Company announcement

No. 67 / 2021

Interim report for 9M 2021

Zealand Pharma Presents Financial Results for the First Nine Months of 2021; Provides Updates on Commercial Launch and Timing for Congenital Hyperinsulinism and Short Bowel Syndrome Phase Three Clinical Studies

Copenhagen, DK and Boston, MA, U.S. November 11, 2021 - Zealand Pharma A/S (Nasdaq: ZEAL) (CVR-no. 20045078) a biotechnology company focused on the discovery, development, and commercialization of innovative peptide-based medicines, today announced financial results for the first nine months of 2021.

Financial results for the first nine months of 2021

  • Revenue: DKK 238.6 million / USD 37.1 million (DKK 290.0 million / USD 45.6 million in the first nine months of 2020).
  • Net operating expenses: DKK -906.2 million / USD -141.1 million (DKK -714.5million / USD -112.3million in the first nine months of 2020).
  • Net operating result: DKK -762.6 million / USD -118.8 million (DKK -449.1million / USD -70.6million in the first nine months of 2020).
  • Cash, cash equivalents, and marketable securities: DKK 1,049.0 million / USD 163.3 million as of September 30, 2021
    (September 30, 2020: DKK 1,528.6 million / USD 240.4 million).

Business highlights for the first nine months of 2021

  • Announced collaboration agreement with DEKA Research & Development Corp. to advance development of infusion pump to be used with dasiglucagon for the potential treatment of congenital hyperinsulinism (CHI). Zealand Pharma A/S entered into a definitive collaboration agreement with DEKA Research & Development Corp., to develop a continuous infusion pump to be used in combination with dasiglucagon, an investigational agent currently in phase 3 trials in patients with congenital hyperinsulinism. The agreement covers the technical development of the pump system as well as associated commercialization activities.
  • Announced presentation of preclinical data on Amylin Analogue ZP8396 and clinical data on GLP1-Glucagon Dual- Agonist BI 456906 at The Obesity Society Annual Meeting. Key findings from the preclinical study of amylin analogue

ZP8396 were: monotherapy showed comparable weight loss potential, with the combination therapy being superior for the treatment of obesity and obesity related comorbidities; and administration of amylin analogue ZP8396 in combination with semaglutide, a GLP-1 analogue, resulted in increased food intake inhibition and body weight loss (~20% vs initial body weight) as compared to single treatment alone in the diet induced obese (DIO) in vivo models.

Key findings of the Phase 1 trial with BI 456906, a subcutaneous dual GLP-1R/GCGR agonist were in the Phase I dose escalation study; BI 456906 was generally well tolerated and resulted in clinically relevant bodyweight reductions of up to 6.6% after 6 weeks and 13.7% after 16 weeks.

  • Announced first patient dosed in EASE-SBS 4 phase 3b trial assessing Glepaglutide in patients with Short Bowel Syndrome. The EASE-SBS4 Phase 3b trial is part of Zealand's EASE-SBSPhase 3 program for glepaglutide. (ClinicalTrials.gov identifier (NCT number): NCT04991311) and will evaluate long-termeffects on intestinal absorption of fluids and energy of once weekly glepaglutide injections. EASE-SBS4 is an open-label single-centerPhase 3b trial investigating the long-termeffect on intestinal absorption, nutritional status and long-termsafety of administration of glepaglutide in patients with short bowel syndrome (SBS). Ten patients will receive once weekly 10 mg subcutaneous injections of glepaglutide over 26 weeks. The EASE-SBS1 pivotal Phase 3 trial remains on track for trial results to be obtained in 2022.

Emmanuel Dulac, President and Chief Executive Officer at Zealand Pharma, comments:

"Zealand Pharma has continued to undergo a transformational first nine months in 2021 and developed into an integrated biopharmaceutical company by leveraging our innovative peptide platform to address unmet needs in type 1 diabetes management and rare diseases. We are progressing with the early stages of our commercial launch of ZEGALOGUE® (dasiglugacon) injection with Zegalogue currently available to 65% of all commercial lives. As our commercial team ramps up the ZEGALOGUE commercial launch, we also look forward to building upon the momentum to advance our other pipeline programs. Recently, we have been encouraged by preclinical data from ZP8396, our Amylin Analogue, and clinical data from GLP-1, our Glucagon Dual-Agonist BI 456906, both sets presented at the recent The Obesity Society Annual Meeting. Additionally, we entered into a collaboration agreement with DEKA Research & Development Corp. and are working to advance the development of their infusion pump to be used with dasiglucagon as a potential treatment option of CHI. Finally, while the Zegalogue net revenue projections have not materialized as we had hoped and we have lowered our revenue guidance as a result, we remain confident in the work that we have done to set the stage for Zegalogue to have commercial success in 2022 and beyond."

Financial guidance for 2021

Net product revenue from the sales of commercial products is expected to be DKK 190 million +/- 10%. This is a decrease of DKK 30 million from the guidance issued on March 11, 2021. The reduction in net revenue from the previous guidance is driven by lower-than-expected sales of Zegalogue for 2021.

In 2021, Zealand Pharma expects revenue from existing license agreements. However, since such revenue is uncertain in terms of size and timing, Zealand Pharma does not intend to provide guidance on such revenue.

Net operating expenses in 2021 are expected to be DKK 1,250 million +/-10% and remains unchanged from the financial guidance issued on March 11, 2021.

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Update regarding COVID-19

Zealand Pharma continues to monitor the COVID-19 pandemic and take precautions to keep our employees, patients, business and clinical partners safe. This is an ongoing exercise in monitoring the effects of the pandemic on all of our key stakeholders and responding appropriately. We maintain compliance with guidance from applicable government and health authorities as appropriate. We have adapted the way we work to support our community's efforts to reduce the transmission of COVID-19 and protect our employees, while continuing to provide patient care and maintain business continuity.

Zealand Pharma has taken measures to secure its discovery activities, which remain ongoing, while work in laboratories and offices has been organized to reduce the risk of COVID-19 transmission. The impact of COVID-19 on our research activities has thus far been minimal. Employees who can work from home have been doing so, while those needing to work in laboratory facilities are divided into shifts to reduce the number of people gathered at one time. Business travel has been minimized and online and video conference technology is used to meet virtually rather than in person. We have continued our clinical trials while working with authorities, investigators, trial sites and contract research organizations to minimize site visits and ensure optimal trial follow-up. In late April, Zealand Pharma in Denmark commenced a gradual return to office program, which currently allows up to 60% occupancy, consistent with local health authority guidelines and practice including frequent testing, sanitizing, and other protective measures.

COVID-19 restrictions have not affected our phase 3-program for dasiglucagon in congenital hyperinsulinism (CHI) and we expect topline data from the second Phase 3 trial in 2021. The pandemic impacted the speed of patient recruitment for our Phase 3 trial with glepaglutide for the treatment of short bowel syndrome, and results are expected in 2022. We currently do not anticipate changes to the timelines for the bi-hormonal artificial pancreas pump Phase 3 program.

Our research and in particular our development programs may be impacted if the pandemic continues to put increased pressure on hospital systems, slow recruitment of patients into the trials or cause lockdowns that affect our clinical trial sites if key external medical resources are diverted elsewhere.

Direct engagement with health care providers and patients has been reduced and transformed by leveraging virtual meetings, training, and support. Our commercial team is focused on supporting the businesses for the V-Go® wearable insulin delivery device and Zegalogue while ensuring a continued high level of service and support for existing patients.

Commercial Update

Zegalogue® (dasiglucagon) injection

Zegalogue (dasiglucagon) injection was approved by the U.S. FDA on March 22, 2021 for the treatment of severe hypoglycemia in people with diabetes aged 6 and over. Zegalogue is available in both an auto injector and a prefilled syringe. The approval was based on efficacy results from three pivotal trials in adults and children with type 1 diabetes, whereby the primary endpoint of time to plasma glucose recovery, was successfully achieved with a median time to blood glucose recovery of 10 minutes following Zegalogue administration. In these Phase 3 studies, the most common adverse events reported (≥2%) were nausea, vomiting, headache, diarrhea, and injection site pain in adults; and nausea, vomiting, headache and injection site pain in pediatric patients.

Zegalogue launched in the U.S. in late June 2021. The Company's primary goal during launch is to ensure all eligible patients have access to Zegalogue and feel supported in their treatment plan. Since approval, Zealand Pharma has made substantial progress working with Pharmacy Benefit Managers (PBMs), Managed Care Organizations, and state Medicaid agencies to add Zegalogue to their respective formularies. As a result of this work, Zegalogue now has unrestricted coverage in approximately 65% of commercial lives which accounts for more than 120 million lives and approximately 55% of Medicaid lives, which accounts for 40 million Medicaid lives. Beginning in 2022, we expect Zegalogue will have unrestricted coverage in approximately 70% of commercial and Medicaid lives, setting the stage for a sustained acceleration of growth.

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Zegalogue net revenue for the period of July 1 - September 30, 2021 was DKK 3.1 million / USD $0.5 million. Year-to-Date net revenue is DKK 4.3 million / USD $0.7 million.

For the year, net product revenue of Zegalogue is anticipated to be below our initial revenue targets. The reduction in revenue is a result of lower-than-expected uptake of prescriptions due to the increase in timelines for approved drug coverage agreements with payers to translate into approved prescriptions in pharmacies.

V-Go® wearable insulin delivery device

The V-Go series of Wearable Insulin Delivery Devices are indicated for continuous subcutaneous infusion of either 20 Units of insulin (0.83 U/hr), 30 Units of insulin (1.25 U/hr) or 40 Units of insulin (1.67 U/hr) in one 24-hour time period and on-demand bolus dosing in 2-Unit increments (up to 36 Units per one 24-hour time period) in adults requiring insulin.

V-Go net revenue for the period of July 1 - September 30, 2021 was DKK 49.1 million / USD $7.8 million. Year-to-Date net revenue is DKK 139.0 million / USD $22.4 million.

Pipeline Update

Type 1 Diabetes Management

Dasiglucagon for bihormonal Artificial Pancreas systems

Zealand Pharma is developing a pre-filled dasiglucagon cartridge intended for use in Bihormonal Artificial Pancreas systems, which holds potential to improve the management of type 1 diabetes (T1D).

Zealand is collaborating with Beta Bionics, developer of the bihormonal iLet® bionic pancreas system, a pocket-sized, dual- chamber (insulin and glucagon), autonomous, glycemic control system. The iLet® bionic pancreas is an investigational device, limited by federal (or United States) law to investigational use only. The iLet® bionic pancreas intends to mimic a biological pancreas by calculating and dosing insulin and/or glucagon (dasiglucagon) as needed, based on input data from a continuous glucose monitor (CGM) worn by a person with diabetes. Top-line results from a Phase 2, pre-pivotal trial in people with type 1 diabetes showed that the bihormonal iLet® bionic pancreas using insulin and dasiglucagon provided improved glycemic control relative to the iLet® bionic pancreas delivering insulin alone. During the bihormonal and insulin-only periods, 90% (9 of 10) and 50% (5 of 10) of participants, respectively, had a mean CGM glucose level of < 154 mg/dL.1,2 Importantly these glucose levels were achieved while the median time with CGM glucose levels < 54 mg/dL was only 0.2% during the bihormonal period and 0.6% during the insulin-only period.

  1. Castellanos, L.E. et al. (2021). Performance of the insulin-only iLet bionic pancreas and the bihormonal iLet using dasiglucagon in adults with type 1 diabetes in a home-use setting. Diabetes Care, 44:e118-e120.
  2. Russell, S. et al. (2020). Performance of the bihormonal iLet bionic pancreas with the stable glucagon analog dasiglucagon. [ePoster]. ATTD.

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Zealand's partner, Beta Bionics, and the study sponsor, the Jaeb Center for Health Research, are on track to begin screening in the fourth quarter 2021 into the Phase 3, Bihormonal iLet® Bionic Pancreas Pivotal Program, utilizing insulin and dasiglucagon. The program includes three sub-trials, which are anticipated to provide the clinical data necessary to support the market application for the bihormonal iLet® bionic pancreas and the new-drug application (NDA) for the use of dasiglucagon in bihormonal Artificial Pancreas systems. The first of these three sub-trials will be a three-monthsingle-arm,bihormonal-only safety and test-run trial that will enroll two participants at each of the approximately 30 clinical sites. After 20 pediatric participants and 20 adult participants have been successfully treated for a minimum of 3 weeks in this trial, the two randomized controlled trials (RCTs) will begin - one enrolling ~ 350 pediatric participants (6-17 years of age) and the other enrolling 350 adult participants (≥ 18 years of age) with T1D. The primary outcome measure in the RCTs is superiority in HbA1c of the bihormonal iLet® bionic pancreas using dasiglucagon relative to the insulin-only iLet® system after 26 weeks of therapy on the two interventions. The bihomonal iLet® bionic pancreas performance will also be compared to intensified usual care using CGM therapy in a third arm in both the pediatric and adult RCTs.

Dasiglucagon mini-dose pen

Zealand is developing a dasiglucagon mini-dose pen for potential treatment of exercise-induced hypoglycemia in people living with type 1 Diabetes and for people who suffer from meal-induced hypoglycemia following gastric bypass surgery.

Clinical studies conducted in hospital settings have shown the potential for using low doses of dasiglucagon to correct moderate hypoglycemia. Top-line results from a Phase 2a dose-finding trial in people with type 1 diabetes were presented at the American Diabetes Association congress in June 2021, and top-line results of a post bariatric hypoglycemia Phase 2a trial were reported in 2020.

Out-patient Phase 2 trials in exercise-induced hypoglycemia in people living with type 1 diabetes and for people that suffer from meal-induced hypoglycemia following gastric bypass surgery were initiated in the second quarter this year (ClinicalTrials.gov Identifier: NCT04764968 and NCT04836273). The Phase 2 trial in people with T1D specifically evaluates the effectiveness of pen-administeredlow-dose dasiglucagon for prevention and treatment of hypoglycemia in people with type 1 diabetes.

Rare Diseases

Dasiglucagon for congenital hyperinsulinism (CHI)

The potential for chronic dasiglucagon infusion delivered via a pump to prevent hypoglycemia in children with CHI is being evaluated in a Phase 3 program. The aim is to reduce or eliminate the need for intensive hospital treatment, reduce the frequency of dangerous low blood glucose and need for constant feeding, and to potentially delay or eliminate the need for pancreatectomy. The FDA and the European Commission both granted orphan drug designation to dasiglucagon for the treatment of CHI.

We announced data from the first Phase 3 trial in the program, trial 17109, in December 2020. This trial evaluated children aged 3 months to 12 years old with more than three hypoglycemic events per week despite previous near-total pancreatectomy and/or maximum medical therapy. Dasiglucagon on top of standard of care (SOC) did not significantly reduce the rate of hypoglycemia compared to SOC alone when assessed by the primary endpoint, intermittent self-measured plasma glucose. However, hypoglycemia was reduced by 40-50% with dasiglucagon as compared to SOC alone when assessed by blinded continuous glucose monitoring. Dasiglucagon treatment was assessed to be well tolerated in the study and 31 out of 32 patients continued into the long-term extension study.

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Zealand Pharma A/S published this content on 11 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 November 2021 16:46:02 UTC.