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

Good day, and thank you for standing by. Welcome to the Zealand Pharma conference call to discuss collaboration and license agreement with Roche for petrelintide. [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, Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator. Welcome, and thank you for joining us today to discuss Zealand Pharma's global collaboration and license agreement with Roche announced this morning. You can find the related company announcement on our website at zealandpharma.com. As described on Slide 2, I caution listeners that during this call, we will be making forward-looking statements that are subject to risks and uncertainties. Turning to Slide 3 and our agenda. The following members of Zealand Pharma's management team are with me today: Adam Steensberg, President and Chief Executive Officer; David Kendall, Chief Medical Officer; and Henriette Wennicke, Chief Financial Officer. All speakers will be available for the Q&A session, along with Eric Cox, Chief Commercial Officer. Moving to Slide 4. I will turn the call over to Adam Steensberg, President and CEO. Adam?

Thank you, Anna, and thank you to all for joining the call today. This is a historic day for Zealand Pharma as a company. Let's move to Slide 5. We are extremely pleased to enter a partnership and collaboration agreement with Roche, our potential [Technical Difficulty] Zealand Pharma and Roche will commercialize petrelintide as a potential foundational therapy for weight management and rapidly expand into related indications. Our aim is to redefine the standard of care for people living with overweight and obesity by establishing petrelintide as a leading amylin-based franchise. This will be a true partnership between Zealand and Roche. Development, commercialization and manufacturing activities will be managed through a shared governance structure with joint decision-making, leveraging the strengths of each company while allowing Zealand to expand our reach and operations in line with our strategy. By developing petrelintide both as a stand-alone therapy and as the foundation in a combination with other agents, starting with Roche lead incretin asset and potential best-in-class GLP-1 GIP receptor dual agonist, we take a patient-centric approach to address unmet medical needs among the majority of people with overweight and obesity. Moving to Slide 6. During the last few months, we have seen significant interest from large pharma companies to partner with Zealand on the co-development and co-commercialization of petrelintide. In a very competitive process, we identified Roche as the ideal partner to help us maximize the full value potential of petrelintide. Roche has already demonstrated a very strong commitment to strengthening their portfolio within cardiovascular, renal, metabolic diseases, including obesity. They share our vision for petrelintide as a potential foundational future therapy for weight management, and we see a very strong cultural fit between Zealand and Roche, which will be important as we join forces to accelerate development of petrelintide to redefine the standard of care for people living with obesity and related diseases. With industry-leading research and development capabilities, a global commercial reach and an impressive track record of disrupting new therapeutic areas as well as an extensive manufacturing network, I'm confident that Roche is the perfect partner to help us unlock the full value potential of petrelintide. Turning to Slide 7. We are focused on developing new and better treatment options for people with overweight and obesity to tackle one of the greatest health care challenges of our time. We have witnessed a substantial increase in the global prevalence of overweight and obesity, rising from around 10% in the '70s to 40% to 50% today. We have seen the approval and successful rollout of the first 2 once-weekly GLP-1-based therapies to address this global health challenge. But in the U.S., only about 2% of eligible patients are on pharmacotherapy today. There's a significant unmet medical need for therapies that can deliver effective weight loss but with improved tolerability and acceptability, including lower frequency [Technical Difficulty] gastrointestinal adverse events so that patients may have more and more positive [Technical Difficulty] achieve and important healthy weight loss. Moving to Slide 8. [indiscernible] disease. We are in the very early stage of the evolution of this market with many different classes and different product offerings to market [Technical Difficulty] improved tolerability, better effect on obesity-related comorbidities, different delivery methods and combination therapies for specific patient segments. Our amylin analog, petrelintide, with that Zealand and Roche at this a future foundational weight management. Based on the clinical data to date, we are confident in the best-in-class potential of [Technical Difficulty] even further. With petrelintide as a monotherapy, we are targeting 15% to 20% mean weight loss with improved gastrointestinal tolerability for a different and better patient experience and with the potential for high-quality weight loss. By also developing combinations with petrelintide as the foundation, we are targeting the segment of patients who need higher weight loss and/or potentially better glycemic control than what amylin agonism can offer alone, a patient-centric approach aiming to address the unmet medical needs of the majority of people with overweight and obesity. And with that, let's move to Slide 9 as I turn over the call to our Chief Medical Officer, David Kendall, to discuss current development status of petrelintide and our obesity pipeline. David?

Thank you very much, Adam. And once again, welcome to everyone, and thank you for joining us. Let's turn now to Slide 10. This slide represents an overview of our differentiated mid- to late-stage obesity pipeline. As most of you are aware, petrelintide is currently being evaluated as a potential best-in-class stand-alone therapy for weight management in a large comprehensive Phase IIb trial in people with overweight and obesity, and we expect to complete enrollment in the ZUPREME-1 trial, the first of our 2 Phase IIb trial this month. We also remain on track to initiate our second Phase IIb trial in people with overweight and obesity and coexisting type 2 diabetes in the coming months, the so-called ZUPREME-2 trial. With the exciting and transformative partnership announced today together with Roche, we are also planning to initiate Phase IIb trials with the first combination product under this collaboration agreement in 2026. We will also combine our amylin analog petrelintide and Roche's lead incretin asset, CT-388, a potential best-in-class GLP-1 GIP receptor dual agonist. This fixed-dose combination product has the potential to provide best-in-disease weight loss efficacy and glycemic control. Turning to Slide 11 for a brief reminder of the key attributes of petrelintide. Our long-acting amylin analog petrelintide is a 36 amino acid isolated peptide based on the sequence of human amylin. Petrelintide has consistently demonstrated a half-life of 10 days, making it suitable for once-weekly administration. And the compound is stable with no fibrillation at physiologic pH levels and can be both co-administered and co-formulated with other peptide-based therapies. Petrelintide activates both key amylin receptors and the closely related calcitonin receptor, a very deliberate design principle that we believe is important in leveraging the optimal therapeutic effects of amylin analogs. Moving to Slide 12. Petrelintide has consistently demonstrated best-in-class potential based on results from early clinical trials completed to date. These trials have shown consistent and compelling efficacy and safety as well as tolerability and provide the evidence necessary to rapidly advance the development of petrelintide as a stand-alone therapy for weight management. Furthermore, the clinical results have given both us and Roche the confidence to explore petrelintide as a foundation in combination with other agents starting with Roche's lead incretin asset, CT-388. And this leads me to Slide 13. As outlined by Adam, the vision of Zealand Pharma and Roche is to establish the leading amylin-based weight management franchise with petrelintide. Amylin agonism offers a unique and distinct mechanism for achieving weight loss in people with overweight and obesity. Amylin agonism reduces body weight by enhancing satiety and restoring leptin sensitivity, a mechanism that contrasts with the reduction in appetite and prospective food intake associated with GLP-1-based treatments. Furthermore, preclinical data have demonstrated that amylin agonism, including petrelintide, offers the potential to preserve lean muscle mass, resulting in higher quality weight loss. In addition, both our own observations and clinical observations with other amylin analogs have demonstrated improvement in cardiovascular risk factors, such as blood pressure, lipids, markers of vascular inflammation without increasing heart rate, supporting the potential for reducing cardiovascular risk. With petrelintide as a stand-alone therapy, we have an opportunity to address many of the most important and urgent medical needs among the majority of people living with overweight and obesity, thus positioning petrelintide as a future foundational therapy. Zealand Pharma and Roche will also explore petrelintide in combination with other agents, starting with a fixed-dose combination product of petrelintide and CT-388. Our ambition is to explore and unlock the full potential of petrelintide, reaching as many patients as possible. One novel concept that we find interesting with petrelintide, CT-388 fixed-dose combination products is to maximize the dose of the generally better tolerated non-incretin agent, petrelintide, adding an optimized dose of the incretin-based GLP-1/GIP dual agonist for people who need additional weight loss and improved glycemic control without materially compromising gastrointestinal and broad-based tolerability. We are truly excited about this partnership, and we now have the opportunity together with Roche to establish the leading amylin-based weight management franchise, offering treatment options in the future for the vast majority of people with overweight and obesity. And with that, I would now like to move to Slide 14, and turn the call over to Henriette, our Chief Financial Officer, who will elaborate on the financial considerations of the partnership agreement. Henriette?

Thanks, David, and hello, everyone. Let's turn to Slide 15. I am extremely satisfied with the financial terms of this agreement. The total consideration to Zealand from these collaborations amount up to $5.3 billion. Zealand will receive $1.65 billion in upfront payments. And this figure includes $1.4 billion due upon closing and $250 million in anniversary payments. The $250 million are not contingent on any specific milestones other than time. Just to put this into perspective, this is the largest ever cash upfront payment in a single asset collaboration transaction in the pharmaceutical industry across all stages of development and across all therapeutic areas. And in addition to the sizable upfront, Zealand is also eligible to near-term development milestone payments up to $1.2 billion, which are mainly related to initiation of Phase III trials with petrelintide monotherapy and sales-based milestone payments of up to $2.4 billion. For the fixed dose combination product of petrelintide and Roche's CT-388, Zealand will pay $350 million to Roche for the contribution of CT-388. This contribution fee will be deducted from the potential future development milestones to Zealand. Zealand and Roche will co-develop and co-commercialize petrelintide and potential combination products. This means that all research and development costs will be split on a 50-50 basis. And most importantly, from a value perspective, we capture the long-term value of petrelintide by sharing profit with Roche on a 50-50 basis in the U.S. and Europe on both petrelintide monotherapy and potential combination products, including petrelintide combined with CT-388. The terms of the agreement provides Zealand with great flexibility, including opt-out and opt-in rights to participate in up to 50% of the commercial activities as well as possibilities to defer cost under certain pre-agreed terms. Combined with the strong financial position of the company, this structure provides comfort that we can honor our commitment and obligation in this partnership. In the rest of the world, where Roche has exclusive commercial rights of petrelintide and other products arising from the collaboration, Zealand is eligible to double-digit to high-teen percentage tier royalties on net sales. Roche is responsible for manufacturing and commercial supply, and will carry all CapEx to support the commercial plans for the products under the collaboration. And with that, I will move to Slide 16, and turn the call back to Adam for concluding remarks.

Thank you, Henriette. I'm incredibly pleased that Zealand and Roche have entered into this co-development and co-commercialization partnership with a shared vision to develop petrelintide as a future foundational therapy for weight management. In Roche, we have found the ideal partner, and I'm convinced that with the strong capabilities of both companies, we have a unique opportunity together to redefine the standard of care to the benefit of people living with overweight and obesity. I consider obesity to be one of the greatest health care challenges of our time. This partnership is a step change to realize Zealand Pharma's vision of becoming a key player in the future management of obesity. We want to play a major role in solving the obesity crisis, and we're extremely excited to embark on this journey with Roche, aiming to establish the leading amylin-based franchise around petrelintide. Thank you all. I will now turn the call over to the operator for questions.

Our first question comes from the line of Michael Novod from Nordea.

It's Michael Novod from Nordea. So I rarely say congratulations on conference calls but I guess this time, it's appropriate. So congrats with an impressive deal. A few questions. So first of all, can you elaborate a bit on sort of how you view the cost in running a global Phase III program? Should we assume for modeling purposes that it's the standard $1 billion to $2 billion that then needs to be split between Roche and Zealand? And then also on the approach to commercialization, you do say that you have opt-in and opt-out rights. Where are you right now in terms of what we should assume as the base case around commercialization? Because I guess if you also -- if you decide to fully opt in, wouldn't it also make sense then that you do glepaglutide alone because you already then have to do some investments, so keeping the rights for your GLP-2 as well in short bowel. And then lastly, on the combination, good to see that you're starting the combination trial already in 2026. Does that also mean that we should not expect that you will do exploratory work on other GLP-1 plus glepaglutide combinations?

Thank you, Michael. First of all, -- it's -- we are going to embark on a very ambitious Phase III program together with Roche. And in order to establish glepaglutide as a future foundational therapy, we will not provide guidance for Phase III costs but I mean, I think it's fair to kind of apply average numbers, as you also suggested, into modeling work. But we will only later together with Roche provide more clear, you can say, guidance for these costs. But it is going to be a very ambitious program, again, that is needed in order to establish glepaglutide as a foundational therapy. With regard to the opportunity to participate in up to 50% of commercial rollout, this is something we will decide and communicate on later. And again, it will also, of course, in the partnership be laid out where we contribute the best and how to operationalize this. It's important -- it has been, as we have shared for a long time, important to us to have maximum strategic flexibility here so we can develop the company alongside this fantastic opportunity. And in due time, we will be more kind of clear on which role we will take alongside Roche in this partnership. But importantly, we have an opportunity to participate in up to 50% of the commercial rollout. Regardless of the model, we still have a 50-50 profit share ultimately on both petrelintide and the combination product. On your questions on glepaglutide, it is still our ambition to partner this program. We think it has a huge potential to help a lot of patients living with short bowel syndrome. We will initiate a phase -- we plan to initiate Phase III additional study in the second half and in parallel, pursue a partner for this program as we, as a company, will focus in on the journey that we now have taken a major step forward on to become a key player in the obesity space. On the combination studies, we will -- again, probably we will wait with updating on the specific designs, including if we -- how you can say if we will also pursue additional combination opportunities beyond CT-388. That is something we'll design to -- decide together with Roche in the joint development committee. But thank you for your questions, Michael.

Our next question comes from the line of Suzanne van Voorthuizen from VLK.

Congrats on the deal. First, can you elaborate a bit more on the competitiveness of the process and the main drivers for the deal to come together now versus later in the year since with your earnings update, the signals appeared more conservative on the potential timing of the deal. Secondly, with multiple Phase III trials ahead, can you give context to what extent these obligations are already covered by the cash in from the deal and for the opt in, opt out, well, the opt out specifically is the alternative then royalties? And will these be similar to the rest of the world royalty rate? And if you allow me to squeeze in the last one. Can you provide some color on the way you and Roche will be collaborating in terms of steering committees or split from who is in the lead where or some color how the decision-making process is designed?

Thank you, Suzanne. As we have communicated for a long period, it has been a very competitive process where we have engaged with a number of large pharma companies. It has been extremely important for us all the time not to rush this process but also we have, of course, had a certain sense of urgency considering all the work we have ahead of us, including investments in manufacturing and actually building up a leading franchise. In this process, you can say we have had 3 very important parameters. Number one, and very importantly, we wanted to partner only with a company who have an ambition of leading in this therapeutic area. And I think it's probably clear to everyone that with the steps that Roche have taken in the last few years, they have demonstrated that, you can say, willingness and that desire vision. And that's also what we have clearly seen in the interactions with Roche. So that was a clear parameter. The other thing is the vision around petrelintide as a future foundational therapy where we, again, just feel that we are very aligned with the team. And then lastly, on the cultural fit because this is a true co-development and co-commercialization partnership with profit share, of course, it's extremely important that the 2 cultures align well. As you could say, we don't just want a beautiful wedding. We actually want a beautiful marriage, here, and we think with all we have observed in the interactions with the Roche team, we really feel there is a strong cultural fit. And that leads me a little bit to your third question around we will establish joint steering committee, development, manufacturing and commercialization committees with joint decision-making. So we collaborate on this on all aspects. And then, of course, you can say when it comes to specific conduct of trials and so on, specific trials will be, you can say, run or guided by one company or the other. So it will be a true collaboration where we will leverage each other's strengths. And of course, we are aware that Roche has an extremely strong clinical trial network, which we will also tap into, including a strong commercial organization. The opt-in and opt out actually doesn't have too much to do with regard to profit share. I mean, regardless of our decision to opt in and out of the operational aspects of commercialization, we still have the profit share, 50-50 profit share on petrelintide and on the combination product. This is, again, back to what I said before, something we'll decide together with Roche as we approach commercialization, what role Zealand will play. But for us, it has been important to have the opportunity to contribute with up to 50% of the commercial rollout but also the opportunity to do less if that is better for the partnership and for how we have decided to develop Zealand. But it's clearly an agreement that allows Zealand to grow along the vision and ambition that we have stated for some time that we want to become a generational biotech. We don't -- we want to develop our capabilities and reach alongside a strong partner. And as I said in my prepared remarks, we just see Roche as the strongest partner we could wish Roche when embarking on this very ambitious journey. Thank you, Suzanne.

Our next question comes from the line of Charlie Haywood from Bank of America.

Charlie Haywood, Bank of America. And obviously, congratulations on the news. I think you alluded to this in the CT-388 fixed-dose combo. But just wondering if you expect that fixed dose to be more amylin biased based on your sort of prior commentary? And then in terms of the Phase II combo trial, could you look at multiple fixed doses within that with different proportions of amylin to GLP-1 to assess that? And could you also move that strategy forward to Phase III with the different proportions? And then second question, how should we think of your timeline for planned Phase III starts for mono and combo? And given we've seen Roche fairly keen to expedite obesity asset development, do you see any potential for an earlier monotherapy Phase III start?

Thank you, Charlie. I'll just address the last question and then hand over to David. I think there's no -- I mean, as you know, we have been accelerating timelines for the monotherapy since we increased the capital last summer. But of course, now once we get together with the Roche team, we will, of course, look into potential future, further improvements into the program. And also, as we stated, the opportunity to expand into additional indications. So there's no question, of course, that teaming up with Roche now allows us to reevaluate if we can do things even faster. But again, this is something we will communicate on once we are a little bit further into the collaboration. And David, will you address the combination opportunities and ratios and so on.

Yes. Happy to, Adam. And Charlie, thanks for the questions. Obviously, we at Zealand and clearly, the Roche team are not naive to understanding the incretin-based therapeutic space and 388 while still in the early and mid-phase development. I think from both our prepared remarks and the nature of your question, the answer is yes. In this collaboration, we will look to, I will say, optimize both parts of that combination. This is not, I think, for either of us in the partnership, all about chasing the biggest number and the tolerability sort of left to the side. As we have said, we think petrelintide at its higher doses can remain very well tolerated and combining that with what is an optimized of [Technical Difficulty] cretin-based therapy like 388 will be part of [indiscernible] planning. Obviously, the results from Phase IIb for both assets will be necessary to more broadly understand both the efficacy potential and the tolerability profile of each. But in simple terms, maximizing the more tolerable of the classes of agents, which we believe is the amylin agonist and optimizing the GLP-1 component, which comes with a lot of benefits, including likely greater efficacy on glycemic control and the additive weight loss that we would expect, we will keep our options open. I think the other piece that this allows is understanding at least from the early data with 388 between their 8 and 22-milligram dose, they saw significant weight reduction and whether the lower doses will achieve nearly the same weight loss as the higher doses with better tolerability if we can combine that optimized dose with what turns out to be the higher and most well-tolerated and efficacious dose of petrelintide, that will absolutely be part of the planning. So I think your question speaks exactly to the plans we will form with Roche going forward.

Our next question comes from the line of Benjamin Jackson from Jefferies.

It's Ben Jackson at Jefferies. Just 2 very brief questions, I guess. First, if we think about the data in obese type 2 diabetics that we saw recently from a peer, are you able to chat about what you think the key learnings are from those headlines? Obviously, very limited at this stage but is there anything that you'd want to comment or flag on there? And then secondly, with regards to the deal timing, perhaps a little bit earlier than anticipated, is there any ability to accelerate this beyond what you were initially believing that you could? Or are timings are very much the same with an internal interim read at the second half of the year followed by potential primary completion over in the first half of next year? Any thoughts or color around that would be fantastic.

Thank you, Benjamin. I will address your questions. On timing of the deal, I think we have been very consistent in the last 9 months and said that we have been exactly where we wanted to be in the process that we have defined and that we have also stated in the last month. And so we have never guided on expected timing. I actually recall at our full year call, some addressed that maybe it's later than anticipated and now it's earlier than anticipated. But I think we have been very consistent that we were exactly where we wanted to be in these discussions. And I think we basically deliver at least according to how we had hoped to have this roll out. And more importantly, we deliver a partnership with the company we wanted to partner with. So that is fantastic for us. On the -- and I would say there's not, you can say, other things that have affected our decision-making in this process. This has been with a keen focus to deliver a co-development and co-commercialization partnership with profit share with a partner who we share the vision of this molecule, a partner who wants to lead in this space and one where we see a strong cultural fit. On REDEFINE-2, I think in our minds, the data, of course, follows quite nicely along what we saw from REDEFINE-1, except that perhaps in this setting, even though, again, we only saw around 60% of the patients reaching the top dose, the combination of a rather low dose in our mind, at least of amylin together with GLP-1 almost double the response rate, placebo-corrected response rate. So I think it holds great promise for what we want to do with the combination therapy. But as David also shared, we do like -- we would likely have a different approach to the ratio and also how we design the studies in the future. But that is, again, something we'll communicate more about. But our confidence in a combination therapy such as petrelintide and CT-388 has not changed. I would say, on the contrary, it has reaffirmed that for patients -- for those most morbidly obese patients who truly need a very large weight loss or those obese individuals who live with type 2 diabetes, it could be a very strong combination therapy. Having said that, and as we have also shared on many prior calls, we do think that petrelintide as a monotherapy carries significant potential to deliver the weight loss that the majority of obese individuals are looking for and hopefully, in a more pleasant way with less GI side effects and then this feeling of being full faster rather than having lost your appetite. So nothing has changed, and we actually just pursue the vision and ambition that we have set out a long time ago. And so far, we have just followed the data.

Our next question comes from the line of Hen Boeg from Deutsche Bank.

I know you said you weren't guiding to any cost for Phase III but if you could give us any sort of expectations of cost towards clinical development over the next couple of years, that would be helpful. And then second question would be, I guess, you're starting the Phase IIb in 2026. So when could we expect to see the first data of the combo trial?

Yes. So again, we cannot provide more clear guidance on the specific cost for the Phase III program. What we have been -- and what Henriette shared in the prepared remarks is that we have, of course, made sure that we can honor our obligations into this collaboration with how things have been structured. And it's an ambitious program. And unfortunately, at this time, you will have to just use generic numbers for cost of similar programs when you try to model this. This will, again, of course, ultimately depend on the decisions we make together with our partner, Roche. But we are very ambitious, including Phase III and CT outcome studies are an important parameter of this program since we want to develop it into a foundational therapy. We will also not guide on expected timelines on the Phase IIb for the combination program. Again, this will be -- we will guide on this once we have the collaboration up running and decided on all the different aspects together with Roche. But thank you so much.

Our next question comes from the line of Jacob Mekhael from KBC Securities.

Congrats on this very nice deal. I have a few, if I may. The first one is based on the large deal size, can you please elaborate on some of the reasons or key selling points, which led Roche to opt for petrelintide over other amylins being developed? And then I have one on the commercial rights. Now that you've secured 50% and you have that potential route to go through, which commercial models do you think would be a good fit for Zealand? And one more I have. Based on your conversations with Roche, how much interest is there from them to do additional deals? And could they have interest in, for example, going for dapiglutide further down the line?

Thank you for your question. I think as we also shared in the start, it's our clear understanding that Roche, they have a strategy of leading in this space in the future. And therefore, also how we at least understand that is that they are only going for molecules with best-in-class potential. And that's why I think they have focused in so much on petrelintide in this environment. We -- as we have said for a long time, truly believe we have a molecule that can become -- deliver the weight loss that the majority of obese individuals do. We think we have the best-in-class within the amylin class molecules. And I think that is the reason that Roche chose us in this collaboration. But of course, they will have ultimately to speak for themselves. On the commercialization strategy, it is too early for us to comment on the exact setup. This is again something we will discuss within the partnership to make sure that we optimize for, you can say, making sure that we capture the full value potential of this molecule. So this is something we will agree in partnership with Roche, how we ultimately set up the commercial rollout and our contributions into the operations. But importantly, we have shared decision-making and then ultimately, depending on where we are at that time, we can opt into -- we can have up to 50% rights of commercial rollout but we could also choose to do significantly less. But this is something we again will define in the partnership. And then I think your last question was around additional deals. I think our key focus on the deal on this has been on the train side, and we have actually not discussed other opportunities in our pipeline. So I cannot speak for that.

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

On the deal. So maybe firstly, obviously, Adam, you have talked about potential for amylin as a monotherapy. But now after running the process and as part of the collaboration, where does Roche and pharma companies see amylin monotherapy fitting in relative to GLP-1s or GLP-1/GIP monotherapy? Is there anything new that you learned based on these discussions over the last few months regarding amylin monotherapy and its positioning in this competitive space? And just as a quick follow-up, maybe how much of the deal value or consideration was for monotherapy versus future combinations? And lastly, a quick clarification. I think the press release also mentioned other products arising from the collaboration, including next-generation petrelintide combo. So maybe if you can clarify what products or targets are part of this? And where are they in development?

Thank you, Prakhar. So if I just start, you can say this is a true co-development a co-commercialization partnership that we have announced today with Roche, where, of course, our ambition is to establish petrelintide as a leading franchise as a new foundational therapy for weight management. And it is at least our understanding that, that vision is what carries the majority of the value because imagine you can say the GLP-1 class will be a quite established class. It already is, I guess, but to launch into this space with a new modality for the many patients already at that time who cannot tolerate or have decided not to be on GLP-1 therapies is a fantastic opportunity. And really the opportunity to also address weight maintenance in a better way if you can say, for the patients who find it difficult to stay on therapy when they are on a GLP-1. That is the key theme here. And it is at least our understanding and from the parties that we have discussed with the large pharma parties, including Roche, as you can imagine, that, that opportunity to actually provide an alternative to the GLP-1s were a huge driver for the agreement that you look at today. Having said that, there's no question that for the most morbidly obese patients or obese individuals, for instance, living with type 2 diabetes, a combination therapy is a fantastic opportunity and carries significant value, especially if we can think a little bit differently around the relative ratios and optimize for the patient experience and not just, you can say, the ultimate weight loss, we see a huge opportunity for the combination product as well. So I think that is -- it is this vision to establish a new foundational therapy that has been the main driver for this partnership.

Our next question comes from the line of Laura Hindley from Morgan Stanley.

Laura Hindley from Morgan Stanley. Congratulations on the deal. Firstly, can you just remind us of the latest IP protection on petrelintide? Do you expect the fixed-dose combination with CT-388 will offer an extension? And then just going back to commercialization again. You've mentioned that Zealand will decide to opt in or opt out as you move through the development process. But what are some of the factors or indicators that you'll be monitoring that would drive Zealand's opt-in or opt-out decisions? And then last one, just to confirm, will you still be running a Phase Ib trial for petrelintide with a marketed GLP-1? Or is that replaced by the Phase IIb with CT-388?

Thank you, Laura. I think we have a very long IP protection for this program. I think it takes us, we believe, into the 40s, but we will have to follow up on that later. On the -- you can say -- what will drive specific decisions around up out and up in, it is honestly too early for us to share that. We have been very clear that we want to -- we have -- we are extremely ambitious with where we want to take Zealand Pharma in the journey over the next 5 years. We have basically -- we do see what we have established last year as a foundation for accelerated growth. So we want to continue to develop as a company alongside Roche in this fantastic partnership. And we will, at a later time point, communicate to the market how we anticipate to play a role in the commercial rollout, which, of course, also will be in detailed discussions with Roche over the next years. It's important, however, to say that it's -- we have the opportunity to contribute with up to 50%, and then we can decide to do less if we want to. On the Phase Ib study that we have planned for with an existing GLP-1, it's also too early for me to guide on what we will do there. But clearly, we have the plans in place, and then we will update the market later on any decisions if there are changes on that. But thank you, again, for your questions.

Our next question comes from the line of Alexandra Ramsey from William Blair.

Congratulations on the great deal. So regarding the combination with CT-388, we were wondering if you could share with us your view on sort of weighing the pros and cons of co-formulation as mentioned in the press release and designing a bifunctional molecule, something like incretin.

Thank you, Alexa. It's, of course, in our minds, at least a clear upside to be able to co-formulate rather than having something that has already been locked from the start because ultimately, we need to find the right ratio between amylin and CT-388 in humans to deliver the benefits that we are looking at without compromising on tolerability. But it's only a benefit where you can truly co-formulate as we do believe we have an opportunity with here. Of course, if you cannot have the 2 molecules in the same solution, it could become difficult from a manufacturing perspective. But we see a huge opportunity here to actually, you can say, make sure that we develop the optimal ratio between the 2 modalities to achieve the benefits that we are looking for without compromising on tolerability and other issues. So we see it as a huge upside compared to a molecule where the modalities have fled together from the start.

Our next question comes from the line of Thomas Bowers from SEB.

Congratulations on a great deal here. So I have 3 questions remaining. So just to kick off with the CapEx, I understand that Roche will cover all that for API. But is there anything in relation to the deal that make you have to pay a plus-plus on the COGS to cover part of the investments done by Roche. And then just on the royalty for rest of world and maybe also just to confirm in regards to the co-promo, is there anything that relates to patent expiration regarding the tail of the income globally or just for the rest of world. So I'm just wondering if there's something that we should be aware of, for example, after the composition of matter patent expires in '37. And then just lastly, just to confirm, is there anything regarding the combination with 388 that should argue against that you could potentially not be able to make this as a premixed combination solution?

Thank you, Thomas. So with the deal that we announced today, you're right that Roche will be responsible for making all these investments into manufacturing and be ready to supply the market. And they will not carry a cost premium for us. It's just -- so that is the good news here. And again, of course, a very important parameter as we made decision in this process because we do understand how big of an undertaking it is to establish the right manufacturing and supply network. It is our belief that we will be able to co-formulate the 2 molecules but that is, again, something we, of course, will have to provide further updates on as we progress this collaboration. On the tail on royalties and what have you, these are very standard terms. And I would say, of course, they continue on, I would call them favorable standard terms.

So nothing that could change after '37?

Yes. I cannot comment on the specifics, but we think we have IP protection that takes us into the '40s.

Thank you. There are no further questions at this time. So I'll hand the call back to Adam Steensberg for closing remarks.

With that, we would like to thank all of you for attending and for your questions. We look forward to future announcements and updates and to connecting in the coming weeks and months. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.