're not going higher on dosing for petrelintide in Phase IIb, what's the reason? Second question, just following up on combination strategy. Obviously, monotherapy is a focus right now. But from your perspective, which combination mechanism might be most attractive for an amylin drug from an efficacy and safety perspective.

Obviously, some of the competitors are -- have a different strategy with Novo going after GLP-1, but there seems to be some additive effects of GI rates that for an amylin while Lilly is using GLP-1 for their amylin. So I wanted to get your perspective on combination mechanism for amylin.

[Adam Steensberg, executive]

Thank you for those questions. It is the highest dose in Phase Ib that we anticipate to also put forward in Phase IIb, and we don't anticipate to go higher, partly because we don't think we need to, but also because this is, you can say where we have the touch coverage to support the dosing. So of course, we could consider going higher if we really felt we had to. But if you -- and I think people will understand that when they see the more detailed data that will pretend it later, we think we are really where we need to be and within the dose range that is needed for petrelintide to achieve the target product profile we are aiming for.

On the combination therapies, I would say that we would anticipate that amylin could be a good combination partner for any GLP-1 containing molecule. So -- and that could be a pure GLP-1, or GLP-1/GIP or GLP-1, GLP-2 or GLP-1. So I think there are many opportunities because amylin and GLP-1 works on different ways to reduce appetite for those patients who really need the highest degree weight loss. It's a more logical combination than just trying to get the max out of a GLP-1, if you will. So we have, of course, and if you look into the data and over have presented to [indiscernible], it is, of course, impressive data with a very high degree of weight loss for those patients who need that very high degree of weight loss also think it's an attractive profile. But we would expect to see similar data if it was a GLP-1/GIP or [indiscernible] or GLP-1, GLP-2 combined with amylin.

[Operator]

The next question comes from the line of Michael Novod from Nordea.

[Michael Novod, analyst]

Just 2 short questions. With funding in place -- significant funding in place, what are your considerations around oral development, oral technologies? How can it be applied to existing assets? What are you thinking around that? And when could we potentially hear something around that? And then secondly, can you talk to whether you've said that you have the right balance between calcitonin and amylin receptor agonism with petrelintide compared to competition and sort of the bang for the buck on the weight loss without causing too many side effects.

[Adam Steensberg, executive]

Thank you, Michael. I will answer the first question, and David, he can talk about the balance around amylin and calcitonin. I would say we do have activities that also focus on all delivery of amylin and there are many interesting technologies out there that can help peptides getting across the intestinal barrier. But I would, however, say for us, it's really life cycle management opportunities.

We are in the camp that truly believe that injectables will remain the major you can say, administration way for a long time for these categories. We think they are quite convenient for patients. It's once a week as compared to having to take a poll perhaps every single day and also, you can say, running some of the targeted issues with that -- associated with that. So -- but we have activities, and it's something that has our keen focus.

It's also fair to say that these are some of the activities we would most likely only step up significantly within a partnership, but we are making the preparatory steps for doing that.

David, will you talk about the balance and I'll...

[David Kendall, executive]

I'm happy to. And thanks for your question, Michael. As we are slowly learning the understanding of the biology of both amylin receptors, particularly amylin-1 and/or so amylin-3, these ramp modified receptors as well as understanding which of these receptors may ultimately contribute to clinical outcomes, I will say before I get into detail that ultimately, clinical outcomes are likely to be the point of differentiation if there is any among these. But we believe based both on rodent data and not understanding that calcitonin receptors do play an important role, both in the central nervous system, but for maintaining the positive metabolic environment if the calcitonin receptor is absent, you see physiologically less satiety, greater weight gain in animal models who've had the calcitonin receptor knocked out, energy expenditure may also change.

So we believe quite firmly that while activating the amylin receptor in a potent way is critically important that some calcitonin receptor agonism does actually contribute to the weight loss observed. So having the -- makes sense to us. Again, not having seen data from so-called pure amylin analog. So it's tough to make comparisons. So we will await clinical data, do our own work, understanding the receptor biology, but I remain convinced that petrelintide certainly has a profile that we think can be very effective.

[Operator]

The next question comes from the line of Jesper Ilsoe from Carnegie.

[Jesper Ilsoe, analyst]

A few questions from my side on petrelintide as well. Firstly, thanks for the comments on new studies in both combo and type 1. Perhaps since you've now announced this, what is your current thoughts on also making head-to-head studies versus GLP-1 to really prove differentiation and beta tolerability versus GLP-1. That's my first question.

Second question, just a follow-up on your comments about keeping 50% rights to U.S. So I understand that you want to stay involved in development. But can you please explain why it's -- it's good for a big pharma partner to have new onboard on commercialization as well because I guess they can already with that quite good given the current sales force. And focus and also on that note, have you had any initial feedback from partners on those demands for 50% U.S. rights.

So I just wonder if it could mean that a partner potentially will avoid a partnership as, I guess, a long-term value creation for a partner would be lower if they give away, if you can say that 50% U.S. rights. And just last question. Will that also be the demands for our partnership programs such as the petrelintide?

[Adam Steensberg, executive]

Thanks for your question. Yes. On head-to-head studies, that is something we will consider in the future and not something we have in the plans right now. Normally, you do these studies when you know the dose that you are moving into Phase III with as well. But of course, we see huge potential, not only in patients with type 2 diabetes where you can say there's already data that suggesting that amylin potentially -- can be more effective than the GLP-1 but also just on exploring the tolerability profile between being -- losing weight on GLP-1 versus an amylin. But here, it's actually good to know the dose that you anticipate to utilize in Phase II before we do those studies.

On the, you can say, partnership discussions, I think it will be partners that we are discussing with will ultimately have to answer by themselves why they could think it would be attractive to share commercial rights with us. We feel we are sitting with a very unique opportunity here.

We think we have one of the strongest opportunities within space, which is you can say, just emerging, the BT space, and we think we are in a very strong position to negotiate a deal with focus on long-term value creation for Zealand pharma. And in our minds, that includes having commercial rights in the major markets. Otherwise, you lose your strategic impact and also you compromise on the long-term value creation. I will, of course, not comment on, you can say, conversations we have with these partners that would be premature. But that is how we enter these discussions, and we feel these will be fruitful as we progress them.

On your last question on dapiglutide, if we will have the same conversations. Our focus right now from a partner perspective is on petrelintide. But of course, when discussing that, we will, at one point, also discuss dapi. But again, I have to remind everyone that we still need to see probably the most important data that comes out later in this quarter. So before we have those data, we will not comment on the partner structure that we anticipate for this molecule. But I understand your questions, but it's too early to address them.

[Operator]

As there are no further questions, I would like to hand back to Adam Steensberg for any closing remarks.

[Adam Steensberg, executive]

With that, we would like to thank you all for attending and for your questions. We look forward to future announcements and updates and to connecting in the coming weeks and months.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.