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

Good day, and thank you for standing by. Welcome to the Zealand Pharma webcast and conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Anna Krassowska, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you. Welcome, and thank you for joining us today to discuss the top line results announced earlier from the Phase Ib trial with our long-acting amylin analog, petrelintide. With me today to present and discuss the data are Adam Steensberg, President and Chief Executive Officer; and David Kendall, Chief Medical Officer. Our Chief Financial Officer, Henriette Wennicke, is also on the call today for the Q&A that will follow after the presentation. You can find the related company announcement on our website at zealandpharma.com. As described on Slide 2, I caution listeners that we will be making forward-looking statements that are subject to risks and uncertainties. Moving to Slide 3. I will now turn the call over to Adam Steensberg, President and CEO. Adam?

Thank you, Anna, and thanks, everyone, for joining the call today. Today is a very important day for Zealand Pharma. We are extremely pleased to report the top line data from the Phase I 16-week trial with petrelintide, which we are developing as a monotherapy for weight management. These data position petrelintide as a potential best-in-class amylin analog for weight management and reaffirm our conviction in petrelintide as an alternative to GLP-1-based therapies. With the potential for GLP-1 like weight loss and the very benign GI tolerability profile observed in trials today, we believe that petrelintide has the potential to become the backbone of therapy for weight management in the future. Moving to Slide 5 and our R&D pipeline, which includes truly differentiated obesity assets, 2 rare disease assets with best-in-class potential, both of which have PDUFA dates with the U.S. FDA in the fourth quarter, and 2 assets focused on chronic inflammation, which are both ready for first-in-human clinical trials. The focus of today's call will, of course, be on the Phase Ib top line results with petrelintide. Turning to Slide 6. We believe that the obesity pandemic and their associated comorbidities represent the greatest health care challenge of our time. Obesity is associated with premature excessive death and more than 220 complications and comorbidities can be ascribed to obesity, including serious chronic diseases like liver disease, cardiovascular disease, Type 2 diabetes, kidney disease, Alzheimer. According to WHO, 2 billion people globally are now considered overweight and obese. In the U.S. alone, prevalence of overweight and obesity is rapidly approaching 50% of the population. Thus, the prevalence of obesity is still rising despite the launch of the first therapies to address this global health care challenge. And treatment rates globally are only approximately 2% to 3% of the addressable population. Moving to Slide 7. Considering the magnitude of the obesity pandemic, we believe there is a need for novel and alternative treatment options with a different mechanism of action than the GLP-1-based therapies approved today. We have seen the approval of the first and the first successful rollout of the first 2 once weekly GLP-1-based therapies to address this global health care challenge. In Phase III clinical trials of longer duration, they have demonstrated potential for 15% to 21% mean weight loss in patients with obesity and positive outcomes on several obesity-related comorbidities. On the flip side, GLP-1-based therapies are associated with a number of gastrointestinal adverse events, including nausea, vomiting, diarrhea and constipation. Recent data suggest that up to 30% of patients with obesity under GLP-1 treatment stopped within a month before they reach target dose. And within 1 year, up to 60% to 70% of obese patients withdraw from treatment. Thus, we believe there is a need for therapies that can help patients who cannot tolerate GLP-1-based therapies or who will be looking for an alternative solution to maintain weight loss. The 16-week data reported today significantly increases our confidence in the potential of petrelintide to represent an alternative to GLP-1 based therapies for the management of overweight and obesity. We are targeting GLP-1 like weight loss of 15% to 20% in long-term Phase III clinical trials with a potential for high-quality weight loss implying increased preservation of lean body mass. Importantly, petrelintide offers a differentiated mechanism of action, reducing food intake by increasing satiety for a different and potentially better patient experience. We are also confident that petrelintide has the potential for a significantly improved GI tolerability profile compared to GLP-1 receptor agonist, suggesting both lower frequency and milder severity of gastrointestinal adverse events, which is an important point of differentiation in weight maintenance. And with that, let's move to Slide 9, and I will turn over the call to our Chief Medical Officer, David Kendall, who will present the top line results.

Thank you, Adam, and thank you all for joining us. I am extremely excited and pleased to share our top line results from our 16-week Phase I trial of petrelintide. As outlined by Adam, amylin agonism offers a unique and distinct mechanism for achieving weight loss in people with overweight and obesity. And treatment with amylin agonists represent an exciting potential alternative to incretin-based therapies. Amylin agonism reduces body weight by enhancing satiety and restoring leptin sensitivity, a mechanism that is in contrast to the reduction in appetite and prospective food intake that occur with GLP-1-based therapies. Furthermore, nonclinical data have demonstrated that amylin agonists, including petrelintide, offer the potential to preserve lean body mass and, therefore, provide higher-quality weight loss when compared to incretin-based treatments. In addition, both our own observations and clinical observation with other Amylin analogs have demonstrated improvements in cardiovascular risk factors such as blood pressure, lipids and markers of vascular inflammation without increasing heart rate, supporting the potential for improving cardiovascular risk. Our long-acting amylin analog, petrelintide, is a 36 amino acid [indiscernible] peptide based on the sequence of human amylin. Petrelintide has a 10-day half-life, making it suitable for weekly administration The compound is stable at neutral pH, minimizes fibrillation and can be both co-administered and co-formulated with other peptide-based therapies. In-vitro studies have demonstrated that petrelintide activates both key amylin receptors and the closely related calcitonin receptor, a basic mechanism that we believe is important for the therapeutic effects of amylin analogs on body weight. We have previously presented data demonstrating that short-term treatment with lower doses of petrelintide can achieve weight loss of more than 5% in healthy lean and overweight and obese individuals. In this 6-week study, petrelintide was assessed to be very well tolerated and all reported gastrointestinal adverse events were mild. These data were presented in full at Obesity Week 2023. Moving now to Slide 10 and the trial design of Part 2 of our Phase Ib study. Petrelintide was evaluated in a randomized, double-blind, placebo-controlled Phase Ib trial, enrolling a total of 48 adults with overweight and obesity. Participants were randomized into 1 of 3 dose cohorts assessing multiple ascending doses of petrelintide using a dose titration scheme or to placebo. Study medication was administered weekly for 16 weeks, followed by a 9-week follow-up period. Note that study participants randomized to the 2 higher dose cohorts received the maximum assigned maintenance dose for a period of only 6 to 8 weeks. Importantly, in this trial, there was no specific diet or activity intervention provided. Today, we are pleased to report the top line data from an interim analysis for safety, tolerability and change in body weight at 16 weeks at the end of the active treatment period. The full analysis of trial data will include an additional 2 months of posttreatment follow-up for safety and full results from this trial are planned for presentation at an upcoming scientific congress. Moving now to Slide 11. Shown here is a summary of key baseline characteristics of the participants enrolled in this trial. In contrast to many weight loss studies previously reported, approximately 80% of the participants in this trial were male. Median age was 49 years, while median body weight was 92 kilograms, with a median BMI of 29 across the study participants, all groups were well matched for baseline characteristics. On Slide 12, we show the reductions in body weight observed. The reduction in mean body weight across the 3 dose cohorts was 4.8%, 8.6% and 8.3% from baseline after 16 weeks of treatment, while placebo treatment resulted in a mean body weight loss of 1.7%. Importantly, and consistent with our observations from earlier studies with petrelintide, all participants on active treatment lost weight during the 16 weeks of study and the weight loss appeared to be on a continued downward trajectory throughout the active treatment period. In addition, review of data from individual participants supports that separation at the higher dose is possible with longer treatment duration in a larger study population. We find these data to be even more compelling in light of the fact that the study population was predominantly male with a relatively lower BMI, and these results were achieved in the absence of any background lifestyle modification. Moving now to Slide 13 and the tolerability profile. petrelintide was assessed to be both safe and well tolerated in the trial, with no serious or severe adverse events, and the safety profile observed was consistent with our earlier studies. All gastrointestinal, or GI, adverse events were mild, except for 2 moderate events, including nausea and vomiting reported by one participant who discontinued treatment after the third dose. Notably, no other participants discontinued treatment due to adverse events and no other participants reported vomiting, and there were only 2 reports of diarrhea, both of which were mild. Overall, nausea was reported by 16.7% to 33.3% for active treatment groups and 16.7% with placebo treatment. In addition, only a low number of participants reported injection site reactions, all of which were mild. No antidrug antibodies were observed. The tolerability profile reported in this trial further demonstrate the potential for an improved patient experience as compared to that reported in both clinical trials and with the clinical use of [ incretin-based ] therapies. In their totality, these results strongly reinforce our conviction that petrelintide has the potential to be an effective monotherapy as a treatment for overweight and obesity and furthermore, offers the potential as an alternative to incretin-based therapies for both achieving and maintaining weight loss. We look forward to presenting the full results and analysis from part 2 of this multiple ascending dose trial at a scientific conference later this year. Turning to Slide 14. These exciting and compelling data provide us the confidence and necessary information to rapidly progress our plans for initiation of a comprehensive Phase IIb trial of petrelintide monotherapy, which we expect to initiate in the second half of 2024. The draft study design is shown here. This larger trial with longer treatment exposure will enroll more than 400 adults with overweight or obesity, and will compare multiple doses of petrelintide or placebo over an estimated 42 weeks of treatment with up to 5 dosing arms. Consistent with other studies of treatments for overweight and obesity, the primary endpoint will be percentage change in body weight from baseline, and the study plans include a number of key secondary and exploratory endpoints, including assessments of body composition. We very much look forward to advancing the development of this exciting asset, and we truly believe that petrelintide offers the unique opportunity to establish a new class of stand-alone therapies for the treatment of overweight and obesity. And before concluding, and I would like to express our thanks to the devoted study team, the investigators, and most importantly, to the volunteers who participated in this study. We are indebted to all of these individuals for the execution of this trial and look forward to progressing petrelintide development in the months and years ahead. And moving now to Slide 16. I would like to turn the call back to Adam for concluding remarks.

Thank you, David. Let me put the 16-week data into a bit of context. We believe petrelintide, based on this molecular specific attributes and the clinical data reported in the Phase Ib multiple ascending dose trial, post potential as a best-in-class amylin analog that could become a leading backbone therapy for future weight management. With all the caveats for indirect cross trial comparisons, including differences in trial design and baseline characteristics. The 16-week data further increases our confidence that with Phase II and III trials of longer duration, we will achieve our target product profile of 15% to 20% mean weight loss and thus represent a clear alternative to GLP-1-based therapies. We look very much forward to initiating a comprehensive Phase IIb trial with petrelintide in the second half of 2024, while we will continue to increase our investments in CMC upscaling and clinical trials to further explore the potential of petrelintide in obesity and related comorbidities. Turning to Slide 17 for a brief summary of the target profile of petrelintide. In addition to the potential of 15% to 20% mean weight loss in trials of longer duration as well as the potential for preservation of muscle mass, which we will learn more about in our Phase IIb trial, petrelintide offers the differentiation mechanism of action that reduces food intake by restoring sensitivity to [indiscernible] and increasing satiety. In contrast to GLP-1 receptor agonist that suppresses appetite. Amylin agonism is the first non-incretin that has demonstrated potential as a monotherapy for GLP-1-like weight loss. Petrelintide also offers potential for significantly improved GI tolerability, which will be a very important point of differentiation, both for the proportion of people with overweight and obesity who cannot tolerate a GLP-1, but also for people who will simply be looking to try something else. Remember that, in today's world, despite the generally low GLP-1 treatment persistence, there are no alternatives yet. And with that, I would like to thank you all and will now turn over the call to the operator for questions.

[Operator Instructions] And your first question comes from the line of Julian Harrison from BTIG.

Congratulations on this data. I'm curious if there was any time-dependent trend in the nausea averse events. Did they happen earlier on and resolve from there? Or was the timing more sporadic?

Yes. Julian, this is David. Thanks for your question and kind congratulations. The nausea trend was, in fact, that the majority of events occurred early in the treatment and dose escalation phase. And in fact, the vast majority were transient, and there was a significant decrease in the reported rates of nausea over the course of treatment. So a pattern that, again, further, I think, exemplifies the tolerability profile that we have at least postulated and certainly one that for us represents a very mild representation of nausea as a potential adverse event.

And then 2 forward-looking questions, if I may. I'm curious had this study been longer, at what point would you have expected efficacy to plateau? And then also any comments with regards to expectations for body composition results in future readouts that would be greatly appreciated.

This is Adam. I will just start by addressing your last question and turn over to David for the first one. I mean I would say the preclinical evidence for preservation of muscle mass is really compelling and very strong observation, not only done with the petrelintide, but also across other amylin analogs. So it is something that you can say we have high expectations for and something we will explore thoroughly in the Phase IIb study and clearly something that could help further differentiate this opportunity as not only, you can say, increasing the energy -- increasing the muscle mass could be of health benefits, but also supporting increased resting energy metabolism and thus a more, you can say, pleasant way of maintaining your weight loss. David, maybe you want to address the first question?

Yes, and in regards to your question or comment about plateau in clinical response. Based on the data we've seen both in this study and the previous studies, we see no evidence of an early plateau in the treatment response. And as has been reported with cagrilintide and was seen previously with petrelintide, we would anticipate progressive weight loss over a period in excess of 1 year. Obviously, the Phase IIb that we have outlined will give us a further look at this over approximately 1 year of treatment. But as you likely know, the regulatory requirements now provide an opportunity to look out beyond 76 weeks of therapy. So where that plateau may occur is at least based on available evidence, likely at a year or beyond, and we would anticipate something very similar for petrelintide.

And your next question comes from the line of Michael Novod from Nordea.

Michael Novod from Nordea. [indiscernible] So a couple of questions from my side as well. So first of all, can you go into detail around whether you'll be able to take sort of dosing somewhat higher? Of course, we don't know your highest dose yet, but looking at the Phase IIb, it's very comprehensive on the dosing side, maybe a bit of detail on whether you can actually take dosing higher than what we're seeing currently. And then secondly, is there any rationale for the low -- BMI 29 is rather low, especially given the enrollment criteria going up much higher. So any rationale behind why you ended up around 29. And then lastly, is it fair to assume, also regarding muscle mass preservation, the link between [indiscernible] receptors and [indiscernible] sensitivity, so thereby also explaining part of the potential rationale around muscle mass preservation.

Thank you for your questions, Michael. I will start and then David will provide further insight. As David mentioned also with the higher dose and as you can see from the data, then the 2 high doses, which are both very high doses, they achieved similar degree of weight loss in this study of 16 weeks duration, but there was also a clear trend, I would say, when you start to explore individual patient trends that the highest of those doses would provide more weight loss with time. As we have also discussed previously, then we are actually at the max anticipated dose based on our [indiscernible] exposure. So I would say we are -- we have achieved very high doses that would not prevail or prevent us from actually going higher in later studies. But I would -- I think it's fair to say, with where we are right now, we actually think we are in the relevant dosing event and then feel very confident to move into Phase IIb with the current doses. And as David also said before, we would expect, you can say, continuous weight and also dose separations among the 2 higher doses in with longer [indiscernible], and then, David, maybe over to you on the BMI question and the muscle preservation versus the 2 receptors.

Yes. And I'll add, Michael, thanks for your questions, that the 2 doses you see as dose 2 and dose 3 are really high and highest, given where we started with part 1 of the study. But to your BMI question, in this small study, we did not stratify for baseline BMI, and I will say it is, in some ways, just the fortune of a small single-center trial where the lower BMIs and the male preponderance were observed, neither were stratified in this study. And my own thoughts is, despite that, if anything, those characteristics may have muted the responses we see. And while we're quite pleased with the responses observed, other than the lack of randomization in small trials, and that BMI was consistent across the 3 treatment groups and placebo. And then finally, your question about muscle mass, insulin sensitivity and the role of calcitonin receptor versus the amylin, particularly the amylin 1 and 3 receptors. I think I'll stick with my party line that our understanding of amylin receptor biology is still in its infancy in many ways. But based on the data we've seen and understanding of the relationship between the 2 key amylin receptors and calcitonin that all 3 are critical components of the weight effects of amylin agonists, whether that preservation of muscle mass and the associated improvements in insulin sensitivity are related to 1, 2 or all 3 of those receptors, I think remains a part of our ongoing exploratory discovery work. So more data to follow would be what I would say on the latter.

Your next question comes from the line of Prakhar Agrawal from Cantor Fitzgerald.

Congrats on the data. So on the baselines, you highlighted the high percentage of means, but most of the data for women showing better weight loss than males is from GLP-1 drugs. So I'm just curious as to the same trend hold for amylin as well and does your prior data from Part 1 or cagrilintide support this theory? And I have a couple of follow-ups.

Yes. Thanks, Prakhar, I'll take that. Certainly, the evidence does support that outside of GLP-1-based therapies that weight loss in women is as great or greater than in men. And certainly, at least in the small numbers of subjects we observed in this trial, the women who were randomized to each of the 3 active treatment arms were the ones who were at the high end of the weight loss. So it bears true in our early experience for petrelintide and I think will likely bear true for other weight loss therapies. And obviously, that will go into planning and stratification for our population for the Phase II study, so we get a much fairer representation of the effect in both men and women.

And just a couple of more questions. What was the magnitude of injection site reactions? I think you had that in mild, but at this point, do you think that the injection site reactions are differentiated versus cagrilintide? And lastly, any color on metabolic parameters? And do you think it's comparable or better than GLP-1 monotherapy? The reason I asked is this will be important if you want to develop Amylin as a monotherapy given the outcomes benefit seen with the GLP-1 drugs.

I can confirm that the -- you can say the frequency and also the severity of injection site reactions were really low and mild. So we were really, you can say, confirming also our observations from the 6-week study. So these are really low numbers of injection site reactions. There were, you can say, 1 or 2 subjects who were actually, you can say, reporting most of those. So you can say on an overall, you can say, cohort, it was, I would say, impressively low numbers. So you can say perhaps it also goes hand-in-hand with the fact, as you can see from our release, that we did also not observe any antidrug antibodies. So we really feel that perhaps, you can say, the construct of petrelintide being able to formulate that neutral-pH is something that is supporting, you can say, the observation of very low numbers of injection site reactions and also the absence of these, so far, of antidrug antibodies. David, any further?

Yes. I'll reemphasize what Adam said. I mean the preponderance of the reactions were reported by 2 individuals, and mild was the grading of all of them. So I would say qualitatively, certainly consistent with what we would call very low rates of injection-type reactions. In terms of your question, Prakhar, on metabolic parameters, obviously, we have additional analyses to be completed from this data set, you're getting top lines and we will be in exploring once the full safety data set is closed out in the next few weeks. But suffice it to say that metabolic parameters, including other measures of cardiovascular risk, like blood pressure, heart rate will be part of our subsequent data disclosures and really important information, to your point. to demonstrate the potential for protection beyond simple weight reduction. So more to follow, Prakhar.

And your next question comes from the line of Suzanne van Voorthuizen from Kempen.

Congrats on the data. Firstly, on the dose levels, you're not disclosing yet, but you're saying you're within the relevant therapeutic band. So I was wondering, for the Phase IIb, how those 5 dose levels differ from each other. If it's more in between doses or if there are other differences like frequency or titration? And my second question is on partnering. If you can elaborate once more on your thinking around the potential partnering of petrelintide and how this data set feeds into your thought process?

Maybe I'll just start with the partnering discussions. And we have been, I think, very clear that, as you can imagine, that is significant. And I think everybody understands that there's significant interest in this space. And our ultimate goal is also to find a very committed partner who just as us, would see petrelintide as a potential future alternative to the GLP-1 based therapies. And with the data that we have at hand here, also something that could actually form the backbone of future management of obesity. So with the data at hand, we have also been very clear that we will have more, you can say, progress discussions with some potential partners to see if we have a shared vision for the product because, at least before we approach Phase III, we see, of course, a clear need to partner, to have somebody that can support us in a global reach, somebody who can help with investments in manufacturing for which will be quite significant investments, if you are developing something that could become a leading therapy for weight management. So having said that, we also, as we have communicated on this call, a very, you can say, committed and also firmly believe that we have all the skills to push this molecule forward. So -- but in the next phase, into Phase IIb. And I will just remind everyone that we have, you can say, a long history in this space, including having taken other products all the way to the market. So it's with a lot of confidence we move forward, but it's also with a clear ambition of finding a partner when time is right. And then I'll hand over to you, David, for the question on the Phase I -- sorry, Phase IIb trial design.

Thank you, Adam, and thanks, Suzanne. As you can see from the draft study construct, there are multiple dose arms proposed or at least available to us. And I think, as Adam alluded to earlier, we certainly feel like we have the opportunity to extend this to the higher doses that we've assessed, and that pushes us to the limits, we think, of the appropriate high dose of petrelintide that could be the most effective, but that does not mean we have had these data in hand long enough to fully assess and then discussed with regulatory authorities, the specific doses that we will go with. But I think suffice it to say that we will seek to evaluate all, but certainly, these higher and highest doses in Phase III. And the titration scheme, same set of considerations, meaning, we want to make this clinically relevant is faster or better or should it fit with usual clinical practice. As you can hear from the tolerability profile, there is little need to make major adjustments in the titration scheme simply for tolerability. But if that allows us to achieve the higher doses even more safely and with even greater tolerability, we will certainly take that under consideration as we rapidly progress our plans to complete the Phase II protocol.

[Operator Instructions] And your next question comes from the line of Lucy Codrington from Jefferies.

Just firstly, I wonder if you can tell us in which dose cohort the patient that discontinued treatment was. And any indication as to why this patient may have been unable to tolerate when everyone else seem to tolerate it so well? And secondly, just to clarify, the BMI 29, the initial slides say median, but then the final comparative slides says mean. So I just wanted to check, is the mean and median both 29? And then for the Phase IIb, is the plan to include [indiscernible] interventions for the Phase IIb study? Or are you planning to have a similar kind of clean trial for the Phase IIb, and if so, what's the rationale for that? Yes, I think I'll stop there.

And I'll try to take them one at a time. I miss components, Adam will hopefully fill the gaps. As regards the single subject who discontinued, that individual received a total of 3 doses. So the starting dose and one escalation, but actually have the symptoms reported as mild at the first injection, the dose continued, and after the third injection in the highest dose cohort chose to discontinue. A couple of key components to understand, this individual remained at relatively lower doses at the time they discontinued, but did start at a slightly higher starting dose than we had built into the other dose cohorts. So it, I hope, taught us a fair amount, even though it's one subject. And obviously, no other subjects reported anything similar or discontinued due to GI side effects or adverse events related to treatment. Why it's median and mean, I can simply say they are the same. And the lifestyle intervention, yes, we do anticipate in Phase IIb building in diet and activity recommendations into Phase IIb as is recommended by the regulatory authorities, given that this was a short proof of concept and dose and safety and tolerability study, it was not built as essential in Phase Ib, but will be included in Phase II.

There are currently no further questions. I will hand the call back to Adam Steensberg.

And with that, we would like to thank all for attending and for your questions. We look very much forward to future announcements and updates. Have a good evening.

Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.