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The last time I wrote about Zealand Pharma A/S (OTCPK:ZLDPF), it was in a Seeking Alpha article entitled “Zealand Pharma: Survodutide Has Potential Beyond Obesity Treatment.” I discussed how that it was advancing three drugs for the huge obesity market, but primarily I went over the dual aspect that survodutide could be used for both the treatment of patients with MASH [formerly known as NASH] and weight loss.
I’m happy to state that there was a recent advancement in another drug in its pipeline, known as petrelintide. That is, this particular drug was able to help patients achieve an average weight loss of up to 8.6% over a 16-week period. Being that this drug is dosed once a week, it could offer patients a better alternative.
This is the point of this article, in that petrelintide could serve as an alternative to current and future GLP-1R agonists. Thus, even if there is competition among all the other companies with GLP-1R drugs, this company is not serving to compete against them with this particular drug. However, as I stated on the last occasion, it is in the process of developing other weight loss drugs. Survodutide takes the aspect of not only weight loss but reducing MASH in patients as well, while the other drug dapiglutide handles not only the GLP-1 component of weight loss but in addition to low-level inflammation in the stomach of a patient [GLP-2 targeting]. Thus, the expanded potential here goes way beyond developing a “me too” GLP-1 receptor agonists like all the other companies out there.
Petrelintide Could Shake Up Weight Loss Drug Market
An important update to consider regarding the advancement of petrelintide for the treatment of patients with obesity, is that it recently reported positive results from its ongoing phase 1b 16-week multiple-ascending dose [MAD] study. Specifically, the results released were from Part 2 of the phase 1b MAD trial, where a total of 48 patients with a median age of 49 years and a median baseline BMI of 29 kg/m^2 were treated with either one of three dose cohorts of petrelintide or placebo over this 16-week period. Patients who took the highest dose of this drug achieved a median weight loss of up to 8.6%, compared to those on placebo with an average weight loss of only 1.7% from baseline.
This is good data, but what is left honestly for investors to look forward to in terms of catalyst opportunities? Actually, there are three catalysts expected from this program. All of which, are expected to be released in 2024. The first of which is that full-detailed data of these released results will be presented at an upcoming medical meeting.
Secondly, the look of this data just released was only an interim look. Thus, final results from this phase 1b study using petrelintide for the treatment of these patients will be released later this year.
Lastly, with this positive data on hand from this early-stage phase 1b study, it is expected that it will be able to begin a phase 2 study in 2024. As you can see, there are still plenty of catalysts as it relates to this drug for the treatment of this specific patient population.
Obesity is a type of disorder where an excessive amount of fat can impair a patient’s overall well-being. A major issue with it is that it can lead towards the development of other problems such as heart disease, Type 2 Diabetes [T2D] and even cancer. To be considered to have obesity, a person must have a body mass index [BMI] of 30 or more. Other problems that these patients could experience might be extra pressure being placed on the skeleton and joints of the body, which could also lead to other major problems. A treatment like petrelintide or other GLP-1 receptor agonists, even with offering a moderate 5% to 10% weight loss, could reduce the risk of a person getting cancer, diabetes or heart disease.
The global obesity market could reach $77 billion in 2030. This is a considerable market opportunity, but it will not be easy because of all the GLP-1 drugs that are already approved or in clinical development.
If there are so many drugs already in place, especially GLP-1 receptors, then how does Zealand Pharma hope to compete against them? There are several ways, actually. The first way is differentiation of petrelintide, which is that it is a non-incretin peptide. This particular drug increases satiety [feeling of fullness for an extended period of time], while GLP-1 drugs reduce appetite instead.
A second way would be not only the increased satiety of taking it, but the leptin sensitivity that is restored. Leptin is an important hormone that plays a crucial role in energy, but controls if a person feels full or empty. An impact on this hormone could mean product differentiation compared to other available weight loss drugs.
A third way would be to offer a good amount of weight loss, but at the same time preserve lean muscle mass. The final differentiating factor would be in terms of safety or patient compliance. How so? In terms of an improved gastrointestinal tolerability [GI] profile and fewer adverse events [along with less severe adverse events being present]. This can be stated in terms of what is currently known about approved GLP-1 drugs. That is, petrelintide becoming a positive alternative instead of directly competing against such drugs. For instance, these are some interesting things to note about GLP-1 drugs:
- About 30% of obesity patients stop taking GLP-1 drugs in 1 month of receiving them
- Up to between 60% to 70% of patients stop taking GLP-1 drugs within 12 months of taking them.
The problem here is the safety of these drugs. Yes, they actually do work well, but the problem is that many patients can’t continue on them because of the severity of adverse events. This is where an amylin analog could be helpful in being able to allow for a large amount of weight loss, while at the same time reducing side effects. Especially, when GLP-1 drugs have to be dosed daily, but petrelintide only needs to be injected subcutaneously once a week.
Other Clinical Drugs In Pipeline Could Offer Product Differentiation
Petrelintide as an amylin analog is one way for Zealand Pharma to compete. However, a good thing about this company in terms of targeting the entire obesity market is its multi-prong approach. What do I mean by this? Well, consider that it has several other drugs in its pipeline being developed for the treatment of this patient population. One of which is known as survodutide, which is a long-acting dual agonist of GLP-1 and glucagon. The GLP-1 component takes care of the patient “not being hungry,” while glucagon is the energy component that burns fat. Glucagon is a hormone produced by the liver which is responsible for this exact function.
Other items to note include that survodutide was licensed to Boehringer Ingelheim and that it is being advanced in a phase 3 clinical testing for obesity. That is, there are three ongoing studies as part of the SYNCHRONIZE program, as follows:
- SYNCHRONIZE-1 : Patients with obesity but without Type 2 Diabetes
- SYNCRHONIZE-2 : Patients with obesity but with Type 2 Diabetes
- SYNCHRONIZE-3 : Long-term study to determine cardiovascular safety in patients with obesity.
Another drug in its pipeline with product differentiation would be dapiglutide, which is a long-acting GLP-1/GLP-2 dual receptor agonist. How is this product any different? Well, it still has the same mechanism of action [MOA] of other weight loss drugs like GLP-1, but could be differentiated with the GLP-2 component. The purpose of this GLP-2 component is to go after the low-level inflammation that occurs in obesity patients. Such patients are prone to bacterial translocation into the blood stream, thus susceptible to inflammation in the stomach. A drug like this would not only be helpful for weight loss, but to also reduce inflammation. The ability to reduce inflammation in the gut, would then lead to the possibility of reducing the risk of other co-morbidities like cardiovascular disease, liver disease and neuroinflammation [leading to increased risk of Alzheimer’s possibly].
Hopefully, this company can generate product differentiation through the use of one of these drugs, even petrelintide. However, there is another one being developed in its pipeline, known as ZP6590, which is an investigational long-acting GIP receptor agonist. GIP drugs are designed to do both cause fat reduction and prevent fat accumulation. This is an early-stage preclinical candidate, but the idea here is to not advance this drug alone, but to instead add it to another drug that allows for weight loss. Such an animal study was already done, in that the combination of ZP6590 as a GIP agonist + GLP-1 drug semaglutide [Wegovy] generated a substantial increase in weight loss. This combination allowed for weight loss to double to -24.1%, versus semaglutide only achieving -13.7%.
The only problem here is that such synergy was achieved in animal testing and will need to be shown again in humans. However, from what has been shown thus far, such synergy could allow for improved weight loss when ZP6590 is added to other peptide drug candidates.
One last item to note is that survodutide MOA may have been confirmed today with the release of positive results from a competitor by the name of Altimmune (ALT) with its drug pemvidutide. Why is that? That’s because pemvidutide is also a dual GLP-1/Glucagon agonist drug in development for the treatment of patients with obesity. It was not only able to show that the highest dose of its drug was able to achieve a mean weight loss of up to 15.6% at 48 weeks, but had superior lean mass preservation compared to other marketed drugs like Novo Nordisk’s (NVO) Wegovy [semaglutide] and Eli Lilly’s (LLY) Zepbound.
Zealand Pharma Financials
It has a cash position of $561,124,200 as of the end of Q1 of 2024. To have sufficient cash on hand, it enacted a private placement agreement in January 2024. With this financing event, plus the several tranches of the EIB Loan facility, it believes that it has enough cash on hand for a cash runway to fund its operations into 2027. This makes sense because its cash burn per quarter is $38,265,892.84. Thus, Zealand is well capitalized to continue its operations without any near-term risk of dilution.
Risks To Business
There are several risks that investors should be aware of before investing in Zealand Pharma. The first risk to consider would be regarding the development of petrelintide for the treatment of patients with obesity. As I stated above, it was able to help people achieve an average weight loss of up to 8.6% over a 16-week period at the highest dose. This was observed in Part 2 of the phase 1b study. The thing is that this company wants to advance this amylin analog into a phase 2 study beginning in 2024. The risk is that even upon completion of such a mid-stage study, there is no assurance that a positive outcome will be achieved. Nor, that the weight loss observed from this trial will be shown to be equivalent to or superior to the prior phase 1b study.
A second risk to consider would be regarding survodutide, which is being advanced in the ongoing late-stage SYNCHRONY program in three-phase 3 studies. Two of the studies are being done to treat obesity patients, both with and without Type 2 Diabetes. There is no assurance that one or both of these late-stage trials will meet their respective primary endpoint. The third study is looking to see if such a drug can reduce cardiovascular issues that arise in these obesity patients. There is no assurance that this drug will be able to achieve the intended goal of improving safety for these patients. Lastly, this program has been licensed to Boehringer Ingelheim for development. A risk is that this big pharmaceutical company could choose to terminate such a collaboration at any moment.
A third risk to consider would be regarding the development of dapiglutide for the treatment of patients with obesity. That’s because the mechanism of action [MOA] of targeting GLP-1 is well known, but the key finding would be if GLP-2 targeting of reducing low levels of inflammation of the gut, yields a superior weight loss drug that is differentiated from the rest. This remains to be seen, but a drug that can help patients lose weight and also reduce the risk of obtaining co-morbidities is highly welcomed.
The fourth and final risk to consider would be regarding the development of ZP6590. That’s because the goal of advancing this GIP receptor agonist is to combine it with other weight loss drugs like GLP-1 receptor agonists. The risk is that even though preclinical animal testing showed a synergistic effect of greater weight loss, when ZP6590 was combined with Wegovy, there is no assurance that a similar or superior outcome will be observed in human clinical testing. Nor that eventual weight loss observed in phase 1 or other studies show this drug to achieve greater weight loss compared to other marketed drugs for patients with obesity.
Conclusion
Zealand Pharma has done well to advance several candidates in its pipeline for the treatment of patients with obesity. Even though it is targeting the crowded obesity space, its drugs are differentiated in many ways, as I have shown above. In terms of petrelintide, it provides an entirely different MOA compared to other approved drugs. Another positive item to highlight is that the MOA of survodutide had been shown by a competitor. That is, Altimmune’s drug pemvidutide was able to help patients achieve a substantial amount of weight loss of up to 15.6% at 48 weeks. However, it did so, proving that it had superior lean mass preservation compared to other marketed drugs like Wegovy and Zepbound.
This highlights the massive potential of Zealand advancing its own dual glucagon/GLP-1 receptor agonist for the treatment of patients with obesity. With a differentiated product pipeline of drugs targeting obesity, plus several catalysts expected to be released in 2024 relating to petrelintide, I believe that Zealand Pharma A/S investors could benefit with any potential gains made.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
