For coming today. I'm joined by the Zealand team, both Henriette, CFO, as well as Utpal, the CSO. We've got a Q&A lined up that we'll jump straight into. I think what's perhaps most interesting to me from here is back in December you did talk about a Metabolic Frontier 2030 strategy. Do you want to talk about what progress you've made? Probably for Utpal, for you to begin with here, what progress have you made on the research side, and what kind of research are you focusing on going forwards from here? Then we'll dive right in with the assets after that.
Yep.
That we can talk about.
Yeah. No, thank you for the question. I think on the Metabolic Frontier, there are really three approaches that we have there. First, very much continuing our focus around weight loss, but looking at non-aversive pathways so that you can continue to get double-digit weight loss, better tolerability, and continue to look at outcomes. The second pillar is the one that I think is really counterintuitive and one that you don't see a lot of attention in, but one that has been a central thesis for us going forward is around improving metabolic capacity and metabolic flexibility. This really gets into the whole insulin-leptin axis and thinking about the weight-independent insulin sensitization.
If you think about where pioglitazone and others had delivered the outcomes, if it weren't for some of the adverse events that came along with that target-specific biology, those outcomes were unprecedented and something none of the incretin-based therapies have really been able to deliver. The idea is how do we continue building on obesity, but also get to weight-independent insulin sensitivity that addresses broader metabolic health. Finally, the third pillar is recognizing with the science that's evolving and breaking in the space is much of peripheral metabolism is actually controlled by the brain. Starting to think about targets that are shuttled directly to the brain to control our peripheral metabolism. As we do that, we recognize that peptides will still be our core, but that platform has to expand.
You saw our first push into that late last year with signing our deal with a small molecule company in China, very much focused on developing oral therapeutics for validated targets. You'll continue to see more efforts on the business development side focused on research partnerships to expand our platform. We're starting to build out our capabilities in Cambridge, very much focused on starting to go into adjacencies of peptides with antibodies, antibody-peptide conjugates to expand the pharmacology that we can exploit.
It's super exciting. There's a lot to go into. I do want to dig into the early-stage stuff at the end, but I think we first have to begin with what is perhaps most topical going into this weekend at ADA. The first of which I'm going to start with is petrelintide, so the amylin side of things. Starting really broad, we've had the phase II top line data. What is it this weekend that investors should be thinking about into that presentation, and what would you advise us that we focus on?
Okay.
Oh, go ahead.
I think, look, what's remarkable at ADA is not only petrelintide but also the survodutide data readouts. If you think about a company our size, to have two practice-changing medicines read out at the same conference is pretty remarkable. I think on petrelintide, I think really just seeing more color coming out of our ZUPREME study, and I would point out, I think the tolerability profile that you see there is really going to drive adherence on that. I think as you've seen lately, there's some really interesting publications that talk about how it takes a while for a lot of the cardiovascular outcomes to take shape for people on these therapies. Once they're off therapy, within six months, they're all gone.
What we see with amylin-based therapeutics is patients will stay on therapy for a much longer time, and the thesis around tolerability has borne itself out, seeing just game-changing acceptability, placebo-like acceptability, and tolerability in our phase II study. You'll see a lot more color commentary around that.
Super useful. Let's do it. Let's stick on ADA. You mentioned survo. I don't mean to jump between assets. I think we should address it as well. We get two readouts there in the symposium, the SYNCHRONIZE-1 and the SYNCHRONIZE-MASLD as well. My understanding is you guys haven't seen any of that. You're still to see it for the first time, given it's under the partner. Again, what is the focus there for what you're looking for to build confidence in your royalty stream and payments going ahead in those presentations?
Maybe I'll start on the science, then you can speak on the royalty. Look, I think BI has not been very public or very vocal about this asset. To me, I've been tracking this asset for a while, and I think it's really the hidden gem in the industry. I love their framing, and I think the framing really speaks volumes about "See obesity, think liver, treat heart." I think the market reacted to a 16.6% weight loss, but the reality is that misses the point of what else survodutide brings in. The glucagon component really results in this being the first in class for a U.S. launch of a GLP-1 glucagon, point number one.
Number two is the fact that glucagon component isn't coming in with a hammer, but you're just touching the receptor, so 10:1 balance approximately between GLP-1 to glucagon, and it's directly acting on the liver. The MASH data that you've seen coming out of phase II, which is truly remarkable and something that none of the current GLP-1-based therapies achieve. My encouragement is continue to think about some of the data readouts on obesity, but also pay close attention to what you see on liver, and then continuing data readouts into next year and beyond for some of the outcome studies where they're running one of the largest liver outcome studies in the industry to date.
On the royalty side, anything you're specifically looking for to build that confidence?
I think we have great confidence that is it actually. I have to say that, Boehringer is going to be a third company to market in this field with a truly differentiated, as Utpal also put it, a GLP-1. One thing is, of course, the treating obesity. Another thing is all the comorbidities, their position up against is right. We don't have any insights into the commercial rollout plans. If you look at the clinical trials they're conducting, they can file as early as end of this year, meaning that they can actually launch and put the products into the hands of patients next year. Of course, then we will see the royalties coming our way. We have high single-digit to low double-digit royalties. Sorry.
That's okay.
On the product. Clearly the data we saw both from petrelintide and of course, survodutide was two major de-risking events from a clinical point of view from our side.
It feels like we talk about, in the upcoming ADA SYNCHRONIZE-1 a lot, but there's also SYNCHRONIZE-MASLD. Do you want to just briefly touch on what that's actually going to tell us, in terms of the liver side of things and how that could build confidence going into the liver programs that we may actually see next year or slightly further on?
Look, I think a large percentage of patients living with obesity also have MASH. I think if you start thinking about that Venn diagram, this has a huge opportunity. I think it comes down to, across both of those studies, is this is not just another me-too obesity therapy, but it actually addresses a lot of the comorbidities that current GLP-based therapies aren't able to meet through the glucagon component acting directly on the liver. I think, look, we'll see the data for the first time, much like you guys will. We're just as excited as you are to see that at ADA.
Good. Look, that's ADA cleared off. Let's talk a little bit more about petrelintide and go into that. We've got the phase II headlines, as we said, we get it at ADA. Ultimately, what are you looking to see in a phase III study with your partner, Roche, that will build your confidence in where this is going to be positioned ultimately?
I think basically we just need to confirm what we saw in phase II. I think what we saw was clearly a safe molecule, tolerability that is not seen with any other molecules out there. Extremely clean profile. Then delivering weight loss double-digit. What is most actually looking for today. I think of course phase II, we are extremely happy with the data we had at hand. There are different levers we can pull in the phase III to optimize, of course, the study design. Of course, going into a phase III, there is always the gender balance. You can actually get more females into the study. We will do that as well. We will have a longer duration of the study. Of course, it is also down to site selection.
Altogether, I think if we can confirm what we had in the phase III, maybe get a bit more efficacy out. What we also said is to get into the teens, but clearly we need to confirm the tolerability profile. This is the position of the product. This is the differentiating angle coming into the market where you'll actually launch a product which people can stay on for a longer period of time. The main issue today is that people drop off. 80% are off treatment within the first year. Within the first month, 30% is actually off treatment. This is a major issue, not only to achieve the health outcomes, but also because then people get this yo-yo effect in terms of bouncing off and on, and get this imbalance.
We need people to stay on treatment, and I think this will be the solution and the first choice that many can actually start their weight loss journey on.
It's a very clear idea that you've set there about the positioning of amylins overall. I guess if I had to push you and say for petrelintide itself, what would you point to that differentiates it from other amylins perhaps?
Yeah.
Can I go even further than that? Is there a consensus yet about whether we should have dual targeting approaches?
Yeah.
Or biased approaches and where that sits now in the scientific community?
Look, let's do unpack the last one. This is one that, obviously we can write a dissertation topic on this, and we could talk ad infinitum on this. The reality is, we could talk about receptor selectivity. At the end of the day, it's academic because from a patient standpoint, they don't care. What patients want is double-digit weight loss and tolerability. What we see is a dual amylin and calcitonin receptor agonist, a balanced profile, is able to deliver unprecedented tolerability. At some of the higher efficacious doses, we're not seeing any vomiting at those doses. The reality of it is, the balanced profile is able to deliver value and deliver outcomes to the patients that they're looking for. That's point number one. Number two is I would remind teams that, people to think about the GLP-1 biology. It took 40 years to unravel that biology.
Every five years there's a new molecule where a new molecule helped you understand the pharmacology, that then helped you get a better molecule that helped you understand the pharmacology, and that cycle continued every five years for about 40 years. I think what you're seeing now in amylin is after the first generation amylin therapeutics, there's been a 25-year lag before the next one's going to be approved. There's a lot that we're going to learn from the clinic. Finally, I would say from a differentiation in the class, I guess I would point out to, for petrelintide, if you see across 600 patients that we've looked at from phase I and phase II, we have seen exceptionally clean profile. There's been not a single safety finding or an adverse event of special interest.
I think that alone differentiates it relative to what other competitors are in this class. I think that's where we're hanging our hat on, is around the clean safety and exceptional tolerability.
That's very clear. I guess if I push yourself to have a think about the obesity market that we're going into, I think some of the big debates we're having at the moment is perhaps one around pricing. How do you plan or think about pricing going three to five years ahead? The second is also about this consumerization angle as well. Is that something that's a key thought in the way that you run the development programs with Roche?
Yeah. Clearly on the latter part, clearly it is. We see that this is consumer-driven. The majority of all scripts today are initiated by the patients and by the consumer. I think especially petrelintide fits nicely into that, because what we are looking at is the patient experience. That we actually look to provide a product that you can actually stay on and you can actually enjoy your life, but you can still achieve the weight loss you're looking for, not having all the GI issues and side effects, which you probably would live with today with the solution that is out there. Clearly we have the consumer center of everything we do, and we need to prepare our launch and our pre-launch commercial activities based on that to say how do we actually capture that experience the best.
You can say on the other question around on pricing, clearly the price erosion we have seen over the last couple of years has been faster than I think most expected. I will also say when we were sitting there and negotiating the deal we did with Roche, and going through that process and doing our modeling work, we did expect prices to come down. But we also expect volume to be a very different place compared to where it is today. There is a number of factors that will play into that. One thing is today you only have very few solutions in the market. You now see orals launching with great speed, great uptake curves, also expanding the market. When there is new modalities coming in like amylin, there is also an opportunity of course to expand the market.
We will likely look at very different volumes also when we are to launch, and a key component of that is of course also that people stay on treatment. Number one issue today is that you need to capture a majority of your patient almost every month. 30% dropping off every month, then you need to capture that the next month just to stay on the same volume base. If we can have patients to stay on, of course, that is one element of actually changing that dynamic. What we can control today, I will not comment on what the price point will be when we are set to launch. We will price based on value. What are people willing to pay and what benefits are we delivering? Of course, what you can control today is your cost base.
How do you build up your production facilities? How do you optimize that you actually can work with your cost of goods, and how do you get scale into your marketing? That's back to the volume game. All of that is what we actively are preparing for right now in order for us to be ready to scale and have flexibility as we launch the product.
Very clear. I think that's a really good summary of obesity. There is another side to this development program, which is obviously ZUPREME-2, which is more on the type 2 diabetes side. Do you see amylin as having a role for type 2 diabetes, and what could we learn from ZUPREME-2 that could build that kind of confidence that you could have?
Yeah. Certainly we've seen with GLP-1-based therapies, a significant drop-off in efficacy between patients with obesity and patients with type 2 diabetes. We'll see how that translates for amylin-based therapeutics. That'll certainly inform what we do with that going forward.
Very clear. Not only that, but there's also a combination trial phase II that's soon to be started around middle of this year. I think we're going to get some more details from your partner around ADA about what that might look like as well. Is there any kind of details or information you can think about how you're thinking about-
Yeah.
a combination approach going forward, given you also get the financials on that side, too?
Yeah. Look, I think this is where the foundation is still the same, right? The focus is on tolerability. You're starting with petrelintide as a backbone, and then sprinkling on different amounts of CT-388 to see how can you get the weight loss but not compromise on tolerability. I think we're looking at three different ratios of CT-388 and petrelintide. Again, the idea is to maximize your experience and optimize your experience going forward, recognizing that some patients may want slightly more weight loss.
On the financials, this is, of course, the beauty of the deal we did with Roche a bit more than a year ago, that this is a 50/50 co-develop, co-promote deal, and we profit share both on petrelintide monotherapy, but also the combination product with CT-388. We have fully shared incentives in putting these two products into the market, and optimize the value.
I think also it seems like it's building a bit of a franchise there, a bit of portfolio around amylins, and you've seen some of your competitors go into different kind of approaches, whether that's longer, whether that's small molecules for orals. Is that part of the consideration going forward and are you working on that now?
Yeah, absolutely. I think we talked about that at Capital Markets Day. We actually have programs internally focused on that. I think we recognize that, look, different patients are going to have different options, that they'll want different options. From a Zealand standpoint, we want to make sure that we have a solution for them. Most certainly, we talked about those, and those programs are progressing as planned.
That's clear. I think when we look historically, Zealand very much seen as a biotech research and development company. There is this potential to opt into the commercial side of things as well with Roche in certain regions. What are you thinking about when considering that, and is that something you see Zealand as building out and becoming more of a commercial biopharma, let's say, rather than the biotech we see today?
Yes, that's, of course, a good question, which we have not really decided on exactly what to do yet. One of the beautiful things around this deal we have with Roche is one thing, we have 50/50 profit sharing in Europe and U.S., but we also have the opportunity to opt into 50% of the commercial activities. That will not change whether we get 50% of the profits. It's just a way for us to develop the company over time. How much we decide to do that between zero and 50%, time will show what segments, what would make sense for us to contribute. Of course, what we are looking at together with Roche is to optimize the value of the assets. Yes, I think this is an excellent opportunity for Zealand to build out over the years.
Yes, we have petrelintide as leading assets. We have more in the pipeline to come, and we are building a generational biotech that are here to last. Time will show exactly how we are going to play that out.
Yeah, that's clear. I guess moving away from amylin, but staying around this kind of capital expenditure area, we recently saw the buyback that you initiated. How are you thinking about this capital allocation strategy going forward? Could you see more return to shareholders as these milestones come in? What are you thinking about when making those decisions?
Yeah. Clearly, our capital allocation actually pretty clear and pretty straightforward as we also communicated at our Capital Markets Day. It's about maximizing the value of petrelintide. We are building a franchise around petrelintide to offer that to patients. It's about our research, really expanding our efforts within research. We are investing over the next five years, $800 million into this space. That's, of course, in Denmark. It's in Boston, but it's also collaborations. We are looking at doing more collaborations across the field. Then of course, now we decided to hand back to shareholders $200 million rest of year here. We just had, as a company, two major de-risking events. On the clinical side, survodutide, petrelintide, but also financial de-risking. Of course, clearly now on survodutide, you'll see royalty stream coming in from next year.
Petrelintide, we just secured $700 million coming from Roche this year, potentially $700 million coming next year. We thought the time was right to give a little bit back to shareholders. We have had many good long-term supporters, $200 million this year. Of course, now this is the tool we have in the toolbox, let's see exactly how we'll apply it. We had the financial flexibility to do it now.
Got it. You've had several early-stage partnerships ongoing as well. You mentioned some at the start. Perhaps could you give us a little bit more color on how they're progressing, and could I push you to say, is there a timeframe when we could see the first enter the clinic at all?
Yeah. We're not going to speak to the timeline. I think we'll announce that when the time is ready. I think from a partnership standpoint, we're actively in conversations with a number of partners. Our focus is very much on the research front to expand our scope of platform. As I mentioned earlier, we started with being peptides with extracellular targets. I think now we've moved into small molecules. I think you will see in Cambridge an expansion both internally as well as through collaboration around antibodies, antibody-peptide conjugates. I think you'll see by end of this year, we will have a lot more tools in our toolbox than what we did 12 months before that. That a lot of that's going to be through partnerships, not just growing internal headcount to do that.
That's going to be part working with Henriette to just very intelligently allocate capital to maximize our impact on the portfolio. Very clear, to be honest, when we're doing these research platforms, these aren't build it and they'll come. They're very specific problems that we're solving. They're very specific targets that we have in mind, and the idea is to bring tools into the toolbox directed at those targets.
That's clear. Zealand obviously has much more going on than just kind of the obesity metabolic side of things. You do have the rare disease assets still as well. Could you remind us where you are in the progress of that, and also seeking a partner?
How is that progressing, and what are you looking for in potential partners for those assets?
Yes. Glad you actually ask about these two assets, which we tend to forget once in a while. They are progressing nicely. CHI, we actually look to file in the second half of this year, so it could be in the hands of patients already next year, which is, of course, extremely exciting. It's a program that's been on the way for some time, some trials, but we now have path towards bringing it out to patients. We are looking for potential partners. Clearly, we probably need to see the file coming in and the regulatory hurdles to be overcome with the third-party manufacturer we had some issues with. We have transferred that entire process to a new manufacturing site, and that is progressing nicely. We will look for a partner. It's a nice opportunity. Of course, it's ultra-rare, so 800 patients in the U.S.
It's small kids, but this is really changing their life. It's also ultra-rare pricing. Of course, this is a very nice opportunity that is soon to make it to the market. Of course, glepaglutide in short bowel syndrome, the same. We are progressing on the phase III, the confirmatory phase III we are conducting. Let's see how long it will take to recruit. It's more difficult, surely, to recruit than in obesity. This is truly a good opportunity, which we will partner out when time is right. It will be next generation. It's a market that is continually growing, about 20%, and it's clearly an opportunity where you have Takeda and out there with Gattex, north of $1 billion. Clearly a good opportunity for next generation product. We can progress it.
We can progress to phase III, but it's when time is right, someone is ready to engage, we'll do that.
That's very clear. There was initial chatter, I think, early in the year about Kv1.3 ion channel blocker. Talk to us a little bit more about that opportunity. When can we see the next data coming from that? I, again, think this is something that no one really talks about, given the focus on the other two big assets.
I can speak to that a little bit, but I want to add something that Henriette said, and this was a reflection I had when I joined Zealand just a year ago. This is a company of 500 that'll now have potentially two molecules into the FDA for approval by end of this year, and two in phase III, and this is for a company of size of 500, and all of that were homegrown molecules. I think when you just take a look at the sheer magnitude of what that means, that's pretty incredible for a company of 500 in terms of what that innovation engine is, and that's one of the big reasons why I decided to come to Zealand was for that.
I think on Kv1.3, we've shared some of the high-level information, but there's a lot of additional insight that we gained from our SAD study that we will not be communicating externally. That gives us a lot of confidence about some opportunities going forward. Rarely do you see a novel target in our industry that has the PK profile, the clean tox profile, safety profile, as well as some interesting PD data that gives us confidence about what that molecule could do going forward. There's certainly a lot of opportunities in the immunology space as you think about where the effector T memory cells can operate from a autoimmune space, but there's also been a really interesting evolution in the industry around the Venn diagram of metabolic health and autoimmunity and how that come together.
The opportunities are pretty significant, but you're right, that's another one that doesn't seem to show up in the headlines, but it's a pretty significant readout that we had earlier this year.
That's very clear. To wrap up, I want to tie this all together and think about the story going forward for the next 12 months. Let's imagine we get past ADA. We've got several readouts to look forward to, including some of the SYNCHRONIZE-CVOT stuff on the Boehringer side and eventually hearing about a combo. Do you want to just set the stage for what we should be looking for over the next 12 months in terms of readouts and proof points that Zealand is moving forward and continuing progressing its R&D?
Do you want to take that?
Yes. Clearly, I should say right now is focused on getting into phase III. With petrelintide, get that trial moving. You will have the, as you say, the ZUPREME-2 also reading out in the second half, and then of course also the fixed-d ose combinations that will start soon as well going into phase II. If you look at it, clearly more readouts from Boehringer are coming, getting that product ready to market. That's of course Boehringer driving those efforts. We'll have more data on the Kv1.3 also coming out in the second half, and then potentially a filing for CHI. I think there is a lot of things cooking, and then potentially more to come that will come out of the research engine, of course.
Yeah.
Brilliant. Look, with that, I can wrap up at time. Very much looking forward to ADA at the weekend and look and see what's being shared there. Looking forward to the communication around that too. For now, it leaves me to say thank you so much for joining me, both of you. Thank you all for joining, and best of luck for the rest of the conference.
Thank you.
Thank you.