Memorandum

Zealand Pharma ADA 2014 Analyst Breakfast – Glucagon receptor agonist could enter clinical testing later this year – June 27, 2014

Executive Highlights

  • In the company’s preclinical glucagon receptor agonist program, a lead product could move into the clinic later this year; an NDA submission is possible as early as 2017.
  • Management speculated that the chances of the GLP-1 agonist Lyxumia (lixisenatide) demonstrating cardioprotection in its outcomes trial are slim, although the room for downside is also quite low (the trial is still blinded).

Zealand Pharma held an ADA analyst breakfast on the morning of Saturday June 14th, in which new Chief Scientific Officer Dr. Torsten Hoffmann and other members of senior management provided commentary on the company’s pipeline and partnered products for diabetes. Zealand’s most recently approved diabetes product is the once-daily short-acting GLP-1 agonist Lyxumia (lixisenatide), which Sanofi has launched in Europe (including in the UK and Spain), Japan and other overseas markets. Surprisingly, management commented that they consider chances of Lyxumia showing cardioprotection in its CVOT ELIXA to be relatively slim. However, management also noted that the room for downside is also low due to the class’ beneficial effect on CV risk biomarkers, and that a neutral results (with perhaps a trend towards benefit) would still be positive for the class. Lyxumia’s greatest potential clearly lies in its “LixiLan” fixed-dose combination with Sanofi’s market-leading and widely used and widely trusted basal insulin Lantus (insulin glargine). Zealand voiced confidence in Sanofi’s capability and experience in the basal insulin market – although there will be more competition in this space as Lantus’ patent protection expires next year, Zealand noted that type 2 diabetes patients don’t currently switch basal insulins frequently, and that, although there may be competitor products that are priced differently, Sanofi should lead the market for the foreseeable future. This will be very interesting to see when Sanofi’s next-gen basal insulin is approved – in the US, there appears to be more resistance to pricing increases and we assume the next-gen insulin will not have much of a premium but that Lantus will be discounted to some degree (perhaps only slight, at least to start). Notably, Zealand featured new data on two preclinical pipeline candidates at ADA: ZP-GA-1, a compound from their stable liquid glucagon receptor agonist program and a GLP-1/GLP-2 dual agonist program. We learned that the former candidate could move into clinical development later this year, and that based on the current development plan, an NDA as early as 2017 is possible.   

  • On ELIXA, the cardiovascular outcomes trial for Lyxumia that is gating for US resubmission: management suggested that the potential that the trial will show cardioprotection is relatively low, but that the potential that a worrying signal will emerge is also quite low. We were a bit surprised to hear this, as there have been hopes that GLP-1 agonists could show cardioprotection due to the combined effect on glucose and body weight, but this may have just been managing expectations – obviously data is not available yet. We do think that longer trials would be more likely to show cardioprotection but the trial design for most CVOTs is just getting the minimum number of events – so some companies have just put in a higher number of patients. Management confirmed, of course, that there is no actual insight from ELIXA itself, which is still blinded. Overall, Zealand sees non-inferiority as the most likely outcome, and one that will be sufficient for the product to be successful on the market. We wonder if the opinion would be different if the expectations were that the trial would take much longer with a fewer number of patients and the same number of events needed before the trial was over.
  • On Lyxumia’s current market performance: Sanofi suggested during its 1Q14 update that Lyxumia holds a roughly 10-20% share across various European markets, but Zealand management noted that this is not fully reflected in the relatively modest $7 million sales total in 1Q14.
  • The company ended the presentation with an indicative forecast for the status of the diabetes/metabolic pipeline by the end of 2015:
    • LixiLan is expected to be filed for regulatory review;
    • Lyxumia is expected to be resubmitted for regulatory review in the US;
    • The GLP-1/glucagon dual agonist ZP2929 (which was recently dropped by BI as the lead candidate for the companies’ GLP-1/glucagon dual agonist program) is expected to be ready for phase 2 (the company has expressed its intentions to partner ZP2929 before Phase II);
    • A new GLP-1/glucagon dual agonist lead candidate will have been selected for the BI partnership, and it is forecast to be in phase 1;
    • A candidate for an undisclosed diabetes/obesity target from the drug discovery partnership with Lilly is expected to be in phase 1;
    • A novel preclinical candidate for diabetes and/or obesity is expected to be in preclinical development.

 

Questions and Answers

Q: If you look at the LixiLan phase 2b data, do you have an explanation for the weak additive performance you see when you added lixisenatide?

A: If you look at the performance of Lantus, Lantus performed better than we have seen in other clinical trials. Sanofi is looking into the reason, but if you look at the absolute results for LixiLan, they are very strong with an overall HbA1c lowering to 6.3% with weight loss, low GI side effects and no increase in hypos compared to Lantus alone

A: Based on Lantus being a strong insulin that doctors know a lot about, and that the US is the biggest market for diabetes, we feel confident that the launch of the LixiLan combination will be very strong.

Q: In phase 3, what is the average additive effect of the GLP-1 agonist component that you expect to see?

A: I do not know off the top of my head, but I would suggest that something in the range of 0.4-0.5% would be what we would expect to see.

A: It is important to keep in mind that for agents that primarily control postprandial glucose excursions, A1c is probably not the only relevant parameter to give the full answer of the long-term benefits to patients. We do not know exactly what the best biomarker is, and we’ve been discussing with Sanofi the possibility of doing research on what the best biomarker is to show the clinical importance of reductions in postprandial glucose.

Q: Is LixiLan’s primary advantage the potency, or the fact that patients could use it to intensify treatment earlier?

A: I think it is more the latter factor. It could change the treatment paradigm, and you could see patients move directly from orals onto a combination injectable. That is how I see the strength of the trial with regards to the current patient need. Most patients now go on basal insulin for ten years, gain weight, and only much later do they start on a GLP-1 agonist. 

Q: When is the glucagon analog expected to enter clinical testing?

A: We plan to start clinical trials this year with our lead product, and if everything goes right with the current expectations of conducting mainly bioequivalence phase 2/3 trials, we could file an NDA as early as 2017.

Q: In your early stage pipeline, can you prioritize each agent in terms of how important a partnership will be?

A: […] We could take the glucagon agonist program all the way ourselves, whereas for our GLP-1/gastrin and GLP-1/GLP-2 programs we are looking for partners for the clinical development.

Q: What is the timeline for selecting a new lead candidate for the partnership with BI?

A: We have a shortlist of molecules that are on their way to SoPD (start of pre-development) nomination. We would expect BI to select a new lead this year.

                                               -- by Manu Venkat and Kelly Close