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

All right. Good day, everyone. Welcome to Day 2 of Cantor Global Healthcare Conference. For our next session, we are very excited to host Zealand Pharma. And representing Zealand is Dr. David Kendall, Chief Medical Officer. David, thank you for joining us.

Pleasure. Thanks.

Lots going on at Zealand these days, but not surprisingly, I wanted to start off on amylin given the interest in the space. Now amylin has been a target that's been around for a while, but suddenly, there is renewed interest in this mechanism for obesity, even going through some of the EASD presentations. Everyone was talking about amylin. What makes amylin an attractive target on obesity right now relative to GLP-1, GLP?

Yes. Thanks, Prakhar, and for those who aren't familiar with the history, I started my pharma career at Amylin Pharmaceuticals way back when. So I think much of it dates back to the -- both the discovery, but then the early clinical applications of then pramlintide, a very short-acting agent, but seeing in a small obesity Phase II study back then 10% to 12% weight loss with longer exposure. So That, to me, was the early proof of concept. That's almost 15 years ago now that those data became available. But I think also the unique mechanism by which it works, the incretin-based therapies as everyone knows clearly work. They bind to the GLP-1 receptor and other receptors come with certain baggage. The adverse event profile for a lot of them is quite similar, particularly around GI tolerability. Amylin works through different receptors, different signals. And although decreased appetite is part of this, the sense of fullness, the satiety signal is the unique one. So I liken it to waking up, you had the stomach flu or you created a brown bottle flu in yourself and you just don't feel like eating. That's GLP-1 like effects. Whereas I've gone to the buffet one too many times I'm full is the second satiety or fullness signal, very distinct. And I think that plus the tolerability profile that we're seeing with them on agonists, much better tolerated, both frequency severity and the nature of the GI tolerability issues, we think can be substantially different.

Right. And a lot of amylin drugs in development right now, you clearly have a view that potently activating both amylin and calcitonin receptors is important?

Yes.

Can you just explain why do you believe that? And what led to the drug that we know petrelintide?

Yes. So the amylin-calcitonin receptor biology is a complex one and probably still fledgling in our understanding, much like GLP-1 was back in the day. But the GLP-1 -- or I'm sorry, the amylin receptors, in hind brain, in the hypothalamus calcitonin receptors expressed in the brain and in the midbrain in particular. Knockout studies with animals show that the calcitonin receptor is playing a very important role in metabolism, controlling metabolism, controlling satiety. So we believe receptors don't exist in places where they're not needed. So the central role of calcitonin and the potent amylin activation. So based on an amylin backbone, that's petrelintide, long-acting agents. It's quite clear, probably have the greatest clinical effect. We believe petrelintide can achieve GLP-1 like weight loss, 15% to 20% with longer exposures. And we strongly believe that calcitonin-amylin receptor binding and biology is critical to the weight reducing effects in particular.

Got it. And so what are the safety implications of hitting calcitonin, anything that you are closely watching?

Yes, potent activation of the calcitonin receptor like salmon calcitonin obviously, changes calcium metabolism. Although for the bone, this can stimulate osteoblast activity, makes further stronger bones. It's not the therapy we use routinely for osteoporosis. But the flushing heart rate effects of high levels of calcitonin and potentially effects on calcium metabolism. The good news is even if you activate the calcitonin receptor, the body is exquisitely sensitive to maintaining serum calcium. So we don't anticipate significant effects on either bone metabolism to the negative or these flushing like symptoms, tachycardia and the calcium effects with the right balance, which we believe we have from our toxicology studies.

Got it. And recently, you have shown that amylin drugs lead to lower lean muscle mass loss. There was some data at ADA and EASD as well, I believe. So mechanistically, why is that happening?

Simple answer, we don't know. But it's quite clear that with petrelintide, pramlintide previously and the data with cagrilintide, it is a fat-specific weight change, at least in the animal models. We'll have to corroborate that in the human clinical trials. I think there are 2 potential reasons. One, we alluded to in our recent presentation at EASD food choices and the approach to food tends to avoid high fat and/or a simpler process carbohydrates leased in animal models. If you reduce fat, the body will preferentially burn fat. But the more important one, we believe, is amylin's signal to sensitize to leptin, which is our signal of adiposity. So when we all lose 5 pounds, the body suddenly thinks we're starving. Doesn't matter what our starting weight is, leptin levels fall sensitivity to leptin falls. So you can then preferentially burn less fat, body is protecting itself, if you will. By maintaining that amylin signal still seeing adiposity, we think there is a preferential burn. And in the animal models, it's quite clear that, that differs from GLP-1-based therapies.

Okay. Got it. Novo's cagrilintide or CagriSema is the furthest along in development. Maybe talk about how Petri, which is your lead amylin differs versus Novo's amylin drug?

Yes. I mean I would say at the surface, they are quite similar. So we're very encouraged by Cagri's clinical effects, the safety profile. They, too, I believe, have stated that it binds both the amylin and calcitonin receptor and you're seeing pretty substantial additive weight loss. The major differences, we think, are not just biochemical but that we can formulate petrelintide at a physiologic pH. It is stable nonfibrillating. There is an acidic solution. So we'll always be either 2 chambers or 2 injections when used in combination with something like Sema. We also believe we have advantages, a longer half-life greater bioavailability, probably similar potency. But at least in our Phase Ib study reported earlier this year, going to higher doses than they've seen with Cagri. The other real limitation is, at least with CagriSema. Cagri will carry all of the profile of the Sema molecule. So the weight loss should be additive. But the potential for additive GI tolerability issues, we think is also a concern. We've disenabled or separated the two. So while we believe ultimately, they could be used in combination with petrelintide plus a GLP-1. It could be admixed with any other neutral pH compound, and you can titrate each individually.

And Novo never developed their amylin as a monotherapy or so far not yet. Is there any specific reason for that? And why did you decide to go for a monotherapy route?

Yes. One, we believe the stand-alone therapy that could serve truly is the new backbone of obesity treatment. We realized GLP-1s would have been around for a few decades by the time the effective amylin hit the market, but a better tolerated GLP-1 like weight loss component to this, we believe, can set it apart as a monotherapy. Back to the Novo question, I won't try to answer for them, but I suspect a lot of it was the importance of supporting semaglutide in a very successful franchise. And the other is, I think, as they were doing development, this understanding of we need alternatives, we need approaches other than GLP-1s, use other metabolic diseases, hypertension, lipid disorders, diabetes you almost always use multiple approaches with one "backbone approach," a better tolerated molecule that's as effective can be admixed with anything such as petrelintide, we think can set it apart. And so we think separating them actually builds even greater value for the assets.

Okay. You presented Phase I data recently in June, I think. Maybe just help us characterize the efficacy and safety for petrelintide as a monotherapy versus other mechanisms?

So for those who haven't reviewed the data recently, this was a 16-week Phase Ib with 3 treatment arms, we call this Part 2 because we had done a 6-week Part 1 that showed the lower doses at 0.6 and 1.2 milligram resulted in about a 5% weight loss. In this, what I'll call the mid- to high and highest doses, we saw up to an 8.6% weight loss over 16 weeks. And at those highest doses, they had only between 6 and 8 weeks of actual exposure to the maximum dose because of the titration scheme we employed. But to us, that puts the placebo corrected weight loss approaching 7% above that observed for Cagri and for Sema and just slightly less than that seen with tirzepatide. So the early data readouts at those higher doses suggest you are on the 15% to 20% trajectory for weight loss, very encouraging safety and tolerability, very limited GI side effects, all but one individual when they reported them, said they were mild. Only one individual stopped drug of the 3 treatment groups or 36 subjects for GI tolerability issues related to drug. So to us, confirmation of the safety and tolerability profile and the efficacy that we think will be clearly GLP-1 like.

Right. And I guess one question that we got when the data was released was around the dose response. You certainly believe that there will be dose response and longer trials. So maybe talk about why you're confident on that.

Yes. And the full data for this study will be reported at ObesityWeek, upcoming. I think a lot of people surmised that before it was even official for us. The dose separation between the 2 highest doses, while the clinical result was comparable, shorter exposure and there was a pattern in at least the mid-high dose group, where they seem to lose an excessive amount of weight on the same dose as early. So the separation and the trajectory of the lines later suggests that at least at that mid-high and highest dose, we have the potential to go to at least 2 to 4 plus the doses you're seeing for petrelintide.

Okay. And when you present the detailed data at ObesityWeek, what should investors be focusing on?

Yes. I think more detail on the individual responses. Again, in that study, every individual exposed to the active study, drug, lost weight at some point through the trial. The average was between 5% and 8.6% for the 3 treatment groups. But then, obviously, giving a little bit more granularity to what the tolerability profile means, other safety parameters, none of which raised for us any level of limitation or concern for progressing to Phase IIb, which will be in the coming months.

Okay. And you said that amylin could be a more tolerable drug than GLP-1. Any details on that could be provided maybe on the frequency of GI events, the time course?

Yes. We don't have direct comparative data, so we're making sort of qualitative discussions, but we are seeing, at least in the early components of the trial where the titration is usually the most rapid probably rates, particularly vomiting, diarrhea, that are half of that or less than observed with GLP-1s, I would say it's similar for nausea that we're seeing it at half the rate as you see in GLP-1 trials, at least early. The other thing we're seeing is, if you remember the earlier Phase I studies, all the GI side effects were mild. We had this one episode on the patient in the highest-dose cohort. But both a lesser frequency, lesser incidents. And ultimately, these data would suggest less intense and perhaps shorter duration. We did not see substantial increase as we stepped up the doses, for example, it was with first exposure. So those sorts of things will be part of the discussion.

Okay. And longer term, you have highlighted that you would like to see 15% to 20% weight loss as a monotherapy. What's driving that confidence?

Yes. I think it's both some preliminary modeling now that we have the Phase Ib data looking at the trajectory, knowing what we know from pramlintide and cagrilintide, what the slope of those curves looks like beyond just 14 to 16 weeks of exposure. So that and the comparative trial data that say this actually exceeds what we saw with Sema in their Phase II -- Phase I and Phase II studies and is approaching that we see with tirzepatide. So the trajectory will tell the story, obviously, but we believe a continued downward trend up through 48 weeks at least.

Okay. And talk about the Phase II design potentially, what dose is titration schedule, anything that you can provide right now.

Yes. An additional detail on that will likely come with the disclosure of the Phase Ib data in full, but it will be a multi-arm study we've described approximately 4, maybe 5 treatment arms with the placebo-controlled group. We anticipate titrating up to the highest dose that they have exposure in Phase Ib that was part of the intent of Phase 1b is to reach our sort of tox limits and no elements and have done so safely. So that protocol is pretty much signed off and ready for initiation, but multiple arms, as we've talked about, I think, publicly, at 28 weeks, we'll do a cut for regulatory purposes only, but to take that for dose ranging to design the Phase III as early as possible, but the full duration of the trial will be more than 40 weeks of exposure. So we'll have one small unblinded team that gets the regulatory work done and the rest of us will be still awaiting the full 1-year exposure.

Okay. Got it. And longer term, is there a reason to believe that amylin monotherapy could have a different shape of the weight loss curve compared to a GLP-1 monotherapy?

Yes. I think 2 answers to that question, Prakhar. One is for amylin alone, we believe, given this leptin-sensitizing capacity and the overall effectiveness that you could see a more stable plateau. Now that could be driven by adherence tolerability, acceptability as well, which would be perfectly fine with us if people can take it, the toughest drug to use is the one you won't take. And the significant proportion of people who stop GLP-1 therapy, we think, will be helped. So we believe this will be as good or potentially better in terms of weight maintenance. The other question that begs is, well, you lose a lot of weight on a GLP-1. You don't feel that great. Can you then either convert or cover with an amylin agonist that's being better tolerated as effective for weight maintenance. And we think that leptin signal component, even though it sounds like a basic science, may be very important for weight loss and weight maintenance.

Okay. And you're obviously focused on monotherapy right now with amylin, but combination strategy, what combination mechanisms may be most attractive? And when do we hear more about that?

Yes. We anticipate first and foremost, that these tolerability and efficacy data hold up, people will think of amylin first, not just GLP-1, although we'll be fighting a few years of history. But combination studies, we know will be important. So early safety studies in combination with GLP-1s to look at the additivity, the impact on adverse events, just as they've done with CagriSema will be part of our planning. And then what combinations we take into Phase III? Do we do an amylin SGLT2? Do we an amylin GLP-1? Do you do it sequentially as follow-on or for maintenance? A lot of Phase III and Phase IIIb planning to that. But all those possibilities, we believe, will be important to ultimately enhance the value of the amylin assets in petrelintide, in particular.

And Novo's CagriSema Phase III trials will start reading out soon. So is that something that could guide your combination strategy as well in terms of the efficacy and safety that you would see from that product in a larger sample?

Absolutely. And I think it could move us either way. If this looks exuberant and then combination studies undoubtedly will be higher priority if it looks like as we postulate there's really a bit of baggage that comes with the high-dose GLP-1 because remember, you can only titrate to the highest Sema dose or the highest Cagri dose if you get to the highest Sema dose because it's a paired administration. So I think you could see limitations in effectiveness based on tight tradability, not so much because of the amylin component, but the GLP-1 component. But I think it will reaffirm efficacy, which we've seen in Phase II. I would be interested in the Cagri only arm just for tolerability. It's not, in my mind, adequate for a separate indication for Cagri alone, but I think it will teach us a lot about where the adverse events in the trial are coming from.

Got it. And GLP-1 monotherapy drugs, obviously have the benefit of showing outcomes data? What gives you confidence that amylin could replicate that?

Yes. I think for us, that's a critically important part of the life cycle and the development of this compound. GLP-1s have salutary effects on lots of things, the heart. Now we see the liver with glucagon agonism adding more. But amylin, one, if you can't take a GLP-1, you're not getting the benefit. So if it's 70%, 80% of people who are off of GLP-1 after a year, what do you do for that group, amylin agonism, data from Cagri, or preliminary data from Phase I and the animal data does not increase our rate, lowers blood pressure appears to lower markers of vascular inflammation. There are no amylin receptors on cardiomyocytes that we're aware of. But those other effects, combined with reduced body weight, we think can and will have a salutary effect on comorbidities. Will we beat a GLP-1 in cardiovascular outcomes, I'm not sure that's the point, cardiovascular safety and demonstrating these, but cardiovascular outcomes would, I think, nail that for the life cycle of assets like petrelintide.

Okay. Any plans to test amylin in diabetes as a monotherapy or combination?

So our current Phase II plans will include a separate study for weight reduction in a type 2 diabetes population. As many of you know, when you give a GLP-1 to population with diabetes, they lose less weight than those without diabetes because GLP-1 is an effective glucose-lowering therapy, stimulates insulin so you store at the same time, you're losing weight. We believe that amylin in the diabetes population can actually preserve the weight reduction. So weight reduction in those without and with diabetes should be similar or postulate, so we also want to include them in the Phase III program. While there has been some outside interest in developing it for a separate diabetes indication, we think it's a primary indication must and will remain obesity and weight management.

Got it. And amylin space is getting very competitive with more options coming similar to what we have seen with the GLP-1. So maybe lay out the landscape as you see right now with some of your competitors, you have Astra going with their amylin, Lilly has their amylin, Gubra has an amylin readout coming. So just lay out the landscape for us and how you will differentiate.

Yes. I think one, we're relatively further advanced. Eloralintide, the Lilly molecule we know very little about other than its structure. Pure amylin agonism differs from our amylin calcitonin balanced approach. One, we think it's more efficacious. If you have both amylin receptors alone, have only part of the metabolic effect, predominantly on glucagon secretion and probably satiety, not just food intake, but we feel confident that we are positioned to be best-in-class duration of action, early clinical data, the rodent and safety data we've seen throughout give us great confidence. Selfishly, we like to say we were there first talking about this as a stand-alone therapy and now others are sort of singing our tune, which is maybe a form of complement. I think the other limitation, particularly for Cagri is you're not going to have Cagri available to you as an individual therapy. So if amylin's work as we believe they do, we should be amongst the first and we believe best in that category.

Okay. Moving on to some of your other assets. We can probably talk about amylin for a while. But you have dapiglutide as well, GLP-1, GLP-2, which has started to show more encouraging weight loss data. So maybe even mechanistically talk about what does GLP-2 add on top of GLP-1 and what are you trying to achieve with this asset?

Yes. And from the recent data you and others may have seen, we are seeing GLP-1 like weight loss with the higher doses, and we're continuing to even higher dose exposures now that we have the tox coverage the dose is up to 26 milligrams out at 28 weeks, so we'll have a little longer exposure in that fourth cohort. But GLP-2 specifically, has tissue preservative, tissue restorative effects, and these are not just limited to the lining of the gut. But that for us is one of the important potential mechanisms by which this little bit of GLP-2 that we think we've dialed in will have protecting the gut barrier, which is a source of inflammation, inflammation in visceral adipose tissue and in the liver. There are GLP-2 receptors on the stellate cells in the liver that give rise to some of the inflammatory components of MASH. So we think direct effects potentially on the liver and really encouraging data around vascular inflammation and neuro inflammation. And whether that will translate to reduced cardiovascular risk above the GLP-1 alone effects on neurodegenerative diseases like Alzheimer's, maybe Parkinson's. All of these we think are clear ways to differentiate a GLP-1, GLP-2 from the myriad of GLP-1-based therapies.

And so for this asset, it is the differentiation more about inflammation? Or could the GLP-2 also improve the weight loss and improve the tolerability profile of a GLP-1 asset?

Yes. I mean there was -- there's preliminary evidence that GLP-2 can make GLP-1 infusions better tolerated I think some of that has been abrogated by a longer, more potent GLP-1 receptor agonist like we believe DAPI is. So I wouldn't predict or anticipate significant reductions in GI tolerability, but if they occur, it will likely be that we can get to higher doses than other GLP-1s. And it's where the GIP-containing molecules have taken us as well as to slightly higher doses that the other mechanisms are, we think, focused on those tissue restorative and anti-inflammatory. So we don't expect a lot of other value add, except potentially higher dose.

Got it. And so you had some weight loss data with higher doses that was disclosed recently. So maybe just talk about that, what you saw with the higher doses. And what are you hoping to achieve in terms of the profile for this drug on weight loss?

Yes. I think depending on who you ask and our core teams, but those data certainly make this look like a GLP-1 like asset. And if we can further double and triple that dose exposure, then we would anticipate weight reduction that is in the high end of the dual agonist category. If you ask our CEO, Adam, he'll tell you somewhere in excess of 20%, my core team and the modeler say, 15% to 25% is clearly achievable. And we believe when you get to high teens and now around 20%, you talking 1% or 2% difference there, probably means less to the clinical population than it does to us and to the investment community to prove you have what you'd say you have. So I would say well in excess of 15% and likely in excess of 20% weight loss.

Got it. And when do we see the data presentation from dapiglutide and whenever you present the data, will we get data on inflammation markers as well, which typically is differentiation for this asset?

Yes. It just came into our hands a couple of weeks ago. So you saw the top lines, and thank you, Anna, for putting that out into the world. And once we have the full clinical study report, which, as you know, it takes a few weeks, a couple of months, and then we anticipate a disclosure at a Scientific Congress in the first part of next year seems the most likely. And that will, like the petrelintide data include more granular data on the weight loss, the titration scheme and the adverse event profile. Remembering that this 28-week Cohort 4 is still going to be ongoing. We hope some of that can be included in the presentation, but it will wrap up about the time many important abstracts are due. So there's always that game.

Okay. Moving on to the third asset that you have, which is partnered with BI, semaglutide. There's a perception out there that the semaglutide tolerability is not good based on what we have seen in Phase II. Could you talk about why that's not the case in your view? And why the tolerability for obesity and MASH should improve in Phase III?

Yes. I mean I think the theoretical reasons supporting this could be different as glucagon is known to have some GI tolerability or adverse effect profile. But given, again, their titration scheme, what they're now doing in Phase III going to the highest dose higher than we saw even in some of the Phase II studies. But clearly, for example, in the diabetes study where they dosed twice weekly to very high dose. It is clearly our estimation and the pattern of adverse events seen in those who continued the therapy in Phase II clearly put it for us on par with GLP-1-based therapies. Depending on the trial, the population, interestingly, the tolerability profile in the MASH study was slightly better than what was observed in the obesity studies, may have been titration scheme, may have been stability at the top doses, interestingly in their F4 presentation. There was no worse and in fact, maybe even better tolerability in those with the worst liver function. So I think there's lots of now associated evidence that say this will be GLP-1 like, not better, not worse, and all of the data point that, obviously, Phase III will tell the story.

Okay. And so what's the status of the Phase III trials in obesity in MASH?

Yes. So the obesity trials are rapidly progressing to completion and I think ClinicalTrials.gov has the final completion of the 78-week exposure end of '25 with full study, I think, was listed in January of '26. So those are moving on schedule that will trigger their likely submission for the obesity indication. The MASH trials. We are awaiting word from the partner as they control development as to when and how those studies will be initiated, but we fully expect, given their public statements that BI will initiate the MASH Phase III program, which may not be a 78-week 1.5 years trial because it's a different indication independent of obesity. But the negotiations are on biopsy, non-biopsy endpoints, all those things, but we anticipate initiation of that soon.

Okay. And last question for me. You have some early-stage obesity assets as well that you're working on. Which assets are you most excited about?

We haven't disclosed the details around this, but we have a program we ourselves call Obesity Plus which, as you can imagine, includes amylin plus, which is petrelintide and other molecules. So if the amylin signal is, as we think potent, efficacious, well-tolerated, can we leverage that with other either common peptide signals, the issue of adding, for example, an activin or myostatin, because you have natural lean mass preservation. We don't think it's necessary. But leveraging, for example, program that amylin Takeda have where they added human metreleptin to amylin, looking to get synergistic weight loss because leptin alone does nothing. But are there leptin ligands, fragments of that, that could be manufactured. So these are ideas that we are generating. So I would say if there is another peptide signal tolerated or not, then we will be investigating that in early clinical trials and trying to optimize peptides to bring into the clinic.

Okay. That's all the time we have today, but thank you to the Zealand Pharma team for joining us.

Perfect. Thanks, Prakhar. Thanks, everyone.