Zealand Pharma A/S – Interim report for first nine months 2012 (unaudited)

| Source: Zealand Pharma A/S

Copenhagen, 2012-11-13 08:30 CET (GLOBE NEWSWIRE) -- Company Announcement
No. 20/2012

─ Positive net results of DKK 89 (EUR 12) million for the period
─ Revenue from milestone payments of DKK 224 (EUR 30) million 
─ Cash and securities of DKK 498 (EUR 67) million on 30 September 2012
─ Pipeline progress, including advances for diabetes products; Lyxumia® (lixisenatide), fix-flex LixiLan combination device and ZP2929
─ On Lyxumia®, a response from the European regulators and a US filing are expected before end 2012
─ Revenue guidance for 2012 unchanged, while guidance for a positive net result has been adjusted to DKK 30-40 (EUR 4-5) million from DKK 37-57 (EUR 5-8) as a reflection of an increased activity level in Q4

Copenhagen, 13 November 2012 – Zealand Pharma A/S (NASDAQ OMX Copenhagen: ZEAL) reports higher revenues from partner payments, a net profit and an increase in cash and securities combined with important progress for the company’s drug pipeline for the nine month period 1 January to 30 September 2012.

Financial Highlights for the first nine months of 2012

• Revenue of DKK 223.6 (EUR 30.0) million consisting of milestone payments from license and collaboration partners, including Sanofi, Boehringer Ingelheim and Helsinn (9m 2011: DKK 120.0 (EUR 16.1) million).
• Royalty expenses of DKK 15.6 (EUR 2.1) million (9m 2011: DKK 0.0 (EUR 0.0) million).
• Net operating expenses of DKK 120.2 (EUR 16.1) million (9m 2011: DKK 90.8 (EUR 12.2) million).
• Net results of DKK 88.8 (EUR 11.9) million (9m 2011: DKK 32.5 (EUR 4.4) million).
• Cash and securities as at 30 September 2012 amounted to DKK 498.3 (EUR 66.9) million (30 Sept 2011: DKK 441.9 (EUR 59.3) million).

Pipeline Highlights in Q3 2012 and the period thereafter

• Lyxumia® (lixisenatide) for Type 2 diabetes (partnership with Sanofi): 

- In October, Sanofi presented a series of clinical data on Lyxumia® (lixisenatide) at the European Association for the Study of Diabetes (EASD) 48th Annual Meeting in Berlin, Germany, supporting the potential of this Zealand Pharma invented, once-daily prandial GLP-1 agonist as a new treatment for Type 2 diabetes. The presented data include results from the GetGoal-L and GetGoal Duo I Phase III studies, demonstrating the efficacy and safety of Lyxumia® as add-on treatment to basal insulin, including Lantus®.
- Lyxumia® has been filed for registration in Europe (November 2011) and a recommendation from the Committee for Human Medicinal Products (CHMP) under EMA is expected before the end of 2012.
- Lixisenatide has also been filed for registration in Japan (June 2011) and a filing in the US is expected in December 2012.

• Fix-flex single injection device for the combination of Lantus® and Lyxumia® for Type 2 diabetes (partnership with Sanofi):

- The development of the fix-flex device for the  combination of Lantus® and Lyxumia® delivered in a single injection has entered phases for industrialization, validation, usability and manufacturing.
- The device is expected to be available mid-2013 for Phase III initiation of the combination product.

• ZP2929 for Type 2 diabetes and/or obesity  (partnership with Boehringer Ingelheim):

- In September, ZP2929, a dual acting glucagon/GLP-1 agonist was advanced into clinical development with the start of a randomized, double-blind Phase I study to evaluate the safety and tolerability of single ascending daily doses of the compound in healthy subjects.
- The Phase I study is conducted by Zealand Pharma in the United States under an Investigational New Drug (IND) application with the FDA and is progressing according to plan. Completion of enrolment in the study is expected in Q1 2013.
- The license and R&D collaboration with Boehringer Ingelheim on dual acting glucagon/GLP-1 agonists is progressing well. During the first 17 months of collaboration, Zealand Pharma has received upfront-, milestone, and other payments including cost reimbursements and research funding of EUR 29 (DKK 216) million. Based on the current development plan for ZP2929, Zealand Pharma may be eligible to receive additional payments of up to EUR 14 (DKK 104) million in the next 12 months.  

• Dual acting GLP-1-gastrin agonist, ZP3022 for diabetes

- In October, at the EASD 48th Annual Meeting Zealand Pharma presented new preclinical data on ZP3022, a peptide from the company’s program on dual acting GLP-1-gastrin agonists. The data presented demonstrate that in disease models of diabetes, treatment with ZP3022 resulted in a significant increase in pancreatic beta-cell mass associated with a significant improvement in glycemic control.

David Solomon, CEO and President of Zealand Pharma, commented on the report: 
“We have continued to make good progress in our peptide-drug pipeline throughout 2012, including the advance of ZP2929, the lead candidate in our partnership with Boehringer Ingelheim, into clinical development for the treatment of Type 2 diabetes and/or obesity – and based on revenue from our partnering activities we are in line to record financial profits for the second consecutive year.  
Our company now stands before a transformational event as we await the imminent outcome of the European regulatory authorities’ review of the first Zealand Pharma invented drug, lixisenatide, alongside a planned regulatory filing in the US in December. Supported by our partner, Sanofi's strong position and deep understanding of patient needs, we are confident that lixisenatide will find an important role in the management of Type 2 diabetes.”


Financial guidance for 2012
Zealand Pharma retains its revenue guidance for 2012 of DKK 224 (EUR 30) million with related royalty expenses of DKK 16 (EUR 2) million.
Full year guidance on net operating expenses has been adjusted to a range of DKK 167-177 (EUR 22-24) million from DKK 150-170 (EUR 20-23) million as a reflection of an increased activity level in Q4. As a result, Zealand Pharma now expects a positive net result for 2012 at a range of DKK 30-40 (EUR 4-5) million, compared to previously expected DKK 37-57 (EUR 5-8) million.

# # #

Conference call
Zealand Pharma will host a conference call today, at 14:00 CET/ 8:00 EST. David Solomon, President and Chief Executive Officer, Mats Blom, Chief Financial Officer and Hanne Leth Hillman, Vice President for IR and Corporate Communication, will host the call to present the Interim report for the first 9 months of 2012 which will be followed by a Q&A session. The conference call will be conducted in English and the dial-in numbers are as follows:

DK: +45 3272 9273
UK and international: +44 (0) 20 3003 2666
US: +1 212 999 6659

Pass code for all participants: Zealand Pharma

A live audio cast of the call including an accompanying slide presentation will be available via the following link: http://livecast.wehay.com/stockontv/121113/zealandpharma/, which can also be accessed from the investor section of the company’s website (www.zealandpharma.com). Participants are advised to register for the audio cast approximately 10 minutes before the start.

A replay of the event will also be available on the company’s website following the call.

For further information, please contact:
David H. Solomon, President and Chief Executive Officer
Tel: +45 2220 6300

Hanne Leth Hillman, Vice President and Head of IR & Corporate Communication
Tel: +45 5060 3689, email: hlh@zealandpharma.com

About Zealand Pharma
Zealand Pharma A/S (NASDAQ OMX Copenhagen: ZEAL) is a biotechnology company based in Copenhagen, Denmark. Zealand Pharma specializes in the discovery, optimization and development of novel peptide drugs and has a broad and mature pipeline of drug candidates identified through its own drug discovery activities. The company’s focus lies in the field of diabetes/metabolic diseases, and its lead drug invention is lixisenatide (Lyxumia®)1, a once-daily GLP-1 agonist, which is licensed to Sanofi for the treatment of Type 2 diabetes. In November 2011, Sanofi filed for registration of lixisenatide in Europe and regulatory filing in the United States is expected in Q4 2012.

Zealand Pharma has a partnering strategy for the development and commercialization of its products and in addition to the collaboration with Sanofi in Type 2 diabetes, the company has partnerships with Boehringer Ingelheim in diabetes/obesity, Abbott in acute kidney injury and Helsinn Healthcare in chemotherapy induced diarrhea. Zealand Pharma focuses its activities in disease areas where existing treatments fail to adequately serve patient needs and where the market potential for improved treatments through the use of peptide drugs is high. For further information: www.zealandpharma.com.

1  Lyxumia is the proprietary name submitted to the EMA for lixisenatide. The proprietary name for lixisenatide in the United States is under consideration. Lixisenatide is not currently approved or licensed anywhere in the world.