Zealand Pharma A/S Interim report for Q (un-audited)

Transcription

1 Company Announcement No. 12/2012 (un-audited) Net profit for the quarter of DKK 66 (EUR 9) million Important pipeline progress, and revenue from milestone payments of DKK 120 (EUR 16) million Cash and securities of DKK 526 (EUR 71) million on 31 March 2012 Financial guidance for 2012 maintained Copenhagen, 25 April 2012 Zealand Pharma A/S (NASDAQ OMX Copenhagen: ZEAL), a Danish biopharmaceutical company dedicated to the discovery and development of peptide drugs, reports pipeline progress, a net profit and an increase in cash and securities for the interim period 1 January to 31 March Highlights for Q Revenue of DKK (EUR 16.2) million consisting of milestone payments from Sanofi and Helsinn Healthcare (Q1 2011: DKK 0.0 (EUR 0.0) million). Royalty expenses of DKK 15.3 (EUR 2.1) million (Q1 2011: DKK 0.0 (EUR 0.0) million). Net operating expenses of DKK 39.4 (EUR 5.3) million (Q1 2011: DKK 43.3 (EUR 5.8) million), which is in line with expectations. A net profit of DKK 65.7 (EUR 8.8) million (Q1 2011: A net loss of DKK 44.9 (EUR 6.0) million). Cash and securities on 31 March 2012 amounted to DKK (EUR 70.7) million (31 March 2011: DKK (EUR 52.4) million). Pipeline advances: Lixisenatide (Lyxumia ) for Type 2 diabetes - In registration phase in Europe (partnership with Sanofi): - Positive top-line results from GetGoal-P, supportive for this once-daily GLP-1 drug candidate - The GetGoal-P results marked the completion of the global GetGoal Phase III program for lixisenatide and triggered a USD 20 million milestone payment to Zealand Pharma from Sanofi Elsiglutide for the prevention of chemotherapy-induced diarrhea (partnership with Helsinn Healthcare): - Initiation of a Phase IIa study to evaluate the efficacy and safety of elsiglutide in patients with colorectal cancer, treated with chemotherapy Zealand Pharma A/S Page 1 of 11

2 David Solomon, CEO and President of Zealand Pharma commented on the report: During the first months of 2012, we have further strengthened our cash position alongside important progress for our pipeline of peptide drug candidates. Our partner, Sanofi, completed the global Phase III program, GetGoal, for lixisenatide (Lyxumia ) now in the registration phase in Europe with positive results from the GetGoal-P study supporting the intended use of this novel once-daily GLP-1 in the treatment of patients Type 2 diabetes. We look forward to a response from the European Authorities on lixisenatide and to Sanofi s planned filing in the US later this year while we concentrate on advancing the development of our internal peptide drug programs. Financial outlook for 2012 Zealand Pharma maintains its financial expectations for 2012 as announced in the 2011 full year results announcement on 15 March 2012 (Company Announcement 07/2012). Revenue from milestone payments received in Q from Sanofi and Helsinn Healthcare amounts to DKK 120 (EUR 16) with related royalty expenses of DKK 15 (EUR 2) million. The timing of other potential milestone based payments from partners is largely outside the control of Zealand Pharma, and therefore no further revenue guidance is provided for the full year at this point. Total net operating expenses are expected in the range of DKK (EUR 20-23) million. # # # For further information, please contact: David H. Solomon, President and Chief Executive Officer Tel: Hanne Leth Hillman, Vice President for IR & Corporate Communication Tel: , hlh@zealandpharma.com About Zealand Pharma Zealand Pharma A/S is a public (NASDAQ OMX: ZEAL) biotechnology company based in Copenhagen, Denmark with a mature clinical pipeline of innovative peptide drugs. The company's lead invention is lixisenatide (Lyxumia 1) ), a oncedaily GLP-1 agonist licensed to Sanofi for the treatment of Type 2 diabetes. In October, Sanofi submitted a marketing authorization application (MAA) for lixisenatide in Europe and submission for regulatory approval in the United States is expected in Q Zealand Pharma also has a collaboration with Boehringer Ingelheim covering dual acting glucagon/glp-1 agonists, including ZP2929, for the treatment of diabetes and obesity, and a license agreement with Helsinn Healthcare on elsiglutide, a clinical stage GLP-2 drug for the prevention of chemotherapy-induced diarrhea. Zealand Pharma specializes in the discovery, optimization and development of novel peptide drugs, and all drug candidates in its pipeline have been identified through the company's own drug discovery activities. Zealand Pharma's products target 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: Note 1) Lyxumia is the intended trademark for lixisenatide. Lixisenatide is not currently approved or licensed anywhere in the world. Zealand Pharma A/S Page 2 of 11

3 Business highlights in Q Lixisenatide (Lyxumia ) for Type 2 diabetes (in partnership with Sanofi) o In February, Zealand Pharma and Sanofi announced positive top-line results from the GetGoal-P study, one of the studies in the global GetGoal Phase III program, assessing the efficacy and safety of lixisenatide in Type 2 diabetes. Results from GetGoal-P, which involved 484 patients with Type 2 diabetes, showed that lixisenatide achieved its primary efficacy endpoint of significantly reducing blood glucose levels (HbA1c) compared to placebo (p<0.0001) as an add-on therapy to pioglitazone with or without metformin. Safety and tolerability results were consistent with other studies within the GetGoal program. o The positive top-line results from the GetGoal-P study marked the completion of the global GetGoal Phase III program for lixisenatide, which has involved more than 4,500 patients with Type 2 diabetes. The completion of the GetGoal Phase III program triggered a milestone payment of USD 20 million to Zealand Pharma from Sanofi. Elsiglutide for the prevention of chemotherapy-induced diarrhea (in partnership with Helsinn Healthcare) o In March, Helsinn Healthcare advanced the development of elsiglutide, dosing the first patients in a Phase IIa study to evaluate the efficacy and safety of the drug candidate for the prevention of chemotherapy-induced diarrhea. The study is planned to enroll 138 patients with colorectal cancer, who will be randomized to receive subcutaneous treatment with elsiglutide or placebo in parallel with 5- fluorouracil (5-FU)-based chemotherapy. In connection with the start of the Phase IIa study, Zealand Pharma received EUR 1 million from Helsinn. Management s review Pipeline overview Zealand Pharma has seven peptide drug candidates in clinical or near clinical development, designed to offer better treatment for patients with diabetes, metabolic, gastrointestinal and cardiovascular diseases. Five of the seven programs are covered and fully financed under partnership agreements with pharmaceutical companies. Drug candidates for diabetes and related metabolic diseases Three Zealand Pharma discovered diabetes/metabolic peptide drug candidates are in development lixisenatide (Lyxumia ), lixisenatide/lantus combination pen and ZP2929. Further, the company is working on several earlier stage discovery and preclinical drug projects targeting better treatment in this field. Through its partnerships with two of the world s leading diabetes companies, Sanofi and Boehringer Ingelheim, Zealand Pharma holds a unique position to further grow its presence as a provider of novel treatments for the benefit of patients with diabetes and related metabolic diseases. Lixisenatide (Lyxumia ) For Type 2 diabetes (partnership with Sanofi) Lixisenatide (Lyxumia ) is a GLP-1 receptor agonist for once-daily administration, discovered by Zealand Pharma and developed by Sanofi for the treatment of Type 2 diabetes. Lyxumia is the intended trademark for lixisenatide. Lixisenatide is not currently approved or licensed anywhere in the world. Lixisenatide has been assessed in an extensive global Phase III program, GetGoal, which has involved more than 4,500 Type 2 diabetes patients. Throughout the GetGoal Phase III program, lixisenatide has delivered Zealand Pharma A/S Page 3 of 11

4 positive results, supporting the efficacy and safety of the drug as a monotherapy, in combination with oral anti-diabetes drugs and in combination with basal insulin. In November 2011, a Marketing Authorisation Application (MAA) by Sanofi for lixisenatide (Lyxumia ) was filed with the European Medicines Agency (EMA). Submission for regulatory approval of lixisenatide in the United States is planned for Q As requested by the American authorities, FDA, the US submission will include 12 month cardiovascular safety data from some of the studies in the GetGoal program and expected interim safety data also from a large ongoing CV outcome study, ELIXA. ELIXA evaluates cardiovascular safety of lixisenatide in up to 6,000 Type 2 diabetes patients with a history of a cardiac event and full study completion is expected in Lixisenatide/Lantus combination pen For Type 2 diabetes (partnership with Sanofi) Sanofi is also developing lixisenatide in a combination pen with Lantus, their world-leading insulin product. The combination pen planned to allow for flexible dosing of Lantus with a fixed dose of lixisenatide and the program is on track for start of Phase III studies in early ZP2929 For Type 2 diabetes and obesity (partnership with Boehringer Ingelheim) ZP2929 is a dual-acting glucagon/glp-1 agonist, designed by Zealand Pharma to be a potent synthetic agonist with effect on both the glucagon and the GLP-1 receptors. Zealand Pharma and Boehringer Ingelheim are advancing preparations of ZP2929 towards first human dosing. The first clinical study will be conducted by Zealand Pharma, while Boehringer Ingelheim will be responsible for the clinical development thereafter and finances all clinical development including Phase I. Drug candidates for gastrointestinal diseases Two Zealand Pharma discovered GLP-2 peptide drug candidates are in development targeting improved treatment options for patients suffering from certain gastrointestinal diseases. Elsiglutide For the prevention of chemotherapy-induced diarrhea (partnership with Helsinn Healthcare) Elsiglutide is a potent and selective GLP-2 agonist licensed to Helsinn Healthcare. Helsinn is evaluating elsiglutide in a Phase IIa study for the prevention of diarrhea in colorectal cancer patients treated with chemotherapy of the 5-FU type. In parallel, Helsinn is completing a Phase Ib study with elsiglutide, with results so far showing that the drug candidate is safe and well tolerated at doses above the expected therapeutic dose in colorectal cancer patients. ZP1848 For Inflammatory Bowel Diseases ZP1848 is another novel GLP-2 peptide agonist evaluated by Zealand Pharma in Phase Ia and Ib studies with positive results and now under evaluation for the next development step. Drug candidates for cardiovascular drug candidates Danegaptide For cardiovascular disorders Danegaptide is a small and potent, first-in-class peptide drug candidate, acting as a second-generation gap junction modifier. Zealand Pharma owns the global rights to danegaptide and is currently evaluating the drug candidate towards next development step. Zealand Pharma A/S Page 4 of 11

5 ZP1480 For post-surgical kidney injury (partnership with Action Pharma) ZP1480 is a first-in-class melanocortin peptide agonist, discovered by Action Pharma and modified with Zealand Pharma s SIP technology. All rights to ZP1480 (AP214) are owned by Action Pharma. Action Pharma has evaluated ZP1480 in a Phase IIb study with positive results for the treatment of postsurgical kidney injury in patients with cardiac disease. Organisation and Management The average number of employees in the organisation has increased to 101 in the first three months of 2012 from 85 in the same period last year. The increase is a consequence of a higher activity level in the research and development organisation mainly related to the research collaboration with Boehringer Ingelheim. Zealand Pharma A/S Page 5 of 11

6 Key Figures for the group The Board of Directors and Executive Management have approved this interim report containing condensed financial information for the first three months of 2012 ending 31 March The report is prepared in accordance with IAS 34 as endorsed by the EU and the additional Danish disclosure requirements for listed companies. The accounting principles are unchanged in the three months of 2012 and reference is made to the Annual Report 2011 for a more detailed description of the accounting policies. DKK thousand INCOME STATEMENT AND COMPREHENSIVE INCOME Q1 Q1 Full year Revenue 120, ,284 Royalty expenses -15, Gross profit 105, ,172 Research and development expenses -42,188-39, ,938 Administrative expenses -6,053-5,855-34,905 Other operating income 8,860 1,883 28,435 Operating result 65,632-43,314 8,764 Net financial items 54-1,590 4,613 Net result for the period 65,686-44,904 13,377 Comprehensive income for the period 65,686-44,904 13,377 Earnings per share - basic (DKK) Earnings per share - diluted (DKK) March 31 March 31 December BALANCE SHEET Cash and cash equivalents 326, , ,342 Securities 199, , ,358 Total assets 553, , ,481 Share capital ('000 shares) 23,193 22,871 23,193 Shareholder's equity 512, , ,397 Equity / assets ratio March 31 March 31 December CASH FLOW Depreciation 1, ,130 Change in working capital 27, ,943 Investments in fixed assets -2,683-2,786-11,475 Free cash flow 98,217-42,816-13, March 31 March 31 December OTHER Share price DKK Equity per share DKK Average number of employees Compounds in clinical development (end period) Zealand Pharma A/S Page 6 of 11

7 Financial Review (Comparative figures for the same period last year are shown in brackets) Income statement The net result for the first three months of 2012 was a profit of DKK 65.7 million (-44.9). The increased profit is mainly a result of milestone payments received from the license agreements with Sanofi and Helsinn Healthcare. Revenue Revenue for the first three months of 2012 increased to DKK million (0.0) and consisted of milestone payments from the agreements with Sanofi and Helsin Healthcare. Royalty expenses Royalty expenses for the period was DKK 15.3 million (0.0) and were related to the milestone payments from Sanofi and Helsinn Healthcare. Research and development expenses Research and development expenses amounted to DKK 42.2 million (39.3) which were in line with expectations. R&D expenses related to ZP2929 and the research collaboration with Boehringer Ingelheim have been refunded and recorded as other operating income, see below. Administrative expenses Administrative expenses for the period were in line with expectations and previous year and amounted to DKK 6.1 million (5.9). Other operating income Other operating income for the first three months of 2012 amounted to DKK 8.9 million (1.9) mainly associated with income under the agreement with Boehringer Ingelheim, relating to funding of development costs for ZP2929 and costs related to the research collaboration. Operating result Operating result for the period was a profit of DKK 65.6 million (-43.3). Net financial items Net financial items for the first three months of 2012 amounted to DKK 0.1 million (-1.6). Net financial items consist of interest income, banking fees and regulations based on changes in exchange rates. Result from ordinary activities before tax Result from ordinary activities before tax in the period came to a profit of DKK 65.7 million (-44.9). Tax on ordinary activities No tax on the result from ordinary activities has been recorded since Zealand Pharma offsets any tax through tax losses carry forward from previous years. No deferred tax asset has been recognized in the balance sheet due to uncertainty as to whether tax losses can be utilized. Net result Net result for the first three months of 2012 amounted to a profit of DKK 65.7 million (-44.9). Zealand Pharma A/S Page 7 of 11

8 Equity Equity stood at DKK million (369.3) at the end of the period, corresponding to an equity ratio of 93 % (90). The increase in equity is a result of profits made during the last 12 months as well as the exercise of warrants in December of Capital expenditure Investments in new laboratory equipment for the period amounted to DKK 2.7 million (2.8). Cash flow As of 31 March 2012, Zealand Pharma had cash and cash equivalents including securities of DKK million (390.2). The cash flow from operating activities amounted to DKK million (-40.0), and cash flow used for investing activities to DKK million (102.8) of which DKK 50.0 million (100.0) has been invested in securities. The total cash flow for the first three months of 2012 amounted to DKK 48.2 million (-142.8). Financial outlook for 2012 Revenue from milestone payments already received in 2012 from Sanofi and Helsinn Healthcare amounts to DKK 120 million with related royalty expenses of DKK 15 million. The timing of other potential milestone based payments from partners is largely outside the control of Zealand Pharma, and therefore no further revenue guidance is provided for the full year at this point. Total operating expenses for 2012 are expected in the range of DKK million. Hereof, approximately DKK 30 million is expected to be funded via operating income under partner agreements, corresponding to expected net operating expenses of DKK million. Risk factors This interim report contains forward-looking statements, including forecasts of future expenses as well as expected business related events. Such statements are subject to risks and uncertainties as various factors, some of which are beyond the control of Zealand Pharma, may cause actual results and performance to differ materially from the forecasts made in this interim report. Without being exhaustive, such factors include e.g. general economic and business conditions, including legal issues, scientific and clinical results, fluctuations in currencies etc. A more extensive description of risk factors can be found in the 2011 Annual Report under the section Risk management and internal control. Zealand Pharma A/S Page 8 of 11

9 Management s Statements on the Interim Report The Board of Directors and the Executive Management have today considered and adopted the interim report of Zealand Pharma A/S for the period 1 January 31 March The interim report has not been audited or reviewed by the company s independent auditor. The report is prepared in accordance with IAS 34 as endorsed by the EU and the additional Danish disclosure requirements for listed companies. The accounting principles are unchanged in the first three months of 2012 and reference is made to the Annual Report 2011 for a more detailed description of the accounting policies. In our opinion, the interim report gives a true and fair view of the Group s assets, equity and liabilities and financial position at 31 March 2012 and of the results of the Group s operations and the Group s cash flows for the period 1 January 31 March Moreover, in our opinion, the Management s Review and Financial Review gives a true and fair view of developments in the Group s operations and financial position and describes the most significant risks and uncertainty factors that may affect the Group. Copenhagen, 25 April 2012 Executive Management David H. Solomon Mats Blom Arvind M. Hundal President and CEO SVP and CFO SVP and CBO Christian Grøndahl EVP and CSO John Hyttel SVP and COO Board of Directors Daan J. Ellens Chairman Jørgen Lindegaard Vice chairman Alain Munoz Peter Benson Florian Reinaud Jutta af Rosenborg Christian Thorkildsen Helle Størum Zealand Pharma A/S Page 9 of 11

10 CONSOLIDATED INCOME STATEMENT (DKK'000) Q1 Q1 Full year Revenue 120, ,284 Royalty expenses -15, Gross profit 105, ,172 Research and development expenses -42,188-39, ,938 Administrative expenses -6,053-5,855-34,905 Other operating income 8,860 1,883 28,435 Operating result 65,632-43,314 8,764 Financial income 965 2,377 6,564 Financial expenses ,967-1,951 Result from ordinary activities before tax 65,686-44,904 13,377 Tax on ordinary activities Net result for the period 65,686-44,904 13,377 Comprehensive income for the period 65,686-44,904 13,377 Earnings per share - basic (DKK) Earnings per share - diluted (DKK) March 31 March 31 December CONSOLIDATED BALANCE SHEET (DKK '000) ASSETS Plant and machinery 15,470 9,902 14,856 Other fixtures and fittings, tools and equipment Leasehold improvements 2,112 2,175 1,968 Fixed assets under construction Deposits 2,508 2,440 2,493 Non current assets total 21,337 14,793 20,367 Trade receivables ,894 Prepaid expenses 3,941 2,906 1,080 Other receivables 2, ,440 Securities 199, , ,358 Cash and cash equivalents 326, , ,342 Current assets total 532, , ,114 Total assets 553, , ,481 LIABILITIES AND EQUITY Share capital 23,193 22,871 23,193 Retained earnings 489, , ,204 Equity total 512, , ,397 Trade payables 10,498 8,160 8,592 Prepayment from customers 2, ,284 Other liabilities 27,771 31,337 10,208 Current liabilities 40,766 39,497 28,084 Total liabilities 40,766 39,497 28,084 Total equity and liability 553, , ,481 Zealand Pharma A/S Page 10 of 11

11 CONSOLIDATED STATEMENT OF CASH FLOWS (DKK '000) Q1 Q1 Full year Profit / loss for the period 65,686-44,904 13,377 Adjustments 6,679 9,669 12,372 Change in working capital 27, ,943 Cash flow from operating activities before financing items 100,241-36,147-5,194 Financial income 1, ,339 Financial expenses paid ,967-1,951 Cash flow from operating activities 100,900-40,030-1,806 Change in deposit Investments in fixed assets -2,683-2,786-11,475 Purchase of securities -49, ,000-99,685 Cash flow from investing activities -52, , ,213 Capital increase 0 0 8,482 Repurchase of own shares Cash flow from financing activities 0 0 8,056 Decrease / increase in cash and cash equivalents 48, , ,963 Cash and cash equivalents at beginning of period 278, , ,305 Cash and cash equivalents at end of period 326, , ,342 Share Retained CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DKK '000) capital earnings Total Equity at 1 January , , ,108 Warrants compensation expenses 0 7,118 7,118 Comprehensive income for the period 0-44,904-44,904 Equity at 31 March , , ,322 Equity at 1 January , , ,397 Warrants compensation expenses 0 5,512 5,512 Comprehensive income for the period 0 65,686 65,686 Equity at 31 March , , ,595 Changes in share capital Share capital at 31 December ,682 Capital increase at 23 November ,337 Capital increase at 9 December Capital increase at 12 December Share capital at 31 December ,193 Share capital at 31 March ,193 Zealand Pharma A/S Page 11 of 11