Zealand and Boehringer Ingelheim sign second collaboration agreement to advance novel peptide medicines

Zealand Pharma (“Zealand”) (NASDAQ OMX Copenhagen: ZEAL), a company specialized in the discovery, design and development of peptide medicines, and Boehringer Ingelheim, one of the world’s leading pharmaceutical companies, today jointly announced a new global exclusive licence, research and development collaboration. The collaboration covers a novel therapeutic peptide project from Zealand’s portfolio of preclinical programs. The aim is to develop novel medicines for improved treatment of patients with cardio-metabolic diseases. The target is undisclosed.

This marks the second collaboration between Zealand and Boehringer Ingelheim following the first agreement, which was signed in June 2011. The first collaboration is ongoing for the development and commercialization of novel glucagon/GLP-1 dual-acting peptide therapeutics to treat patients with Type 2 diabetes and/or obesity. The new collaboration reflects the confidence both parties have in each other and of their complimentary expertise in the research and development of new medicines.

Commenting on the announcement, David H. Solomon, President and CEO of Zealand, said: “This second agreement secures additional funding and attractive value potential to Zealand. It demonstrates our strong partner relations with Boehringer Ingelheim, leveraging Zealand’s expertise in the design and development of therapeutic peptides to now cover an additional target in the cardio-metabolic disease area. We look forward to working with Boehringer Ingelheim towards selection of the first preclinical peptide therapeutic to be advanced in development under this new agreement.”

Dr Michel Pairet, Boehringer Ingelheim’s Senior Vice President Corporate Division Research and Development non-clinical, commented: “Partnering is key to our business strategy and the relationship with Zealand is a long-term and important one. We are, therefore, extremely pleased to enter into this new agreement with Zealand, a company recognised as experts in their field, which will further complement and strengthen our own discovery and development efforts in the area of cardio-metabolic diseases.”

Under the new agreement, Zealand and Boehringer Ingelheim will combine their research expertise for up to four and a half years focusing on the continued discovery, identification and characterization of novel peptide medicine candidates within the selected therapeutic target area of cardio-metabolic disease. The companies will work together to advance the therapeutic peptides stemming from this research collaboration into preclinical development. Boehringer Ingelheim will be responsible for the conduct of preclinical and clinical development as well as for the commercialization and solely fund the research, development and commercialization of products under the agreement.

Dependent upon the achievement of pre-defined development milestones, with the first at initiation of preclinical development, as well as regulatory and commercial milestones, Zealand is eligible to receive potential payments of up to a total of EUR 295 million for the first compound, developed and marketed under the collaboration. Zealand will be eligible to receive additional milestones for other compounds advanced. Further, Zealand is entitled to research funding plus tiered royalties on global sales of products stemming from the collaboration. Zealand retains co-commercialization rights in Scandinavia.

Zealand’s financial outlook for 2014

The new agreement with Boehringer Ingelheim is expected to positively affect Zealand’s revenue and other operating income by a total of DKK 42 (EUR 5.6) million in 2014.
The company therefore raises its full year revenue guidance to DKK 133 (EUR 18) million (from DKK 96 (EUR 13) million) and lowers its expectations on net operating expenses in 2014 to DKK 195-205 (EUR 25-28) million (from DKK 200-210 (EUR 26-29)).