Zealand Pharma A/S

OTC:ZLDPF

Earnings Call Analysis

Zealand Pharma Advances Pipeline and Secures Financial Stability

Zealand Pharma has made significant strides with its pharmaceutical pipeline, notably advancing Survodutide into Phase III trials, obtaining FDA priority review for dasiglucagon with a PDUFA date set for December 30, and maintaining a solid financial position bolstered by milestones from partnerships, including a EUR 30 million milestone from BI and a USD 10 million milestone from Sanofi. Negotiations for partnerships may extend into 2024 due to the split NDA process for dasiglucagon but the focus is on value creation from these assets. The cash position stands strong at DKK 1.6 billion, enabling operations until mid-2026, with revenue for the first nine months of 2023 mainly driven by recognized milestones amounting to DKK 320 million and an operational expense guide between DKK 800 million to DKK 900 million remains unchanged.

Progress on Key Drug Applications and Upcoming Catalysts

The company is awaiting a decision from the FDA on their drug dasiglucagon, with a priority review status set for December 30 this year, which could de-risk the program significantly. They are also preparing additional datasets for the FDA, related to continuous glucose monitoring, which should be ready in the first half of 2024. The next 12 months are poised to be eventful, with key submissions and trial results expected, notably the submission of a new drug application for glepaglutide.

Financial Highlights and Operating Expenses

Revenue for the first nine months of 2023 reached DKK 320 million, primarily due to milestone recognitions from partners BI and Sanofi. Operating expenses for the same period slightly decreased to DKK 633 million, with a reduction in sales and marketing expenses though R&D expenses have increased significantly, particularly due to investments in obesity programs and progression of rare disease assets. The company guides for a net operating expense of between DKK 800 million to DKK 900 million for 2023.

Financial Position and Outlook

The company’s cash reserves, including cash equivalents and marketable securities, stand at approximately DKK 1.6 billion, with an expected runway to mid-2026. The financial position has been bolstered by a capital raise and impending milestone payments. However, they reported a net financial loss of DKK 125 million for the nine-month period.

Pipeline Development Focus and R&D Expenditure

The company is heavily investing in obesity treatments and rare disease assets, likely causing the recent increase in R&D expenditure. Partnerships discussions for glepaglutide are intended to progress following the NDA submission later this year.

Clinical Trials and Recruitment

Efficient recruitment of clinical trials is a top priority, especially for programs such as Survodutide Phase III, where a rigorous recruitment process could accelerate the trial's timelines. These efforts are integral to the success of the company's obesity and rare disease programs.

Earnings Call Transcript 2023-Q3

[Operator]

Good day, and thank you for standing by. Welcome to the Zealand Pharma Results for Q3 2023 Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to turn the conference over to your first speaker, Anna Krassowska, Head of Investor Relations. Please go ahead.

[Anna Krassowska, executive]

Thank you, operator. Welcome, and thank you for joining us to discuss Zealand's interim results for the first 9 months of 2023. 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 interim report on our website at zealandpharma.com. As described on Slide 2, we will be making forward-looking statements that are subject to risks and uncertainties.

With that, 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'll begin on Slide 3. In the third quarter, we saw strong progress across several programs in our pipeline, supported by a solid financial development. Survodutide advancing into global Phase III trials is an important step in Zealand's long-term commitment to bring forward novel therapies for BCT and obesity-related diseases. With the launch of the SYNCHRONIZE trials, Boehringer will be only the third company to initiate a Phase III program in this new era of weight loss therapies. We see obesity and related comorbidities as the biggest health care challenge of our time. And we believe that Zealand is uniquely positioned to help address this global pandemic which we'll be discussing further in details at our Obesity R&D event in December.

In early October, we presented clinical data from multiple ascending dose trials with our long-acting amylin analog at Obesity Week. The data we have seen so far strongly support our confidence in this molecule as a next-generation treatment for overweight and obesity with potential for weight loss comparable to the GLP-1-based therapies with improved tolerability.

For dapiglutide, we have initiated the 13-week dose titration trial to evaluate higher doses than those investigated in the ongoing investigator-led DREAM trial. Dapiglutide is a truly differentiated GLP-1-containing molecule and we are very excited about evaluating its potential to address not only obesity, but also low-grade inflammation associated with metabolic disease.

In the third quarter, we have also secured significant regulatory progress on our rare disease assets, including a U.S. FDA priority review and a PDUFA date of December 30 for Part 1 of our NDA for dasiglucagon in congenital hyperinsulinism. Henriette will review the financial results and details. Here, I will just mention the revenue recognized in the third quarter for milestones from existing partnerships, which contribute to our solid financial position.

Moving to Slide 4. We are delivering on the strategic objectives that we outlined for the year and remain on track to submit the glepaglutide new drug application for short bowel syndrome to the U.S. FDA this quarter. The Zealand team has also completed nonclinical activities to support potential first-in-human clinical trials with our GIP analog as well as the Kv1.3 ion channel blocker and the complement C3 inhibitor partnered with Alexion.

On partnering, we remain engaged in discussions for dasiglucagon in CHI, while also preparing for making the product available to patients in the U.S. as soon as possible after potential approval. Moreover, while we do believe that FDA's decision to split the NDA into 2 parts secures the most efficient regulatory review process, this has introduced some complexity in the partnering discussions. And our focus is to secure a partnership that best support our long-term strategic goals and maximizes value creation.

We, therefore, recognize that our partnership may be pushed into 2024 when we have further clarity on the label and importantly, a PDUFA decision on Part 1 of the NDA. For glepaglutide in SBS, we expect to engage in more detailed discussions with potential partners once we have submitted the NDA to the FDA.

Moving to Slide 5. I will now 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 will discuss my remarks on 3 specific areas. The Phase III trials with Survodutide, the dual glucagon GLP-1 receptor agonist, the recent results from our long-acting amylin analog, ZP 8396, as well as activities related to dasiglucagon.

Please turn to Slide 6. Our major focus is on obesity, which is increasingly recognized as a complex chronic disease, which is amenable to treatment using pharmacologic agents that target a number of unique metabolic pathways. We believe that the success of weight-loss therapies will be determined by various differentiating factors, catering to specific segments of people living with overweight and obesity. Therefore, our therapeutic approach aims to: one, achieve significant weight loss; two, provide additional effects that can address specific comorbidities; three, improve tolerability; and four, offer alternatives to incretin-based obesity therapies. Each molecule in our portfolio is differentiated through peptide target, design or formulation.

On Slide 7, we outlined the 3 global Phase III trials with Survodutide, the glucagon GLP-1 receptor dual agonist, sponsored and designed by our development partner, Boehringer Ingelheim, in people living with overweight and obesity. The trial SYNCHRONIZE 1 and SYNCHRONIZE 2 include people with obesity or overweight with at least one comorbidity. SYNCHRONIZE 1 will enroll participants without type 2 diabetes and SYNCHRONIZE 2 will enroll participants with type 2 diabetes. Both trials will assess the percentage change in body weight and the proportion of people who achieve categorical body weight loss of 5% or more at week 76 as the primary end points.

600 participants will be randomized 1:1:1 to weekly subcutaneous doses of either Survodutide using monthly titration schedules to reach a maximum dose of either 3.6 or 6 milligrams for maintenance treatment or matched placebo. Recall that the maximum maintenance dose in the Phase II trial in people with overweight or obesity was 4.8 milligrams and that the total treatment duration was 46 weeks. In that trial, body weight reductions had not yet appeared to plateau after the 46 weeks of treatment, indicating that further reductions are likely to be observed with longer treatment duration and higher doses.

The third Phase III trial is a long-term cardiovascular safety study that will enroll nearly 5,000 individuals with overweight or obesity with cardiovascular disease, chronic kidney disease or risk factors for cardiovascular disease. The primary endpoint of this trial is 5-point major adverse cardiac events or MACE defined as the time to the first occurrence of any one of 5 major adverse cardiovascular events: cardiovascular death, nonfatal stroke, nonfatal myocardial infarction, ischemia-related coronary revascularization and heart failure events.

Please turn now to Slide 8 and our amylin program. At this year's Obesity Week held in mid-October, we presented the results of the first 2 cohorts or so-called Part 1 of our Phase Ib trial assessing weekly doses of ZP 8396. These data demonstrated a mean weight loss of more than 5% in healthy, lean and overweight people with very low doses of either 0.6 or 1.2 milligrams administered weekly for 6 weeks. We are very encouraged by these data and the magnitude of weight loss achieved, which we believe is on par with the results reported in initial short-term studies of GLP-1-based therapies.

On Slide 9, we show additional tail of the adverse events reported in this Phase Ib trial with the results showing the ZP 8396 was well tolerated with no serious or severe adverse events and no withdrawals. Gastrointestinal side effects were the most common adverse events reported, all were mild and most occurred within 2 days of the initial dose. Based on these data and the results from our previously reported Phase I single ascending dose trial, we believe that ZP 8396 offers the potential for significantly improved tolerability when compared to the known adverse event profile of incretin-based therapies. The emerging clinical profile supports our conviction that ZP 8396 can play an important role as monotherapy to achieve and maintain weight loss and thus represent an alternative to GLP-1-based therapies.

Turning to Slide 10. Our focus now is on the execution of the ongoing 16-week multiple ascending dose Phase Ib trial exploring significantly higher doses of ZP 8396 using a dose titration scheme. We are very pleased with the progress on this trial to date and expect to report top line results in mid-2024.

Now turning to Slide 11. My final remarks today are related to our dasiglucagon program for the treatment of congenital hyperinsulinism. We submitted the NDA for the prevention and treatment of hypoglycemia in pediatric patients with congenital hyperinsulinism ages 7 days and older in June of this year. The FDA subsequently recommended that the regulatory review should be conducted in 2 parts under the same NDA. Part 1 our original 1 relates to dosing of dasiglucagon for up to 3 weeks, and the FDA has granted a priority review with the PDUFA date on December 30 of this year. I'm very encouraged by the progress our team is making and the continued engagement with the agency as we approach the final steps towards potential approval.

In parallel, in support of Part 2 or original 2 of the NDA, we are preparing and analyzing the continuous glucose monitoring or CGM data sets that were included as an additional measure of glycemic outcome in each of our 2 pivotal Phase III clinical trials as well as in the long-term safety study.

This work is expected to be completed and submitted to the FDA in the first half of 2024 to support the review of Part 2 of this NDA. The sentiment and the strong support for the potential benefit of dasiglucagon for the treatment of CHI were reaffirmed during a recent meeting that convened the clinical investigators from our CHI program who represent the leading experts in CHI from the U.S. and across Europe. Therefore, as Adam stated, we will work to ensure that dasiglucagon is available to U.S. healthcare professionals and patients as soon as possible after a potential approval of Part 1 of our CHI NDA.

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 9 months of 2023. Henriette?

[Henriette Wennicke, executive]

Thanks, David, and hello, everyone on the call. Let's move to Slide 12 at the income statement. Revenue for the first 9 months of 2023 was DKK 320 million. This was mainly driven by the recognition of a EUR 30 million milestone from BI as well as a USD 10 million milestone from Sanofi. Both milestones are expected to be paid in the fourth quarter of the year, but are recognized in Q3 due to the fulfillment of the contractual obligations.

Operating expenses for the first 9 months of 2023 were DKK 633 million compared to DKK 676 million in the same period of 2022. The decrease was driven by lower sales and marketing expenses as well as lower administrative expenses due to cost reduction efforts following the restructuring last year. This was partially offset by significantly higher R&D expenses. Almost 80% of OpEx was allocated to R&D activities in the first 9 months of 2023. This was driven by the progression of delayed -- rate rare disease assets towards submission and significant investments in our whole owned obesity programs.

The net financial items for the first 9 months of the period resulted in a loss of DKK 125 million. This was mainly driven by the final repayment and the termination of the loan with Oberland Capital.

So let's move on to Slide 13 and the cash position. As of September 30, 2023, cash, cash equivalents and marketable securities were approximately DKK 1.6 billion. The increase compared to year-end 2022 was driven by the capital raise in April of DKK 1.5 billion and partly offset by cash used in operating activities during the first 9 months as well as the repayment of the Oberland loan in May.

With the revolving credit facility of DKK 350 million provided by Danske Bank, we now have approximately DKK 1.9 billion in cash, which combined with the expected payment of DKK 285 million in milestones in Q4 from BI and Sanofi resulted on runway to mid-'26. I am very satisfied with our financial position and the solid foundation it provides us to ensure we maximize the value of our assets.

So let's move to Slide 14 and our financial guidance, which is unchanged. So let's keep this very short. We continue to guide for net operating expenses of between DKK 800 million to DKK 900 million in 2023. And with that, I will move to Slide 15 and turn the call back to Adam for some concluding remarks.

[Adam Steensberg, executive]

Thank you, Henriette. Building on the progress in the first 9 months of the year, I expect an equally exciting next 12 months with several important events and catalysts. Just to name a few. Rounding off the year in rare diseases, we expect to submit the new drug application for glepaglutide in short bowel syndrome, and we have the PDUFA date for dasiglucagon in CHI.

Looking into next year, we expect results from Survodutide Phase II trial in NASH, a 16-week clinical trial with our amylin analog, the investigator-led Phase II trial with dapiglutide followed by results from our 13-week dose titration trial and initiation of new first-in-human clinical trials. Importantly, we will also continue to engage in partnership discussions.

A final note on Slide 16, before we take questions. We really hope that you can join us for our Obesity R&D event on December 5 in person in London or online. We have a very strong lineup of 3 leading experts in the field: Professor Daniel Drucker, Louis Aronne and Carel Le Roux. Together, we will share perspective on the scientific rationale and clinical potential of Zealand's obesity assets. Personally, I look very much forward to this event and hope to see many of you there. Please contact us or go to our website to register.

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

[Operator]

[Operator Instructions] And our question comes from the line of Michael Novod from Nordea.

[Michael Novod, analyst]

So two questions, one relating to dasiglucagon in CHI. So it may be not a big surprise that it's going to be -- your partnership going to be pushed in given the PDUFA date of 30th December, so it's going to be pushed in '24 past. Can you talk about sort of what kind of interest you're seeing? Have you seen sort of a declining interest after the FDA decided that you had to do the NDA in 2 parts? And should we expect that a potential partnership will not materialize after the Part 2 has been filed with the FDA as well for the data that is needed for that?

And then secondly to the amylin analog. So it was obvious from discussions at Obesity Week that you are likely going up to around 6 milligrams in Part 2. Can you talk about if you see that being well tolerated, is there a possibility that you can take it even further? I know it's probably then going to take a bit longer time. But can you talk about whether you could push the dose even further than 6 milligrams?

[Adam Steensberg, executive]

Thank you, Michael. I will take the first question, and then I'll hand over to David to discuss your question on amylin. As I mentioned in the prepared remarks, then, of course, with the splitting of the NDA that introduced some complexity in our partner discussions. And you can -- but having said that, you can say our confidence in the asset has not changed. I would say actually on the contrary and the way we see this now is that our main focus is, of course, to secure the PDUFA date for Part 1, and then do all the preparative work and submit Part 2.

The feedback or the -- you can say, maybe not feedback somewhat, but more our observations will be that having a better understanding of the full label potential will be helpful in some of these discussions we had early on before this decision was taken. I'll remind you that the first part is only treatment for up to 3 weeks versus the latter part, the Part 2 will support chronic use. We see a huge need for both situations, but it is clear that a lot of the CHI patients especially those with diffuse disease, they are in need for chronic therapies. That's why we are so focused on also the -- getting to Part 2.

So it is quite difficult for me to guide on the specific, you can say, considerations for the potential partnership companies. But what I can say is that Zealand's focus, as I said, will be to secure the value creation that we believe we have with this asset, and we will not compromise on if people view the potential different than we do.

Having said that, that also means that we have taken means to make the product available to patients at PDUFA date once we have the PDUFA Part 1. But I can only confirm that we have continued good discussions, whether this will happen this year, next year early on when we have the PDUFA data only after we have submitted Part 2, I cannot guide on right now. But we remain very confident in the opportunity.

And David, I will hand over to you to discuss the main potential for significant -- for dosing levels and so on, even though we are in the midst of the study. I know we cannot share maybe everything but... David?

[David Kendall, executive]

Thank you, Adam, and thank you, Michael. I'll add to Adam's comment on the dasi in CHI. It obviously does require additional work getting the supplemental data as we discussed. But from our perspective, that does not increase uncertainty, it just pushes the time line for that full review and to leverage the full value of that asset clinically. Obviously, both acute and chronic therapy is of great interest to us and of great interest to potential partners with whom we're discussing it.

To your question about amylin dosing, obviously, we'll be ultimately guided by the results of the Phase Ib and seeing where in multiple ascending dose, we can and will take the doses of amylin. Obviously, the Part 2, as we've described, the Phase Ib that's ongoing will extend treatment out to 16 weeks. And while that's relatively short term for obesity trials, we believe that will give us a great perspective on not only what doses are achievable, certainly, we believe higher than 0.6 and 1.2 that have already been reported. I can't speculate yet on where the maximal dose might take us. And obviously, with those results in hand, we'll put together a final protocol that we believe pushes to the optimal doses, both as high as feasible, but also as we've stated throughout, to maintain what we already see as a very favorable tolerability profile. So more to follow in the first half of next year.

[Operator]

And the question comes from Lucy Codrington from Jefferies.

[Lucy-Emma Codrington-Bartlett, analyst]

Just following up on the partnership with the CHI discussions. I do appreciate that there is a lot of unknown yet. But in terms of a couple of things, when you say you would want to wait -- the partners might want to wait for the full label, does that then mean we need to wait for the Part 2 approval? And is that part 2 also under priority review and that could still come next year? Or could that end up coming in 2025? And just on your plans to make it available as soon as possible after the 30th of December without waiting for a partner, is that feasible to do without a significant investment required on your part?

Then secondly, just in terms of the Survodutide Phase III, and I appreciate you're not in charge here. But in terms of the timing, it seems kind of conservative perhaps to what I was expecting in terms of the primary readout. Do you think there is scope for an earlier readout than end of 2025, early 2026?

And then finally, on the current R&D rate, there was quite a significant step-up in the third quarter. Should we be thinking about that as a sensible level going forward? Or should I be thinking about anything else kind of into the next quarter and then into 2024?

[Adam Steensberg, executive]

Thank you, Lucy. I will address your first question and then hand over to David afterwards to address Survodutide and then Henriette will address your last question on the R&D spend.

Full label -- let me put it this way, of course, with Part 1, once and if approved, they will be of course, derisking the program significantly because, of course, part of the Part 1 NDA review includes all the quality, all the device. A lot of the clinical questions will be cleared and will be very, very important label elements. So just having the PDUFA date, December the 30th will derisk, of course, a lot of labor considerations.

Once we have, as David discussed, all the existing data from the continuous glucose monitoring data evaluated in the ways that we have -- or agreeing with FDA that will further provide a significant derisking of the potential future label because then we know you can say, to which extent we have potential claims to support and so on for specific areas. So that will, of course, also provide some further clarity. And ultimately, you can say, of course, it comes with a potential approval of Part 2, then we will have all the clarity.

So I would say this is not black and white. We believe that just getting the initial label in place and having a full oversight of all the data that FDA requested provides a lot of clarity on the potential future label for this program. So I'm sorry, I cannot be more precise right now. I hope it's clear that our confidence in what we are working on here is -- remains very high, but also that we will not compromise on the value potential and a strategic opportunity for us on this asset in this partnering process.

And as I mentioned, and thanks for that question. We have and we are taking means to make the product available in the U.S. as soon as possible after a potential approval also of Part 1. And it's not something that will carry a huge spend for us also not going into next year, if that is the case. So this is something that we feel that we are on top of and we will do what's needed.

David, would you -- I hope this answers your question, Lucy. And then David, just -- would you address the Survodutide question on [ wait ] and so on.

[David Kendall, executive]

I'm happy to. Thanks, Adam, and thanks, Lucy, for your questions. One added comment on to Adam's discussion around the current NDA and original 1 and original 2. Remember that this remains part of the same NDA for which the Part 1, original 1, was granted priority review. So while we cannot speculate that Part 2 will receive the same because it is under the same NDA that is and remains a possibility. And obviously, both for us and for the agency, the review of these detailed but existing data from CGM and more data collection will be part of that. So pending their acceptance of that second file we'll know and understand that it remains under the same NDA where a priority review is possible. I can't speculate on whether it's likely or possible.

Survodutide, the Phase III program readouts to your question on timing. Obviously, the endpoints and the readouts are dependent on a number of variables, which you know quite well, primarily getting sites up and running, actively recruiting and recruiting at an acceptable or rapid rate. And it is not about the first patient and first visit to the clinic. It's about the last patient and their last visit.

So with that, I think these readouts, which obviously are in the hands of our BI partner, and their timing are probably based on their current estimates using the sites that have been identified and will get up and running. So I think one comment to that end is we have seen that the majority of trials in overweight and obesity tend to recruit quite quickly. So our hope, obviously, is with that program and our other obesity programs that, that rate of recruitment into clinical trials will remain vigorous and that, that can move the readout time lines forward as much as possible. So I'll leave it at that. And obviously, additional questions probably best answered by those on the clinical side at BI. And then I'll turn the financial question on step-up in our R&D expenses over to Henriette if she has a comment.

[Henriette Wennicke, executive]

Yes. Thank you, David, and thank you, Lucy, for the question. You are correct. Our R&D spend in the quarter is stepping up compared to what we saw in the first and second quarter. As you know, always with the R&D activities is depending, there can be certain swing factors. And depending on where you are in your clinical activities, but also research activity. With that said, that is clear. We do invest heavily into obesity, and we have good progression of our programs there. Currently, at the same time, of course, we are investing our rare disease assets to get them over the finish line. So there will always be swing factors where we are, of course, investing here only at the moment.

[Operator]

And questions come from the line of Rajan Sharma from Goldman Sachs.

[Rajan Sharma, analyst]

I've just got a couple on Survodutide and SYNCHRONIZE Phase III. So obviously, you mentioned that there's a higher maintenance dose in the Phase III relative to what we saw in Phase II. Could you just kind of help us understand the rationale for this? And then if you're able to, could you perhaps give us any color on the titration schedule? I think the Phase II used a bi-week titration, is this the case in the Phase III? Or will there be a slower titration? And could you also confirm if the trial will allow for antiemetic therapy?

And then just on glepaglutide and thinking about partnership there, how should we think about timing? And I guess, what are the gating factors here? Is it that partners are waiting for submission or potentially an approval? And is it fair to assume that any potential partners may be waiting for topline data from your potential competitor, Ironwood?

[Adam Steensberg, executive]

Thanks Rajan for your question. I will address your glepa question, and then I'll hand over to David on the Survo question.

So on partnerships for glepa, as I mentioned on the call, we plan to stop -- we are on track to submit the NDA later this year, and it's only after then we will, you can say, progress significantly in the partnership discussion. So -- and at least if what I'm aware of Ironwood are expecting to see topline results of report, topline results from their program in March. So I think it's probably fair to assume that it's not likely to have a partnership before that. Whether partners' interest and so on will depend on those, I mean, of course, to some extent, I think we are eagerly as interested.

And as you know, we feel very comfortable in our assets. So I think it's a fair assumption that a partnership will only happen after that event, but perhaps equally driven by just the process that we are running right now and which will only be really started after we submit the NDA. David, will you take the questions on Survo?

[David Kendall, executive]

I'm happy to, and thanks as well for the question. Yes, you're correct. The higher dose going up beyond what was utilized in Phase II. Obviously, these protocols, and I'm speaking now, obviously, on behalf of our BI partner who've done the negotiating at end of Phase II, those discussions have to occur with the FDA to get approval on the protocol both for the treatment population and the doses used and you need obviously the appropriate pharmacology and clinical pharmacology studies as well as safety and tox studies, which allow those doses. I think 2 things emerge from Phase II: One, you've alluded to, which is the titration schedule and monthly titration will be used. The comments and specific details on antiemetic use will obviously be part of the protocol, but suffice it to say that, I guess, all will be done to ensure that the dose assigned at randomization is titrated on that monthly schedule and is maintained for as long as possible. I think it now has essentially become the standard in clinical trials where you're force titrating to these doses that antiemetic and other measures for titration can be used.

So the higher doses, obviously, are supported. This protocol is signed off and moving forward. I mean I think given what we saw from Phase II, particularly in the overweight and obese population, but also in the shorter type 2 diabetes study that both the effects on body weight and the potential effects on glycemic control in those with diabetes will be enhanced by pushing to these top doses.

[Operator]

The questions come from the line of Charlie Mabbutt from Morgan Stanley.

[Charles Mabbutt, analyst]

Firstly, on the cardiovascular outcomes, can you just go into a little bit more detail on the study? I appreciate you didn't design it specifically, but given the sort of increased patients with cardiovascular disease or chronic kidney disease or cardiovascular disease risk factors at baseline, it seems like quite a little more complicated than, I guess, other cardiovascular studies we've seen. So could you just explain the rationale for that and why sort of the CKD studies and the cardiovascular disease studies might not be done separately?

And then I guess secondly, I guess, how do you think about trial duration in like a Phase IIa study for something like dapiglutide? I guess does a 13-week study give you enough information to know as an additive benefit of GLP-2 versus GLP-1? And would a larger Phase II therefore be needed before going to Phase III?

[David Kendall, executive]

Yes. I'm happy to start and Adam, please add additional details. On the CBOT, Charlie, good question. I think it's worth noting that our BI colleagues have now achieved indications with the empagliflozin franchise in both cardiovascular disease, heart failure as well as in CKD with their recent outcomes and approvals. So as partners, they have a great understanding of these populations.

I think it's also important to note that chronic kidney disease, particularly in the absence of diabetes, and remember, these are obesity studies, first and foremost, confers a cardiovascular risk that in many cases, approaches that or is similar to that of pre-existing cardiovascular disease. I think the other component that our BI partners look to achieve in this study population is a more representative population of those with overweight obesity who have comorbidities that relate to cardiovascular risk.

So including cardiovascular risk factors, previous cardiovascular events and CKD, I cannot comment on whether CKD will have a secondary outcome measure, but obviously, renal function and renal outcomes will be an important safety measure in all these trials. I think it's also important to point out that the previous CBOTs that have been designed, say, with the assets from Novo and Lilly, are with assets that were previously evaluated for cardiovascular outcomes in diabetes. So whether those sponsors also wanted to demonstrate effects separate from the diabetes-related cardiovascular effects or not. Noting that for Survodutide, this will be the first potential approval in overweight and obesity. So a slightly broader population with a slightly broader outcome, the 5-point base makes very good sense, at least to me. And I think to us collectively in the BI-Zealand partnership in terms of that cardiovascular outcomes study.

For the second question on glepa, and its potential -- or I'm sorry, dapi and its trial design, obviously, you are correct, Phase Ib and shorter 13- to 16-week studies that are up and done are generally only directional in giving you a sense of both dosing tolerability and the potential for weight reduction as we get into Phase II, both the requirements for and we believe the understanding that longer duration Phase II trials out 36, 42, even 48 weeks in duration and give you a much clearer assessment and are required by the FDA to help you design Phase III. So Phase Ib will be directional. We hope to have very clear insights from both the DREAM investigator-led study and our own program at the higher doses. But obviously, the duration of exposure will be relatively brief as it is with many Phase Ib even in obesity.

[Operator]

We have no further questions at this time. I will now hand back to Adam Steensberg for closing remarks.

[Adam Steensberg, executive]

Thank you. And with that, we'd like to thank you all for attending and for your questions today. We look very much forward to seeing you on the road and connecting at our Obesity R&D event in London on December 5 and on future announcement and updates. Thank you.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.