ANNUAL
REPORT
2015
From
peptide
to
patient
Zealand Pharma A/S
01_Our business
01_Zealand in brief and Highlights
Our business
Our portfolio
Corporate matters
Financial statements
Zealand in brief and 2015 highlights
Value creation at Zealand
Key figures, financial highlights and 2016 guidance
Letters from the Chairman & the CEO
Zealand’s strategy
Key Performance Indicators
Contents
Zealand in brief
Highlights in 2015 and early 2016
– Progress on all fronts
Management review
Our business
Value creation at Zealand
– Turning peptides into medicines
2
Key figures, financial highlights and 2016 guidance 4
Letters from the Chairman and the CEO
Zealand’s strategy
Key Performance Indicators
Our portfolio
Portfolio overview
2015 achievements
2016 achievements and news outlook
Out-licensed portfolio
Proprietary pipeline
Corporate matters
Board of Directors and senior management
Risk management and internal control
Corporate Governance, Corporate
Social Responsibility and Human Resources
Shareholder information
Financial review
Financial statements
Financial statements
Notes
Statements
Company information
6
10
11
14
16
17
18
24
34
38
41
44
48
50
55
78
80
Zealand is a maturing biotech company with established scientific
expertise and a leading-edge position in turning peptides into
medicines (see p. 2).
The company has a mature portfolio with five products out-licensed
to Sanofi, Helsinn and Boehringer Ingelheim, including one marketed
medicine and two under regulatory review in the US.
Zealand’s strategic focus is on its growing proprietary pipeline, which
includes four investigational medicines in clinical development.
Out-licensed products: Lixisenatide (Type 2 diabetes), marketed
as Lyxumia® outside the US and under US regulatory review, and a
combination of lixisenatide and Lantus® (LixiLan) (Type 2 diabetes),
also under US regulatory review, both by Sanofi; elsiglutide
(chemotherapy induced diarrhea) in Phase IIb development by
Helsinn; and two preclinical projects (diabetes and/or obesity) by
Boehringer Ingelheim. On all our out-licensed products, Zealand has
no financial obligations and is eligible to potential milestone payments
and sales royalties.
Proprietary pipeline (all rights with Zealand): ZP4207 glucagon
rescue treatment (acute, severe hypoglycemia) in Phase II; ZP1848
(short bowel syndrome) in Phase II; ZP4207 multiple-dose version
(hypoglycemia control) in preparation for next clincal Phase; and
ZP2929 (diabetes/obesity) in Phase I. In addition, Zealand has several
therapeutic peptides in preclinical development.
Zealand’s management is highly international with broadly diversified
competencies. The organization is agile and efficient with established
in-house expertise from early research to late-stage clinical
development. At the beginning of 2016, the company had just over
110 employees of wich 80% work in R&D functions.
Zealand is publicly listed on Nasdaq Copenhagen (ZEAL.CO) with a
market value of DKK 3 billion / EUR 397 million as of 1 March 2016.
(Market value 31 December 2015: DKK 3.7 billion / EUR 498 million).
Zealand’s financial position is solid including cash resources of DKK
440 / EUR 59 million by end 2015.
In 2016 and onwards, royalty and milestone revenues from the
out-licensed portfolio are expected to grow, providing financing for
the continued advancement and expansion of Zealand’s proprietary
pipeline.
Our business has considerably matured since the beginning of 2015. Under
our agreement with Sanofi, both lixisenatide and LixiLan have been filed
for US approvals with prospects of significant revenue growth and a path to
profitability for our company in the years to come. We have advanced our own
pipeline, including initiation of two Phase II trials with two Zealand invented
investigational medicines. All in line with our strategy for accelerated value
creation, where we will take select specialty peptide medicines all the way
through registration ourselves for the benefit of patients and shareholders.
President & CEO / Britt Meelby Jensen
Out-licensed products:
Lyxumia 20mcg
injection
lixisentatide
Fixed-ratio combination
of lixisenatide and insulin
Lixisenatide (Type 2 diabetes):
glargine (Type 2 diabetes)
Elsiglutide (chemotherapy
Boehringer Ingelheim
∞
Cardiovascular safety
∞
Successfully completed
induced diarrhea):
∞
A new lead drug candidate
established (ELIXA trial)
Phase III
∞
Filed for US approval
∞
Filed for US approval with
∞
∞
Started in Phase IIb
Completed patient
priority review
enrollment
advanced into preclinical
development under each
of two collaborations
Proprietary pipeline (all rights with Zealand):
ZP4207 (acute, severe
ZP1848 (Short bowel
ZP4207 (hypoglycemia
Danegaptide (cardiac
hypoglycemia):
syndrome):
control):
reperfusion injuries):
∞
Phase I trial completed with
positive results
∞
∞
Advanced into Phase II
∞
Advanced into Phase Ib
∞
Completed Phase II
Start of patient dosing in
development
Proof-of-Concept trial,
∞
Advanced into Phase II with
Phase II Proof-of-Concept
∞
Phase Ib completed with
unfortunately with
start of patient dosing
trial
positive results
negative results
Expansion of
clinical competencies,
including in-house
regulatory, quality and
medical expertise
New Board members
with broad international
competencies
New CEO and senior
management team
92%
increase in
market value
in 2015
Doubling of
shareholders to
> 10,000*
US ownership
share of
17-20%*
* As per 1 March 2016
2015 YEAR END
CASH POSITION
DKKm
440
DKKm
22
DKKm
29
DKKm
137
2015 REVENUE
DKKm 188
Lyxumia® royalties
Sanofi milestone payments
Boehringer Ingelheim
milestone payments
Front cover features Zealand employees from left to right: Nina from Medicinal
Chemistry, Thomas from Clinical Development and Hanne from Project Management.
1
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
01_Value creation at Zealand
Our business
Our portfolio
Corporate matters
Financial statements
Zealand in brief and 2015 highlights
Value creation at Zealand
Key figures, financial highlights and 2016 guidance
Letters from the Chairman & the CEO
Zealand’s strategy
Key Performance Indicators
Value creation at Zealand
– Turning peptides into medicines
Preclinical development
Dynamic
interaction in
R&D to optimize
therapeutic
profile
~7,400
Zealand
peptides with
optimized
profile
What are peptides?
Peptides are naturally occurring biological molecules.
Zealand’s approach and focus
Zealand has an established leading scientific expertise in the
Like proteins, they are made up of chains of amino
field of peptide-based medicines. Our in-house competencies
acids, however typically shorter (2-50 amino acids long).
include a deep understanding of peptide chemistry and
In the human body alone, there is an estimated 7,000
functionality coupled with extensive experience applying
native peptides, which are involved in many essential
structural design principles to develop novel medicines.
physiological functions. Due to their important roles,
peptides represent a highly relevant basis for medicines.
For each new project we apply our capabilities to identify
Peptides generally have high potency (strong biological
novel peptides with optimal therapeutic profiles in terms of
effect at low concentrations) and strong selectivity (effect
efficacy and safety as well as ensuring cost effectiveness
primarily on the intended biological target), which is of
and development of strong intellectual property (IP)
therapeutic relevance. Due to their smaller size, peptides
protection. Our R&D organization is structured to progress
also offer advantages over proteins in terms of therapeutic
a novel investigational peptide medicine effectively through
administration routes and cost of manufacturing.
preclinical development, including the establishment of
Key steps in the value chain
for a new medicine
proof-of-mechanism in cell based disease assays (in vitro)
and in key animal disease models (in vivo).
Over the past few years, we have expanded and
strengthened our development competencies downstream
The development of a new investigational medicine
to include a strong clinical experience team including
is a long, expensive and highly regulated process.
quality assurance and regulatory. Today, Zealand has the
Addressing patients’ unmet medical needs is of high
necessary in-house capacity to advance investigational
long-term value, when taking into consideration also
medicines from idea to pre-clinical IND-enabling studies
that new medicines usually are protected by patents or
and through the clinical development Phases I to III.
data exclusivity for several years after launch. It takes
on average 12–15 years from the identification of a new
Our therapeutic focus lies in specialty disease areas where
drug project idea to market launch of a new medicine.
peptide-based medicines have particular relevance and
As a project successfully advances from design phase to
where the patient populations are easily identifiable and
selection of a lead investigational medicine candidate
treated by specialists. In such areas, the complexity and
for preclinical development (laboratory and animal
size of the clinical development program will typically be
studies) and subsequently into and through the clinical
manageable for Zealand to take the proprietary medicine all
development Phases I to III, its probability of success,
the way through registration.
i.e. of market approval, and value increases significantly.
This is a result of additional supportive efficacy and
safety data being generated and validated by healthcare
authorities at each step.
Partnering is an essential element
for our value creation
With reference to the table below, on average one out
Partnering activities (in-licensing, out-licensing, acquisitions
of 10 investigational medicines advanced into clinical
and R&D collaborations) are becoming an increasingly
development will succeed all the way to the market.
essential component in the development of Zealand’s
Probabilities of success to market for
biotech companies, but also with medical centers and
portfolio. We collaborate with academia, pharma and
an investigational medicine
Development
stage
Clinical Clinical Clinical
Phase II Phase III
Phase I
Under
regulatory
review
Market probability
10%
16%
50%
83%
Source: Hay, M. et al. (2014): Clinical development success rates for
investigational drugs, Nature biotechnology
patient organizations as we progress along our strategic
focus “From peptide to patient” taking select medicines all
the way through registration.
We look for new opportunities in specialty disease areas
where peptides have strong potential, but also relevant
non-peptide clinical opportunities where Zealand’s
competencies can be applied.
Idea generation
We initiate new peptide medicine projects
by focusing on a selected biological target
of relevance in a specialty disease area. Key
in the idea phase is to carefully evaluate and
define the IP space and opportunities to
create novel IP.
Intellectual Property
Peptide structure optimization
Based on the native peptide, we optimize
the molecular structure in order to get:
• Strong therapeutic effect
• High stability of the peptide to provide a
Establish Proof-of-Principle
We study the effect of the peptide
medicine in relevant disease models and
preclinical evaluation of the products’
safety profile.
convenient dosing profile
• Strong patent protection
• Good safety profile
Protection of our proprietary peptide therapeutics, processes, technologies and know-how are important for us.
Partnerships: Value enhancement and
sourcing of new opportunities
Access to competencies and external opportunities via partnerships with academia, biotech and clinical
centers is important to grow our pipeline while retaining a dynamic organization. New external opportunities
are persued in preclinical and early clinical development, where Zealand competencies can be applied.
Clinical development
Efficacy
2
medicines
based on
Zealand peptide
advanced into
Phase III
8
Zealand
peptide
medicines
advanced into
Phase II
~670
active
patents
10
Zealand
peptides
advanced
into clinical
development
Phase III
In Phase III the therapeutic benefits of
an investigatonal peptide medicine are
confirmed in a representative number
of patients. The objective is to provide
evidence to support
regulatory filings.
2
medicines
based on
Zealand peptides
filed for
approval
Phase II
The objective is to show relevant
therapeutic effect in patients (clinical
Proof-of-Concept). Often 2-3 different
doses are investigated in parallel (dose-
finding). The number of patients
enrolled depends on the
disease indication.
1
marketed
medicine
Phase I
First dosing in a small number of humans
to investigate the clinical safety of an
investigational medicine. This Phase
typically involves healthy volunteers but
can also include patients.
Regulatory review process
On the market
Submissions of files for regulatory approvals in the US, EU and Japan. Acceptance
and review processes by the respective authorities US Food and Drug Administration
(FDA) and European Medicines Agency (EMA).
Zealand peptide-based medicines
are made available for patients.
Lyxumia 20mcg
injection
lixisentatide
2
3
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
01_Key figures and Financial highlights
Our business
Our portfolio
Corporate matters
Financial statements
Zealand in brief and 2015 highlights
Value creation at Zealand
Key figures, financial highlights and 2016 guidance
Letters from the Chairman & the CEO
Zealand’s strategy
Key Performance Indicators
Consolidated
key figures
Financial highlights of 2015
and 2016 financial guidance
DKK ’000
Note
2015
2014
2013
2012
2011
Financial highlights of 2015
Income statement and comprehensive income
Revenue
Royalty expenses
Gross profit
187,677
-22,267
153,773
-13,776
165,410
139,997
6,574
-872
5,702
223,565
142,284
-15,933
-112
207,632
142,172
Research and development expenses
-214,959
-180,036
-164,467
-182,759
-126,938
Administrative expenses
Other operating income
Operating result
Net financial items
-44,606
-39,826
-34,155
12,828
-81,327
-38,505
6,328
7,302
-73,537
-185,618
1,047
1,942
Result from ordinary activities before tax
-119,832
-72,490
-183,676
Tax on ordinary activities
1
5,875
7,500
0
Net result
Comprehensive income
Earnings per share – basic (DKK)
Earnings per share – diluted (DKK)
Statement of financial position
-113,957
-64,990
-183,676
-113,957
-64,990
-183,676
-4.82
-4.82
-2.87
-2.87
-8.10
-8.10
Cash, cash restricted and cash equivalents
440,199
538,273
286,178
-27,611
35,135
32,397
3,975
36,372
0
36,372
36,372
1.61
1.60
358,922
126,940
23,193
-34,905
28,435
8,764
4,613
13,377
0
13,377
13,377
0.60
0.60
278,342
149,358
469,481
23,193
Securities
Total assets
Share capital (‘000 shares)
Shareholders’ equity
Equity/assets ratio
Royalty bond
Cash flow
Depreciation
Change in working capital
Investments in fixed assets
Free cash flow
0
0
24,383
634,688
596,756
346,913
520,983
24,353
23,193
252,231
252,828
0.40
0.42
312,951
272,170
23,193
316,141
0.91
0
491,015
441,397
0.94
0
0.94
0
6,215
-138,871
-4,040
5,932
15,521
-4,497
5,911
-3,643
-4,569
2
-221,373
-46,680
-174,187
5,319
13,782
-8,849
59,688
4,129
-30,943
-11,475
-13,281
Other
Share price (DKK)
Market capitalization (DKKm)
Equity per share (DKK)
Average number of employees
Products in clinical development (year end)
Products in registration phase (year end)
Medicines on the market
151,50
3,689
10.60
110
6
2
1
83.00
1,925
11.17
103
5
0
1
59.00
1,368
13.97
107
6
0
1
84.00
1,948
21.70
104
7
0
0
3
4
5
57.00
1,322
19.51
91
6
0
0
Notes:
(1) According to Danish tax legislation Zealand is eligible to receive DKK 5.9 million in cash relating to the tax loss of 2015
(2) Free cash flow is calculated as cash flow from operating activities less purchase of property, plant and equipment
(3) Equity per share is calculated as shareholders’ equity divided by total number of shares less treasury shares
(4) On 20 May 2015, Zealand initiated clinical Phase Ib development of ZP4207 for mulitple-dose use, and on 17 September 2015, ZP1848 was advanced into
clinical Phase II development
(5) End of July 2015, Sanofi filed lixisenatide for regulatory approval in the US, and the file was accepted for review by the FDA in September 2015.
In December 2015, Sanofi filed LixiLan for regulatory approval in the US. The file was accepted for review by the FDA in February 2016.
Revenue
DKKm
250
200
150
100
50
0
Net operating expenses
DKKm
250
200
150
100
50
0
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Milestone income
Royalty income
Net R&D expenses
Administrative expenses
Revenue
Net operating expenses
Zealand’s revenue amounted to DKK 188 million in 2015, which
Total net operating expenses were DKK 247 million in 2015,
was an increase of 22% over 2014.
up 16% compared to 2014. The increase was mainly driven
by higher net research and development (R&D) expenses
The main revenue component was milestone payments of DKK
as a result of accelerated development activities. These
159 million, generated under the license collaborations with
included clinical Phase I and Ib single and multiple dose
Sanofi and Boehringer Ingelheim. Milestone payments were up
trials with ZP4207 (stable glucagon for hypoglycemia) and
19% compared to 2014.
the preparation and advancement of ZP1848 (short bowel
syndrome) into clinical Phase II development.
Royalty revenue to Zealand from Sanofi’s sales of Lyxumia®
increased 41% in 2015 to DKK 29 million.
Financial guidance for 2016
In 2016, Zealand expects continuously growing royalty
payments from Sanofi on sales of Lyxumia® outside the US.
Pending positive US regulatory decisions on both lixisenatide
Net operating expenses in 2016 are expected to increase to
a range of DKK 340-360 / EUR 45-48 million. The increase
over 2015 is explained primarily by a higher level of clinical
and LixiLan in Q3 2016 and potential subsequent commercial
development costs associated with the advancement of
launches by Sanofi also in 2016, royalty payments on US sales
Zealand’s proprietary clinical pipeline.
may be received as well. However, no specific guidance on
the level of royalties can be provided, as Sanofi has given no
guidance on 2016 sales of Lyxumia® or LixiLan.
Operating loss before royalty income/expenses is therefore
expected in a range of DKK 140-160 / EUR 19-21 million.
Additional revenue of up to DKK 200 / EUR 27 million may be
received from event driven partner related milestones.
4
5
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
01_Letters from the chairman and the CEO
Our business
Our portfolio
Corporate matters
Financial statements
Zealand in brief and 2015 highlights
Value creation at Zealand
Key figures, financial highlights and 2016 guidance
Letters from the Chairman & the CEO
Zealand’s strategy
Key Performance Indicators
Letter from
the Chairman
In this context, I see substantial potential for Zealand based
on its well-established scientific competencies to design and
develop novel peptide medicines, which represents a field of
significant unexplored potential.
Since innovation and effective execution are key success
components in the biotech industry and in Zealand, we
continuously strive to support innovation and improve our
processes, to remain efficient in terms of the time and cost
required to bring new medicines through development to
meet patients’ needs.
A highly international Board – And new senior
management team in place
In 2015, we strengthened both Zealand’s Board composition
and its senior management. I am pleased that the new Board
composition has led to a strengthened diversity of skills and
Martin Nicklasson, Chairman of the Board of Directors
international experience to effectively govern Zealand through
Dear Shareholder
the next phases of its exciting development. Furthermore, our
new CEO Britt Meelby Jensen joined Zealand at the beginning
of 2015 and she has brought additional important leadership
In 2015 and into 2016, Zealand’s business has advanced
qualities to the company. Under her firm leadership, a new
remarkably. I am very pleased to state that Zealand is in its
competent senior management team has been put in place
strongest position ever.
as well as we have launched a new value creating business
The corporate objective of Zealand is to invent and provide
strategy.
new and better medicines with clear benefits to patients
Diligent growth strategy for accelerated value creation
in areas of unmet medical need. Towards this end, we are
The new strategy for accelerated value creation at Zealand
determined to create a sustainable, innovative and profitable
has its foundation in both Zealand’s achievements to date
business with strong shareholder value. In order to support
and its prospects for significant royalty revenue growth in
these objectives, we have in 2015 significantly enhanced the
the coming years. The aim of the strategy is to take select
capabilities and competencies of our Board, installed a new
specialty peptide medicines all the way from design through
dynamic management team and launched a strategy for
development to registration. Thereby, we aim long term to
accelerated value creation under the headline “From peptide
retain the full value creation and control of our own products.
to patient”. I am confident that with these initiatives, we have
the right foundation for Zealand to continue to succeed.
All lights on green for Zealand in 2016
The need for better medicines is eternal and Zealand
development prospects. 2015 was a transforming year, firmly
has established a leading position
setting the foundation for meeting our strategic goals.
The fundamentals for the pharmaceutical/biotech industry
remain solid with significant needs for new and better
I am convinced that Zealand has what it takes to remain
I am optimistic about Zealand’s future opportunities and
medicines in many disease areas.
”I am confident that Zealand has the
right management, the right strategy
and the necessary competencies to
remain successful and continue to
develop its business for the benefit
of patients and our shareholders.”
successful and continue to grow its business for the benefit
of our shareholders. I wish to thank you all for your trust
while expressing, on behalf of the Zealand board, a strong
commitment to work diligently also in the future in the best
interests of the company and in the best of your interests.
Martin Nicklasson
Chairman, Board of Directors
Zealand’s corporate objective
Accelerate
value
creation for
patients and
share holders
6
7
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
Our business
Our portfolio
Corporate matters
Financial statements
Zealand in brief and 2015 highlights
Value creation at Zealand
Key figures, financial highlights and 2016 guidance
Letters from the Chairman & the CEO
Zealand’s strategy
Key Performance Indicators
Letter from the CEO
– Building for accelerated value creation
Dear Zealand shareholders
Launch of an ambitious strategy: “From peptide to patient”
2015 was an exciting and eventful year where our business
Building on our current position of strength and the prospects
considerably matured.
of significant revenue growth from our portfolio of out-
We had defined 2015 as a catalyst year for our company.
licensed products, we launched an ambitious growth strategy
Looking back, it became a catalyst year as we reached all the
in November 2015. The new strategy sets the direction
milestones defined and we delivered more than we had guided
for accelerated value creation for Zealand, and it marks an
on. We have seen advancements for both our proprietary and
important change of focus with regard to our proprietary
out-licensed products, we have developed our organization
portfolio and future playing field. We want to advance and
and competencies, we have strengthened the Board and the
expand our proprietary pipeline with the intention to take
senior management team, and we have launched our new
select proprietary medicines through to registration. We focus
ambitious strategy “From peptide to patient”.
on specialty disease areas where peptides have high relevance,
Entering 2016 there is no doubt that Zealand is in a stronger
in-house and external innovation, maintaining a dynamic and
and advancement of new products will be based on both
position than ever.
agile organization. Engagement in strategic partnerships from
early research to commercialization is a key element in the
In 2015, Zealand’s business advanced to a higher level
strategy as well as we will consider potential asset acquisitions
Over the years, Zealand has built both a proprietary and an
if attractive opportunities appear.
out-licensed portfolio. Zealand fully owns and controls the
proprietary pipeline, leaving us the potential of a significant
Building on more than 17 years’ leading-edge scientific
share of future sales revenue. The out-licensed portfolio is
expertise and today’s strong in-house capabilities, we are
resourced and financed by our partners, and it represents
excited about our journey to invent and bring new and better
medicines with broad potential and a maturity stage, which
medicines to patients.
can generate important milestone and royalty revenues in the
years to come. In 2015, important progress was delivered for
Prospects for 2016 point to another great year with
both parts of the portfolio.
potential of considerable revenue growth
For our proprietary pipeline, we reached the following
was initiated in two Phase II trials with ZP4207 for better
milestones:
hypoglycemia management in diabetes and with ZP1848
•
Danegaptide, a novel gap junction modifier for reperfusion
for treatment of short bowel syndrome, respectively. For
injuries: Completion of the enrollment of almost 600
danegaptide, the readout of Phase II unfortunately showed no
patients with an acute myocardial infarction in Phase II
effect against cardiac reperfusion injuries.
We have had a strong beginning of 2016. Dosing of patients
•
ZP4207, a glucagon analogue for acute, severe
hypoglycemia in diabetes, completed Phase I with positive
As a key milestone in February, FDA accepted LixiLan for
results
priority review, and we are now awaiting regulatory decisions
•
ZP1848, a long acting GLP-2 analogue, advanced into
on both lixisenatide and LixiLan this year in July and August,
Phase II for treatment of Short Bowel Syndrome
respectively. This leaves hope that two medicines based on a
•
ZP4207 for multiple dose use to better manage
Zealand invention will be available for US diabetes patients in
hypoglycemia in patients on insulin, advanced into and
2016 – with prospects of considerable revenue growth for our
completed Phase Ib with positive results.
company in the years to come.
The increased level of late stage clinical development activities
For our out-licensed portfolio, we also reached very important
leads to higher operating expenses. This is reflected in our
milestones:
2016 financial guidance and will be financed via our solid cash
•
Lixisenatide, the first once-daily prandial GLP-1 agonist,
position and expected revenue growth from both milestone
was filed in the US
payments and royalties.
•
The fixed-dose single-injection combination of lixisenatide
and Lantus® (LixiLan), was submitted for regulatory review
in the US using a priority review voucher
I am proud to conclude, that we have built a strong foundation
and kicked-off a very exciting journey for accelerated growth
•
Elsiglutide, a GLP-2 analogue for chemotherapy induced
and continued success. We have a strong scientific platform,
diarrhea, was advanced into Phase IIb
a high-value portfolio of out-licensed products and a
•
Progress under both license agreements with Boehringer
growing proprietary pipeline, which I am confident will create
Ingelheim with the selection of new preclinical lead
significant value for both patients and shareholders in the
candidates and an associated milestone payment.
coming years. Also, we more than doubled our number of
shareholders, and I would like to deeply thank everybody for
the strong confidence in our company.
Our diligent growth
strategy has four
elements
We will build a proprietary portfolio,
taking select medicines through
registration with full ownership
retained
We will focus on specialty disease
areas of high relevance for peptide
medicines
We will strengthen our leading
position in therapeutic peptide
R&D while maintaining a dynamic
organization with both in-house and
external innovation
We will accelerate growth via
strategic partnerships and reduce
focus on full out-licensing
Britt Meelby Jensen
President and
Chief Executive Officer
8
9
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
01_Zealands strategy
01_Key Performance Indicators
Our business
Our portfolio
Corporate matters
Financial statements
Zealand in brief and 2015 highlights
Value creation at Zealand
Key figures, financial highlights and 2016 guidance
Letters from the Chairman & the CEO
Zealand’s strategy
Key Performance Indicators
Zealand’s strategy
Key Performance
Indicators
Building on Zealand’s position of strength, in November 2015, management
launched a diligent growth strategy for accelerated value creation. The strategy is
labelled “From peptide to patient” and consists of four main elements.
Every year, Zealand defines Key Performance Indicators (KPIs) to measure its
performance towards continued success of the company. These are a combination
of financial, pipeline and organizational objectives. For 2016, our KPIs reflect our
new strategic direction.
Build a portfolio of proprietary
medicines
Focus on specialty disease
areas
2015: Zealand performed strongly on all KPIs defined for the year
1. Advance and grow our portfolio of medicines for the
3. Grow the portfolio of partnerships
benefit of patients
As a key element in our strategy, we will take a
We will build on over 17 years’ experience in
There were substantial advancements in both the out-licensed
During 2015, the company strategy was redefined with
growing number of existing and new investigational
optimizing the therapeutic benefits of peptides and
and proprietary portfolio (the latter covered below), with
increasing focus on growing our proprietary pipeline. As
medicines further in development ourselves – and
we focus on carefully selected specialty disease
successful progress to the next phase on four of the five
a consequence, it was decided not to extend the research
in select specialty disease areas, all the way through
areas, where peptide-based medicines have high
out-licensed projects:
collaboration with Eli Lilly and instead allocate the related
registration and to launch for patients. By keeping
relevance. More specifically, we pay attention to four
•
Lixisenatide and LixiLan (both Type 2 diabetes) were
R&D resources to the proprietary preclinical specialty disease
the ownership of commercial rights to our products,
different parameters:
we will retain the full value creation and control. For
submitted for US regulatory approvals, including the
activities.
decision by Sanofi to redeem a priority review voucher for
our out-licensed products, we generate milestone
1) the patient population is well-defined;
LixiLan
On 1 December 2015, a new Chief Business Officer with broad
revenue and high-single to low-double digit
2) there is a clear unmet medical need to be fulfilled
•
Elsiglutide (chemotherapy induced diarrhea) was advanced
international experience was appointed to drive Zealand’s
percentages in sales royalties, which is vital to fund
by better medicines;
into Phase IIb by Helsinn
strategic partnership activities.
our growth strategy.
3) the relevant group of health care providers is
Over time proprietary medicines will provide higher
distinct and addressable; and
•
A lead product candidate (diabetes/obesity) was selected
and entered preclinical development under the Boehringer
revenue shares, determined by the go-to-market
4) the clinical development path through to
Ingelheim collaboration.
model.
registration is considered manageable to Zealand
in size and complexity.
Enhance our peptide expertise
and maintain a dynamic R&D
organization
Accelerate growth via strategic
partnerships
Zealand has an established and validated leading-
We aim to grow the value of our proprietary pipeline
edge expertise in design and development of
while maintaining a dynamic and agile organizational
peptide-based medicines. We continue to invest in
model. We will increasingly engage in strategic
enhancing and expanding our competencies, and
partnerships and leverage strategic collaborations
2. Increase the proprietary part of the pipeline
4. Generate growing revenues and retain a solid financial
position
During 2015, the proprietary portfolio was expanded with two
new medicines in clinical development:
•
Start and completion of a Phase Ib trial with ZP4207 for
Royalty revenues in 2015 increased based on Sanofi’s growing
sales of lixisenatide (Lyxumia®). However, the majority of
the total revenues of DKK 188 / EUR 25 million came from
multiple-dose use (hypoglycemia control)
milestone payments from Sanofi and Boehringer Ingelheim,
•
Initiation of new Phase II development program for ZP1848
which financed a considerable part of our operational costs
(short bowel syndrome).
and helped to retain a solid financial position.
2016: The KPIs for 2016 are set to measure our performance in accordance
with the strategy
combine internal scientific innovation with externally
across the value chain, i.e. from early research to
1. Advance and expand the pipeline of proprietary
3. Enter new strategic partnerships in support of pipeline
sourced projects to expand both our preclinical and
commercialization, with academia, biotech and
investigational specialty medicines
value creation
early-stage clinical pipeline.
pharma companies, as well as clinical centers and
The objective is to advance at least two existing proprietary
In alignment with the updated strategy, Zealand will engage in
commercialization partners.
products to the next development phase during 2016 and to
strategic collaborations across the value chain to increase and
It is essential for our continued success that we
expand the proprietary pipeline with at least one new specialty
accelerate pipeline value creation.
maintain a dynamic and agile organization, to be able
We have a couple of existing projects that are better
drug candidate; either invented internally or externally sourced.
to act fast on new opportunities.
suited for out-licensing, but overall, the past focus on
As we grow our pipeline, we will stepwise build
pure out-licensing will be reduced as the proprietary
2. Enhance our leading-edge peptide competencies
4. Retain a solid financial position with growing revenues
critical competencies in-house and supplement
portfolio of specialty medicines grows.
The objective is to:
The aim is to secure growing revenue for Zealand, from
these with external expertise.
•
Engage in new technology or research based collaborations
milestone payments and royalty payments on global sales
to strengthen or broaden our peptide competencies
while retaining a strong cash position.
•
Expand clinical competencies via new collaborations with
clinical centers of excellence in specialty disease areas.
10
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_Our portfolio
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
Our
portfolio
12
Our portfolio includes several
out-licensed products and
projects, including one medicine
marketed outside the US
(Lyxumia®) and two products
under regulatory review.
Our strategic focus is to
continuously advance our
growing pipeline of proprietary
investigational medicines,
of which four are in clinical
development.
All products and projects currently in our
portfolio are based on in-house invented
therapeutic peptides. In this section, we
present an overview of the portfolio and
each product in detail.
Portfolio overview
2015 achievements
2016 achievements and news outlook
Out-licensed portfolio
Proprietary pipeline
Photo features Zealand employee:
Jens, industrial PhD student in Pharmaceutical
Development, working in one of Zealand’s laboratories.
14
16
17
18
24
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_Portfolio overview
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
Portfolio
overview
Out-licensed products and projects
Proprietary pipeline
Five products and projects are under license collaborations: Two with Sanofi, one with Helsinn and two with Boehringer
We have a growing number of novel proprietary investigational medicines in development, which all stem from our profound
Ingelheim. These include one medicine on the market outside the US, two investigational medicines under US regulatory review,
expertise in peptide therapeutics. It is our strategic focus to continue to expand and advance our proprietary pipeline targeting
one in clinical development, and two preclinical projects. For all products under license collaborations, Zealand has no financial
unmet medical needs in specialty disease areas.
obligations and is eligible to potential milestone payments of up to a total of DKK 4.8 billion / EUR 652 million and on future sales
We have four products in clinical development and several preclinical projects.
royalties.
Lyxumia® (lixisenatide) – ex-US Type 2 diabetes
ZP4207 (Single-dose) Rescue treatment for acute, severe hypoglycemia
Preclinical
Phase I
Phase II
Phase III
Reg.
Marketed
Preclinical
Phase I
Phase II
A once-daily prandial GLP-1 receptor agonist for the treatment of Type 2 diabetes developed and commercialized
as Lyxumia® by Sanofi in 50 countries outside the US. Lixisenatide significantly lowers blood glucose with a
profound effect on prandial or meal-related glucose, making it relevant to use for insulin intensification.
A novel glucagon analogue with high stability in liquid formulation, intended for use as a convenient ready-to-use rescue pen for acute,
severe hypoglycemia. Phase I results have demonstrated good safety and tolerability of ZP4207 after single-dosing in healthy volunteers
and Type 1 diabetes patients. In February 2016, Zealand initiated patient dosing in a Phase II trial, expected to complete in H2 2016.
Lixisenatide – US Type 2 diabetes
ZP1848 Short bowel syndrome
Preclinical
Phase I
Phase II
Phase III
Under regulatory review
Preclinical
Phase I
Phase II
Lixisenatide was filed by Sanofi for regulatory approval in the US in July 2015. The FDA accepted the file in
September and regulatory review is ongoing with a decision expected in July 2016.
A long-acting GLP-2 analogue with high stability in liquid formulation. In February 2016, the first patients were dosed in a clinical Phase II trial
expected with enrollment of 18 patients with short bowel disease. Clinical update on enrollment and timeline for completion in Q4 2016.
Lixisenatide/insulin glargine fixed-ratio combination Type 2 diabetes
ZP4207 (Multiple-dose) Component in artificial pancreas for hypoglycemia management in diabetes
Preclinical
Phase I
Phase II
Phase III
Under regulatory review
Preclinical
Phase I
In preparation for next clinical Phase
An investigational single-injection combination of lixisenatide and insulin glargine, referred to as LixiLan. Phase III
successfully completed showing significant HbA1c reduction over both Lantus® alone and lixisenatide alone. Under
regulatory priority review in the US with FDA decision expected in August 2016. EU filing expected in March 2016.
A multiple-dose version of our stable glucagon analogue in development as hypoglycemia component of a dual-hormone artificial
pancreas system for better management of insulin dependent diabetes. Phase Ib results showed good safety and tolerability of the product
and its ability to provide a clinically relevant blood glucose response after repeat daily dosing in healthy subjects.
Elsiglutide Chemotherapy induced diarrhea
Preclinical
Phase I
Phase II
ZP2929 Diabetes/obesity
Preclinical
Phase I
A novel GLP-2 receptor agonist licensed to Helsinn in Cancer Supportive Care. In Phase IIb development by Helsinn.
The enrollment of approximately 500 patients with colon cancer has been completed. Results expected in H2 2016.
A once-daily dual acting glucagon/GLP-1 receptor agonist for subcutaneous administration. ZP2929 is in Phase I clinical development as a
potential new treatment for patients with Type 2 diabetes and/or obesity. Additional preclinical data provided for discussion with the FDA.
Glucagon/GLP-1 dual agonists Diabetes/obesity
Several peptide projects & indications
Preclinical
Preclinical
Global license collaboration with Boehringer Ingelheim for the treatment of diabetes and/or obesity. In February
2016, Boehringer selected a new once-weekly lead product candidate for advancement into preclinical
development.
Our proprietary preclinical pipeline comprises of several projects. Those disclosed include a novel GIP receptor agonist, a GLP-1-gastrin
dual agonist, a GLP-1-GIP receptor dual agonist, which all represent potentially more efficacious approaches for treatment of diabetes
and/or obesity. We also have a dual-acting GLP-1/GLP-2 receptor agonist in preclinical development.
Undisclosed target Cardio-metabolic disease
Preclinical
Global license collaboration with Boehringer Ingelheim in the field of cardio-metabolic diseases. In September
2015, Boehringer selected a lead product candidate which has been advanced into preclinical development.
14
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_2015 achievements
02_2016 achievements and news outlook
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
2015 achievements
2016 achievements
and news outlook
Out-licensed products and projects
Out-licensed products and projects
Lixisenatide
(Lyxumia®)
– Sanofi
H1
Positive results from the ELIXA cardiovascular (CV) safety outcomes trial presented as key note at
ADA, demonstrating lixisenatide to be safe on all CV parameters
Positive results from GetGoal Duo-2 trial presented at ADA, showing advantages of lixisenatide versus
rapid-acting insulin as add-on to Lantus® for insulin intensification
Submission of a New Drug Application to the FDA for regulatory approval in the US (by Sanofi)
H2
H2
H1
Fixed-ratio
combination of
lixisenatide and
insulin glargine
(Lantus®)
– Sanofi
Elsiglutide
– Helsinn
FDA acceptance of Sanofi’s New Drug Application and initiation of the regulatory review process
Full year royalty revenue of DKK 29 / EUR 4 million
Positive outcome of the first pivotal Phase III trial, LixiLan-O, meeting the primary endpoint
Positive outcome of the second pivotal Phase III trial, LixiLan-L, meeting the primary endpoint
Submission of a New Drug Application to the FDA for regulatory priority review in the US (by Sanofi)
with a DKK 137 / USD 20 million milestone payment to Zealand
Initiation of Phase IIb dose-finding trial by Helsinn in up to 480 patients with colorectal cancer
Enrollment of app. 1,700 patients with colorectal or breast cancer completed in observational study by
Helsinn to analyze the incidence and severity of chemotherapy induced diarrhea in Europe and the US
Lixisenatide
(Lyxumia®)
– Sanofi
Fixed-ratio
combination of
lixisenatide and
insulin glargine
(Lantus®)
– Sanofi
Elsiglutide
– Helsinn
H1
• Quarterly royalty reports and status updates
H2
• Quarterly royalty reports and status updates
• US regulatory decision by the FDA (July)
H1
FDA acceptance of Sanofi’s New Drug Application for priority review in the US
• Submission for regulatory approval in Europe (by Sanofi)
• Presentation of results from the two Phase III trials, LixiLan-O and LixiLan-L, at a medical conference
H2
• US regulatory decision by the FDA (August)
H1
Confirmed completion of enrollment in Phase IIb with approximately 500 patients enrolled
H2
• Top-line results from Phase IIb dose-finding trial
• Publication of results from observational study of chemotherapy induced diarrhea in the EU and US
Boehringer Ingelheim
collaborations
H2
2nd license collaboration – Undisclosed target for diabetes/obesity:
Selection of a novel lead peptide therapeutic for advancement into preclinical development (by
Boehringer Ingelheim) and a DKK 22 / EUR 3 million milestone payment to Zealand.
Boehringer Ingelheim
collaboration
H1
1st license collaboration – Glucagon/GLP-1 dual agonists for diabetes/obesity:
Selection of a novel once-weekly lead peptide therapeutic candidate for advancement into
preclinical development
Proprietary pipeline
Proprietary pipeline
Danegaptide
H2
Completion of enrollment (585 patients with an acute myocardial infarction (STEMI)) in Phase II
Proof-of-Concept trial
Danegaptide
H1
Results from Phase II Proof-of-Concept trial
ZP4207
Single-dose
ZP1848
ZP4207
Multiple-dose
ZP2929
Preclinical
proprietary projects
Other
H1
Positive results from Phase I trial
ZP4207 Single-dose
H1
Initiation and dosing of the first patients with Type 1 diabetes in clinical Phase II trial
H2
Advancement of ZP1848, a novel long-acting GLP-2 analogue, into clinical Phase II development for
short bowel syndrome
H2
• Top-line results from clinical Phase II trial
ZP1848
H1
Dosing of the first patients with short bowel syndrome in Phase II trial
H2
• Update on patient enrollment and timelines for study completion
H1
H2
H2
H1
H1
H2
Advancement into clinical Phase Ib multiple ascending dose trial backed by a DKK 12 / USD 1.8 million
grant from Helmsley Charitable Trust
ZP4207 Multiple-dose H2
•
Advance into next stage of clinical development for use as component in a dual-hormone artificial
pancreas device for better glucose management in diabetes
Positive results from the Phase Ib trial, showing ZP4207 to be safe and well tolerated after multiple
dosing
Completion of additional supportive preclinical studies
Presentation of preclinical data on novel GLP-1/GIP dual agonist, showing support for its potential as
a novel treatment for Type 2 diabetes/obesity
Presentation of preclinical data on novel GLP-1-gastrin dual agonist, showing the ability of the
compound to increase beta-cell mass and improve glycemic control in diabetes models
New management team and enhancement of international Board competencies
Presentation of growth strategy, labelled “From peptide to patient” for accelerated value creation
Appointment of new Chief Business Officer
ZP2929
Preclinical
proprietary projects
H1
H1
• Decision on next clinical step – engagement with the FDA
Collaboration with BioSolveIT to create unique therapeutic peptide design software
• Presentations of new data on proprietary preclinical peptide therapeutics at medical conference
H2
• Presentations of new data on preclinical peptide therapeutics at medical conference
Other
H1
Appointment of new Chief Science Officer
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_Lixisenatide
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
Out-licensed
portfolio
Five products and projects are under
license collaborations with Sanofi,
Helsinn and Boehringer Ingelheim.
These include lixisenatide, which is
marketed as Lyxumia® outside the US
and is part of two regulatory filings
in the US, plus one product in clinical
development and two preclinical
projects.
On the out-licensed portfolio, Zealand
has no financial obligations and is
eligible to remaining potential milestone
payments of up to a total of DKK 4.8
billion / EUR 652 million and on future
sales royalties.
Lixisenatide (Lyxumia® & LixiLan) – Sanofi
Elsiglutide – Helsinn
Two preclinial projects – Boehringer Ingelheim
19
22
23
Photo features Zealand employee:
Jens from Business Development working on both
in-licensing and out-licensing opportunities.
Lixisenatide
– Type 2 diabetes
Lixisenatide – First Zealand invented medicine on the market
Lixisenatide is a once-daily GLP-1 receptor agonist, invented by Zealand for the treatment of Type 2 diabetes. Lixisenatide is
licensed globally to Sanofi (EURONEXT: SAN) who has developed the product both as a stand-alone medicine and as part of a
fixed-ratio combination product with insulin glargine (Lantus®), refered to as LixiLan. Lixisenatide was launched in 2013 outside
the US under the name Lyxumia®. Both lixisenatide and the combination product are under regulatory review in the US and with
regulatory decisions expected in July and August, respectively.
Type 2 diabetes – A serious chronic disease
Key to effective management of Type 2 diabetes is to
Type 2 diabetes is a metabolic disorder with hyperglycemia
control hyperglycemia. Diabetes is associated with a
(high blood sugar levels) resulting from inadequate insulin
significantly increased risk of heart disease and stroke,
secretion or insulin resistance. It is the most common form of
limb amputations, blindness and kidney failure – and is
diabetes as it represents 90% of all cases. It is estimated that
projected to be the 7th leading cause of death in 2030.
over 500 million people worldwide are affected by diabetes,
with management costs exceeding USD 600 billion annually.
What is GLP-1?
Glucagon-like peptide 1 (GLP-1) is a native peptide hormone
produced in the human body by intestinal L-cells in response
to meal intake. The main actions of GLP-1 are to stimulate
insulin secretion and regulate appetite and food intake.
GLP-1 receptor agonists for the treatment of Type 2 diabetes
GLP-1 receptor agonists are a new class of injected medicines
for the treatment of Type 2 diabetes. They mimic the action of
GLP-1 and stimulate the release of insulin only upon ingestion
and with additional effects on slowing gastric emptying
and inducing satiety with beneficial impact on weight. In
clinical practice, GLP-1 therapy is associated with significant
HbA1c (blood sugar) lowering, weight loss and a low risk of
hypoglycemia.
Lixisenatide (Lyxumia®) royalty revenue 2013-2015
DKKm
10
8
6
4
2
0
Q1
Q2
Q3
2013
Q4
Q1
Q4
Q1
Q3
Q2
2014
Q4
Q2
Q3
2015
Invented by Zealand
Global rights licensed
to Sanofi
License collaboration with Sanofi
– Terms of agreement:
Sanofi has the global development and
commercialization rights to lixisenatide and any
combination product including lixisenatide. All
financing of products under the agreement is
covered by Sanofi.
Zealand is eligible to total milestones of up to
USD 275 million (of which up to USD 140 million
are outstanding). In terms of royalties on global
sales, Zealand is entitled to tiered low double-digit
percentages on lixisenatide and a fixed, low double-
The US market represents ~70% of the total market for GLP-1
digit percentage on sales of LixiLan and any other
medicines. With US regulatory decisions on both lixisenatide
and the lixisenatide/Lantus® combination product expected in
2016, royalty revenue is projected to increase significantly.
combination including lixisenatide.
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_Lixilan
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
Lixisenatide (Lyxumia®)
Fixed-ratio combination of lixisenatide
and insulin glargine (Lantus®)
ex-US
Preclinical
Phase I
Phase II
Phase III
Reg.
Marketed
Preclinical
Phase I
Phase II
Phase III
Under regulatory review
US
Preclinical
Phase I
Phase II
Phase III
Under regulatory review
First Zealand invented medicine on the market – A once-daily GLP-1 agonist with a pronounced prandial effect
Lixisenatide belongs to a sub-class of GLP-1 receptor agonists with a short acting profile. The medicine has demonstrated a
pronounced lowering effect on meal-related blood sugar increase (post-prandial glucose) in addition to its effect on fasting
New combination drug for Type 2 diabetes: Fixed-ratio combination of lixisenatide and insulin glargine (LixiLan)
Lixisenatide has been developed by Sanofi as part of a fixed-ratio, single-injection combination with insulin glargine 100 Units/mL
(Lantus®). Lantus® is a Sanofi product and the most prescribed basal insulin worldwide. The therapeutic relevance of a combination
treatment with basal insulin and a GLP-1 receptor agonist for patients with Type 2 diabetes has been shown in several clinical trials.
glucose. With this profile, lixisenatide has particular therapeutic relevance as an add-on treatment to basal insulin for better
Advancements in 2015 and 2016 (until 16 March)
glucose management.
Advancements in 2015 and 2016 (until 16 March)
• Launched by Sanofi in more than 50 countries (Lyxumia®)
• Total Sanofi sales of Lyxumia® in 2015: EUR 38 million
• Key supportive safety (cardiovascular) and efficacy (insulin intensification) results presented at ADA
• September 2015: FDA accepted Sanofi’s NDA for lixisenatide in the US.
•
•
•
•
The primary endpoints were met in two pivotal Phase III trials, LixiLan-O and LixiLan-L, showing significant HbA1c lowering
December 2015: Sanofi submitted an NDA for regulatory review of the combination product in the US and redeemed a Priority
Review Voucher as part of the submission
The NDA for the combination product was associated with a USD 20 million milestone payment from Sanofi to Zealand
February 2016: FDA accepted the NDA for priority review, shortening the regulatory review time for the combination product
from ten months to six months.
Lixisenatide’s therapeutic profile
• Significantly lowers HbA1c
• Reduces body weight
In 2015: Additional strong support for lixisenatide’s
Positive results from two pivotal Phase III trials
therapeutic profile
LixiLan-O
LixiLan-L
• Associated with a low risk of hypoglycemia
ELIXA results – Cardiovascular safety profile established
Enrollment: 1,170 patients with Type 2 diabetes insufficiently
•
Slows gastric emptying with pronounced lowering of post
Top-line results from ELIXA, a Cardiovascular Safety Outcome
controlled on oral medication (OAD).
Enrollment: 736 patients with Type 2 diabetes insufficiently
controlled on basal insulin (insulin glargine (Lantus®)).
prandial glucose (PPG)
Trial, have demonstrated lixisenatide to be safe versus
Lixisenatide is administered as a once-daily injection. For the
population of more than 6,000 adults with Type 2 diabetes.
a statistically superior lowering of average blood glucose
showing a statistically superior lowering of average blood
placebo on all cardiovascular safety parameters in a high-risk
Results: LixiLan met the primary efficacy endpoint of showing
Results: LixiLan met the primary efficacy endpoint of
first two weeks after initiation of treatment with 10 mgr. per
day, thereafter with a maintenance dose of 20 mgr. per day.
Results from GetGoal Duo-2
Lyxumia 20mcg
injection
lixisentatide
In a Phase IIIb trial, lixisenatide has shown to have a similar
effect on glucose reduction with advantages on body weight
(HbA1c) compared with lixisenatide, and compared with
insulin glargine (Lantus®) in Type 2 diabetes patients treated
with metformin.
glucose (HbA1c) in Type 2 diabetes patients insufficiently
controlled with insulin glargine (Lantus®) alone with or without
metformin.
compared to rapid-acting insulin, when added to basal insulin
Relevant Type 2 diabetes populations to target:
Relevant Type 2 diabetes populations to target:
for treatment intensification in patients with Type 2 diabetes.
In the US, ~5.5 million are not well controlled on OADs*
In the US, ~4 million are not well controlled on basal insulin*
* Source: 2017 projections based on model from Adelphi
Effective diabetes management: Both fasting and prandial (meal-related) glucose levels must be controlled
HbA1c is a measure of average 2-3 months plasma glucose (sugar) levels. To effectively control diabetes, an HbA1c target value of
<7% or even <6.5% is recommended. It is important also to keep glucose fluctuations to a minimum, which means to effectively
control both fasting plasma glucose (FPG) and postprandial (meal-related) plasma glucose (PPG). So, the following applies:
effective HbA1c control=effective FPG control & effective PPG control.
Trademarks for lixisenatide
Lyxumia® is the trademark approved for lixisenatide
outside the US.
In the US, no trademark has yet been approved.
2016 – Next steps and news flow outlook
•
July: US regulatory decision by the FDA on
lixisenatide
•
Expected increase in royalty revenue from Sanofi’s
sales of lixisenatide (Lyxumia®) outside the US
Lantus® SoloStar®
100 units/ml (U-100)
0
1
+
Lyxumia 20mcg
injection
lixisentatide
2016 – Next steps and news flow outlook
•
March: Submission for regulatory approval
in the EU
•
June: Sanofi will present results from the two
Phase III trials at a medical congress
•
August: US regulatory decision by the FDA on the
fixed-ratio combination of lixisenatide and insulin
glargine (Lantus®) in the US
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_Elsiglutide
02_Boehringer Ingelheim collaborations
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
Elsiglutide
Boehringer Ingelheim
collaborations
Preclinical
Phase I
Phase II
Preclinical
Preclinical
Elsiglutide, a potential first-ever treatment for the prevention of chemotherapy induced diarrhea
Elsiglutide is a novel GLP-2 analogue invented by Zealand. Global development and commercial rights in the field of cancer
supportive care are licensed to Helsinn, who is developing elsiglutide as a potential first ever treatment to help prevent
chemotherapy induced diarrhea in cancer patients.
Two license collaborations ongoing with Boehringer Ingelheim for the treatment of diabetes and/or obesity
Zealand has two collaborations ongoing with Boehringer Ingelheim, each covering novel therapeutic peptides invented by
Zealand for the treatment of Type 2 diabetes and/or obesity. Under both collaborations, Boehringer Ingelheim is progressing a
selected lead development candidate in preclinical development for the potential advancement into clinical development.
Advancements in 2015 and 2016 (until 16 March)
•
•
In February 2015, Helsinn initiated dosing of patients in a Phase IIb dose-finding trial
In June 2015, Helsinn completed the enrollment of approximately 1,700 cancer patients in an observational study of
chemotherapy induced diarrhea
In February 2016, Helsinn completed the enrollment of approximately 500 patients in the Phase IIb trial.
•
Advancements in 2015 and 2016 (until 16 March)
•
Collaboration on undisclosed target (obesity/diabetes): In October 2015, Boehringer Ingelheim selected a novel lead peptide
therapeutic for preclinical development with an associated DKK 22 / EUR 3 million milestone payment to Zealand.
Collaboration on glucagon/GLP-1 dual agonists (diabetes/obesity): In February 2016, Boehringer Ingelheim selected a novel
lead glucagon/GLP-1 peptide therapeutic for preclinical development.
•
Phase IIb trial – Enrollment has been completed
A randomized, double-blind, placebo-controlled trial to assess
the effect of elsiglutide in the prevention of CID. The trial
has enrolled approximately 500 colorectal cancer patients
receiving 5-FU based chemotherapy regimens (FOLFOX or
FOLFIRI), randomized to treatment with one of three doses
of elsiglutide (10 mg, 20 mg. and 40 mg.) or placebo. The
primary endpoint is the proportion of patients with diarrhea
of grade ≥2 during the first cycle of chemotherapy. Topline
results are expected in H2 2016.
For further details on the Phase IIb trial, see:
ClinicalTrials.gov – Identifier: NCT02383810.
Large observational study in CID conducted by Helsinn
Helsinn has conducted a large international, multi-center,
prospective, cohort observational study involving more than
a hundred sites in six European countries and in the US.
The study objective is to gain a better understanding of the
incidence rate and clinical impact of CID in colorectal and
breast cancer patients. Together with the results from the
Phase IIb trial, this study is important to guide the design of a
potential pivotal Phase III program for elsiglutide.
Elsiglutide – Supportive preclinical and clinical results
Results from Phase IIa trials have shown that elsiglutide
reduces the severity of CID in colorectal cancer patients and
has a good safety profile. In preclinical models, elsiglutide
has shown to stimulate growth of the intestinal mucosa and
decrease the incidence and severity of CID.
2016 – Next steps and news flow outlook
•
H2: Top-line results from Phase IIb dose-finding
trial
H2: Results from observational study of CID
incidence and severity in 1,700 patients
•
Chemotherapy induced diarrhea (CID)
CID is a severe and potentially life-threatening condition
affecting cancer patients undergoing chemotherapy
primarily with regimens containing 5-fluorouracil
(5-FU). The condition is associated with:
• Dehydration and electrolyte imbalance
• Renal insufficiency and immune dysfunction
• Hospitalization and reduced quality of life
• Sub-optimal cancer treatment
5-FU based chemotherapy regimens can result in up to
50-80% of cancer patients developing CID*. Today, no
effective treatments are available for patients.
* Source: Stein, Voigt and Jordan, Ther. Adv. Med. Oncol. 2010
Terms of the license agreement with Helsinn
Helsinn has global development and commercial
rights to elsiglutide for its use in Cancer Supportive
Care. Zealand is eligible to milestone payments of
up to EUR 140 million (of which EUR 16 million have
been received) on elsiglutide and to royalties on global
sales of the product. Zealand retains an option to
obtain commercial rights to elsiglutide in the Nordic
countries.
Helsinn (www.helsinn.com)is a privately owned
pharmaceutical group with an extensive portfolio of
marketed products and a broad development pipeline.
Collaboration on glucagon/GLP-1 dual agonists
(diabetes/obesity)
This collaboration covers the development and
commercialization of novel dual acting glucagon/GLP-1
peptide agonists for the treatment of Type 2 diabetes and/or
obesity.
In February 2016, Boehringer Ingelheim selected a new lead
development candidate from the portfolio of novel glucagon/
GLP-1 dual agonists designed by Zealand under a former
reseach part of the collaboration. This new lead candidate
has now been progressed into preclinical development by
Boehringer Ingelheim.
Collaboration on undisclosed target (obesity/diabetes)
This collaboration was initiated in July 2014 based on a novel
therapeutic peptide project from Zealand’s preclinical portfolio.
Under the collaboration, Zealand and Boehringer Ingelheim
have jointly designed and developed novel therapeutic
peptides for the improved treatment of patients with cardio-
metabolic diseases, specifically in the field of obesity and
diabetes. The biological target has not been disclosed.
With the selection of a first preclinical development
candidate in October 2015, Boehringer Ingelheim became
sole responsible for the conduct and financing of the
preclinical and potentially clinical development as well as
commercialization. The lead candidate is being progressed
through preclinical development.
Terms of the agreement on glucagon/GLP-1 dual
agonists
Boehringer Ingelheim retains global development and
commercialization rights to all compounds covered
by the agreement, while being solely responsible for
all development, manufacturing and commercial
activities including the necessary financing.
Zealand is eligible to milestone payments of up to EUR
376 million (up to EUR 365 million are outstanding)
related to the achievement of pre-specified
development, regulatory and commercial milestones
for the first product, and to tiered royalties ranging from
high single to low double digit percentages on global
sales of products developed and commercialized
under the agreement. Zealand also retains co-
commercialization rights in the Scandinavian countries.
Terms of the agreement on an undisclosed target
Boehringer Ingelheim retains global development and
commercialization rights to all compounds invented
and covered under the agreement, while being solely
responsible for all development, manufacturing
and commercial activities including the necessary
financing.
Zealand is eligible to milestone payments of up to EUR
295 million (up to EUR 287 million are outstanding)
related to the achievement of pre-specified
development, regulatory and commercial milestones
for the first lead product. Zealand is also entitled to
tiered high single digit percentages on global sales of
products developed and commercialized under the
agreement, while retaining co-commercialization
rights in the Scandinavian countries.
2016 – Next steps and news flow outlook
Advancement towards clinical Phase I
•
development
2016 – Next steps and news flow outlook
Advancement towards clinical Phase I
•
development
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_ZP4207
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
Proprietary
pipeline
Zealand has a growing pipeline of novel
proprietary investigational medicines
in development, focused on the field of
specialty diseases:
Two products are in clinical Phase II
development, another in preparation
for next clinical Phase, one in clinical
Phase I and a number of projects are in
preclinical development.
ZP4207 (Stable Glucagon) – Hypoglycemia in diabetes
– Rescue treatment
– Component in an artificial pancreas device
ZP1848 – Short bowel syndrome (SBS)
ZP2929 – Diabetes and/or obesity
Preclinical proprietary projects
25
26
27
28
30
31
Photo features Zealand employee:
Anne from Clinical Development working on
the Phase II trial of ZP4207
ZP4207 (Stable Glucagon)
Hypoglycemia in diabetes
Hypoglycemia is a challenge for more effective diabetes control
The most feared side effect associated with effective insulin treatment in diabetes
Substantial clinical evidence shows that the fear of hypoglycemia is a serious obstacle for better glucose control in diabetes, as
patients often are inclined to take less insulin than prescribed to reduce the risk of hypoglycemia. Inoptimal control of diabetes is
associated with serious long-term complications.
Hypoglycemia – When blood glucose levels get too low
Symptoms include anxiety, sweating, tremors, palpitations,
Hypoglycemia is a condition where blood glucose (sugar)
nausea and pallor. In severe cases, hypoglycemia can lead to
levels drop to low levels. It is most frequently associated with
loss of consciousness, seizures and coma, and in some cases
diabetes and primarily in patients on insulin therapy only.
death.
Type-1 diabetes patients are the most likely to experience
episodes of hypoglycemia since they inject themselves with
•
In the US alone, 2.9 million diabetes patients are on insulin
insulin several times per day or use an insulin pump. Diabetes
only therapy1.
patients on insulin can experience episodes of low blood
•
All patients with Type-1 diabetes and approximately 20% of
sugar levels with varying frequency and severity.
Type-2 diabetes patients in the US are treated with insulin2.
Sources: 1 www.diabetesselfmanagement.com/diabetes-resources/tools-tech/insulin-pumps; 2 Decision Resource, 2012.
About glucagon
Glucagon is a native peptide, which plays an important
increase blood sugar levels. The therapeutic use of native
role in the control of blood sugar levels. The effects
glucagon in cases of hypoglycemia is challenging due to
of glucagon are opposite to those of insulin – it helps
the peptide’s low solubility and very poor stability in liquid
to release stored glucose into the blood stream to
solution.
Two parallel clinical development programs ongoing for ZP4207
ZP4207 is a novel analogue of human glucagon, invented by Zealand. ZP4207 shows superior stability compared to native glucagon,
which is unstable in liquid formulation. The features of ZP4207 support its potential use to improve management of hypoglycemia
associated with insulin treatment in diabetes patients. Two product routes are pursued in parallel: 1) As a single-dose ready-to-use rescue
treatment for severe hypoglycemia and 2) As an essential component in an insulin-glucagon dual hormone artificial pancreas system.
ZP4207 – Rescue treatment
ZP4207 – As component in an artificial pancreas
A liquid glucagon, which
is readily available for use
can provide patients and
relatives with a much more
An artificial pancreas device
could significantly improve
For illustration only
glucose control. An artificial
pancreas in the form of a dual-
SENSOR
108
convenient product, than what is currently available. In cases
hormone (insulin + glucagon)
of an acute, severe hypoglycemia event, this may lead to a
pump has the potential to
For illustration only
faster treatment.
significantly improve glucose
control in diabetes. ZP4207 as the most advanced glucagon
available for liquid formulation could provide basis for
important advancements in the field.
24
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
ZP4207 (single-dose)
Rescue treatment
ZP4207 (multiple-dose)
Component in artificial pancreas
Preclinical
Phase I
Phase II
Preclinical
Phase I
In preparation for next clinical Phase
ZP4207 – A single-dose ready-to-use rescue treatment for severe hypoglycemia
ZP4207 for multiple-dose use has potential as an important component in an artificial pancreas
Zealand is developing its novel, stable glucagon analogue, ZP4207, as a single-dose rescue treatment for acute, severe
The properties of ZP4207 indicate its relevance for multiple-dose use as a more general treatment to better manage low blood
hypoglycemia. ZP4207 is well suited for liquid formulation and has potential to be offered as a ready-to-use rescue medication to
sugar levels, reducing the risk of hypoglycemia in patients with diabetes who are treated with insulin. This could translate into an
provide diabetes patients and caregivers a more convenient and faster treatment.
Advancements in 2015 and 2016 (until 16 March)
overall more effective glucose control to avoid long-term complications. We are preparing a multiple-dose version of ZP4207 for
advancement into clinical Phase II trials as a potential component in a dual-hormone artificial pancreas system.
•
Phase I completed with positive results showing that ZP4207 is safe and well tolerated in healthy volunteers and patients with
Advancements in 2015 and 2016 (until 16 March)
Type 1 diabetes
•
In February 2016, Zealand dosed the first patients in a Phase II trial.
•
•
In 2015, Zealand initiated and succesfully completed a Phase Ib trial of its stable glucagon analogue for multiple-dose use
A grant of USD 1.8 million from the Helmsley Charitable Trust received to fund initial clinical and pre-clinical activities.
ZP4207 Phase I results: Good safety and tolerability
effect to that of a marketed native glucagon product. Patients
Phase Ib trial design and results – safe and well-tolerated
Current treatments and the potential of an artificial pancreas
with the ability to effectively raise glucose levels
in the trial will be randomized to one of four groups and four
ZP4207 has been evaluated in a Phase Ib trial. Results have
Currently, patients with Type 1 diabetes manually measure
Zealand has evaluated ZP4207 in a single-dose Phase I
different single doses of ZP4207 administered subcutaneously
demonstrated that ZP4207 is safe and well-tolerated with the
levels of glucose in their blood by either using the traditional
two-part trial comparing ZP4207 to a marketed glucagon.
after an insulin-induced hypoglycemia event. In the lowest
ability to provide a clinically relevant blood glucose response
method of pricking one’s finger, or by using a continuous
In the trial: 64 healthy volunteers and 20 patients with Type
dose group, a parallel design is applied, and in dosing groups
after repeat daily dosing in healthy volunteers.
glucose monitor (CGM). Based on these measurements, they
1 diabetes were enrolled. They were treated with single
2-4, patients will be dosed with both ZP4207 and a marketed
must adjust glucose levels by taking multiple injections of
ascending doses of 0.01 mg to 2.0 mg.
glucagon in a crossover design.
The Phase Ib clinical trial with ZP4207 was a randomized,
insulin daily or by continually infusing insulin with a pump via
Results showed that ZP4207 is safe and well-tolerated across
For further details on the Phase II trial, see:
primarily the safety and tolerability of the compound
tremendous amount of manual effort by the user.
all doses evaluated. Furthermore, blood glucose levels were
ClinicalTrials.gov – Identifier: NCT02660008.
after multiple dosing. Secondary endpoints measured the
increased as expected across a broad dose range. In addition,
pharmacokinetics and pharmacodynamics (blood sugar levels)
By automating detection of blood sugar levels and delivery
ZP4207 showed the expected effects in raising blood glucose
Existing glucagon rescue treatments
of ZP4207 after multiple dosing. The trial was conducted at a
of insulin in response to those levels, an artificial pancreas
levels after insulin induced hypoglycemia in Type 1 diabetes
– An underpenetrated market
clinical diabetes center in Germany and is planned to enroll 24
has the potential to transform the lives of people with
patients, similar to the effects of marketed glucagon.
Current glucagon treatments are solely available in the form
healthy volunteers, who will receive three different cohorts of
type 1 diabetes. Zealand is part of the Artificial Pancreas
Phase II trial ongoing
of a lyophilized powder, which requires reconstitution with
sterile water in a multi-step process before use. In the case of
daily doses of ZP4207, each over five days.
Project driven forward by JDRF (Juvenile Diabetes Research
Foundation).
double blind and placebo-controlled study to evaluate
needles placed under the skin. This requires diligence and a
In February 2016, Zealand dosed the first patients in a Phase II
an acute, severe hypoglycemia event, this can lead to handling
For further information on the Phase Ib trial, see:
trial.
errors, delayed administration of glucagon and results in
Clinical Trials.gov Identifier: NCT02390141
The Phase II trial is a single-center, randomized, double-blind
trial, which will enroll 56 patients with Type 1 diabetes. The
Due to the complexity of the current glucagon rescue kits
primary trial objective is to evaluate the pharmacokinetics and
many patients do not have a rescue kit with them at all times
sub-optimal treatment.
pharmacodynamics of ZP4207 to be able to fully compare its
even though this is recommended by the ADA.
Professor, MD, Ph.D Kirsten Nørgaard, University Hospital of Hvidovre:
A severe hypoglycemic event
– An abnormal drop in blood sugar
Hypoglycemia can happen suddently. Type 1 and
Type 2 diabetes patients on insulin therapy are
at risk of hypoglycemia because glucagon is not
automatically released to raise blood glucose level.
23% of Type 1 diabetes patients on insulin therapy fear
to die of low blood sugar while they are sleeping.1
1 Survey conducted by YouGov 2013
Rikke Mikkelsen who has Type 1 diabetes – from the book
“Angsten er der jo altid” (The fear is always there):
“It has always been difficult for me to
control my blood sugar and it has for
example resulted in two car accidents.”
2016 – Next steps and news flow outlook
•
H2: Results from ongoing clinical Phase II trial
“Insulin pumps improve glucose control and reduce the risk of hypoglycemia.
An important next step for better diabetes treatment would be the introduction
of fully automated dual-hormone pumps providing both insulin and glucagon.”
S E N S O R
1 0 8
For illustration only
2016 – Next steps and news flow outlook
•
H2: Advancement into the next clinical Phase to
explore the use of ZP4207 in a dual-hormone
artificial pancreas system.
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_ZP1848
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
ZP1848
Preclinical
Phase I
Phase II
ZP1848
Short bowel syndrome (SBS)
SBS is a growing disease area of high unmet medical needs
Short bowel syndrome (SBS) is a serious and complex chronic
disease associated with severely reduced or complete loss
of intestinal function. The main underlying causes of SBS are
Crohn’s disease, ischemia, radiation damage and colon cancer,
which often result in surgical removal of smaller or larger parts
of the small intestine and colon. Reduced intestinal function
can also occur as a result of bowel damage.
Short bowel syndrome is a specialty disease area of increasing
awareness. This is the result of improved treatment of the
underlying causes combined with the increasing availability of
nutritional support to help patients with SBS.
ZP1848 – An attractive treatment for short bowel syndrome (SBS)
ZP1848 is a novel, long-acting GLP-2 analogue with a unique stability profile in liquid formulation, which is invented and fully owned
by Zealand. ZP1848 can be administered in a ready-to-use/pen devise which will give patients an easy-to-use treatment for SBS. Many
patients are dependent on several hours of parental nutrition per day, and we are truly excited about the potential of releasing these
patients of their burden. ZP1848 can potentially improve patients’ quality of life by reducing time on infusion and reduce number of days
Healthy person
Patient with short bowel syndrome
on parenteral nutrition.
Advancements in 2015 and 2016 (until 16 March)
•
•
In September 2015, Zealand advanced ZP1848 into clinical Phase II development
In February 2016, the first patients with SBS were dosed in a clinical Phase II Proof-of-Concept trial
Short bowel syndrome – Treatment options
Serious challenges for SBS patients:
In preclinical studies, ZP1848 has shown efficacy on small
In February 2016, Zealand dosed the first patients in the Phase II
Depending on the severity of the disease the following
treatment options for patients with SBS are available:
•
•
•
Increased food intake
Parenteral (intravenous) nutrition from a catheter in up to
16 hours a day
Teduglutide (Gattex®), a short-acting GLP-2 analogue*
•
•
•
•
Lack of ability to retain a proper fluid and nutritional balance
intestine growth and demonstrated the physico-chemical
Proof-of-Concept trial with ZP1848. It is a randomized, double-
Dependency on nutritional support, in the most severe cases
properties of a long-acting, stable and soluble peptide
blind, dose-finding trial to investigate the clinical efficacy and
parenterally administered via central catheter
Enormous fecal (often via stoma) and urinary output
Severe co-morbidities in the form of malnutrition, liver and
kidney damage and infections
therapeutic with the potential for convenient administration in
safety of the compound in the treatment of SBS. The trial is
liquid formulation.
conducted at the world-leading gastrointestinal center at the
University Hospital of Copenhagen (Rigshospitalet), Denmark,
Zealand has also investigated ZP1848 in a combined single
and will enroll 18 patients with SBS.
•
Hospitalization and severely reduced quality of life
(SAD) and multiple (MAD) ascending dose Phase I trial. Results
ZP1848 has attractive therapeutic potential for SBS
Clinical Phase II trial design and primary objective
SBS prevalence is increasing due to higher awareness and
improving care:
EU = ~10,000-20,000 patients1
US = ~10,000-20,000 patients2
* Annual cost of USD 410,000 per patient in the US.
Sources:
1 Jeppesen PB. J Parenter Enteral Nutr. 2014;38 (suppl 1): 8S-13S.
2 Byrne TA, et al. Ann Surg. 1995;222(3): 243-255
GLP-2 is an important intestinal hormone
Patient with short bowels syndrome:
GLP-2 (glucagon like peptide 2) is a naturally
occurring peptide hormone produced primarily by
the small intestine. It is secreted together with GLP-1
in response to food ingestion and acts by binding to
the GLP-2 receptor, which is predominantly found
in the gastrointestinal tract. GLP-2 plays a key role
in intestinal growth and formation by promoting
regeneration of the epithelial surface of the gut and
thus is an obvious therapeutic target in the field of
gastrointestinal diseases.
“It has turned our life upside down.
We can’t travel, or plan anything.
We don’t go out, we invite in, on our
terms. You can’t live a normal life.”
from this trial demonstrated that ZP1848 is safe and well-
The primary objective of the trial is to assess the effect of
tolerated with a supportive effect on bowel function.
ZP1848 on improving patients’ intestinal absorption capacity
measured as reduction in fecal wet weight output.
For further information on the Phase II trial, see:
ClinicalTrials.gov Identifier: NCT02690025
Phase II trial design: Double-blind, Proof-of-Concept, dose-finding trial (18 patients)
DOSE
High
CROSSOVER
DOSE
High
Screening
and
recruitment
Medium
Wash out
Medium
Follow-up
Timeline (days)
-21
T1
0
Low
Low
T2
21
T3
49
T4
70
105
Thomas Breuer, Clinical Trial Manager at Zealand:
“Our Phase II trial is uniquely designed
to provide clinical support for ZP1848
as a potential new therapy and generate
data to also better understand the
disease and patients’ needs.”
2016 – Next steps and news flow outlook
•
In 2016, further development updates on the
advancements of Phase II trial will be announced
•
Completion of end results from the Phase II trial
are expected in 2017
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29
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
02_ZP2929
02_Preclinical proprietary projects
Our business
Our portfolio
Corporate matters
Financial statements
Portfolio overview
2015 achievements
2016 achievements and news outlook
Lixisenatide
LixiLan
Elsiglutide
Boehringer Ingelheim collaborations
ZP4207
ZP1848
ZP2929
Preclinical proprietary projects
ZP2929
Glucagon/GLP-1 dual agonist
Preclinical
proprietary projects
Preclinical
Phase I
ZP2929 – A once-daily dual acting glucagon/GLP-1 peptide receptor agonist
ZP2929 is a once-daily dual acting glucagon/GLP-1 peptide receptor agonist, invented by Zealand. ZP2929 is in Phase I clinical
development as a potential new treatment for patients with Type 2 diabetes and/or obesity.
Several late-stage preclinical projects
Our proprietary pipeline comprises several therapeutic peptides in preclinical development. Of these, the most advanced primarily
target diabetes and obesity, while earlier projects focus more on specialty diseases. The below listed preclinical projects are the
most advanced and they have been presented at diabetes conferences in the US and Europe.
ZP2929 acts with high potency on both the glucagon and the GLP-1 (glucagon-like peptide-1) receptors. In preclinical studies,
ZP-I-98 is a novel GIP receptor agonist which in preclinical
In preclinical studies ZP3022 has been shown to increase
ZP2929 has shown the ability to improve glycemic control while causing a significant and sustained weight loss.
studies has shown an enhanced effect on the treatment of
ß cell mass and improve glycemic control in db/db mice and
GIP receptor agonist (ZP-I-98) – Type 2 diabetes
GLP-1-gastrin dual agonist (ZP3022)
Preclinical results
Obesity model (DIO mice)
Diabetes model (db/db mice)
be suitable for convenient once-weekly dosing.
GLP-1/GLP-2 dual agonist
Type 2 diabetes when combined with a GLP-1 receptor agonist
Zucker Diabetic Fatty (ZDF) rats. ZP3022 produces a unique
by inducing both robust glycemic control as well as a greater
gene expression response compared to exendin-4 given alone
loss of body weight than seen with standalone treatments.
or in combination with gastrin17 and may have therapeutic
ZP-1-98 has a long-acting profile, which indicates that it could
potential in the prevention/delay of ß cell dysfunction.
Body weight gain (g)
4
n = 9-10
3
2
1
0
-1
-2
-3
-4
HbA1c (%) Relative to day 0
1.50
n = 11
*
*
1.25
1.00
0.75
0.50
0.25
0.00
-0.25
-0.50
0
7
14
21
Days of treatment
28
35
42
0
7
* p<0.001
14
21
Days of treatment
28
*
35
42
* p<0.001
GLP-1-GIP receptor dual agonist (ZP-DI-70)
GLP-2 receptor agonists promote intestinal barrier function
The potent and selective GLP-1-GIP receptor dual agonist is
and can thereby help to reduce inflammation, associated
a promising candidate for the treatment of Type 2 diabetes
with obesity and diabetes. The hypothesis that by adding the
with superior body weight lowering effect compared to
effect of a GLP-2 receptor agonist to the established beneficial
existing therapies. The in-vivo profile of the compound
effects of a GLP-1 receptor agonist on glycemic control, may
further suggests that ZP-DI-70 could be used as a
therefore represent a novel strategy for treating diabetes. A
convenient once-weekly treatment. The pharmacokinetic
novel Zealand invented GLP-1/GLP-2 dual agonist, ZP-GG-72
and pharmacodynamic preclinical results demonstrate
has been evaluated for potency on GLP-1 and GLP-2 receptors
the possibility of prolonging the activity of GLP1-GIP dual
with pharmacological effects investigated in DIO (Diet
agonists, which builds on existing evidence from animal
Induced Obese) mice versus teduglutide (a GLP-2 analogue)
studies which suggests that the anti-obesity efficacy of GLP-1
and exendin-4 (a GLP-1 analogue). Results have shown that
can be enhanced by co-administration with the incretin
treatment with ZP-GG-72 cause an increase in intestinal
ZP2929
Marketed GLP-1 agonist
Placebo
ZP2929
Marketed GLP-1 agonist
Placebo
hormone GIP.
weight and improved glycemic control.
ZP2929: Additional data for FDA review
ZP2929 has been evaluated in the first part of a single-dose
Phase I trial in healthy volunteers with no safety issues.
Subsequently, the FDA has raised concerns regarding findings
in a preclinical study and requested additional data to support
ZP2929’s profile before accepting further clinical evaluation.
We have been in an ongoing dialogue with the FDA to agree
on what additional preclinical data to provide, and this data is
currently being generated.
2016 – next steps and news flow outlook
•
H1: Submission of additional preclinical data to
the FDA.
Protecting our peptide innovations
through Intellectual Property
Protection of our proprietary peptide therapeutics,
processes, technologies and know-how are essential.
We own and license patents and focus intensively on
building broad coverage and establishing a very solid
patent portfolio that ensures maximum protection
of our products and core technologies. The strategy
also involves seeking broad protection for specific
products and their formulation. The ultimate goal is
to ensure that Zealand and its collaborative partners
avoid or are aware of patent challenges that could
obstruct any of their projects.
Photo features Zealand employee:
Kennet from Molecular Pharmacology working
in one of Zealand’s laboratories.
Photo features Zealand employees:
Charlotte from Pharmacology and Nina from Medicinal
Chemistry working together in Zealand’s laboratories.
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Corporate matters
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Corporate
matters
32
The people at Zealand and how
we organize and manage our
business.
Efficient management systems and a
dynamic organization are important for
developing our business and creating
value for our patients and shareholders.
However, the most essential element for
our success is the skills and dedication of
the people who work for and at Zealand.
In 2015, we introduced new members to
our Board of Directors as well as to our
senior management team.
We strive to ensure openness and
transparency and to provide stakeholders
with relevant insight into our business
and the way it is managed.
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Photo features Zealand employees:
Gitte, Marion and Helle from the Finance Department talking
with Hans-Christian from Legal on the preparations for the
Annual General Meeting 2016.
34
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38
41
42
43
44
48
33
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Board of Directors
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Board
of Directors
Martin Nicklasson
Rosemary Crane
Catherine Moukheibir
Chairman of the Board
Vice Chairman of the Board
Board member
Chairman of the Remuneration and
Compensation Committee
Qualifications
Chairman of the Audit Committee
Chairman of the Nomination Committee
Qualifications
Certified pharmacist
BA in communication from the
State University of New York, MBA
from Kent State University
Qualifications
MBA from Yale University
Alain Munoz
Board member
Peter Benson
Board member
Michael J. Owen
Board member
Qualifications
Qualifications
MD in Cardiology and Anesthesiology
MA in Business Economics
Qualifications
PhD in Biochemistry
Competencies
Competencies
Competencies
Competencies
Medical insight, substantial clinical
Extensive managerial and strategic
Broad operational, drug discovery and
PhD in Pharmaceutical Technology
Competencies
Extensive experience with European
and strategic experience in the field of
experience and understanding within
clinical expertise from the international
Business insight and commercial
biotech business models, financial
pharmaceutical R&D.
the biotech industry.
biotech and pharmaceutical industries.
Competencies
understanding of the US
strategy and reporting.
Broad-based executive experience from
pharmaceutical market.
positions in European pharmaceutical
Member of the executive board of:
and biotech companies.
Member of the Board of:
Innate Pharma S.A.
Teva Pharmaceuticals Industries
Chairman of the Board of:
Ltd., Oswego State University
Member of the Board of:
Orexo AB, Farma Holding AS and
Business School (Advisory board),
Creabilis Ltd. (chairman), Ablynx S.A.,
Basilea Pharmaceutica Ltd.
The Foundation Board of Oswego
Cerenis Therapeutics Holding S.A.
State University (Advisory board),
and Imperial College Business School
Member of the Board of:
The Transplant House Committee at
(Advisory Board).
Biocrine AB, PledPharma AB, Premier
University of Pennsylvania (Advisory
Research Group Ltd and the Swedish
board).
Heart-Lung Foundation.
Christian Thorkildsen
Helle Størum
Jens Peter Stenvang
Board member/employee elected
Board member/employee elected
Board member/employee elected
Project Director
Director of Business Development
Senior Application Specialist
Qualifications
Cand.pharm. PMP
34
Qualifications
M.Sc. Business Administration
Diploma in Basic Pharmaceutical
Medicine
Qualifications
Degree in biology
Chairman of the Board of:
Hybrigenics
Managing partner in:
Sunstone Capital
Member of the Board of:
Blink Biomedical SAS, Ossianix Inc.,
Avacta Group plc and ReNeuron Ltd.
Member of the Board of:
Valneva SE and Oxthera AB.
Advisor to:
Kurma Biofund
Member of the Board of
plc.
Arcoma AB., Alligator Bioscience AB.
and Opsona Therapeutics Ltd.
Advisor to:
Kymab Ltd., Qure Invest SARL and
CRT Pioneer Fund LP.
Zealand’s Board of Directors
Name
Year of
birth
Natio-
nality
First time
election
Position
Zealand
ownership per
1 March 2016
(no. of shares)
Martin Nicklasson
Rosemary Crane
Catherine Moukheibir
Alain Munoz
Peter Benson
Michael J Owen
Christian Thorkildsen
Helle Størum
Jens Peter Stenvang
1955
1960
1959
1949
1955
1951
1968
1967
1954
Swedish
American
British
French
Swedish
British
Danish
Danish
Danish
2015
2015
2015
Chairman
Vice Chairman
Chairman of Audit Committee
2005*
Board member
2007
2012
2006
2008
2014
Board member
Board member
Employee elected**
Employee elected**
Employee elected**
-
-
-
5,250
-
-
15,000
7,500
1,000
* Resigned in 2006 and was re-elected 2007
** Employee elected board members are elected for a period of four years
35
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Senior management
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Senior
management
Adam Steensberg
Senior Vice President, Chief Medical and Development Officer
Hanne Leth Hillman
Senior Vice President, Investor Relations & Communications
Adam Steensberg (Danish, born 1974) joined Zealand in 2010
Hanne Leth Hillman (Danish, born 1965) joined Zealand as
as Head of Clinical Development. Since 2011 he has been
Vice President for IR and Communications in 2011 and was
leading all development activities and was promoted to Senior
promoted to Senior Vice President in March 2015.
Vice President and Chief Medical and Development Officer in
March 2015.
Prior to joining Zealand, Hanne served in positions with
responsibility for Investor Relations, financial market relations
Prior to joining Zealand, Adam led clinical research teams as
and corporate communications at two other publicly listed
medical director at Novo Nordisk A/S, and worked as clinician
biotech companies. She has more than ten years of broad-
at the University hospital of Copenhagen. Adam has served as
based experience from Life Science banking, having held
medical and scientific advisor within endocrinology, cardiology,
senior positions in equity research, asset management and
gastroenterology, and rheumatology. He has significant
corporate finance.
experience with leading regulatory strategies and has been
instrumental in implementing a patient-centric discovery and
Hanne holds an MBA in International Finance from the Aarhus
development process at Zealand. Adam has published more
University School of Business and has studied International
than 45 peer-reviewed scientific papers in international journals.
Economics at the University of Montréal’s Business School and
Adam holds a Doctor of medicine followed by a Doctor of
Co-Chairman of the Board in the Danish Investor Relations
at École Superieure de Commerce in Marseille, France. She is
Medical Sciences (DMSc/ dr.med) from the University of
Association (DIRF).
Copenhagen, Denmark and an MBA from IMD, Switzerland.
Ownership: 72,000 warrants / 11,500 shares
Ownership: 62,000 warrants
From left to right: Mats Blom, Hanne Leth Hillman, Britt Meelby Jensen, Adam Steensberg and Carlos de Sousa
Zealand’s Executive management comprises of Britt Meelby Jensen and Mats Blom.
Britt Meelby Jensen
President and Chief Executive Officer (CEO)
Mats Blom
Senior Vice President and Chief Financial Officer (CFO)
Carlos de Sousa
Senior Vice President and Chief Business Officer (CBO)
Andrew Parker (Joining Zealand 1 July 2016)
Senior Vice President and Chief Science Officer (CSO)
Britt Meelby Jensen (Danish, born 1973) joined Zealand as
Mats Blom (Swedish, born 1965) joined Zealand as CFO in
Carlos de Sousa (Portuguese, born 1958) joined Zealand in
Andrew Parker (1965, British) comes from a position as General
CEO in January 2015. Prior to joining Zealand, she headed the
March 2010. Prior to joining Zealand, Mats served as CFO at
December 2015 as Senior Vice President, and Chief Business
Partner and Scientific Director for the Life Sciences Investment
world leading Agilent-owned Danish diagnostics company,
Swedish Orphan International a leading European orphan drug
Officer.
Dako, as the company’s CEO.
company.
Fund Eclosion2 & Cie SCPC in Switzerland. In parallel, he has
held the position as CEO for Arisgen SA (an Eclosion2 portfolio
For the last 25 years, Carlos held numerous senior
company developing an oral peptide drug delivery technology).
Britt has extensive experience from a range of managerial
Mats has extensive managerial experience and has held CFO
management positions in the international pharmaceutical
positions within the life science industry, including 11 years of
positions at Active Biotech and Anoto both publicly listed on
and biotech industries, including roles at Nycomed/
Andrew has more than twenty years of experience from
international experience with Novo Nordisk. At Novo Nordisk,
Nasdaq Stockholm. Previously, Mats worked for several years
Takeda, Pfizer, Novartis, BBB Therapeutics and Newron
senior leadership and managerial positions in international
she held various global leadership positions, including head
as a management consultant at Gemini Consulting and at
Pharmaceuticals. Throughout his career, Carlos has worked
pharmaceutical, biotech and start-up companies, including
of Diabetes Marketing Nordic, Global Diabetes Lifecycle
Ernst & Young’s Transaction Services division.
extensively with business development including in-licensing,
several years with Shire Pharmaceuticals, Opsona
Management, prelaunch commercial projects and more
partnering, mergers and acquisition, corporate leadership,
Therapeutics, and AstraZeneca to mention a few.
recently Corporate Vice President for Global Marketing, Market
Mats holds a BA in Business Administration and Economics
strategy, marketing and medical affairs.
Access and Commercial Excellence.
from the University of Lund followed by an MBA from IESE
He holds a Ph.D. from the National Institute for Medical
University of Navarra, Barcelona.
Carlos de Sousa is a Medical Doctor by training and holds an
Research at Mill Hill, London, conducted post-doctoral
Previously, Britt has worked for McKinsey and Company and
executive MBA from the Stern School of Business, New York.
research at Johns Hopkins Medical School, Baltimore, USA,
within the EU Institutions in Brussels. She has a M.Sc. from
Mats is Chairman of the Board for Medical Need AB.
Copenhagen Business School, Denmark and an MBA from
Solvay Business School in Brussels, Belgium.
and also has an MBA from the University of Warwick Business
School, UK. Andrew has published more than 25 scientific
articles in renowned international journals.
Ownership: 100,000 warrants
Ownership: 137,038 warrants / 110,000 shares
Ownership: -
Ownership: -
36
37
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Risk management
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Risk management and
internal control
At Zealand, we constantly monitor and assess both the overall risk of doing
business in the pharmaceutical biotech industry and the particular risks
associated with our current activities and corporate profile.
Below is a summary of Zealand’s key risk areas and how we
Doing business in the pharmaceutical / biotech industry
Zealand’s management is responsible for implementing
Risks of specific/particular importance to Zealand are scientific
attempt to address and mitigate such risks. Environmental and
involves major financial risk. The development period for novel
adequate systems and policies on risk management and
and development risks, commercial risks, intellectual property
ethical risks are covered in our Corporate Social Responsibility
medicines typically stretches over many years; costs are high
internal control and to assess the overall risks and specific
risks, partner interest risks, financial risks and risks relating to
reporting.
and the probability of reaching the market is relatively low due
risks associated with Zealand’s business and operations.
financial reportings. Risk and mitigation plans are monitored
to developmental and regulatory hurdles.
Furthermore, Zealand’s management seeks to ensure that
by Management and this continuous risk assessment is
such risks are managed best possible in a responsible and
an integral part of the quarterly reporting to the Board of
efficient manner.
Directors.
Risk related to
Risk description
Risk mitigation
Risk related to
Risk description
Risk mitigation
Research and
Research and development of new
During the course of the research and
Intellectual
If Zealand or its partners were to face
Zealand’s internal patent department work in close
development
pharmaceutical medicines is by its nature
development process Zealand regularly assesses these
property
infringement claims or challenges by
collaboration with external patent councils and partners
a very risky activity. The probability of
risks through a quarterly risk assessment of all the
third parties, an adverse outcome could
patent councils to minimize the risks of patent infringement
discovering and developing an efficient
company’s research and development projects conducted
subject Zealand or its partners to significant
claims as well as to prepare any patent defense should it be
and safe new medicine with strong IP
by Management in collaboration with the department
protection is very low.
heads and project managers and presented to the Board
of Directors. Each project is described and progress is
measured based on milestones. An individual risk analysis
for each of the projects is conducted and a prioritizing of
the project portfolio is performed.
Commercial
Commercial activities relates to market
From early on in the research phase and all the way
activities
size, competition, development time and
through development, commercial risks are assessed to
costs, partner interest and pricing.
make sure that final products are potentially commercially
By having the first products on the market
the risks relating to pricing, reimbursement
and competition has increased.
viable. Any major changes in the commercial potential for
a drug candidate can lead to reduced value prospects and
eventually discontinued development.
When it comes to the launched partnered products, it is
Zealand’s partners that are responsible for managing the
commercial risks. However, Zealand stay in close contact
with its partners to be able to assess these risks and if
possible support our partners in managing them.
liabilities to such third parties. This could
necessary.
lead Zealand or its partners to curtail or
cease the development of some or all of
their candidate drugs, or cause Zealand’s
partners to seek legal or contractual
remedies against Zealand including, in some
cases, a reduction of royalties owing to
Zealand.
Zealand employees are educated and kept updated on
policies regarding the proper and legal management of
external intellectual property.
Partner
interest
Entering into collaborations with partners
In order to mitigate these risks, Zealand strives to foster a
can bring significant benefits but also
close and open dialogue with its partners, thereby building
potentially involves risks. In addition, full
strong partnerships that work effectively.
control of the products is often given over
to the collaborator.
Zealand has also taken a decision to increase the focus on
proprietary programs in order to decrease the dependency
of partners in the development process and to capture more
of the value of its projects.
Financial
Financial risks relate to cash and treasury
The financial risks are managed in accordance with the
management, liquidity forecasts and
Finance Policy and regularly assessed by the company’s
financing opportunities.
management and reported to the audit committee and the
Board of Directors. See also page 77; Note 21 – Financial
and operational risk.
38
39
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Corporate Governance
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Corporate
Governance
Risk management and internal control
related to financial reporting
Zealand follows the Danish securities law and as a company listed on Nasdaq
Copenhagen, we are guided by the Corporate Governance Recommendations
designated by Nasdaq Copenhagen.
Zealand has a number of internal control and risk
The Board of Directors approves policies and procedures and
Nasdaq Copenhagen has incorporated the Recommendations
recommendations. The reason is that the Board of Directors’
management systems in place to ensure that its financial
senior management has the daily responsibility. The Board
by the Danish Committee of Corporate Governance, and
is of the conviction that the external advisors will provide
statements provide a true and fair view and is in accordance
of Directors has established an audit committee with an
Zealand intends to meet these recommendations in all
professional and unbiased advice in both their capacities as
with the International Financial Reporting Standards as
advisory role relative to the Board of Directors. The Board of
respects of material relevance to our company. As part of
advisers to the executive management and to the remuneration
adopted by the EU and Danish disclosure requirements for
Directors has concluded that it is not relevant to establish an
our Corporate Governance policy, we apply the “comply or
committee.
listed companies. On a yearly basis, an evaluation – with
internal audit function in Zealand, considering Zealand’s legal
explain” principle as recommended.
special emphasis on risk management and internal control
structure, size and the fact that operations are carried out at
Recommendations section 4.1.4: The Committee
related to the financial reporting – is done to ensure that risks
one single site.
are managed in a responsible and efficient manner.
Zealand regularly reviews its rules, policies and practices
recommends that if share-based remuneration is provided,
related to the overall governance of our company with
such programs should be established as roll-over programs,
Description of management reporting
the purpose of ensuring that we meet our obligations to
i.e. the options are granted periodically and should have a
Zealand has several policies and procedures in key areas of
systems and internal control systems
shareholders, employees, regulatory authorities and other
maturity of at least three years from the date of allocation.
financial reporting. The internal control and risk management
Zealand has management reporting and internal control
stakeholders, while serving to maximize long-term value.
Some of the warrants granted to executive management can
systems are designed to mitigate, detect and correct material
systems in place that enables it to monitor performance,
be exercised in a period from one to five years after grant.
misstatements rather than eliminate the risks identified in the
strategy, operations, business environment, organization,
It is the view of management that Zealand complies with the
financial reporting process.
procedures, funding, risk and internal control. The company
recommendations set forward with two exceptions, which is
Zealand’s statutory report on Corporate Governance, which
A review and prioritization of material accounting items is also
to avoid misstatements in the financial reporting.
Statements Act, section 107b, is available in full at the
performed. Items in the financial statements that are based on
Recommendations section 3.4.8: The remuneration committee
company’s website:
estimates or that are generated through complex processes
A full description of the risk management and internal control
will be using the same external advisors as the executive
www.zealandpharma.com/investors/corporategovernance
carry a relatively higher risk for error. Zealand performs
system in relation to financial reporting is included in the
management, even if this is against the Corporate Governance
believes that the reporting and internal controls are adequate
highlighted and explained below:
has been prepared in accordance with the Danish Financial
continual risk assessments to identify such items and to assess
statutory report on Corporate Governance, cf. section 107b of
the scope and related risk.
the Danish Financial Statements Act, which can be found on
the company’s website:
www.zealandpharma.com/investors/corporategovernance
40
41
Photo features Zealand employee: Mette from Medicinal Chemistry working in Zealand’s laboratories.
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_CSR
03_HR
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Corporate Social
Responsibility (CSR)
Human Resources
At Zealand we are developing our company both through in-house
development and through external collaborations while we are committed
to be socially and environmentally responsible and comply with relevant
laws, standards and guidelines.
We have a lean organization that helps to keep us agile and efficient. We have
an inclusive corporate culture where we care about our colleagues, our external
stakeholders and not least the people we develop medicines for.
Zealand’s policies with regards to CSR cover many areas of our business.
Our CSR status report describe the status and activities within the
following focus areas considered important to Zealand’s business:
At Zealand, we have an engaging and dynamic work environment that is
driven by our core values:
1. Employee well-being including
health, safety and labor practices
2. Ethics and quality in relation to
research and development activities
We prioritize the well-being of our employees and it is
Our quality policies comply with international
our policy to actively ensure the physical and mental
recognized standards and guidelines in all stages
health and safety of all our employees.
of research and development.
Passionate
Courageous
Ambitious
Curious
Empathetic
We are dedicated
We speak our
We challenge
We approach every
We care for our
and determined to
mind and dare to
ourselves everyday
new idea and
colleagues and the
excel our goals
challenge
opportunity in an open
people we discover
and receptive way
medicine for
3. Environmental sustainability and climate
4. Business ethics
We aim to reduce the impact on
the environment and climate.
We strive to conduct business according
to the highest ethical standards.
We strive to attract and retrain the most qualified employees
Key employee ratios
Employees at Zealand are our most important resource, and
it is important for us to attract and retain skilled people with
curiosity, engagement and determination who have the ability
with integrity and rational to interact constructively with both
colleagues and partners to deliver on our ambitious corporate
goals.
2015
2014
Male Female Male Female
2014
2015
Zealand Pharma A/S 48%
52%
46%
54%
Executive
management
50%
50%
100%
0%
Senior management 60%
40%
60%
40%
Head of departments 59%
41%
73%
27%
Diversity at Zealand
whereas the senior management team constitutes 40%
Zealand’s culture and policy is rooted in a respect of diversity
women end of 2015 (2014: 40%). When looking at the gender
We work with developing our employees’ competencies
as knowledge and experience are the key to our success
and is fully compliant with Danish regulation regarding equal
split for the head of departments, 41% were female end of
as a biotech company. We believe that an experienced
Other employees
46%
54%
40%
60%
opportunity employment.
2015 (2014: 27%).
management team and a talented pool of employees’ with
profound experience in the pharmaceutical and biotech
Other employee figures
Zealand is committed to hiring and retaining the most
Furthermore, when looking at the members of the Board of
industry and with diverse backgrounds is the best way to drive
qualified employees without regard to race, creed, gender or
Directors, we currently constitute 3 women and 6 men, of
performance and innovative thinking.
age, but strives for diversity throughout the organization with
which 2 women and 4 men have been elected at the Annual
respect to age, nationality and gender. Moreover, Zealand aims
General Meeting (AGM) 2015 (33% female representation). The
We have an even distribution of female and male employees
to achieve a reasonable representation of both genders on
target in 2014 was a minimum of 25% AGM elected female
and approximately 19% of our employees are non-Danish.
all management levels – from Board of Directors to head of
board members within 2 years. This target has been achieved
>80% of the employees work in R&D and 37 of our employees
departments. We will encourage female candidates’ interest in
by the election of Rosemary Crane and Catherine Moukheibir
holds a PhD.
taking on managerial tasks.
at the AGM in 2015.
Our split of female vs. male employees can be seen on page
Read the full CSR report
43 in the table “key employee ratios”.
Zealand has in accordance with the Danish Financial
The executive management has an even split of female and
report on CSR, which can be found on the company’s website:
male representation in 2015 (2014: 0% female representation),
www.zealandpharma.com/investors/csr
Statements Act, section 99a and 99b, prepared a statutory
Employees in R&D
Employees in administration
Average age of workforce
% of non-Danish employees
Employees holding a PhD
PhD students
Other trainees
2015
2014
91
21
46,1
19%
37
3
3
78
19
45.0
22%
34
3
1
FTE at the end of the year
110
103
42
43
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Shareholder information
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Shareholder
information
Zealand’s shares are publicly listed on Nasdaq Copenhagen
Significant share price increase in 2015
Number of shares, end 2015
24,352.769
Listing
Ticker symbol
Nasdaq Copenhagen
ZEAL.CO
Index membership
OMX Copenhagen Midcap
Share capital and ownership structure
Zealand’s share capital increased in 2015 due to exercise of
representing an increase of 112%. In February, we crossed a
employee warrants
milestone, when the number of shareholders passed 10,000.
As per 31 December 2015, Zealand’s share capital had a
nominal value of DKK 24,352,769 divided into 24,352,769
On 1 March 2016, Zealand had 10,720 registered shareholders,
shares with a nominal value of DKK 1 each. The share capital
representing a total of 21,917,836 shares or 90% of the total
has remained unchanged in 2016 (as per 15 March).
outstanding share capital of the company.
In 2015, the share capital was increased by a nominal value of
Ownership distribution
DKK 1,159,722 as a result of the exercise of employee warrants.
Of Zealand’s share capital, 60% is held by Danish investors.
All Zealand shares are ordinary shares, belonging to one class.
LD, represent combined 34% and retail investors about 19%.
Each share listed by name in Zealand’s shareholder registry
Of registered non-Danish shareholders, 15% are US-based
represents 1 vote at the Annual General Meeting and other
and another 15% are European, with France and the UK
Hereof, the two largest shareholders, Sunstone Capital and
DKK
200
175
150
125
100
75
50
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
2015
2016
Zealand Pharma
Euro STOXX Pharmaceuticals & Biotechnology
Nasdaq Biotechnology
OMX Copenhagen Mid Cap
Share price performance and liquidity
shareholder assemblies.
representing the largest holdings.
Zealand’s share price increased 83% in 2015
In parallel, we succeeded in progressing and expanding
In 2015, Zealand’s share price increased 83%, closing at DKK
our own proprietary pipeline, including the initiation of
A doubling of the number of shareholders since
Through 2015, there has been a slight shift in ownership from
151.50 on 30 December 2015 compared to a closing price of
two new clinical development programs with ZP4207 for
the start of 2015
Denmark to Europe.
The number of registered Zealand shareholders has more
DKK 83 at the end of 2014. With this increase, Zealand shares
hypoglycaemia management and with ZP1848 for short bowel
significantly outperformed all relevant benchmark indexes,
syndrome.
than doubled during 2015 and further increased into 2016.
Of the 10% of non-registered shareholdings, about half is
including the OMX Copenhagen Midcap index, the EuroSTOXX
From 4,549 registered shareholders on 31 December 2014,
estimated to be held by US institutional shareholders and
Pharmaceutical and Biotechnology index as well as Nasdaq
Our strong news flow has continued into 2016, where our
the number has grown to 9,689 on 31 December 2015,
another half by non-Danish European institutional shareholders.
Biotechnology index. With this share price development
share price, however, has been negatively affected by a
Geographical distribution and ownership
Ownership
The strong outperformance of Zealand’s shares was driven
investors in the US. During January and February, our shared
and the increase in share capital, Zealand’s Market Value has
strong deterioration in investor appetite due to growing
almost doubled in 2015 from DKK 1.9 billion to DKK 3.7 billion.
macroeconomic uncertainly – in particular as a spill-over
effect from a very negative sentiment among biotech
10%
15%
15%
Denmark
North America
EU
Non-registered
60%
44
The following shareholders are registered in Zealand’s register
mainly by a positive and high-frequent news flow through
underperformed both Danish midcap and biotech indexes in
of shareholders as being the owners of minimum 5% of the
voting rights or minimum 5% of the share capital (1 share
equals 1 vote):
Sunstone BI Funds and Life Science Ventures Fund,
Copenhagen, Denmark
LD Pension (Lønmodtagernes Dyrtidsfond),
Copenhagen, Denmark
Legg Mason (Royce) Inc.,
Maryland, US
2015 with considerable progress for both our portfolio
the US and Europe, but performance has picked up positively
of out-licensed products and our pipeline of proprietary
since mid-February.
investigational medicines. In particular, have the important
advancements for lixisenatide, which was filed for US
Positive development in share liquidity
regulatory review in July, and most notably for the fixed-ratio
combination of lixisenatide and Lantus® (referred to as LixiLan)
with positive results in two Phase III trial, under our license
Liquidity in Zealand’s share has also increased significantly
in 2015. Average daily turnover on Nasdaq Copenhagen in
2015 has almost 10-doubled to an average of close to DKK
collaboration with Sanofi, impacted positively. This positive
14 million compared to DKK 1.4 million in 2014. In 2016, with
development was accentuated in December 2015 with Sanofi’s
the downturn in market sentiment and in particular a marked
submission of LixiLan for regulatory approval in the US,
increase in risk aversion, liquidity in our shares has fallen to
redeeming a Priority Review Voucher in the filing to decrease
approximately DKK 12 million in daily turnover.
the regulatory review time from 10 to six months.
45
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Investor Relations at Zealand
In line with the disclosure requirements for companies
IR Newsletters
listed on Nasdaq Copenhagen, Zealand issues company
In addition, we issue online IR newsletters on a regular
announcements to inform publicly of material news relating
basis to update on recent news and the status of our
to the company and its activities. This include issuance of
activities. Under the investor section of Zealand’s website:
Calendar 2016
Event calendar
Date
Event
quarterly interim financial reports. In addition, Zealand issues
zealandpharma.com/investors, we provide access to relevant
31 Mar
Oddo Biotech / Medtech Investor Forum, Paris
press releases to inform of business news of non-material
information in the form of all our news releases, our IR
character, and Investor News to inform of upcoming IR news
newsletters. investor presentations, our IR event calendar,
and events.
and recent financial and annual reports. Zealand can also be
Direct access to management
Zealand’s objective is to have an open, accessible and
Register on our website to get news
proactive interaction with the investor community. Our main
and IR newsletters directly
followed on Twitter and LinkedIn.
4-6 Apr
Bio-Europe Spring, Stockholm
12-13 Apr
Needham & Company’s 15th Annual Healthcare Conference, New York
12-13 Apr
2016 Danish Biotech Conference, New York
10-11 May
BioEquity Europe 2016, Copenhagen
6-9 Jun
2016 BIO Internaional Convention, San Francisco
IR activities consist of direct access to the management team
Zealand has shifted almost entirely to online
7-9 Jun
Goldman Sachs 37th Annual Global Healthcare conference, Palos Verdes, CA
via conference calls and webcasts, Capital Market Days,
communication and provision of information in order
conference attendance and 1-to-1 meetings in both the US
to protect the environment and minimize administrative
and the main cities in Europe.
expenditures. Therefore, we kindly ask all our shareholders
to register their email address via our homepage under
zealandpharma.com/investors/shareholder-portal
Zealand shares are covered by eight Scandinavian
Hanne Leth Hillman, M.Sc., Senior Vice President and
and International banks:
Head of Investor Relations & Communications:
Institution
Analyst
Bryan, Garnier & Co
Danske Bank
Goldman Sachs
Handelsbanken
Jefferies
Nordea
Eric le Berrigaud
Thomas Bowers
Eleanor Fung
Peter Sehested
Peter Welford
Michael Novod
Oddo Securities – Oddo & Cie
Sébastien Malafosse
Rx Securities
Samir Devani
Retaining strong and trustful relations
is essential for our success. Therefore it
remains a key focus area for us, across
our business, to have an open, engaging
and respectful dialogue with our
shareholders and all other stakeholders
as we progress our company.
Contact IR
We encourage our shareholders,
Zealand Pharma A/S
Hanne Leth Hillman
investors, analysts and other
Smedeland 36
Senior Vice President, Head of Investor Relations
stakeholders to contact us with
DK-2600 Glostrup
and Communications
questions or enquiries relating to
Denmark
Phone: +45 50 60 36 89
Zealand – and if there is an interest
e-mail: investors@zealandpharma.com
to meet.
46
7-10 Jun
Jefferies 2016 Healthcare Conference, New York
7 Jun
InvestorDagen, Aarhus
10-14 Jun
American Diabetes Association (ADA) 76th Scientific Sessions, New Orleans
21 Jun
Citi’s EU Healthcare Conference, London
9 Sep
Goldman Sachs Third Annual Biotech Symposium, London
12-16 Sep
52nd EASD Annual Meeting, Munich
20 Sep
InvestorDagen, Copenhagen
27-28 Oct
11th Annual Peptide Therapeutics Symposium, La Jolla, California
An updated version of the event calendar is always available on zealandpharma.com/investors/events
Financial calendar
Date
Event
19 Apr
Annual General Meeting for 2016
18 May
Interim report for Q1 2016
25 Aug
Interim report for H1 2016
9 Nov
Interim report for 9 months 2016
Photo features Zealand employee:
Hanne from IR and Communications presenting
Zealand at an international IR conference.
47
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
03_Financial review
Our business
Our portfolio
Corporate matters
Financial statements
Board of Directors
Senior management
Risk management and internal control
Corporate Governance
Corporate Social Responsibility
Human Resources
Shareholder information
Financial review
Financial
review
Financial review for the period 1 January – 31 December 2015
Operating result
Royalty bond
Operating result for the period was a loss of DKK -81.3 million
On 12 December 2014, Zealand raised USD 50 / DKK 298.7
Since there is no significant difference in the development
Royalty expenses
of the group and the parent company, except for the royalty
Royalty expenses for the year amounted to DKK 22.3 million
Net financial items
(-73.5).
million in a non-dilutive and non-recourse bond financing
backed by 86.5% of the future annual royalties and other
payments which the company is entitled to on lixisenatide
bond, the financial review is based on the group’s consolidated
(13.8) and relates to royalty paid to third parties on received
Net financial items amounted to DKK -38.5 million (1.0). Net
as stand-alone product under its license agreement with
financial information for the year ended 31 December, 2015,
milestone payments and royalty income relating to the license
financial items consist of interest income and expenses,
Sanofi. Repayment of the bond is based solely on lixisenatide
with comparative figures for 2014 in brackets.
agreement with Sanofi.
amortized costs relating to the royalty bond financing, banking
stand-alone royalty revenue with no recourse to future royalty
fees and changes in exchange rates. Of the net financial items
revenue on LixiLan. Regulatory milestone payments, to which
Income statement
Research and development expenses
DKK 32.0 million is related to interest on the royalty bond and
Zealand is entitled on lixisenatide and LixiLan, will as part of
The net result for the year 2015 was a loss of DKK -114.0
Research and development expenses amounted to DKK 215.0
DKK 9.3 million is related to amortized costs of the royalty bond
the financing be placed in a collateral reserve account, which
million (-65.0). The decrease in net result is a consequence
million (180.0). The increase is related to accelerated
financing.
mainly of increased financial costs relating to interest on the
development activities amounting to DKK 27.1 million, mainly
can never exceed the remaining principal on the loan, and
which will be released to Zealand upon full repayment of the
royalty bond, increased net operating expenses partly offset
development costs for the ZP4207 Phase I trial conducted
Result from ordinary activities before tax
bond. The outstanding principal of the loan at year end 2015
by increased revenues.
Revenue
in Germany and preparation costs for the ZP1848 (short
bowel syndrome) Phase II trial conducted at Rigshospitalet,
Copenhagen. The research and development share of the
Result from ordinary activities before tax came to a loss of DKK
were DKK 341.5 million (306.1). The increase is a result of the
-119.8 million (-72.5).
strengthening of the US dollar versus the Danish crown.
Revenue in 2015 amounted to DKK 187.7 million (153.8).
personnel costs amounted to DKK 93.0 million (85.7), an
Tax on ordinary activities
The bond carries an annual interest rate of 9.375% and upon
increase of DKK 7.3 million which is related to employee
With a negative result from ordinary activities, no tax has been
full repayment of the bond, all further future lixisenatide
In October, Boehringer Ingelheim selected a novel peptide
warrant programs granted in 2015. In 2014, only one program
recorded for the period. However, according to Danish tax
revenue will be fully retained by Zealand.
therapeutic to be advanced into preclinical development
was granted to one member of senior management.
legislation Zealand is eligible to receive DKK 5.9 million (7.5) in
under one of two ongoing collaboration agreements resulting
in a milestone of DKK 22.4 / EUR 3 million. In December,
Administrative expenses
cash relating to the tax loss of 2015.
Cash flow
Cash flow from operating activities amounted to DKK
Sanofi submitted an NDA for LixiLan leading to a milestone
Administrative expenses amounted to DKK 44.6 million (39.8).
No deferred tax asset has been recognized in the statement of
-225.4 million (-42.2), and cash flow from investing activities
payment of DKK 136.6 / USD 20 million. Total milestones in
The increase is mainly due to employee warrant programs
financial position due to uncertainty as to when and whether
amounted to DKK -4.0 million (19.8) of which DKK 0.0
2015 amounted to DKK 159.1 million (133.5) corresponding to
granted in 2015.
tax losses can be utilized.
a 19% increase versus previous year.
million (24.4) relates to disposal of securities. Cash flow from
financing activities amounted to DKK 96.4 million (272.2) and
Royalty revenue from sales of Lyxumia® continued to grow and
amounted to DKK 28.6 million (20.3) corresponding to a 41%
Other operating income
Net result and comprehensive income
relates to capital increase due to exercise of warrants and
Other operating income amounted to DKK 12.8 million (6.3).
Net result and comprehensive income both amounted to DKK
the 2014 amount related to net proceeds from the royalty
Other operating income mainly consists of funding from
-114.0 million (-65.0) in each case due to the factors described
bond financing. The total cash flow for the full year of 2015
increase versus previous year.
Boehringer Ingelheim covering the development costs in one
above.
amounted to DKK -133.0 million (249.8).
of the research collaborations.
Allocation of result
Cash and cash equivalents
No dividend has been proposed and the year’s net loss of DKK
As of 31 December 2015, cash and cash equivalents amounted
Lyxumia® royalty revenue
Net operating expenses
-114.0 million (-65.0) has been transferred to retained earnings.
to DKK 440.2 million (538.3).
DKKm
30
25
20
15
10
5
0
DKKm
250
200
150
100
50
0
2013
2014
2015
2011
2012
2013
2014
2015
Net R&D expenses
Administrative expenses
Equity
Equity amounts to DKK 252.2 million (252.8) at the end of the
Cash and securities
year, corresponding to an equity ratio of 38% (42). The decrease
in equity is a result of the net loss for the year of DKK -114.0
million (-65.0) compensated by new equity relating to the
exercise of warrants by employees during the year of DKK 96.4
million (0.0) and warrant compensation expenses of DKK 16.9
million (1.7).
Capital expenditure
Investments in plant and equipment for the period amounted
to DKK 4.0 million (4.5) mainly related to new laboratory
equipment.
DKKm
600
500
400
300
200
100
0
2011
2012
2013
2014
2015
48
49
ZEALAND PHARMA A/S ANNUAL REPORT 2015Management reviewZEALAND PHARMA A/S ANNUAL REPORT 2015Management review
04_Financial statements
04_Statement of comprehensive income
04_Income statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Financial
statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statement of the Board of Directors
and executive management
Independent auditors report
51
51
52
53
54
55
78
79
Financial statements
Income statement
DKK ’000
Revenue
Royalty expenses
Gross profit
Research and development expenses
Administrative expenses
Other operating income
Operating result
Financial income
Financial expenses
Result from ordinary activities before tax
Tax on ordinary activities
Net result for the year
Earnings per share
Basic
Diluted
Note
Group 2015 Group 2014
Parent 2015 Parent 2014
2
3
4, 21
4, 21
5
6
7
8
9
9
187,677
-22,267
153,773
-13,776
22,491
0
141,585
-12,129
165,410
139,997
22,491
129,456
-214,959
-180,036
-214,167
-180,036
-44,606
-39,826
12,828
-81,327
6,328
-73,537
-43,938
12,828
-39,826
6,328
-222,786
-84,078
3,889
-42,394
3,064
-2,017
1,444
-306
3,064
-64
-119,832
-72,490
-221,648
-81,078
5,875
7,500
5,875
7,500
-113,957
-64,990
-215,773
-73,578
-4.82
-4.82
-2.87
-2.87
-9.13
-9.13
-3.25
-3.25
Statement of comprehensive income
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
Net result for the year
Other comprehensive income
-113,957
-64,990
-215,773
-73,578
0
0
0
0
Comprehensive income for the year
-113,957
-64,990
-215,773
-73,578
50
51
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
04_Statement of financial position
04_Statement of changes in equity
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Financial statements
Financial statements
Statement of financial position at 31 December
Statement of changes in equity
DKK ’000
Note
Group 2015 Group 2014
Parent 2015 Parent 2014
DKK ’000
Assets
Plant and machinery
Other fixtures and fittings, tools and equipment
Leasehold improvements
Investment in subsidiaries
Deposits
Non current assets total
Trade receivables
Receivable from subsidiaries
Prepaid expenses
Tax receivable
Other receivables
Cash restricted
Cash and cash equivalents
Current assets total
Total assets
Liabilities and equity
Share capital
Retained earnings
Equity total
Royalty bond
Non-current liabilities
Trade payables
Royalty bond
Prepayments from customers
Other liabilities
Current liabilities
Total liabilities
10
10
10
11
12
13
8
14
15
15
16
17
17
18
19
14,672
1,153
628
0
2,666
19,119
15,994
1,573
1,060
0
2,693
21,320
141,120
25,031
0
2,262
5,875
0
2,209
6,250
26,113
3,6733,673
21,403
2121,424
418,796
615,569
516,849
575,436
14,672
1,153
628
380
2,666
19,499
313
3,549
2,242
5,875
10,627
0
15,994
1,573
1,060
380
2,693
21,700
12,843
11,727
2,209
6,250
22,694
0
Group
Equity at 1 January 2014
Warrants compensation expenses
Comprehensive income for the year
Equity at 31 December 2014
Equity at 1 January 2015
Warrants compensation expenses
Capital increase
Comprehensive income for the year
Equity at 31 December 2015
140,783
163,389
255,335
291,058
DKK ’000
Parent
Equity at 1 January 2014
Warrants compensation expenses
Comprehensive income for the year
Equity at 31 December 2014
Equity at 1 January 2015
Warrants compensation expenses
Capital increase
Comprehensive income for the year
Equity at 31 December 2015
634,688
596,756
182,888
312,758
24,353
227,878
252,231
23,193
229,635
252,828
24,353
117,471
141,824
23,193
221,044
244,237
312,951
312,951
267,170
267,170
0
0
0
0
21,676
0
2,091
45,739
69,506
18,487
5,000
14,383
38,888
76,758
21,580
18,487
0
2,063
17,421
41,064
0
14,383
35,651
68,521
382,457
343,928
41,064
68,521
Total equity and liabilities
634,688
596,756
182,888
312,758
Share
capital
Retained
earnings
Total
23,193
292,948
316,141
0
0
1,677
1,677
-64,990
-64,990
23,193
229,635
252,828
23,193
229,635
252,828
0
1,160
16,947
95,253
16,947
96,413
0
-113,957
-113,957
24,353
227,878
252,231
Share
capital
Retained
earnings
Total
23,193
292,948
316,141
0
0
1,674
1,674
-73,578
-73,578
23,193
221,044
244,237
23,193
221,044
244,237
0
1,160
16,947
95,253
16,947
96,413
0
-215,773
-215,773
24,353
117,471
141,824
Significant accounting policies, and significant
Financial and operational risks
accounting estimates and assesments
Lease commitments
Information on staff and remuneration
1
20
21
Related parties
Fees to auditors appointed at the Annual General Meeting 26
Significant events after the balance sheet date
27
22
23
52
53
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
04_Statement of cash flows
04_Notes
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Financial statements
Notes
Statement of cash flows
DKK ’000
Note
Group 2015 Group 2014
Parent 2015 Parent 2014
Net result for the year
Adjustments
Change in working capital
Cash flow from operating activities
before financing items
Financial income received
Financial expenses paid
Tax received
24
25
8
-113,957
-64,990
-215,773
-73,578
43,553
-138,871
6,559
15,521
20,714
-20,827
4,606
13,722
-209,275
-42,910
-215,886
-55,250
1,269
-23,657
6,250
1,494
-2,017
1,250
340
1,004
6,250
1,494
-64
1,250
Cash flow from operating activities
-225,413
-42,183
-208,292
-52,570
Change in deposit
Net finansing of foreign subsidiaries
Purchase of property, plant and equipment
Disposal of securities
Cash flow from investing activities
Proceeds from issuance of royalty bonds
Royalty bond issuance costs
Capital increase
Cash flow from financing activities
Decrease / increase in cash, cash restricted
and cash equivalents
Cash and cash equivalents at 1 January
Exchange rate adjustments
27
0
-123
0
-4,040
-4,497
0
242424,383
-4,013
19,763
0
0
96,413
96,413
298,675
-26,505
0
272,170
27
28
-4,040
0
-3,985
0
0
96,413
96,413
-123
-380
-4,497
24,383
19,383
0
0
0
0
-133,013
538,273
34,939
249,750
286,178
2,345
-115,864
255,335
1,312
-33,187
286,178
2,344
Note 1 – Significant accounting policies and
significant accounting estimates and assesments
Significant accounting policies
recognized depending on whether certain criteria are met.
Before implementation of the standard, Zealand will assess
The financial statements of Zealand Pharma A/S (Zealand)
whether IFRS 15 Revenue from Contracts with Customers has
for 2015 has been prepared in accordance with International
an impact on the current and new significant contracts. The
Financial Reporting Standards (IFRS) as adopted by the EU
new standard is not expected to have any material impact on
and Danish disclosure requirements for listed companies. The
the future financial statements.
Board of Directors considered and approved the 2015 Annual
Report of Zealand on 16 March 2016. The Annual Report will
IFRS 16 Leases was issued in January 2016 and is effective
be submitted to the shareholders of Zealand for approval at
for annual periods beginning on or after 1 January 2019.
the Annual General Meeting on 19 April 2016.
The standard has not yet been endorsed by the EU. In the
Functional and presentation currency
(except for short term leases and leases of asset of low value)
The consolidated financial statements are presented in Danish
to be reognized as a right-of-use asset and lease liability,
kroner (DKK ´000) which is also the functional currency of the
respectively, measured at the present value of future lease
financial statements of the lessees IFRS 16 requires all leases
parent company.
payments. The right-of-use asset is subsequently depreciated
in a similar way to other depreciable assets over the lease term
During 2014 four subsidiaries were established by Zealand in
and interest shall be calculated on the lease liability similar
relation to the royalty bond financing that was concluded in
to finance leases under IAS 17. Consequently, the change will
December 2014.
also impact the presentation in the income statement and
the statement of cash flows. As the standard is newly issued,
The notes comprise both the parent company and the group
Zealand has not yet assessed the impact on the future financial
unless specifically stated otherwise.
statements, but it is not expected to have any material impact
on the future financial statements.
Future IFRS changes
At the date of the approval of the consolidated financial
The consolidated financial statements
statements, a number of new and amended standards and
The consolidated financial statements and the financial
interpretations have not yet entered into force or have not yet
statements comprise the parent company Zealand Pharma
been adopted by the EU. Therefore, they are not incorporated
A/S and the group enterprises, for which Zealand is entitled to
Cash, cash restricted and cash equivalents at 31 December
440,199
538,273
140,783
255,335
in the financial statements.
determine finance and operational policies and which normally
applies on ownership interests of more than half of the voting
Cash could be specified as:
Cash and cash equivalents according to financial statements
418,796
516,849
140,783
255,335
IASB has issued IFRS 9 Financial Instruments, effective for
rights. The consolidated financial statements are prepared
annual periods beginning on or after 1 January 2018. IFRS 9
based on uniform accounting policies in all group entities.
Cash restricted
21,403
21,424
0
0
Financial Instruments is part of the IASB’s project to replace
Consolidation of group entities is performed after elimination
Cash, cash restricted and cash equivalents at 31 December
440,199
538,273
140,783
255,335
IAS 39 Financial Instruments: Recognition and Measurement,
of all intra-group transactions, balances, income and expenses.
and the new standard will change the classification,
presentation and measurement of financial instruments and
Foreign currency translation
hedging requirements. Zealand is assessing the impact of the
Transactions denominated in foreign currencies are translated
standard, but it is not expected to have any material impact on
at the exchange rates at the dates of transaction.
the future financial statements.
IFRS 15 Revenue from Contracts with Customers was issued
transaction and the rate on the payment day are recognized in
in May 2014 and is effective for annual periods beginning
the income statement as financial income or financial expenses.
Exchange differences arising between the rate on the date of
on or after 1 January 2018. The standard has not yet been
endorsed by the EU. Entities will apply a five-step model to
Receivables, payables and other monetary items denominated
determine when, how and at what amount revenue is to be
in foreign currencies that have not been settled at the balance
54
55
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
sheet date are translated by applying the exchange rates at the
items, changes in the net working capital, financial items paid
have been transferred to the buyer. Collaboration agreements
currently not deemed to meet the criteria for recognition as
balance sheet date. Differences arising between the rate at
and income taxes paid.
balance sheet date and the rate at the date of the arising of the
are reviewed carefully to understand the nature of risks and
management is not able to provide any convincing positive
rewards of the arrangement. All the company’s revenue-
evidence that deferred tax assets should be recognized.
receivable or payable are recognized in the income statement
Cash flow from investment activities
generating transactions, including those with Sanofi S.A,
under financial income and expenses.
Cash flow from investment activities includes payments
Helsinn Group and Boehringer Ingelheim International GmbH
Research and development
Fixed assets purchased in foreign currencies are measured at
investments.
the rate of the date of transaction.
Employee incentive programs
arising from development projects should be recognized in
the statement of financial position. The criteria that must be
associated with the purchase and sale of fixed assets and
have been subject to such evaluation by management.
According to the IAS 38, “Intangible Assets,” intangible assets
Consolidated financial statements
Cash flow from financing activities
In accordance with IFRS 2 “Share-based Payment,” the fair
met for capitalization are that:
Cash flow from financing activities comprises new equity, loan
value of the warrants, classified as equity settled, are measured
financing and repayment of interest bearing debt.
at grant date and is recognized as an expense in the income
•
The development project is clearly defined and identifiable
statement over the vesting period and the period of delivery
and the attributable costs can be measured reliably during
Income statement
Cash and cash equivalents
of work. Subsequently, the fair value is not re-measured. The
the development period;
The income statement is classified by function.
Cash and cash equivalents comprise cash and bank balances.
fair value of each warrant granted during the year is calculated
Segment reporting
The group is managed by a management team reporting to
the Chief Executive Officer. No separate business areas or
separate business units have been identified in connection
with product candidates or geographical markets. As
Significant accounting
estimates and assesments
using the Black Scholes pricing model. This pricing model
•
The technological feasibility, adequate resources to
requires the input of subjective assumptions such as:
complete and a market for the product or an internal use of
The expected stock price volatility, which is based upon the
historical volatility of Zealand’s stock price;
•
Management has the intent to produce and market the
the product can be documented; and
product or to use it internally.
a consequence of this, no segment reporting is made
In the statement of the carrying amounts of certain assets
The risk-free interest rate, which is determined as the interest
concerning business areas or geographical areas.
and liabilities estimates are required on how future events will
rate on Danish government bonds (bullet issues) with a
Such an intangible asset should be recognized if sufficient
Statement of financial position
the balance sheet date.
affect the carrying amounts of these assets and liabilities at
maturity of five years;
certainty can be documented that the future income from
the development project will exceed the aggregate cost of
The expected life of warrants, which is based on vesting terms,
production, development and the sale and administration of
Financial assets
The used estimates are based on assumptions assessed
expected rate of exercise and life terms in current warrant
the product. A development project involves a single product
Financial assets include receivables, securities and cash.
reasonable by management, however, estimates are
Financial assets can be divided into the following categories:
inherently uncertain and unpredictable. The assumptions
loans and receivables, financial assets at fair value through
can be incomplete or inaccurate and unexpected events or
program.
Deferred tax
candidate undergoing a high number of tests to illustrate
its safety profile and the effect on human beings prior to
obtaining the necessary final approval of the product from
the income statement, available-for-sale financial assets and
circumstances might occur. Furthermore, the enterprise is
Zealand recognizes deferred tax assets, including the tax base
the appropriate authorities. The future economic benefits
held-to maturity investments. Financial assets are assigned to
subject to risks and uncertainties that might result in deviations
of tax loss carry-forwards, if management assesses that these
associated with the individual development projects are
the different categories by management on initial recognition,
in actual results compared to estimates.
tax assets can be offset against positive taxable income within
dependent on obtaining such approval. Considering the
depending on the purpose for which the investments
were acquired. All financial assets are recognized on their
Revenue
a foreseeable future.
significant risk and duration of the development period related
to the development of biological products, management has
settlement date. All financial assets that are not classified
Evaluating the criteria for revenue recognition with respect to
This judgment is made on an ongoing basis and is based on
concluded that the future economic benefits associated with
as fair value through the income statement are initially
the company’s research and development and collaboration
budgets and business plans for the coming years, including
the individual projects cannot be estimated with sufficient
recognized at fair value, plus transaction costs.
agreements requires management’s judgment to ensure
planned commercial initiatives. The creation and development
certainty until the project has been finalized and the necessary
Statement of cash flows
that all criteria have been fulfilled prior to recognizing any
amount of revenue. In particular, such judgments are made
of therapeutic products within the biotechnology and
regulatory final approval of the product has been obtained.
pharmaceutical industry is subject to considerable risks and
Accordingly, Zealand has not recognized such assets at this
The statement of cash flows shows the cash flow for the year
with respect to determination of the nature of transactions,
uncertainties. Zealand has so far reported significant losses,
time and therefore all research and development costs are
together with the cash and cash equivalents at the beginning
whether simultaneous transactions shall be considered as
and as a consequence, has unused tax losses. Management
recognized in the income statement when incurred. The total
and end of the year.
Cash flow from operating activities
one or more revenue-generating transactions, allocation
of the contractual price (upfront and milestone payments
subscribed in connection with a collaboration agreement)
Cash flow from operating activities is presented indirectly and
to several elements included in an agreement, and the
is calculated as the net result adjusted for non-cash operating
determination of whether the significant risks and rewards
has concluded, that deferred tax assets should not be
research and development costs amounted to DKK 215.0
recognized as of 31 December 2015. The tax assets are
million in 2015 compared to DKK 180.0 million in 2014.
56
57
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Note 2 – Revenue
DKK ’000
Sanofi S.A.
Boehringer Ingelheim Int. GmbH
Helsinn Group
Total milestone payments
Sanofi S.A.
Total royalty income
Group 2015 Group 2014
Parent 2015 Parent 2014
136,600
22,379
112
81,191
37,279
15,015
0
22,379
112
81,191
37,279
15,015
159,091
133,485
22,491
133,485
28,586
28,586
20,288
20,288
0
0
8,100
8,100
Total revenue
187,677
153,773
22,491
141,585
All Zealand revenue can be attributed to other countries than Denmark.
§
ACCOUNTING POLICIES
Revenue comprises royalties and milestone payments. These
The income from agreements with multiple components
revenues are recognized in accordance with the agreements
and where the individual components cannot be separated
and is recognized when it is probable that future economic
is recognized over the period of the agreement. In addition,
benefits will flow to the group and these economic benefits
recognition requires that all material risks and benefits related
can be measured reliably.
to the ownership of the goods and services included in the
Royalty income from licenses is based on third-party sales
of licensed products and is recognized in accordance with
If all risks and benefits have not been transferred, the revenue
contract terms when third-party results are available and are
is recognized as deferred income until all components in the
deemed to be reliable.
transaction have been completed.
transaction are transferred to the purchaser.
Note 3 – Royalty expenses
In 2015, the royalty expenses are related to royalty from sales of Lyxumia® and milestone payments received from Sanofi S.A.
In 2014, the royalty expenses are related to royalty from sales of Lyxumia® received from Sanofi S.A. and milestone payments
received from Sanofi S.A. and Helsinn Group.
§
ACCOUNTING POLICIES
Royalty expenses comprise royalty paid to third parties on certain milestone payments and royalty income from collaboration
agreements.
Notes
Note 4 – Research, development and administrative expenses
§
ACCOUNTING POLICIES
Research and development expenses
that the technology or the product can be commercialized
Research expenses comprise salaries, contributions to pension
and that the future income from the product can cover, not
schemes and other expenses, including patent expenses,
only the production, selling and administrative expenses,
as well as depreciation and amortization attributable to the
but also development expenses. Currently, Zealand has not
group’s research activities. Research expenses are recognized
capitalized any development expenses.
in the income statement as incurred.
Development expenses comprise salaries, contributions to
development based on the salaries to employees in research
Overhead expenses have been allocated to research and
pension schemes and other expenses, including depreciation
and amortization, attributable to the group’s development
and development.
activities.
Administrative expenses
Capitalization assumes that the development of the
personnel, expenses related to company premises, operating
technology or the product in the group’s opinion has been
leases, investor relation, etc. Overhead expenses have been
completed, that all necessary public registrations and
allocated to administration based on the salaires to employees
Administrative expenses include expenses for administrative
marketing approvals have been received, and that expenses
in administration.
can be reliably measured. Furthermore, it has to be established
Note 5 – Other operating income
DKK ’000
Research funding
Government grants
Total other operating income
Group 2015 Group 2014
Parent 2015 Parent 2014
11,576
1,252
12,828
5,812
516
6,328
11,576
1,252
12,828
5,812
516
6,328
In 2015 and 2014, Zealand has, in addition to government grants, also received research funding from Boehringer Ingelheim
International GmbH.
§
ACCOUNTING POLICIES
Other operating income comprises research funding from
Government grants are recognized when a final and firm
business partners and government grants. Research funding
right to the grant has been obtained. Government grants
is recognized in the period where the research activities have
are included in other operating income as the grants are
been performed and government grants are recognized
considered to be cost refunds. Grants related to investments
periodically when the work supported by the grant has been
are set off against the purchase price.
reported.
58
59
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
Note 6 – Financial income
Note 8 – Tax expenses
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
Interest income
Exchange rate adjustments
Total financial income
§
ACCOUNTING POLICIES
139
3,750
3,889
719
2,345
3,064
132
1,312
1,444
720
2,344
3,064
Financial income are recognized in the income statement with
Financial income include interest receivable, as well as realized
the amounts related to the financial year.
and unrealized exchange rate adjustments
Note 7 – Financial expenses
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
Interest expenses, royalty bond
Amortization financing costs
Other interest expenses
Total financial expenses
§
ACCOUNTING POLICIES
32,372
9,689
333
42,394
0
0
2,017
22,017
0
0
306
306
0
0
64
64
Financial expenses are recognized in the income statement
Further, expenses related to the royalty financing are
with the amounts related to the financial year. Financial
amortized over the expected duration of the bond and
expenses include interest payable, as well as realized and
recognized as financial expenses.
unrealized exchange rate adjustments.
Net result for the year before tax
-119,832
-72,490
-221,648
-81,078
Tax rate
Expected tax expenses
Adjustment for non-deductible expenses
Adjustment for exercised warrant programs
Tax effect from subsidiaries
Reduction of corporate tax rate from 25% to 22%
Prior year adjustments
Tax effect on warrant programs
Tax effect on expired warrant programs
Change in tax assets (not recognized)
Total tax expenses
Breakdown of unrecognized deferred tax assets:
23.5%
-28,161
54
-8,357
0
1,557
0
-318
6,500
22,849
-5,875
24.5%
-17,760
69
0
0
1,180
-1,375
0
0
10,386
-7,500
23.5%
-52,087
54
-8,357
23,621
1,557
0
0
6,500
22,837
-5,875
24.5%
-19,864
69
000000
2,583
1,131
-1,375
0
0
9,956
-7,500
Tax losses carried forward (available indefinitely)
742,771
591,326
742,716
591,271
Research and development expenses
31,054
92,885
31,054
92,885
Rights
Non-current assets
Other
43,019
57,543
43,019
51,329
43,019
57,543
43,019
51,329
58,890
50,856
58,890
50,856
Total temporary differences
933,277
829,415
933,222
829,360
Tax rate
22%
22%
22%
22%
Calculated potential deferred tax asset at local tax rate
205,321
182,471
205,309
182,042
Write-down of deferred tax asset
Recognized deferred tax asset
-205,321
-182,471
-205,309
-182,042
0
0
0
0
As a consequence of tax losses from previous years, there are no deferred taxes. Deferred tax reductions (tax assets) has not been
recognized in the statement of financial position due to uncertainty as to when and whether this can be utilized.
The deferred tax for the parent company include the tax positions of ZP Holding SPV K/S as well as ZP SPV 1 K/S, as these entities
are transparent from a tax point of view. Hence the activity of these entities is subject to taxation in the parent company.
According to Danish tax legislation Zealand is eligible to receive DKK 5.9 million (6.3) in cash relating to the tax loss of 2015.
§
ACCOUNTING POLICIES
Tax on results for the year which comprises current tax and
changes in deferred tax is recognized in the income statement
with the portion of taxes related to the taxable income for the
year whereas the portion attributable to entries on equity is
recognized directly in equity.
Current tax liabilities and current tax receivables are
recognized in the statement of financial position as tax
calculated on the taxable income for the year adjusted for tax
on previous years’ taxable income and taxes paid on account/
prepaid. Deferred tax is measured according to statement
of financial position liability method in respect of temporary
differences between the carrying amount and the tax base of
assets and liabilities. Deferred tax assets including the tax value
of tax losses carry forward, are measured at the expected
realizable value, either by elimination in tax on future earnings
or by set-off against deferred tax liabilities within the same
legal tax entity and jurisdiction.
Deferred tax is measured on the basis of the tax rules and tax
rates in force at the balance sheet date when the deferred
tax is expected to crystallize as current tax. Any changes in
deferred tax as a consequence of amendments to tax rates are
recognized in the income statement.
60
61
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
Note 9 – Basic and diluted earnings per share
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
DKK ’000
Plant and
machinery
Other
fixtures
and fittings
Leasehold Fixed assets
under
improve-
ments construction
Net result for the year
Adjusted net profit/loss accruing
to the company’s ordinary shares
-113,957
-64,990
-215,773
-73,578
Cost at 1 January 2015
-113,957
-64,990
-215,773
-73,578
Average number of ordinary shares
Average number of treasury shares
24,203,657
23,193,047
24,203,657
23,193,047
-564,223
-564,223
-564,223
-564,223
Adjusted average number of ordinary shares outstanding
23,639,434
22,628,824
23,639,434
22,628,824
Basic earnings per share
-4.82
-2.87
-9.13
-3.25
Reversal of impairment and depreciation on disposed assets
Depreciation at 31 December 2015
Additions
Transfers
Cost at 31 December 2015
Depreciation at 1 January 2015
Depreciation for the year
62,771
3,735
0
8,663
10,598
131
0
174
0
66,506
8,794
10,772
46,777
5,057
0
7,090
9,537
551
0
607
0
51,834
7,641
10,144
Diluted earnings per share
-4.82
-2.87
-9.13
-3.25
Carrying amount at 31 December 2015
14,672
1,153
628
0
0
0
0
0
0
0
0
0
0
0
0
§
ACCOUNTING POLICIES
Basic earnings per share
Diluted earnings per share
Basic earnings per share is calculated as the net result for the
Diluted earnings per share is calculated as the net result for
period that accrue to the parent company’s ordinary shares
the period that accrue to the parent company’s ordinary
divided by the weighted average number of ordinary shares
shares divided by the weighted average number of ordinary
outstanding.
shares outstanding adjusted by the dilutive effect of potential
ordinary shares.
Note 10 – Property, plant and equipment
DKK ’000
Cost at 1 January 2014
Additions
Transfers
Cost at 31 December 2014
Depreciation at 1 January 2014
Depreciation for the year
Depreciation at 31 December 2014
Plant and
machinery
Other
fixtures
and fittings
Leasehold Fixed assets
under
improve-
ments construction
57,807
2,784
2,180
62,771
41,793
4,984
46,777
7,201
1,462
0
10,346
252
0
8,663
10,598
6,792
298
7,090
8,887
650
9,537
2,180
0
-2,180
0
0
0
0
0
0
0
0
Carrying amount at 31 December 2014
15,994
1,573
1,060
Depreciation for the financial year has been charged as:
Research and development expenses
Administrative expenses
Total
4,984
0
4,984
235
63
298
514
136
650
Depreciation for the financial year has been charged as:
Research and development expenses
Administrative expenses
Total
5,057
0
5,057
413
138
551
455
152
607
§
ACCOUNTING POLICIES
Plant and machinery, other fixtures and fittings, tools and
the selling costs and the carrying amount of the asset at the
equipment and leasehold improvements are measured at cost
time of the disposal. Profits and losses are recognized in the
less accumulated depreciation.
income statement under research and development expenses
and administrative expenses.
Cost comprises acquisition price and costs directly related
to acquisition until the time when the group starts using the
The carrying amount of property, plant and equipment as well
asset.
as non-current asset investments is reviewed for impairment
when events or changed conditions indicate that the carrying
The basis for depreciation is cost less estimated residual value
amount may not be recoverable. If there is such an indication,
after the end of useful life. Assets are depreciated under the
an impairment test is made. An impairment loss is recognized
straight-line method over the expected useful lives of the
in the amount with which the carrying amount exceeds the
assets. The depreciation periods are as follows:
recoverable amount of the asset, which is the higher of the net
• Leasehold improvements 5 years
• Plant and machinery 5 years
present value and the net selling price. In order to assess the
impairment, the assets are grouped on the least identifiable
group of assets that generates cash flows (cash flow
•
Other fixtures and fittings, tools and equipment 3–5 years
generating units). Impairments are recognized in the income
statement under the same items as the related depreciation
Profits and losses arising from disposal of plant and equipment
and amortization.
are stated as the difference between the selling price less
62
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
Note 11 – Investments in subsidiaries
Note 12 – Trade receivables
DKK ’000
Cost at 1 January 2014
Additions
Cost at 31 December 2014
Revaluation at 1 January 2014
Revaluation at 31 December 2014
Carrying amount at 31 December 2014
Cost at 1 January 2015
Additions
Cost at 31 December 2015
Revaluation at 1 January 2015
Revaluation at 31 December 2015
Carrying amount at 31 December 2015
Parent
Trade receivables are mainly related to milestones and royalty from our collaboration agreements, and are due within 30 - 60 days.
There are no overdue receivables and there is no provision for bad debts as no losses are expected on trade receivables.
0
380
380
0
0
380
380
0
380
0
0
380
Part of the receivables has been withheld by the German Tax Authorities (app. 15% royalty received on Lyxumia®), and is expected
to be paid in 2016.
§
ACCOUNTING POLICIES
Trade receivables are provided against when objective
the receivables. The amount of the write-down is determined
evidence is received that the group will not be able to collect
as the difference between the assets’ carrying amount and the
all amounts due to it in accordance with the original terms of
present value of estimated future cash flows.
Note 13 – Prepaid expenses
§
ACCOUNTING POLICIES
Prepaid expenses comprise incurred expenses related to the following financial year.
Subsidiaries:
As a consequence of the royalty bond financing in December 2014 four new subsidiaries were established.
Name
Zealand Pharma A/S subsidiaries:
ZP Holding SPV K/S
ZP General Partner 1 ApS
ZP Holding SPV K/S subsidiaries:
ZP SPV 1 K/S
ZP General Partner 2 ApS
Ownership
and votes
2015
Domicile
Denmark
Denmark
100 %
100 %
Denmark
Denmark
100 %
100 %
Note 14 – Other receivables
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
Helmsley Charitable Trust (ZP4207)
Royalty income
Other
Total other receivables
4,592
15,366
6,155
26,113
0
0
3,673
333,673
4,592
0
6,035
10,627
0
00
2,694
2,694
The management has in accordance with the Danish Financial Statements Act, §5, chosen to submit an exeption declaration
(“undtagelseserklæring”) in accordance with the Danish Financial Statements Act, 146:1, and has not issued Annual Reports for ZP
Note 15 – Cash and cash equivalents
SPV 1 K/S and ZP Holding SPV K/S.
The accounts of the two companies are fully consolidated in the consolidated financials statements of Zealand.
§
ACCOUNTING POLICIES
Investments in subsidiaries are measured at cost in the parent company’s financial statements. Where the recoverable amount of
the investment is lower than cost, the investments are written down to this lower value.
DKK ’000
DKK
USD
EURO
Group 2015 Group 2014
Parent 2015 Parent 2014
66,239
306,296
46,261
227,922
280,215
8,712
64,900
30,744
45,139
227,542
19,081
8,712
Total cash and cash equivalents
418,796
516,849
140,783
255,335
Restricted cash: DKK 21.4 million (21.4) is restricted based on the royalty bond issuance agreement until the royalty bond has been
fully repaid.
64
65
ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
Note 16 – Share capital and treasury shares
Note 18 – Prepayments from customers
Changes in share capital (‘000 shares)
Share capital at 31 December 2010
Capital increase at 12 December 2011
Share capital at 31 December 2014
Share capital at 1 January 2015
Capital increase at 21 March 2015
Capital increase at 11 April 2015
Capital increase at 2 June 2015
Capital increase at 20 June 2015
Capital increase at 8 September 2015
Capital increase at 26 September 2015
Capital increase at 4 November 2015
Capital increase at 13 November 2015
Capital increase at 4 December 2015
Share capital at 31 December 2015
22,871
322
23,193
23,193
121
106
51
47
383
151
61
177
63
24,353
The share capital consists of 24,352,769 (23,193,047) ordinary shares of DKK 1 each. All shares have been fully paid. Capital
increases in 2015 relates to exercise of warrant programs.
At the end of 2015, treasury shares amounted to 564,223 (564,223), equivalent to 2.3% (2.4) of the share capital at 31 December.
The number of treasury shares corresponds to a market value of DKK 85,479,785 (46,830,509) at 31 December.
The full number of treasury shares have been purchased for DKK 1.7 million.
§
ACCOUNTING POLICIES
Purchase and sales prices as well as dividend from own shares
are recognized directly under retained earnings under equity.
Capital reductions by cancellation of own shares reduce the
share capital by an amount equaling the nominal values of
the shares. Profit from sale of own shares, respectively issue
of shares in connection with exercise of warrants is entered
directly on equity.
Note 17 – Royalty bond
In December 2014, Zealand established four subsidiaries in connection with the royalty bond issuance. Part of the establishment
was a contribution/transfer from the parent of certain rights, including intellectual property rights to future royalty payments from
the sale of Lyxumia® and LixiLan.
The principal amount, USD 50 million, is payable in full at 15 March 2026 if not redeemed before. It is possible for Zealand to make
voluntary repayments as of 2016. Royalty payments in excess of interest payments are used for (and shall be used for) principal
repayments of the notes at each payment date. Upon full repayment of the royalty bond, the right to future royalty payments
belongs to Zealand.
See note 22 – Financial and operational risks, for information about due date, interests etc.
§
ACCOUNTING POLICIES
The royalty bond is measured at the time of borrowing at
fair value less any transaction costs. The difference between
the proceeds of the loan and the amount to be repaid is
recognized in the income statement over the term of the loan
as a financial expense using the effective interest method.
§
ACCOUNTING POLICIES
Prepayments from customers comprise not yet consumed prepayments relating to the research collaboration with Boehringer
Ingelheim International GmbH.
Note 19 – Other liabilities
DKK ’000
Severance payment
Employee benefits
Provision for clinical study on ZP1609
Royalty to third-party
Interest, royalty bond
Other
Total other liabilities
§
ACCOUNTING POLICIES
Group 2015 Group 2014
Parent 2015 Parent 2014
613
15,085
0
18,713
9,516
1,812
45,739
18,802
10,511
4,432
0
00
5,143
38,888
613
15,085
0
0
0
1,723
17,421
18,802
10,511
4,432
00
00
1,906
35,651
Financial liabilities are recognized initially at fair value less
transaction costs. In subsequent periods, financial liabilities are
measured at amortized cost corresponding to the capitalized
value using the effective interest method; consequently the
difference between the proceeds and the nominal value is
recognized in the income statement over the maturity period
of the loan.
Other payables are measured at amortized cost corresponding
to nominal value.
Note 20 – Lease commitments
DKK ’000
Operating lease agreements:
Within 1 year
2 to 5 years
Total
2015
2014
3,940
1,241
5,181
4,376
908
5,284
Operating lease agreements include rental agreement of building, company cars and office equipment.
The leases are subject to terms of interminability of between 6 and 60 months.
In 2015 DKK 7.6 million (7.8) was recognized in the income statement.
§
ACCOUNTING POLICIES
Lease agreements are classified as either financial or operating
leases based on the criteria in IAS 17. Lease payments under
operating leases and other rental agreements are recognized
in the income statement over the term of the agreements.
66
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Note 21 – Information on staff and remuneration
DKK ’000
The total staff salaries can be specified as follows:
Salaries
Pension schemes
Other social security costs
Total
The amount is charged as:
Research and development expenses
Administrative expenses
Total
Average number of employees
2015
2014
105,336
98,740
7,243
10,752
6,560
8,763
123,331
114,063
93,039
30,292
85,684
28,379
123,331
114,063
110
103
Average number of employees has been calculated based on ATP expenses.
DKK ’000
Remuneration included above to the:
Base
board fee
2015
Other
2015
Total
2015
Base
board fee
2014
Other
2014
Total
2014
Board of Directors
Martin Nicklasson
Rosemary Crane
Catherine Moukheibir
Peter Benson
Alain Munoz
Michael Owen
Christian Thorkildsen¹
Jens Peter Stenvang¹
Helle Størum¹
Daniel Ellens2
Jørgen Lindegaard2
Florian Reinaud2
Jutta af Rosenborg3
Hanne Heidenheim Bak1 3
Total
450
200
250
150
150
150
150
150
150
150
150
13
0
0
2,113
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
450
200
250
150
150
150
150
150
150
150
150
13
0
0
0
0
0
150
150
150
150
75
150
450
375
150
150
75
0
0
0
0
715
0
0
0
0
0
0
0
0
0
0
0
0
150
865
150
150
75
150
450
375
150
150
75
2,113
2,025
715
2,740
1 The table only includes remuneration related to board work for the employee elected board members.
2 The board members resigned from the board in 2015.
3 The board members resigned from the board in 2014.
Notes
2014
DKK ’000
Remuneration included above to the:
Executive management
David Solomon
Mats Blom
Total
Other senior management
Total
Total
2015
DKK ’000
Remuneration included above to the:
Executive management
Britt Meelby Jensen
Mats Blom
Total
Other senior management
Total
Base
salary
Bonus
Pension
contri-
bution
Warrant
Other Severance compens.
payment expenses
benefits
Total
6,079
1,735
7,814
5,382
5,382
0
400
400
1,083
1,083
304
137
441
535
535
238
242
480
540
540
16,440
0
16,440
0
0
0
23,061
2,514
25,575
2,362
2,362
2,105
2,105
12,007
12,007
13,196
1,483
976
1,020
18,802
2,105
37,582
Base
salary
Bonus
Pension
contri-
bution
Warrant
Other Severance compens.
payment expenses
benefits
Total
3,353
2,400
5,753
8,776
8,776
0
200
200
928
928
335
240
575
877
877
190
260
450
1,101
1,101
0
0
0
3,163
2,372
5,535
7,041
5,472
12,513
353
353
3,321
3,321
15,356
15,356
Total senior management
14,529
1,128
1,452
1,551
353
8,856
27,869
Other senior management in 2015 counts 6 members, including 3 members resigned during the year. Other senior management
in 2014 counts 3 members.
68
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
DKK ’000
Number of warrants
Program
of 2010
Program
of 2010
02-Nov-10 10-Feb-11 17-Nov-11 10-Feb-12 19-Nov-12 08-Feb-13 01-Apr-14
Program
of 2010
Program
of 2010
Program
of 2010
Program
of 2010
Program
of 2010
Total
Outstanding as per 1 Jan. 2014
595.406
423.000
227.085
231.500
214.883
367.262
0 2.059.136
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding as per
31 December 2014
Specified as follows:
Board of Directors
Executive management
0
0
0
0
0
-20.000
0
0
0
0
0
0
0
-11.250
0
0
0
0
0
0
0
100.000
100.000
-23.750
0
0
0
0
0
-55.000
0
0
595.406
403.000
227.085
220.250
214.883
343.512
100.000 2.104.136
134,024
327,358
0
0
0
165,047
0
0
0
0
0
134,024
152,845
67,012
100,000
812,262
Other employees
134,024
403,000
62,038
220,250
62,038
276,500
0 1,157,850
Total
595,406
403,000
227,085
220,250
214,883
343,512
100,000 2,104,136
Number of warrants
Outstanding as per 1 Jan. 2015
595.406
403.000
227.085
220.250
214.883
343.512
100.000 2.104.136
Granted during the year
Forfeited during the year
0
0
0
-7.500
0
0
0
-3.750
Exercised during the year
-589.237
-383.900
-121.826
-64.759
Expired during the year
-6.169
0
0
0
0
0
0
0
0
-17.500
0
0
0
0
0
-28.750
0 -1.159.722
0
-6.169
Outstanding as per
31 December 2015
Specified as follows:
Board of Directors
Executive management
Other employees
Total
Exercise period
From
until
Black & Scholes parameters
Term (months)
Volatility*
Share price
Exercise price DKK
Dividend
0
11.600
105.259
151.741
214.883
326.012
100.000
909.495
0
0
0
0
0
0
0
31.019
0
0
0
31.019
0
0
0
0
0
62.038
11.600
74.240
151.741
183.864
326.012
100.000
847.457
11.600
105.259
151.741
214.883
326.012
100.000
909.495
3-Nov-13 10-Feb-14 17-Nov-14 10-Feb-15 19-Nov-15 10-Feb-16 01-Apr-17
3-Nov-15 10-Feb-16 17-Nov-16 10-Feb-17 19-Nov-17 10-Feb-18 01-Apr-19
60
56%
86.0
94.6
60
33%
70.0
77.0
60
34%
45.70
50.27
60
44%
70.0
77.0
60
56%
86.0
113.3
60
39.3%
79.50
87.45
60
37.5%
69.0
75.9
not expected not expected not expected not expected not expected not expected not expected
Risk free interest rate
2.64%
3.09%
1.02%
0.37%
0.86%
0.66%
0.71%
* The volatility rate used is based on the actual volatility in the Zealand share price.
Notes
Programs granted in 2015:
DKK ’000
Number of warrants
Program
of 2010
Program
of 2015
25-Mar-15 5-May-15 5-May-15 5-May-15
Program
of 2010
Program
of 2015
Total
Outstanding as per 1 Jan. 2015
0
0
0
0
0
Granted during the year
100.000
46.359
100.000
366.250
612.609
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding as per
31 December 2015
Specified as follows:
Board of Directors
Executive management
0
0
0
0
0
0
0
0
0
-3.000
-3.000
0
0
0
0
100.000
46.359
100.000
363.250
609.609
0
0
0
0
0
0
0
100.000
75.000
175.000
Other employees
100.000
46.359
0
288.250
434.609
Total
100.000
46.359
100.000
363.250
609.609
Exercise period
From
until
Black & Scholes parameters
Term (months)
Volatility*
Share price
Exercise price DKK
25-Mar-18 5-May-18 5-May-16 5-May-18
25-Mar-20 5-May-20 5-May-20 5-May-20
60
41.9%
115.50
127.05
60
43.7%
92.0
101.2
60
43.7%
92.0
101.2
60
43.7%
92.0
101.2
Dividend
not expected not expected not expected not expected
Risk free interest rate
-0,21%
-0,10%
-0,10%
-0,10%
* The volatility rate used is based on the actual volatility in the Zealand share price.
Employee warrant programs
The 2010 employee warrant program
Employee warrant programs have been established, which
The program was established in 2010 for the Board of
have to be settled in the enterprise’s equity instruments, and
Directors, executive management, employees and consultants
are offered to a number of employees and the executive
of Zealand.
management. Incentive programs were offered in 2005, 2007,
2009-2015.
The Board of Directors is authorized to issue up to 2,750,000
warrants until 2 November 2015. The program has expired and
a total of 2,355,495 warrants have been granted. By December
31, 2015 1,159,722 warrants have been exercised and the total
proceeds amount to DKK 96.4 million. Per December 31, 2015
1,055,084 warrants can still be exercised.
70
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
The 2015 employee warrant program
Effect on income statement
The program was established in 2015 for the executive
In 2015 the fair value of warrants recognized in the income
management and employees of Zealand.
statement amounts to DKK 16.9 million (1.7) of which DKK 5.5
Note 22 – Financial and operational risks
The Board of Directors is authorized to issue up to 2,750,000
million (0.0) relates to the executive management. Further,
The goal of Zealand’s financial policy is to create a set of
to hedge against this Zealand intend to hold a similar portion
warrants until 20 April 2020. By December 31, 2015 2,283,750
costs for the warrant programs have been adjusted at the end
general guidelines for the financial risk management in order
of its cash position in USD.
warrants of the authorization have not yet been granted. Per
of the year by DKK 0.2 million (0.4) due to actual attrition rate.
to reduce the group’s sensitivity towards fluctuations in
December 31, 2015 463,250 warrants can be exercised.
exchange rates, interest rates, credit rating and liquidity.
By 31 December 2015 Zealand holds USD 48.0 million in cash,
DKK ’000
The amount is charged as:
Research and development expenses
Administrative expenses
Total
§
ACCOUNTING POLICIES
2015
2014
9.504
7.443
16.947
1.764
-90
1.674
The value of services received as consideration for granted
number of warrants that the employees are expected to obtain
warrants is measured at the fair value of the warrant. The fair
rights to. Subsequently, an adjustment is made for changes
value is determined at the grant date and is recognized in
in the estimate of the number of shares that the employees
the income statement as staff costs over the period in which
have obtained rights to so the total recognition is based on
the final right to the warrant is obtained. The contra entry
the actual number of shares that the employees have obtained
to this is recognized under equity. In connection with the
rights to. The fair value of the granted options is estimated by
initial recognition of the warrants, an estimate is made of the
application of the Black and Scholes pricing model.
Zealand’s financial policy has been endorsed by Zealand’s
audit committee and ultimately approved by Zealand’s Board
Interest rate risk
of Directors.
Zealand has the policy to avoid any financial instrument which
exposes the group to any unwanted financial risk. Zealand
Zealand is a biopharmaceutical company with revenues
does not speculate in the underlying trends in the basic
while the value of the royalty bond is USD 50.0 million.
consisting of royalties, up-front payments and milestones
economy.
received as part of Zealand’s partnering activities. Zealand
receives milestone payments from its current partners in USD
The royalty bond has a fixed interest rate of 9.375%.
and EUR and royalty payments in EUR.
Zealand is mainly exposed to research and development
deposits. During 2015, interest rates have been negative on
expenditures. In addition Zealand has an USD loan as well as a
bank deposits in DKK and EUR.
Zealand invests its free cash in fixed rate, time defined bank
significant cash position, as such Zealand is exposed to various
financial risks, which among other relate to foreign exchange
Credit risks
rate risk, interest rate risk, credit risk and liquidity risk.
Zealand is exposed to credit risks in respect of receivables
Exchange rate risk
and bank balances. The maximum credit risk corresponds to
the carrying amount. Management believes that credit risk is
Most of Zealand’s financial transactions are made in DKK, USD
limited as counter parties to the accounts receivables are large
and EUR.
global pharmaceutical companies.
The EUR/DKK exchange rate has politically been fixed within
Cash is not deemed to be subject to any credit risks, as the
very narrow limits and Zealand has evaluated that there are
counterparts are banks with investment grade ratings. (i.e
no transaction exposure or exchange rate risk regarding
BBB- or higher by Standard&Poors).
transactions in EUR. Although there has been some pressure
on the DKK, Zealand does not expect the EUR/DKK exchange
Liquidity risk
rate to be changed.
The purpose of Zealand’s cash management is to ensure
that the group at all times has sufficient and flexible financial
Zealand’s milestone payments have been agreed in foreign
resources at its disposal.
currency, USD and EUR. However, as milestone payments
are unpredictable in terms of timing, the payments are not
Zealand’s short-term liquidity situation is matched with
included in the basic exchange risk evaluation.
Zealand’s quarterly budget revisions to balance the demand
for liquidity and maximize Zealand’s interest income by
As Zealand from time to time conduct clinical trials and
matching Zealand’s free cash in fixed rate, time defined bank
toxicology studies in the US, Zealand will be exposed to
deposits with Zealand’s expected future cash burn.
the exchange rate fluctuation and risks associated with
transactions in USD. Zealand’s policy has up until now been
Capital structure
to manage the transaction and translation risk associated
It is Zealand’s aim to have an adequate capital structure in
with the USD passively, placing the revenues received from
relation to the underlying operating results and R&D projects,
milestone payments in USD on an USD account for future
so that it is always possible to provide sufficient capital to
payment of Zealand’s expenses denominated in USD, covering
support operations and its long term growth targets.
payments for the next 12 – 24 months, hereby matching
Zealand’s assets with its liabilities.
In December 2014, Zealand issued a royalty bond of USD 50
million and created a large exposure against the USD. In order
The Board of Directors finds that the current capital and share
structure is appropriate to the shareholders and to the group.
72
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
USD
Interest rate
Notes
2015
Fluctuation
2015
2014
Effect Fluctuation
2014
Effect
We expect interest payment next year of DKK 40 million on the royalty bond (interest rate 9.375%).
See the cash flow statement for a specification of capital resources as of 31 December 2015 and 2014.
+/- 10%
6,574
+/- 10%
10,399
Fair value measurement of financial instruments
+/- 100
4,735
+/- 100
3,074
The fair value of the royalty bond is based on amortized costs.
basis point
basis point
In 2015 and 2014 there are no financial instruments carried at fair value.
The fair value of the royalty bond disclosed in the note is based on Level 3 in the fair value hierarchy.
The table shows the effect on the profit/loss and equity of probable changes in the financial variables on the statement of
financial position.
Liquidity risk
A breakdown of the group and parent company’s aggregate liquidity risk on financial assets and liabilities is given below:
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
Categories of financial instruments
0
0
0
0
Trade receivables
Receivable from subsidiaries
Tax receivable0
Other recivables
Prepaid expenses
Cash restricted 30,797
Cash and cash equivalents
Loans and receivables
Royalty bond
Trade payables
Prepayment from customers
Other liabilities
141,120
25,031
0
5,875
26,113
2,262
21,403
418,796
615,569
0
6,250
3,673
2,209
221,424
516,849
575,436
312,951
272,170
21,676
2,091
45,739
18,487
14,383
38,888
Financial liabilities measured at amortized cost
382,457
343,928
313
3,549
5,875
10,627
2,242
0
12,843
11,727
6,250
2,694
2,209
0
140,783
255,335
163,389
291,058
0
21,580
2,063
17,421
41,064
0
18,487
14,383
35,651
68,521
DKK ’000
Group
At amortized cost
Trade and other creditors
Royalty bond
Other liabilities
Total financial liabilities at 31 December 2014
At amortized cost
Trade and other creditors
Royalty bond
Interests, royalty bond
Other liabilities
Total financial liabilities at 31 December 2015
DKK ’000
Parent
At amortized cost
Trade and other creditors
Other liabilities
Total financial liabilities at 31 December 2014
At amortized cost
Trade and other creditors
Other liabilities
Total financial liabilities at 31 December 2015
<6
months
6<12
months
1-5
years
Carrying
amount/
Total* Fair value**
18,487
0
0
0
5,000
267,170
0
0
18,487
272,170
38,888
18,487
272,170
38,888
38,888
57,375
21,676
0
0
45,739
67,415
5,000
267,170
329,545
329,545
0
0
0
21,676
21,676
341,486
341,486
341,486
32,000
76,000
108,000
108,000
0
0
45,739
45,739
32,000
417,486
516,901
516,901
<6
months
6<12
months
1-5
years
Carrying
amount/
Total* Fair value**
18,487
35,651
54,138
21,580
17,421
39,001
0
0
0
0
0
0
0
0
0
0
0
0
18,487
35,651
54,138
21,580
17,421
39,001
18,487
35,651
54,138
21,580
17,4211
39,001
* All cash flows are non-discounted and include all liabilities under contracts.
** The fair value of financial liabilities is determined as the discounted cash flows based on the market rates and credit conditions at the balance
sheet date.
Interests on royalty bond is calculated on basis of the fixed interest rate 9.375% and the expected payback time.
74
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Notes
Notes
Note 23 – Related parties
Note 25 – Change in working capital
SPV K/S. ZP Holding SPV K/S has then sold and contributed
Zealand has receivables from group companies of DKK 3.6
Other assurance engagements
Zealand has no related parties with controlling interest.
lixisenatide as stand-alone product and certain milestones to a
second 100% owned subsidiary, ZP SPV 1 K/S. No gain has been
Zealand’s related parties with significant influence comprise of
recognized in the separate financial statements of Zealand
the company’s Board of Directors and senior management.
and costs of the subsidiaries are the carrying amount of the
Transactions with related parties
assets contributed to the subsidiaries, i.e. the nominal value of
cash contribution and nil with respect of the contribution of
Compensation to the Board of Directors and senior
the intellectual property as the intellectual property was not
management is described in note 21.
recognized in the financial statements of Zealand before the
No further transactions with related parties were conducted
transactions.
during the year. In 2014, transactions with the Board of
ZP SPV 1 K/S has then issued a royalty bond against these
Directors for consultancy fee amounted to DKK 0.7 million.
assets. The purpose of this structure is to make the royalty
bond non-recourse to Zealand and at the same time protect
Zealand has in 2014, contributed all IP and rights relating to the
the bond investors from a parent company bankruptcy.
agreement with Sanofi to its fully owned subsidiary ZP Holding
rights to 86.5% of the future annual royalties relating to
(11.7) million at year end.
Ownership
The following shareholders are registered in Zealand’s register of shareholders as being the owners of minimum 5% of the voting
rights or minimum 5% of the share capital (1 share equals 1 vote):
Sunstone BI Funds and Life Science Ventures Fund, Copenhagen, Denmark
LD Pension (Lønmodtagernes Dyrtidsfond), Copenhagen, Denmark
Legg Mason (Royce) Inc., Maryland, US
Note 24– Adjustments
DKK ’000
Depreciation
Warrants compensation expenses
Financial income
Financial expenses
Exchange rate adjustments
Total adjustments
Group 2015 Group 2014
Parent 2015 Parent 2014
6,215
16,947
-3,889
42,394
-18,114
43,553
5,932
1,674
-3,064
2,017
000000
66,559
6,215
16,947
-1,444
306
-1,310
20,714
5,932
1,674
-3,064
64
0
4,606
DKK ’000
Group 2015 Group 2014
Parent 2015 Parent 2014
Change in receivables
Increase in payables
Change in working capital
-215,594
-25,467
6,631
-24,027
76,723
-138,871
40,988
15,521
-27,458
-20,827
37,749
13,722
Note 26 – Fees to auditors appointed
at the Annual General Meeting
DKK ’000
Audit
Tax advice
Non-audit services
Total fees
2015
2014
315
30
104
29
478
400
61
818
677
1,956
Note 27 – Significant events after the balance sheet date
No events have occurred after the balance sheet date of importance to the consolidated financial statements.
76
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
04_Statements
Our business
Our portfolio
Corporate matters
Financial statements
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Statements
Statement of the Board of Directors
and executive management
Independent
auditors report
Today the Board of Directors and executive management have
In our opinion the management’s review includes a fair review
discussed and approved the Annual Report of Zealand Pharma
about the development of the Group and Parent’s operations
A/S for the financial year 1 January – 31 December 2015.
and economical conditions, the results for the year and the
Group and Parent’s financial position as well as a review of the
The consolidated financial statements and parent financial
more significant risks and uncertainty the Group and Parent
statements have been prepared in accordance with
faces, in accordance with the Danish disclosure requirements
International Financial Reporting Standards as adopted by the
for listed companies.
EU and Danish disclosure requirements for listed companies.
To the shareholders of Zealand Pharma A/S
Report on the consolidated
financial statements and parent
financial statements
statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also
We have audited the consolidated financial statements and
includes evaluating the appropriateness of accounting
We recommend that the Annual Report be approved at the
parent financial statements of Zealand Pharma A/S for the
policies used and the reasonableness of accounting estimates
We consider the accounting policies used to be appropriate.
Annual General Meeting.
In our opinion the financial statements give a true and fair
view of the Group and the Parent’s financial position as of
Glostrup, 16 March 2016
31 December 2015 and of the results of the Group and Parents
operations and cash flows for the financial year 1 January –
31 December 2015.
Executive management
Britt Meelby Jensen
President and
Chief Executive Officer
Mats Blom
Senior Vice President and
Chief Financial Officer
Board of Directors
Martin Nicklasson
Chairman
Rosemary Crane
Vice Chairman
Catherine Moukheibir
Board member
Alain Munoz
Board member
Peter Benson
Board member
Michael J. Owen
Board member
Christian Thorkildsen
Board member
Employee elected
Helle Størum
Board member
Employee elected
Jens Peter Stenvang
Board member
Employee elected
financial year 1 January – 31 December 2015, which comprise
made by management, as well as the overall presentation of
the income statement, statement of comprehensive income,
the consolidated financial statements and parent financial
statement of financial position, statement of changes
statements.
in equity, cash flow statement and notes, including the
accounting policies, for the Group as well as for the Parent.
We believe that the audit evidence we have obtained is
The consolidated financial statements and parent financial
sufficient and appropriate to provide a basis for our audit
statements are prepared in accordance with International
opinion.
Financial Reporting Standards as adopted by the EU and
Danish disclosure requirements for listed companies.
Our audit has not resulted in any qualification.
Management’s responsibility for the consolidated
Opinion
financial statements and parent financial statements
In our opinion, the consolidated financial statements and
Management is responsible for the preparation of consolidated
parent financial statements give a true and fair view of the
financial statements and parent financial statements that
Group’s and the Parent’s financial position at 31 December
give a true and fair view in accordance with International
2015, and of the results of their operations and cash flows for
Financial Reporting Standards as adopted by the EU and Danish
the financial year 1 January - 31 December 2015 in accordance
disclosure requirements for listed companies and for such
with International Financial Reporting Standards as adopted
internal control as management determines is necessary to
by the EU and Danish disclosure requirements for listed
enable the preparation and fair presentation of consolidated
companies.
financial statements and parent financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on the consolidated
Statement on the management
commentary
Pursuant to the Danish Financial Statements Act, we have read
financial statements and parent financial statements based
the management commentary. We have not performed any
on our audit. We conducted our audit in accordance
further procedures in addition to the audit of the consolidated
with International Standards on Auditing and additional
financial statements and parent financial statements.
requirements under Danish audit regulation. This requires that
we comply with ethical requirements and plan and perform
On this basis, it is our opinion that the information provided
the audit to obtain reasonable assurance about whether
in the management commentary is consistent with the
the consolidated financial statements and parent financial
consolidated financial statements and parent financial
statements are free from material misstatement.
statements.
An audit involves performing procedures to obtain audit
Copenhagen, 16 March 2016
evidence about the amounts and disclosures in the
consolidated financial statements and parent financial
Deloitte
statements. The procedures selected depend on the
Statsautoriseret Revisionspartnerselskab
auditor’s judgement, including the assessment of the risks
CVR no.: 33 96 35 56
of material misstatements of the consolidated financial
statements and parent financial statements, whether due to
fraud or error. In making those risk assessments, the auditor
Martin Faarborg
considers internal control relevant to the entity’s preparation
State Authorised
of consolidated financial statements and parent financial
Public Accountant
Flemming Larsen
State Authorised
Public Accountant
78
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statementsZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
Our business
Our portfolio
Corporate matters
Financial statements
Company
information
Zealand Pharma A/S
Smedeland 36
DK-2600 Glostrup
Denmark
Tel: +45 88 77 36 00
Fax: +45 88 77 38 98
info@zealandpharma.com
www.zealandpharma.com
CVR no.: 20 04 50 78
Established
1 April 1997
Registered office
Albertslund
Auditors
Deloitte
Statsautoriseret Revisionspartnerselskab
CVR no.: 33 96 35 56
Design and production: In-Mind Design
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ZEALAND PHARMA A/S ANNUAL REPORT 2015Financial statements
ANNUAL
REPORT
2015
Zealand Pharma A/S
Smedeland 36
2600 Glostrup (Copenhagen)
Denmark
Tel +45 88 77 36 00
www.zealandpharma.com
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