Company announcement - No. 36 / 2016

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION IN THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA

This announcement is not an offer of securities for sale in the United States or any other jurisdiction. Securities may not be sold or offered in the United States unless they are registered or are exempt from registration under the U.S. Securities Act of 1933, as amended. Zealand does not intend to register any portion of the Offering in the United States or to conduct a public offering of securities in the United States.

• Proceeds will be used to fund the development of Zealand's proprietary product candidates
• An accelerated book building process to professional institutional investors will begin immediately

Copenhagen, 29 September 2016 - Zealand Pharma ("Zealand") (OMX: ZEAL) announces that its Board of Directors today has resolved to launch an offering of up to 1,229,351 new Zealand shares with a nominal value of DKK 1 each (the "Offering"). The Offering will be at market price and represents up to 5.0% of Zealand's current share capital. Zealand may elect to increase the size of the Offering.

Use of proceeds
Zealand intends to use the proceeds of the Offering to fund the continued development of key clinical stage product candidates in its proprietary pipeline, including:

• Glepaglutide* (ZP1848), a long-acting GLP-2 analog for the treatment of short bowel syndrome (SBS), which is in clinical Phase II development with results expected in mid-2017
• Dasiglucagon* (ZP4207), a novel liquid stable glucagon analog, as single-dose version, which has completed Phase II with positive results for its use as a ready-to-use rescue pen for severe hypoglycemia in diabetes
• Dasiglucagon* (ZP4207) as multiple-dose version, which is in preparation for clinical Phase II to be initiated later in 2016 as an essential component in a dual-hormone artificial pancreas system, representing a potential paradigm shift in the treatment of diabetes

Zealand's license collaboration with Sanofi and the expected remaining milestone payments and royalties on global sales of products under the collaboration remain important mid- to long-term sources of funding.

* Glepaglutide and dasiglucagon are proposed International Nonproprietary Names (pINNs).

Terms of the Offering
The Offering will be conducted as an accelerated book building process to professional institutional investors internationally and in Denmark. Neither Zealand's existing shareholders nor prospective subscribers of any shares in the Offering will have pre-emption rights in the Offering.

The accelerated book building process will open immediately and can close at any time. The result of the Offering including the subscription price of the new shares is expected to be announced as soon as practicable after closing of the Offering. If the Offering is oversubscribed, an individual allocation of shares will be made.

Bryan, Garnier & Co. will act as Sole Global Coordinator and Sole Bookrunner.

Simultaneously with the determination of the final terms and conditions of the Offering, Zealand shall enter into a lock-up agreement starting upon such date and ending 90 calendar days thereafter, subject to certain customary exceptions. Members of the board of directors and executive officers shall enter into lock-up agreements with regard to their ownership of Zealand shares, for the same period of time, subject to certain customary exceptions.

Resolution on the share capital increase
The Offering will occur under the existing authorization to Zealand's Board of Directors, granted by Zealand's shareholders at the Annual General Meeting on 19 April 2016, to increase Zealand's share capital by up to 2,435,276 shares of DKK 1 each (i.e., less than 10% of the share capital), at market price, cf. section 7.1 of Zealand's articles of association.

After the new shares are subscribed, the capital increase will represent up to 5.0% of Zealand's current share capital of DKK 24,587,032. The new shares will account for up to 4.8% of Zealand's share capital upon completion and registration of the share capital increase. Assuming subscription of 1,229,351 new shares, the share capital of Zealand will amount to DKK 25,816,383 divided into 25,816,383 shares of nominal value DKK 1 each.

Admission to trading and official listing
The new shares will be issued under a temporary ISIN code DK0060759835, which will not be listed on Nasdaq Copenhagen, but will be registered in VP Securities for subscription of the new shares. Nasdaq Copenhagen has confirmed that the new shares in the Offering will be listed under the ISIN code for Zealand's existing shares, DK0060257814, and that the temporary ISIN code will be replaced by the existing ISIN code after registration of the share capital increase with the Danish Business Authority, which is expected on or about 4 October 2016.

The new shares
The new shares of nominal value DKK 1 each will rank pari passu in all respects with existing Zealand shares.  The new shares will be registered in the name of the holder in Zealand's register of shareholders through the shareholder's account-holding bank. No Zealand shares carry any special rights. Rights conferred by the new shares, including voting rights and dividend rights, will apply from the time when the capital increase is registered with the Danish Business Authority.  

The new shares will confer on the holders the same right to receive dividends and other rights in Zealand as the existing shares. Dividend payments will be taxed pursuant to current legislation, including any applicable double taxation treaties.

Plesner Law Firm acts as legal advisor to Zealand in relation to the Offering with Dechert LLP as adviser on U.S. legal matters.

*****

For further information, please contact:

Britt Meelby Jensen, President and Chief Executive Officer
Tel: +45 51 67 61 28, email: bmj@zealandpharma.com

Hanne Leth Hillman, Senior Vice President, Investor Relations and Communications
Tel: +45 50 60 36 89, email: hlh@zealandpharma.com

About Zealand Pharma A/S

Zealand Pharma A/S (Nasdaq Copenhagen: ZEAL) ("Zealand") is a biotechnology company focused on the discovery, design and development of innovative peptide-based medicines. Zealand has a portfolio of medicines and product candidates under license collaborations with Sanofi, Boehringer Ingelheim and Helsinn and a pipeline of proprietary product candidates, which primarily target specialty diseases with significant unmet needs.

The company's first invented medicine, lixisenatide, a once-daily prandial GLP-1 analog for the treatment of type 2 diabetes, is licensed to Sanofi. Lixisenatide is marketed as Lyxumia^® outside the United States and approved as Adlyxin^TM in the United States. Lixisenatide has been developed in a fixed-ratio combination with Lantus^® (insulin glargine) which product is under regulatory review in the United States and in Europe. 

Zealand's proprietary pipeline includes: Dasiglucagon^* (ZP4207) a single-dose rescue treatment for acute, severe hypoglycemia (Phase II); Glepaglutide* (ZP1848) for treatment of short bowel syndrome (Phase II); Dasiglucagon* (ZP4207) multiple-dose version intended for use in a dual-hormone artificial pancreas system for better hypoglycemia control and diabetes management (in preparation for Phase II); and other earlier stage clinical and preclinical peptide therapeutics.

Zealand is based in Copenhagen (Glostrup), Denmark. For further information about Zealand's business and activities, please visit www.zealandpharma.com or follow Zealand on Twitter @ZealandPharma.

* Dasiglucagon and glepaglutide are proposed International Nonproprietary Names (pINN).

Forward Looking Statement
This announcement contains forward-looking statements that reflect management's current views with respect to Zealand's product candidates' development, clinical and regulatory timelines, market opportunity, potential financial performance and other statements of future events or conditions. Although Zealand believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors, many of which are beyond Zealand's control. No reliance should be made on such forward-looking statements.

Important Disclaimer
This announcement is not a prospectus and investors should not purchase any securities referred to in this announcement on the basis of this announcement. The information contained in this announcement is for information and background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. No obligation is undertaken to update this announcement or correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of Zealand to proceed with any transaction or arrangement referred to herein. This announcement has not been approved by any competent regulatory authority.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, or act as an inducement to enter into, any contract or commitment whatsoever. The transactions described in this announcement and the distribution of this announcement and other information in connection with the transactions in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not an offer of securities for sale in the United States or any other jurisdiction. Securities may not be sold or offered in the United States unless they are registered or are exempt from registration under the U.S. Securities Act of 1933, as amended. Zealand does not intend to register any portion of the Offering in the United States or to conduct a public offering of securities in the United States. Copies of this announcement are not being, and should not be, distributed in or sent into the United States. It may be unlawful to distribute these materials in certain jurisdictions.
This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, South Africa or Japan, or in any jurisdiction to whom or in which such offer or solicitation is unlawful. There is no intention to register any securities referred to herein in Australia, Canada, South Africa or Japan.

This announcement has been prepared on the basis that any offers of securities referred to herein in any Member State of the EEA will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of such securities. Accordingly any person making or intending to make any offer in a Member State of securities which are the subject of the Offering contemplated in this announcement may only do so in circumstances in which no obligation arises for Zealand or any of financial intermediary to publish a prospectus pursuant to Article 3 of the Prospectus Directive, as amended, in relation to such offer. Neither Zealand nor any financial intermediary has authorized, nor do they authorize, the making of any offer of the new shares in circumstances in which an obligation arises for Zealand or a financial intermediary to publish prospectus for such offer. This announcement is an advertisement and not a prospectus for the purposes of applicable measures implementing Directive 2003/71/EC. The information set forth in this announcement is only being distributed to, and directed at, persons in Member States of the EEA who are qualified investors ("Qualified Investors") within the meaning of Article 2(1)(e) of the Prospectus Directive.

This announcement is only being distributed to, and is only directed at, persons in the United Kingdom that (i) are "investment professionals" falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.") of the Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons").

None of Zealand, Bryan, Garnier & Co. or any of their respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents or any other person accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to Zealand or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement does not constitute an investment recommendation. The price and value of securities and any income from them can go down as well as up and you could lose your entire investment. Past performance is not a guide to future performance. Information in this announcement cannot be relied upon as a guide to future performance.

Bryan, Garnier & Co. is acting for Zealand and for no-one else in relation to the Offering, and will not be responsible to any other person for providing the protections afforded to their clients nor for providing advice in connection with the matters contained in this announcement. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Bryan, Garnier & Co. or by any of their affiliates or agents, as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.