Zealand Pharma A/S (ZEAL) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the conference call to discuss positive results from Phase III trial of Glepaglutide in patients with Short Bowel Syndrome. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Anna Krassowska. Please go ahead.

Thank you. Welcome, everyone, and thank you for joining us today. I'm Anna Krassowska, Vice President of Investor Relations and Corporate Communications at Zealand. With me today to discuss Zealand's top line results for the Phase III EASE 1 trial of Glepaglutide in patients with Short Bowel Syndrome are Adam Steensberg, Zealand's President and Chief Executive Officer; and David Kendall, Zealand's Chief Medical Officer. You can find the related company announcement on our website at zealandpharma.com. I would like to point out that we will be making forward-looking statements that are subject to risks and uncertainties. These statements are valid only as of today, and the company assumes no obligation to update them, except as required by law. Please refer to recent filings for a more complete picture of risks and other factors. With that, I will turn the call over to President and CEO, Adam.

Thank you, Anna, and please turn to Slide 3. So today is a very special day for Zealand Pharma, and we also believe a special day for patients living with Short Bowel Syndrome. It's only 6 months ago, we actually announced our strategy changed towards focusing on R&D, driven really by the note that we have an extremely strong pipeline, focusing on rare diseases, obesity and other disease areas with high unmet medical need. And I'm really, really happy with the progress we've been making in the last 6 months. And with today's news, I could not be a more happy CEO. So the call today is going to be on Short Bowel Syndrome. Let's move to Slide 4. And here, you will see Marianne. And I think that we -- it's actually important on a day like this, just to drill in and consider a little bit what it is we are doing. Marianne was one of the first Short Bowel Syndrome patients that I met and one of the first patients that were introduced to Zealand Pharma. And when you meet people like her who have been living with Short Bowel Syndrome for a long time, but still keeps the spirit up despite all the difficulties and get a living out of life, you get inspired and you want to do that extra effort to deliver and do better than you would otherwise do. So Marianne and the many other patients living with SBS is a true inspiration to us, here at Zealand when we work on progressing these medicines towards rare diseases and other diseases with high unmet medical need. Please go to the next slide, slide 5. So we've had a long-term commitment to improving treatments for SBS really to benefit patients that we believe there's still a high unmet medical need for these patients. There's around 40,000 patients, we believe, living with this disease across U.S. and Europe and some of the most severely affected patients are dependent on parenteral support, volumes in parental support, which means that they have liquids and energy infused into a central bean every day for up to 17 hours every day. And imagine how it can be if you could reduce that dependency either just having a 20% reduction, a 50% reduction are getting completely off, so you will no longer be dependent on parenteral support for infusions, which is, of course, the ultimate goal for these patients. And that is what has been driving us all the time for this program. So we truly believe there are a need for better treatments. Please go to Slide 6. I just want to talk a little bit about Glepaglutide. It's -- we are -- and we do consider ourselves among the leading companies when it comes to peptide drug discovery and development and Glepaglutide is a unique molecule. It's an analogue of human GLP-2. We have added modifications to this molecule so it could form. So once you inject it under the subcutaneous tissue, it will form a depot where Glepaglutide but also 2 of its main metabolites are slowly released into the bloodstream, which gives rise to an effective half-life of around 88 hours. So Glepaglutide has a very long half-life. And it's also interesting to observe when you look at the data in the middle of this slide that the 2 metabolites actually have a higher potency for the receptor than Glepaglutide itself. And as a result of the PK and the potency, it is the main metabolite number 2, that is the one that carries the most effect of Glepaglutide. Please go to the next slide, which really talks about the product that we hope to put in the hands of patients at one time. So because it's a long-acting GLP-2 and because we have developed it as it so it's also stable in solution, we have been able to develop this autoinjector where you -- which we believe is a very simple way of administering drugs. We actually believe that in the future, when you look into peptide drugs, you have to have peptides that can be delivered in easy-to-use autoinjectors because those days where you need to mix your products yourself or dose per weight, et cetera, et cetera, making it difficult for patients, that is not future medications. So -- we -- as David will soon talk about, we have a program that has focused on delivering -- sorry, Glepaglutide either as a once weekly or thrice weekly injection into patients with Short Bowel Syndrome to see if we can improve or decrease their dependency on parenteral support. With that, David, I would like to hand over to you.

Well, thank you, Adam. And again, thanks to all for listening in and participating. I'll begin with Slide 8, and it's a reminder for all of you and for us that EASE 1 and these data that were released today are really the first part of a multifaceted Phase III trial program, which includes 2 very important long-term safety extension studies where efficacy and safety will be assessed in an ongoing fashion for up to 104 weeks of treatment, both the EASE 2 and EASE 3 trial. In addition, we have previously shared that a mechanistic study looking at absorption of fluid and energy is ongoing, and we'll read out in the first half of next year with a preliminary look at those data, the so-called EASE 4 study, Phase IIIb study looking at nutritional status. On the next slide or slide 9, is the detail of the EASE 1 pivotal trial. And before providing a careful description, I want to thank all of my colleagues here at Zealand who participated in executing this trial and in particular, extend our thanks to the volunteers, the patients and families who participated and the important contribution of the investigators and the investigative sites. As we have previously outlined, EASE 1 is a randomized, double-blind, placebo-controlled Phase III trial which is specifically designed to evaluate safety and efficacy of both once- and twice-weekly dosing of 10 milligrams of Glepaglutide over 24 weeks of treatment. Importantly, this trial, which randomized a total of 106 subjects with Short Bowel Syndrome and intestinal failure, requiring at least 3 days or more per week of parenteral support, had a critical optimization and stabilization phase so that we could ensure that the parenteral support was stabilized and that's an accurate oral liquid prescription could be provided to patients during the course of adjustment of parenteral support during the trial. Once that optimization was complete, patients were randomized 1:1:1 to each -- to 1 of the 3 arms, twice weekly Glepaglutide, once weekly Glepaglutide and placebo matched for the duration of the 24 weeks of study. The primary endpoint in this trial was the reduction in weekly parenteral support volume from baseline to week 24 with the primary comparisons between each active treatment group and placebo. Key secondary endpoints that we'll discuss briefly included the proportion of individuals on each treatment regimen achieving at least a 20% reduction in PS volume over the course of the study and those are completely eliminating the need for parenteral support, that is a parenteral support volume reduction of 100% so-called enteral autonomy at the end of the trial. Patients were well balanced and the 106 subjects were well balanced for both gender. The amount of weekly parenteral support required, which was approximately 14 liters of fluid per week and there was a balance as well between those individuals who had Stoma versus Colon-in-Continuity as the result of their previous bowel surgeries. If you go on to Slide 10, shown here graphically is the primary endpoint demonstrating over time the reduction in parenteral support at each individual time point, from baseline out to week 24. Shown in gray is the placebo response, light blue or teal is Glepaglutide once weekly and the dark blue Glepaglutide twice weekly. As you can see, from baseline, Glepaglutide twice weekly, resulted in both prompt and continued reductions in parenteral support out to week 24. And by the end of study, the average reduction in parenteral support volume for those taking Glepaglutide twice weekly was in excess of 5 liters. You can also see, as has been observed in other studies of Short Bowel Syndrome that placebo-treated subjects did have a progressive decline in parenteral support volume but the primary comparison between week 24 Glepaglutide twice weekly and placebo did achieve statistical significance. You see in the middle light blue line, the once-weekly treatment group which had a similar rapid reduction over the first 2 to 8 weeks, but then an interesting plateau in that reduction in parenteral support that extended out through the duration of the study. This observation and the comparison between that and the placebo group did not achieve statistical significance. So once weekly Glepaglutide did not achieve a statistically significantly greater reduction in parenteral support than placebo. However, this plateau intrigued our study team and further analysis of this population to try to understand why this plateau may have occurred, it is outlined in the figure on Slide 11. In reviewing these data, there was a single outlier patient identified in the once weekly arm with a significant increase in parenteral support volume in the late stages of the trial. This was not consistent with either the prescribed parenteral support for that individual patient and inconsistent with the pattern seen virtually with every other subject in the trial. It was later identified that there were duplicate entries in the case report that double the amount of recorded parenteral support over that prescribed. So by excluding that single subject. This plateau effect appears to disappear so that there is still a progressive decline and a numerically greater reduction in parenteral support volume for Glepaglutide once weekly versus placebo. However, even with the exclusion of this outlier that did not achieve statistical significance but does support that Glepaglutide has at least the potential for a dose response based on these observations. In Slide 12 is a summary of some of the specific endpoints I outlined as key secondary outcomes that is the proportion of individual patients achieving a greater than 20% reduction in weekly parenteral support at both weeks 20 and 24. And as you can see, the absolute percentages are listed approximately 66% of those receiving Glepaglutide twice weekly, about 40% of those receiving placebo. The statistical analysis plan allowed for this stepwise comparison. And indeed, those treated with twice-weekly Glepaglutide had a significantly higher clinical response rate as measured by that 20% reduction or more as compared to placebo. In addition, and very importantly, as was alluded to by Adam in his introductory remarks that a complete discontinuation of parenteral support is indeed a desirable outcome for these patients who require virtually daily parenteral support. And in this trial, a total of 9 patients treated with Glepaglutide were able to completely discontinue parenteral support during the course of the trial. 14% of those treated with twice weekly or 5 subjects and 11% of those or 4 subjects treated with once weekly were able to completely discontinue parenteral support. And in contrast, no individuals treated with placebo successfully reduced parenteral support to zero during the 24 weeks of study. In addition to these clinical findings, Glepaglutide was assessed to be safe and was well tolerated during the course of the trial. The most frequently reported adverse events were both injection-type reactions and gastrointestinal side effects. Importantly, 102 of the 106 recruited subjects completed the trial, which contributed to the robustness of this data set and 96 of those individuals have continued into the ongoing safety and efficacy extension trials that I reviewed briefly at the introduction of my remarks. So on slide 13 and in summary of our top line reported results from today, Glepaglutide treatments did meet the primary endpoint with twice weekly dosing achieving a statistically significantly greater reduction in parenteral support volumes than placebo with a reduction just in excess of 5 liters per week with the twice-weekly treatment. In addition, 2/3 of patients in the twice weekly group had a clinically meaningful treatment response that is greater than a 20% reduction in parenteral support and importantly, a total of 9 patients treated with Glepaglutide were completely weaned off parenteral support, while no placebo-treated patients were able to achieve the same. And finally, these data do support the Glepaglutide was assessed as safe and well tolerated during the course of the trial. So we are extremely excited to have these results available to us. And obviously, additional analyses of this very large data sets are ongoing and we look forward to answering any additional questions you may have. Thank you all for joining us. With that, I will now turn the call back to Adam.

Thank you, David, and thanks all. With that, we would like to turn over the call to the operator for questions.

[Operator Instructions] And your first question comes from Joseph Stringer from Needham & Company.

Congrats on the data. I have 2 from us. I'm just curious if you could disclose the mix of -- or the split of patients -- SBS patients who have the Colon-in-Continuity versus Stoma patients in the -- across the 3 arms. What was the relative percentage in each of those? And did you see any different effect in those types of patients? And then the second question is on the safety and drug exposure requirements that would be needed for filing here. Is there anything gating there in terms of the long-term extension? And once weekly versus twice weekly there that you would need prior to same NDA submission?

Thank you for the questions. And I will hand it over to David, and then...

Yes. Thank you, Joseph. First, if I remember the beginning, question of the balance between the groups and overall trial population with Stoma versus Colon-in-Continuity or so-called CIC subjects. The trial itself was not designed to analyze nor was it powered to assess for a difference in the response in those 2 treatment groups. But importantly, the stratification for our trial and the enrollment resulted in a balanced almost 50-50 distribution of Stoma and CIC subjects in each of the 3 treatment groups and obviously, in the population overall. And then your second question about safety exposure. Obviously, for this trial, the 35 subjects who were treated with twice weekly for the course of this trial compared to the 35 subjects randomized to once weekly. We believe based on our initial review of the safety data that we do, in fact, have pretty clear evidence of no imbalance in safety signals between those 2 groups. And obviously, to your point, for the total number of subjects exposed for an extended duration, we will have differences -- remember as well, though, that individuals who were treated with placebo in EASE 1, who rolled over into the EASE 2 extension will be re-randomized and observed in a blinded fashion between once and twice weekly. So an additional approximately 15 to 17 subjects will be treated ongoing with twice weekly. And we believe not only with that, but the encouraging safety profile that I outlined as well as the patient years of exposure that we have a meaningful safety data set that will enable us in active discussions with regulatory authorities to proceed towards submission.

[Operator Instructions] And your next question comes from the line of Sarita Kapila from Morgan Stanley.

It's Sarita from Morgan Stanley. I just had some follow-ups. How important was once weekly dosing versus twice weekly dosing for physicians? And given some of the competitors in development may have more convenient dosing, how do you see the profile of Glepa comparing?

Thanks for that question. I think when we talk to the prescribers, and I think it's the same thing we hear everywhere, then efficacy is the most important thing. There's no surprise to that when you're talking about a rare disease that carries the burden that you see here. So efficacy is the most important parameter. And then with regard to convenient dosing [ regime ]. It's extremely important to not only look at once daily or twice weekly or once weekly, it's also the way you administer the drug. And here, we would say we have a very convenient drug with the autoinjector and the feedback we get from prescribers is that for them, it's not really important for if it's once weekly or twice weekly as long as it's convenient. And you have to compare that with current standard of care where it's a daily injection, you need to mix it and you need to dose it per weight, so account for the weight and also adjust for kidney function, which is a quite complicated and timely procedure versus just having an autoinjector where you inject yourself. I would say for larger disease areas, maybe in obesity or diabetes. It's where you don't have the same structure around managing your disease, then once weekly would be a benefit. But when you talk about a disease area like SBS, what we hear from prescribers is that is not important. So for us, the most important outcome of this study is to see what we believe is really, really strong data. We are extremely encouraged by the number of patients who could wean off completely, and we do believe we have a very, very competitive offering with the data that we now have at hand.

[Operator Instructions] And your next question comes from the line of Thomas Bowers from Danske Bank.

Yes. And congratulations on the data. So a number of questions from my side here. So first of all, just wondering whether you can share how many of the patients had at least one day reduction of PN? And if not, is it fair to assume that you are sort of close to where you normally would expect this to be when you have a reduction number of 66%, then I think Gattex was above 50% on this. So -- any color here would be appreciated. And then on those 9 patients that completely weaned off of PN, I believe Gattex demonstrated 2 patients. So seems like you have something that you could argue for as a small advantage. But I'm just wondering, is if those patients when you measure this, is this at 24 weeks? Or well what I'm trying to ask you is if this includes patients who sort of went off PN and then back on after maybe a few weeks or a couple of months? So is there anything here that shows that this is actually a sustainable result of the GLP-2 therapy and also, of course, expected to be maintained. I'm not sure if you have any color on the extension for these patients? And then my last question, just on the once weekly. Normally, you would assume that the receptor does not require full exposure, at least in theory. So is there any you would say, theoretical thoughts on why this actually fails to demonstrate a meaningful benefit also, of course, when you exclude that single patient outlier?

Thanks, Thomas, for your question. I'll start, and then David might add something. If we just first perhaps discuss the patients who weaned off, we had 5 patients in the twice weekly and 4 patients in the once weekly and at least our understanding that in the pivotal studied with Gattex that were none. There were one, but that was in the placebo group. So we think it's a quite meaningful thing. And I can also confirm that is by end of trial that we had these -- and of course, we also look forward to report on the further calls for other patients went from EASE 2 and 3 in the future. So we believe that's a very encouraging data point. As we said when we started this call, we are extremely happy with the effect data that we saw with twice weekly dosing. We actually think it's very impressive data on all parameters. And then you're right on the once weekly. It was not -- we didn't see the same extent of effect. I would -- of course, we need further analysis of the data to better understand the once weekly dose, but it's clear also with 4 patients weaning off but some have benefited from that. And -- but here, I would just have to highlight that it is a heterogeneous patient group. So these will be analysis will have to do down the road. On your last question on the number of patients who have one day off. I think we also have to save some data for our scientific conferences. So you have to hold that one a little bit. David, do you want to add something?

Yes, I'll just reiterate, Thomas, that the complete cessation of parenteral support, the enteral autonomy was at any time during the trial, but sustained out to 24 weeks. And obviously, those individuals, many of them now are rolling over into or participating in EASE 2, which remains blinded at the investigator level. So we will have an opportunity at the interim analysis point to answer your question more accurately. I was going to repeat what Adam said. Yes, we're saving some of this, both for our team to digest the number who reduced by one day or more. And as Adam said, in the Gattex pivotal, the information that's listed in their USPI and prescribing information. No subjects discontinued during the randomized placebo-controlled portion. It was only in the extension as we understand it for those subjects we're able to discontinue. Back to the dose question, I think it is important that -- while this did not achieve a difference from placebo that Adam's point about some individuals responding at the line when you remove the outlier does fall between twice weekly in placebo, suggesting a dose response and the complete cessation of parenteral support in those 4 patients does suggest a drug effect that may be significant. Obviously, we can't conclude that statistically, but certainly, for us, raises a compelling question as to how that dose may be affecting some of the individuals in this heterogeneous population.

Great. And then maybe just one last small question. Your previous argued for 50 hours half-life and now on this slide to see you're up to 88 hours. Is that some new information that you sort of discovered here? And is that comparable to what we normally see with once daily Gattex? And then, of course, [indiscernible] tied up at 72 weeks, sorry, hours?

Yes. So you're right about that. And this is the -- you can say, the team who have worked on the entire data that we have for PK and also now including data from patients. The PK profile of Glepaglutide especially the half-life is defined by 3 phases, the first, the second and the last phase. And it's when you put those together and then you also adjust for the -- for the exposure that we believe is relevant for clinical effect. So it's -- I would call it -- this is the number that we anticipate we will bring forward also when we approach an NDA. And this is what, in our mind, actually a conservative number because we don't account for all the contributions of the half-life in the third phase, which we believe is actually not contributing to effect.

So are you arguing for maybe if you actually have a once-week profile, but maybe you should go up to a higher dose than 10x?

I mean that's, of course, something we cannot address because we have not done that study, but it's, of course, an interesting thought.

[Operator Instructions] And your next question comes from the line of Jesper Ilsoe from Carnegie.

A few questions from my side. So perhaps you can disclose the percentage with abdominal pain, both in the Glepaglutide arms as well as in placebo? And then just on the partnership interest, perhaps you can raise the main points you've discussed in the early partnership discussions to date. And perhaps some timing on when you expect or would like to strike a potential partnership deal? Is it before or after potential FDA and EMA approval? And then lastly, just on the data set. So what uncertainties, if any, do you see in the data that the regulatory agencies could raise also just on the data that we will await for the scientific conferences to see? So basically, how approvable do you see Glepaglutide now to the FDA and EMA?

Thanks for your questions. I will start to address a few of them, and then I will hand over a few to David. I think we cannot comment in details on partner discussions. The only thing we can say is that we have had significant inbound interest from several companies, and we have also agreed to have some confidentiality agreements in place. We have not allowed people into a data room and the plans right now is, of course, we need some time to understand the data, to understand the next steps to decide which kind of label we would like to go for, et cetera, et cetera. And I think that will require a few months to get to that level before we would be ready to open up a data room. And we also are very focused on the fact that once we do that, we would like to have relevant parties or interested parties a little bit at the same level. So we don't move too much forward in different speeds for different potential partners. So more on that, -- having said that, of course, it could be an event that we could have next year, a partnership announcement, but that depends on how things progress. As we have said all the time, even with the restructuring, we are fully set up as an organization to drive NDA submissions and also commercial preparations before launching. So in that sense, we feel we are very well equipped to progress forward. David, would you address the safety finding? I think we will not comment on that. I mean, in details, I mean, that will again be for later conferences, but we remain encouraged on the abdominal side as you commented, but I think we have to be careful here because we only just all the data today, as you know.

Yes. Jesper, to comment on that because Adam said, I don't think for us there was any even yellow lights or certainly red lights that lit up when we look the safety data set, knowing that this is a population who can develop abdominal pain and other GI side effects from GLP-2 therapy and also as the consequence of their underlying disease, particularly Crohn's disease, where strictures are common. And yes, we will be forthcoming with those when the scientific presentations are put forth. But suffice it to say that we are certainly encouraged by the safety data set that we've seen albeit briefly over the last few hours. And to your question about approvability, I've been in this business long enough to know that speculating on approvability is not something I'm either good at or should venture into. Suffice it to say, though, that I believe not just with the EASE 1 data we're reporting today, but the extension trial, the mechanistic study. We are quite encouraged at the robustness of this data set. And certainly, that will be a part of what will make engagement with the regulatory authorities, I think, critically important for us as we push towards submission and having a trial like this with such a clear result for the primary end point for us is really encouraging. So -- our intent is that we will continue with EASE 2 and 3. We'll have an opportunity to look at interim analysis in each of those and wait EASE 4 to get supplemental mechanistic data, all of which we believe builds out a very effective data set to be considered for a review.

Okay. Can I just ask one follow-up on the abdominal pain question. So would it be fair to assume that if you saw abdominal pain like Gas-X's 31% that you would have called it out into these together with note you made about injection site reactions and gastrointestinal adverse events? Or can we not read anything into it? Just trying to catch on the percentage of patients with abdominal pain because it's a big issue to patients and a big issue with Gas-X. So just any others some color there?

I mean you cannot read -- you cannot win anything out of the release on these aspects, but we acknowledge that it has been reported as a big issue with for patients taking short-acting [indiscernible]. And I can -- we can only say what David said before that we will release further data on this later.

And I think importantly, and we emphasize that 102 of 106 subjects who started the trial finished the trial, which regardless of the potential for adverse events that it was a significant proportion who continued through the 24 weeks and almost 100 of them then continued into the extension. So we will get those data to you as soon as possible. And thanks for the interest because we do appreciate the importance of that to patients and their clinicians.

[Operator Instructions] And your question comes from the line of [indiscernible] Sharma from Goldman Sachs.

Just a follow up on safety and I just wanted to clarify. So -- do you think that you have enough patients in the 2-week dosing data set to support a BLA? And then secondly, just if I could just clarify on EASE 2 and EASE 3, you said that there will be some interim, can you tell us when or do you have any visibility as when they may be?

Thanks for the question. I'll let David address it again. And -- and I think -- yes. David?

Yes. So back to EASE 2 and EASE 3, as they are ongoing studies and they will continue out for 104 weeks each, but we anticipate an opportunity to look at these interim cuts as the year closes out, meaning end of 2022, obviously, closing out, unlocking the database and then analyzing the data it can take from days to several weeks. So I won't predict exact dates for you. But we are looking forward to that, both for assessment of continued efficacy and the opportunity then to observe those who are placebo treated, what happens when they roll over to active treatment once or twice weekly. So that will increase the number of twice weekly treated individuals. As I said earlier, the absolute number of patient years, we believe, is very robust, more than 200 patient years of exposure for a rare disease and keeping these subjects in the trial, I think, is critically important. The degree to which the once weekly and twice weekly exposure will be critical to regulatory authorities. Again, I won't speculate on the importance. But as I said, we were today looking at the relative balance of the reported events in both groups. So there's reason to believe that at least significant information can be drawn from the once per week treatment population.

[Operator Instructions] And your next question comes from the line of Brian [indiscernible] from Jefferies.

It's Brian here from Jefferies onto [indiscernible] Just your thoughts on what you think drove the greater-than-expected placebo response given it looks almost in line with the once weekly?

I'll start, Brian. I think you broke up just a little bit, but what did we make in the placebo effect? I think we were I'm not sure surprised is the right word, but it was a robust placebo effect, greater, at least in magnitude and that, that was observed in the Gattex randomized and placebo-controlled trial reported in their submission and then their label. I think, importantly, we tried our level best to -- with the stabilization period to ensure that the subjects in all groups were in a position where we could elucidate treatment effect, which we obviously did the difference between twice weekly and placebo. We will obviously be looking into things like daily fluid intake, body weight to see if there are any other signals that tell us why the placebo population treated responded the way it did. But obviously, that's only speculative this open for our understanding of their responses, their response and the data are the data. So we again, are pleased that we were able to see a substantial clinically meaningful difference between the twice weekly and placebo even with that fairly robust placebo treatment response.

Thank you. There are currently no further questions. I will hand the call back to you.

Thank you. And with that, we would really like to thank all of you for attending this call, which is, of course, related to very significant event for the company. And as I said, hopefully, for patients living with a Short Bowel Syndrome, we look very much forward to connecting with you at future announcements and updates. Have a good day.

Thank you. This concludes today's conference call. Thank you for participating.