Annual Report • Mar 16, 2016
Annual Report
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Zealand Pharma A/S
| 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 | 10 | |
| Key Performance Indicators | 11 |
| Portfolio overview | 14 |
|---|---|
| 2015 achievements | 16 |
| 2016 achievements and news outlook | 17 |
| Out-licensed portfolio | 18 |
| Proprietary pipeline | 24 |
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.
| Board of Directors and senior management | 34 |
|---|---|
| Risk management and internal control | 38 |
| Corporate Governance, Corporate Social Responsibility and Human Resources |
41 |
| Shareholder information | 44 |
| Financial review | 48 |
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).
| Financial statements | 50 |
|---|---|
| Notes | 55 |
| Statements | 78 |
| Company information | 80 |
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.
– Progress on all fronts
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
Lixisenatide (Type 2 diabetes):
glargine (Type 2 diabetes) ∞ Successfully completed
ZP4207 (acute, severe hypoglycemia):
∞ A new lead drug candidate advanced into preclinical development under each of two collaborations
∞ Completed Phase II Proof-of-Concept trial, unfortunately with negative results
Expansion of clinical competencies, including in-house regulatory, quality and medical expertise
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
2015 REVENUE DKKm 188
1
– Turning peptides into medicines
Peptides are naturally occurring biological molecules. Like proteins, they are made up of chains of amino acids, however typically shorter (2-50 amino acids long). In the human body alone, there is an estimated 7,000 native peptides, which are involved in many essential physiological functions. Due to their important roles, peptides represent a highly relevant basis for medicines. Peptides generally have high potency (strong biological effect at low concentrations) and strong selectivity (effect primarily on the intended biological target), which is of therapeutic relevance. Due to their smaller size, peptides also offer advantages over proteins in terms of therapeutic administration routes and cost of manufacturing.
The development of a new investigational medicine is a long, expensive and highly regulated process. Addressing patients' unmet medical needs is of high long-term value, when taking into consideration also that new medicines usually are protected by patents or data exclusivity for several years after launch. It takes on average 12–15 years from the identification of a new drug project idea to market launch of a new medicine. As a project successfully advances from design phase to selection of a lead investigational medicine candidate for preclinical development (laboratory and animal studies) and subsequently into and through the clinical development Phases I to III, its probability of success, 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.
With reference to the table below, on average one out of 10 investigational medicines advanced into clinical development will succeed all the way to the market.
| Development stage |
Clinical Phase I |
Clinical Phase II |
Clinical Phase III |
Under regulatory review |
|---|---|---|---|---|
| Market probability | 10% | 16% | 50% | 83% |
Source: Hay, M. et al. (2014): Clinical development success rates for investigational drugs, Nature biotechnology
Zealand has an established leading scientific expertise in the field of peptide-based medicines. Our in-house competencies include a deep understanding of peptide chemistry and functionality coupled with extensive experience applying structural design principles to develop novel medicines.
For each new project we apply our capabilities to identify novel peptides with optimal therapeutic profiles in terms of efficacy and safety as well as ensuring cost effectiveness and development of strong intellectual property (IP) protection. Our R&D organization is structured to progress a novel investigational peptide medicine effectively through preclinical development, including the establishment of 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 to include a strong clinical experience team including quality assurance and regulatory. Today, Zealand has the necessary in-house capacity to advance investigational medicines from idea to pre-clinical IND-enabling studies and through the clinical development Phases I to III.
Our therapeutic focus lies in specialty disease areas where peptide-based medicines have particular relevance and where the patient populations are easily identifiable and treated by specialists. In such areas, the complexity and size of the clinical development program will typically be manageable for Zealand to take the proprietary medicine all the way through registration.
Partnering activities (in-licensing, out-licensing, acquisitions and R&D collaborations) are becoming an increasingly essential component in the development of Zealand's portfolio. We collaborate with academia, pharma and biotech companies, but also with medical centers and 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.
regulatory filings. medicines based on Zealand peptides filed for
approval
finding). The number of patients enrolled depends on the disease indication.
marketed medicine
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.
| DKK '000 | Note | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|
| Income statement and comprehensive income | ||||||
| Revenue | 187,677 | 153,773 | 6,574 | 223,565 | 142,284 | |
| Royalty expenses | -22,267 | -13,776 | -872 | -15,933 | -112 | |
| Gross profit | 165,410 | 139,997 | 5,702 | 207,632 | 142,172 | |
| Research and development expenses | -214,959 | -180,036 | -164,467 | -182,759 | -126,938 | |
| Administrative expenses | -44,606 | -39,826 | -34,155 | -27,611 | -34,905 | |
| Other operating income | 12,828 | 6,328 | 7,302 | 35,135 | 28,435 | |
| Operating result | -81,327 | -73,537 | -185,618 | 32,397 | 8,764 | |
| Net financial items | -38,505 | 1,047 | 1,942 | 3,975 | 4,613 | |
| Result from ordinary activities before tax | -119,832 | -72,490 | -183,676 | 36,372 | 13,377 | |
| Tax on ordinary activities | 1 | 5,875 | 7,500 | 0 | 0 | 0 |
| Net result | -113,957 | -64,990 | -183,676 | 36,372 | 13,377 | |
| Comprehensive income | -113,957 | -64,990 | -183,676 | 36,372 | 13,377 | |
| Earnings per share – basic (DKK) | -4.82 | -2.87 | -8.10 | 1.61 | 0.60 | |
| Earnings per share – diluted (DKK) | -4.82 | -2.87 | -8.10 | 1.60 | 0.60 | |
| Statement of financial position | ||||||
| Cash, cash restricted and cash equivalents | 440,199 | 538,273 | 286,178 | 358,922 | 278,342 | |
| Securities | 0 | 0 | 24,383 | 126,940 | 149,358 | |
| Total assets | 634,688 | 596,756 | 346,913 | 520,983 | 469,481 | |
| Share capital ('000 shares) | 24,353 | 23,193 | 23,193 | 23,193 | 23,193 | |
| Shareholders' equity | 252,231 | 252,828 | 316,141 | 491,015 | 441,397 | |
| Equity/assets ratio | 0.40 | 0.42 | 0.91 | 0.94 | 0.94 | |
| Royalty bond | 312,951 | 272,170 | 0 | 0 | 0 | |
| Cash flow | ||||||
| Depreciation | 6,215 | 5,932 | 5,911 | 5,319 | 4,129 | |
| Change in working capital | -138,871 | 15,521 | -3,643 | 13,782 | -30,943 | |
| Investments in fixed assets | -4,040 | -4,497 | -4,569 | -8,849 | -11,475 | |
| Free cash flow | 2 | -221,373 | -46,680 | -174,187 | 59,688 | -13,281 |
| Other | ||||||
| Share price (DKK) | 151,50 | 83.00 | 59.00 | 84.00 | 57.00 | |
| Market capitalization (DKKm) | 3,689 | 1,925 | 1,368 | 1,948 | 1,322 | |
| Equity per share (DKK) | 3 | 10.60 | 11.17 | 13.97 | 21.70 | 19.51 |
| Average number of employees | 110 | 103 | 107 | 104 | 91 | |
| Products in clinical development (year end) | 4 | 6 | 5 | 6 | 7 | 6 |
| Products in registration phase (year end) | 5 | 2 | 0 | 0 | 0 | 0 |
| Medicines on the market | 1 | 1 | 1 | 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.
Zealand's revenue amounted to DKK 188 million in 2015, which was an increase of 22% over 2014.
The main revenue component was milestone payments of DKK 159 million, generated under the license collaborations with Sanofi and Boehringer Ingelheim. Milestone payments were up 19% compared to 2014.
Royalty revenue to Zealand from Sanofi's sales of Lyxumia® increased 41% in 2015 to DKK 29 million.
Total net operating expenses were DKK 247 million in 2015, up 16% compared to 2014. The increase was mainly driven by higher net research and development (R&D) expenses as a result of accelerated development activities. These included clinical Phase I and Ib single and multiple dose trials with ZP4207 (stable glucagon for hypoglycemia) and the preparation and advancement of ZP1848 (short bowel syndrome) into clinical Phase II development.
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 and LixiLan in Q3 2016 and potential subsequent commercial launches by Sanofi also in 2016, royalty payments on US sales 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.
Additional revenue of up to DKK 200 / EUR 27 million may be received from event driven partner related milestones.
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 development costs associated with the advancement of Zealand's proprietary clinical pipeline.
Operating loss before royalty income/expenses is therefore expected in a range of DKK 140-160 / EUR 19-21 million.
Martin Nicklasson, Chairman of the Board of Directors
In 2015 and into 2016, Zealand's business has advanced remarkably. I am very pleased to state that Zealand is in its strongest position ever.
The corporate objective of Zealand is to invent and provide new and better medicines with clear benefits to patients in areas of unmet medical need. Towards this end, we are determined to create a sustainable, innovative and profitable business with strong shareholder value. In order to support these objectives, we have in 2015 significantly enhanced the capabilities and competencies of our Board, installed a new dynamic management team and launched a strategy for accelerated value creation under the headline "From peptide to patient". I am confident that with these initiatives, we have the right foundation for Zealand to continue to succeed.
The fundamentals for the pharmaceutical/biotech industry remain solid with significant needs for new and better 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."
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.
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 international experience to effectively govern Zealand through 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 qualities to the company. Under her firm leadership, a new competent senior management team has been put in place as well as we have launched a new value creating business strategy.
The new strategy for accelerated value creation at Zealand has its foundation in both Zealand's achievements to date and its prospects for significant royalty revenue growth in the coming years. The aim of the strategy is to take select specialty peptide medicines all the way from design through development to registration. Thereby, we aim long term to retain the full value creation and control of our own products.
I am optimistic about Zealand's future opportunities and development prospects. 2015 was a transforming year, firmly setting the foundation for meeting our strategic goals.
I am convinced that Zealand has what it takes to remain 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
6
Zealand's corporate objective
– Building for accelerated value creation
2015 was an exciting and eventful year where our business considerably matured.
We had defined 2015 as a catalyst year for our company. Looking back, it became a catalyst year as we reached all the milestones defined and we delivered more than we had guided on. We have seen advancements for both our proprietary and out-licensed products, we have developed our organization and competencies, we have strengthened the Board and the senior management team, and we have launched our new ambitious strategy "From peptide to patient".
Entering 2016 there is no doubt that Zealand is in a stronger position than ever.
Over the years, Zealand has built both a proprietary and an out-licensed portfolio. Zealand fully owns and controls the proprietary pipeline, leaving us the potential of a significant share of future sales revenue. The out-licensed portfolio is resourced and financed by our partners, and it represents medicines with broad potential and a maturity stage, which can generate important milestone and royalty revenues in the years to come. In 2015, important progress was delivered for both parts of the portfolio.
For our proprietary pipeline, we reached the following milestones:
For our out-licensed portfolio, we also reached very important milestones:
Building on our current position of strength and the prospects of significant revenue growth from our portfolio of outlicensed products, we launched an ambitious growth strategy in November 2015. The new strategy sets the direction for accelerated value creation for Zealand, and it marks an important change of focus with regard to our proprietary portfolio and future playing field. We want to advance and expand our proprietary pipeline with the intention to take select proprietary medicines through to registration. We focus on specialty disease areas where peptides have high relevance, and advancement of new products will be based on both in-house and external innovation, maintaining a dynamic and agile organization. Engagement in strategic partnerships from early research to commercialization is a key element in the strategy as well as we will consider potential asset acquisitions if attractive opportunities appear.
Building on more than 17 years' leading-edge scientific expertise and today's strong in-house capabilities, we are excited about our journey to invent and bring new and better medicines to patients.
We have had a strong beginning of 2016. Dosing of patients was initiated in two Phase II trials with ZP4207 for better hypoglycemia management in diabetes and with ZP1848 for treatment of short bowel syndrome, respectively. For danegaptide, the readout of Phase II unfortunately showed no effect against cardiac reperfusion injuries.
As a key milestone in February, FDA accepted LixiLan for priority review, and we are now awaiting regulatory decisions on both lixisenatide and LixiLan this year in July and August, respectively. This leaves hope that two medicines based on a Zealand invention will be available for US diabetes patients in 2016 – with prospects of considerable revenue growth for our company in the years to come.
The increased level of late stage clinical development activities leads to higher operating expenses. This is reflected in our 2016 financial guidance and will be financed via our solid cash position and expected revenue growth from both milestone payments and royalties.
I am proud to conclude, that we have built a strong foundation and kicked-off a very exciting journey for accelerated growth and continued success. We have a strong scientific platform, a high-value portfolio of out-licensed products and a growing proprietary pipeline, which I am confident will create significant value for both patients and shareholders in the 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.
Britt Meelby Jensen President and Chief Executive Officer
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.
As a key element in our strategy, we will take a growing number of existing and new investigational medicines further in development ourselves – and in select specialty disease areas, all the way through registration and to launch for patients. By keeping the ownership of commercial rights to our products, we will retain the full value creation and control. For our out-licensed products, we generate milestone revenue and high-single to low-double digit percentages in sales royalties, which is vital to fund our growth strategy.
Over time proprietary medicines will provide higher revenue shares, determined by the go-to-market model.
We will build on over 17 years' experience in optimizing the therapeutic benefits of peptides and we focus on carefully selected specialty disease areas, where peptide-based medicines have high relevance. More specifically, we pay attention to four different parameters:
Zealand has an established and validated leadingedge expertise in design and development of peptide-based medicines. We continue to invest in enhancing and expanding our competencies, and combine internal scientific innovation with externally sourced projects to expand both our preclinical and early-stage clinical pipeline.
It is essential for our continued success that we maintain a dynamic and agile organization, to be able to act fast on new opportunities.
As we grow our pipeline, we will stepwise build critical competencies in-house and supplement these with external expertise.
We aim to grow the value of our proprietary pipeline while maintaining a dynamic and agile organizational model. We will increasingly engage in strategic partnerships and leverage strategic collaborations across the value chain, i.e. from early research to commercialization, with academia, biotech and pharma companies, as well as clinical centers and commercialization partners.
We have a couple of existing projects that are better suited for out-licensing, but overall, the past focus on pure out-licensing will be reduced as the proprietary portfolio of specialty medicines grows.
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.
There were substantial advancements in both the out-licensed and proprietary portfolio (the latter covered below), with successful progress to the next phase on four of the five out-licensed projects:
During 2015, the proprietary portfolio was expanded with two new medicines in clinical development:
During 2015, the company strategy was redefined with increasing focus on growing our proprietary pipeline. As a consequence, it was decided not to extend the research collaboration with Eli Lilly and instead allocate the related R&D resources to the proprietary preclinical specialty disease activities.
On 1 December 2015, a new Chief Business Officer with broad international experience was appointed to drive Zealand's strategic partnership activities.
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 milestone payments from Sanofi and Boehringer Ingelheim, which financed a considerable part of our operational costs and helped to retain a solid financial position.
The objective is to advance at least two existing proprietary products to the next development phase during 2016 and to expand the proprietary pipeline with at least one new specialty drug candidate; either invented internally or externally sourced.
The objective is to:
In alignment with the updated strategy, Zealand will engage in strategic collaborations across the value chain to increase and accelerate pipeline value creation.
The aim is to secure growing revenue for Zealand, from milestone payments and royalty payments on global sales while retaining a strong cash position.
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 | 16 |
| 2016 achievements and news outlook | 17 |
| Out-licensed portfolio | 18 |
| Proprietary pipeline | 24 |
Photo features Zealand employee: Jens, industrial PhD student in Pharmaceutical Development, working in one of Zealand's laboratories.
Five products and projects are under license collaborations: Two with Sanofi, one with Helsinn and two with Boehringer Ingelheim. These include one medicine on the market outside the US, two investigational medicines under US regulatory review, one in clinical development, and two preclinical projects. For all products under license collaborations, Zealand has no financial 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 royalties.
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.
We have a growing number of novel proprietary investigational medicines in development, which all stem from our profound expertise in peptide therapeutics. It is our strategic focus to continue to expand and advance our proprietary pipeline targeting unmet medical needs in specialty disease areas.
We have four products in clinical development and several preclinical projects.
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.
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.
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.
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.
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.
| 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 | 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 |
|
| Fixed-ratio combination of lixisenatide and insulin glargine (Lantus®) – Sanofi |
H2 | 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 |
| Elsiglutide – Helsinn |
H1 | 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 |
| 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. |
| Danegaptide | H2 | Completion of enrollment (585 patients with an acute myocardial infarction (STEMI)) in Phase II Proof-of-Concept trial |
|---|---|---|
| ZP4207 Single-dose |
H1 | Positive results from Phase I trial |
| ZP1848 | H2 | Advancement of ZP1848, a novel long-acting GLP-2 analogue, into clinical Phase II development for short bowel syndrome |
| ZP4207 Multiple-dose |
H1 | Advancement into clinical Phase Ib multiple ascending dose trial backed by a DKK 12 / USD 1.8 million grant from Helmsley Charitable Trust |
| H2 | Positive results from the Phase Ib trial, showing ZP4207 to be safe and well tolerated after multiple dosing |
|
| ZP2929 | H2 | Completion of additional supportive preclinical studies |
| Preclinical proprietary projects |
H1 | 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 |
| H1 | New management team and enhancement of international Board competencies |
|---|---|
| H2 | Presentation of growth strategy, labelled "From peptide to patient" for accelerated value creation |
| Appointment of new Chief Business Officer |
| Lixisenatide (Lyxumia®) – Sanofi |
H1 • Quarterly royalty reports and status updates |
|---|---|
| H2 • Quarterly royalty reports and status updates |
|
| • US regulatory decision by the FDA (July) |
|
| Fixed-ratio | H1 FDA acceptance of Sanofi's New Drug Application for priority review in the US |
| combination of lixisenatide and |
• Submission for regulatory approval in Europe (by Sanofi) |
| insulin glargine | • Presentation of results from the two Phase III trials, LixiLan-O and LixiLan-L, at a medical conference |
| (Lantus®) | |
| – Sanofi | H2 • US regulatory decision by the FDA (August) |
| Elsiglutide – Helsinn |
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 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 |
| Danegaptide | H1 | Results from Phase II Proof-of-Concept trial |
|---|---|---|
| ZP4207 Single-dose | H1 | Initiation and dosing of the first patients with Type 1 diabetes in clinical Phase II trial |
| 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 |
|
| 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 |
| ZP2929 | H1 | • | Decision on next clinical step – engagement with the FDA |
|---|---|---|---|
| Preclinical proprietary projects |
H1 | • | 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 |
| H1 | Appointment of new Chief Science Officer |
|---|---|
| ---- | ------------------------------------------ |
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 | 19 |
|---|---|
| Elsiglutide – Helsinn | 22 |
| Two preclinial projects – Boehringer Ingelheim | 23 |
Photo features Zealand employee: Jens from Business Development working on both in-licensing and out-licensing opportunities.
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 is a metabolic disorder with hyperglycemia (high blood sugar levels) resulting from inadequate insulin secretion or insulin resistance. It is the most common form of diabetes as it represents 90% of all cases. It is estimated that over 500 million people worldwide are affected by diabetes, with management costs exceeding USD 600 billion annually.
Key to effective management of Type 2 diabetes is to control hyperglycemia. Diabetes is associated with a significantly increased risk of heart disease and stroke, limb amputations, blindness and kidney failure – and is projected to be the 7th leading cause of death in 2030.
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 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
Global rights licensed to Sanofi
The US market represents ~70% of the total market for GLP-1 medicines. With US regulatory decisions on both lixisenatide and the lixisenatide/Lantus® combination product expected in 2016, royalty revenue is projected to increase significantly.
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 doubledigit percentage on sales of LixiLan and any other combination including lixisenatide.
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 glucose. With this profile, lixisenatide has particular therapeutic relevance as an add-on treatment to basal insulin for better glucose management.
Lixisenatide is administered as a once-daily injection. For the first two weeks after initiation of treatment with 10 mgr. per day, thereafter with a maintenance dose of 20 mgr. per day.
Top-line results from ELIXA, a Cardiovascular Safety Outcome Trial, have demonstrated lixisenatide to be safe versus placebo on all cardiovascular safety parameters in a high-risk population of more than 6,000 adults with Type 2 diabetes.
In a Phase IIIb trial, lixisenatide has shown to have a similar effect on glucose reduction with advantages on body weight compared to rapid-acting insulin, when added to basal insulin for treatment intensification in patients with Type 2 diabetes.
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 recommenated. 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.
Lyxumia® is the trademark approved for lixisenatide outside the US. In the US, no trademark has yet been approved.
20
Preclinical Phase I Phase II Phase III Under regulatory review
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.
Enrollment: 1,170 patients with Type 2 diabetes insufficiently controlled on oral medication (OAD).
Results: LixiLan met the primary efficacy endpoint of showing a statistically superior lowering of average blood glucose (HbA1c) compared with lixisenatide, and compared with insulin glargine (Lantus®) in Type 2 diabetes patients treated with metformin.
Relevant Type 2 diabetes populations to target: In the US, ~5.5 million are not well controlled on OADs*
Enrollment: 736 patients with Type 2 diabetes insufficiently controlled on basal insulin (insulin glargine (Lantus®)).
Results: LixiLan met the primary efficacy endpoint of showing a statistically superior lowering of average blood glucose (HbA1c) in Type 2 diabetes patients insufficiently controlled with insulin glargine (Lantus®) alone with or without metformin.
* Source: 2017 projections based on model from Adelphi
Preclinical Phase I Phase II
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.
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:
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
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.
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.
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.
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
22
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.
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.
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 cocommercialization rights in the Scandinavian countries.
• Advancement towards clinical Phase I development
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 cardiometabolic 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.
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
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 | 25 |
|---|---|
| – Rescue treatment | 26 |
| – Component in an artificial pancreas device | 27 |
| ZP1848 – Short bowel syndrome (SBS) | 28 |
| ZP2929 – Diabetes and/or obesity | 30 |
| Preclinical proprietary projects | 31 |
Photo features Zealand employee: Anne from Clinical Development working on the Phase II trial of ZP4207
ZEALAND PHARMA A/S ANNUAL REPORT 2015 Management review
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 is a condition where blood glucose (sugar) levels drop to low levels. It is most frequently associated with diabetes and primarily in patients on insulin therapy only. Type-1 diabetes patients are the most likely to experience episodes of hypoglycemia since they inject themselves with insulin several times per day or use an insulin pump. Diabetes patients on insulin can experience episodes of low blood sugar levels with varying frequency and severity.
Symptoms include anxiety, sweating, tremors, palpitations, nausea and pallor. In severe cases, hypoglycemia can lead to loss of consciousness, seizures and coma, and in some cases death.
Sources: 1 www.diabetesselfmanagement.com/diabetes-resources/tools-tech/insulin-pumps; 2 Decision Resource, 2012.
Glucagon is a native peptide, which plays an important role in the control of blood sugar levels. The effects of glucagon are opposite to those of insulin – it helps to release stored glucose into the blood stream to
increase blood sugar levels. The therapeutic use of native glucagon in cases of hypoglycemia is challenging due to the peptide's low solubility and very poor stability in liquid solution.
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.
A liquid glucagon, which is readily available for use can provide patients and relatives with a much more
convenient product, than what is currently available. In cases of an acute, severe hypoglycemia event, this may lead to a faster treatment.
An artificial pancreas device could significantly improve glucose control. An artificial pancreas in the form of a dualhormone (insulin + glucagon) pump has the potential to significantly improve glucose
108 SENSOR
For illustration only
control in diabetes. ZP4207 as the most advanced glucagon available for liquid formulation could provide basis for important advancements in the field.
Zealand is developing its novel, stable glucagon analogue, ZP4207, as a single-dose rescue treatment for acute, severe hypoglycemia. ZP4207 is well suited for liquid formulation and has potential to be offered as a ready-to-use rescue medication to provide diabetes patients and caregivers a more convenient and faster treatment.
Zealand has evaluated ZP4207 in a single-dose Phase I two-part trial comparing ZP4207 to a marketed glucagon. In the trial: 64 healthy volunteers and 20 patients with Type 1 diabetes were enrolled. They were treated with single ascending doses of 0.01 mg to 2.0 mg.
Results showed that ZP4207 is safe and well-tolerated across all doses evaluated. Furthermore, blood glucose levels were increased as expected across a broad dose range. In addition, ZP4207 showed the expected effects in raising blood glucose levels after insulin induced hypoglycemia in Type 1 diabetes patients, similar to the effects of marketed glucagon.
In February 2016, Zealand dosed the first patients in a Phase II trial.
The Phase II trial is a single-center, randomized, double-blind trial, which will enroll 56 patients with Type 1 diabetes. The primary trial objective is to evaluate the pharmacokinetics and pharmacodynamics of ZP4207 to be able to fully compare its
effect to that of a marketed native glucagon product. Patients in the trial will be randomized to one of four groups and four different single doses of ZP4207 administered subcutaneously after an insulin-induced hypoglycemia event. In the lowest dose group, a parallel design is applied, and in dosing groups 2-4, patients will be dosed with both ZP4207 and a marketed glucagon in a crossover design.
For further details on the Phase II trial, see: ClinicalTrials.gov – Identifier: NCT02660008.
Current glucagon treatments are solely available in the form of a lyophilized powder, which requires reconstitution with sterile water in a multi-step process before use. In the case of an acute, severe hypoglycemia event, this can lead to handling errors, delayed administration of glucagon and results in sub-optimal treatment.
Due to the complexity of the current glucagon rescue kits many patients do not have a rescue kit with them at all times even though this is recommended by the ADA.
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
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
Preclinical Phase I
In preparation for next clinical Phase
The properties of ZP4207 indicate its relevance for multiple-dose use as a more general treatment to better manage low blood sugar levels, reducing the risk of hypoglycemia in patients with diabetes who are treated with insulin. This could translate into an 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.
ZP4207 has been evaluated in a Phase Ib trial. Results have demonstrated that ZP4207 is safe and well-tolerated with the ability to provide a clinically relevant blood glucose response after repeat daily dosing in healthy volunteers.
The Phase Ib clinical trial with ZP4207 was a randomized, double blind and placebo-controlled study to evaluate primarily the safety and tolerability of the compound after multiple dosing. Secondary endpoints measured the pharmacokinetics and pharmacodynamics (blood sugar levels) of ZP4207 after multiple dosing. The trial was conducted at a clinical diabetes center in Germany and is planned to enroll 24 healthy volunteers, who will receive three different cohorts of daily doses of ZP4207, each over five days.
For further information on the Phase Ib trial, see: Clinical Trials.gov Identifier: NCT02390141
Currently, patients with Type 1 diabetes manually measure levels of glucose in their blood by either using the traditional method of pricking one's finger, or by using a continuous glucose monitor (CGM). Based on these measurements, they must adjust glucose levels by taking multiple injections of insulin daily or by continually infusing insulin with a pump via needles placed under the skin. This requires diligence and a tremendous amount of manual effort by the user.
By automating detection of blood sugar levels and delivery of insulin in response to those levels, an artificial pancreas has the potential to transform the lives of people with type 1 diabetes. Zealand is part of the Artificial Pancreas Project driven forward by JDRF (Juvenile Diabetes Research Foundation).
Professor, MD, Ph.D Kirsten Nørgaard, University Hospital of Hvidovre:
"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."
• H2: Advancement into the next clinical Phase to explore the use of ZP4207 in a dual-hormone artificial pancreas system.
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.
Healthy person Patient with short bowel syndrome
Depending on the severity of the disease the following treatment options for patients with SBS are available:
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 (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.
Patient with short bowels syndrome:
"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."
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 on parenteral nutrition.
In preclinical studies, ZP1848 has shown efficacy on small intestine growth and demonstrated the physico-chemical properties of a long-acting, stable and soluble peptide therapeutic with the potential for convenient administration in liquid formulation.
Zealand has also investigated ZP1848 in a combined single (SAD) and multiple (MAD) ascending dose Phase I trial. Results from this trial demonstrated that ZP1848 is safe and welltolerated with a supportive effect on bowel function.
In February 2016, Zealand dosed the first patients in the Phase II Proof-of-Concept trial with ZP1848. It is a randomized, doubleblind, dose-finding trial to investigate the clinical efficacy and safety of the compound in the treatment of SBS. The trial is conducted at the world-leading gastrointestinal center at the University Hospital of Copenhagen (Rigshospitalet), Denmark, and will enroll 18 patients with SBS.
The primary objective of the trial is to assess the effect of 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
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."
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.
ZP2929 acts with high potency on both the glucagon and the GLP-1 (glucagon-like peptide-1) receptors. In preclinical studies, ZP2929 has shown the ability to improve glycemic control while causing a significant and sustained weight loss.
HbA1c (%) Relative to day 0
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.
• H1: Submission of additional preclinical data to the FDA.
Photo features Zealand employee: Kennet from Molecular Pharmacology working in one of Zealand's laboratories.
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.
ZP-I-98 is a novel GIP receptor agonist which in preclinical studies has shown an enhanced effect on the treatment of Type 2 diabetes when combined with a GLP-1 receptor agonist by inducing both robust glycemic control as well as a greater loss of body weight than seen with standalone treatments. ZP-1-98 has a long-acting profile, which indicates that it could be suitable for convenient once-weekly dosing.
The potent and selective GLP-1-GIP receptor dual agonist is a promising candidate for the treatment of Type 2 diabetes with superior body weight lowering effect compared to existing therapies. The in-vivo profile of the compound further suggests that ZP-DI-70 could be used as a convenient once-weekly treatment. The pharmacokinetic and pharmacodynamic preclinical results demonstrate the possibility of prolonging the activity of GLP1-GIP dual agonists, which builds on existing evidence from animal studies which suggests that the anti-obesity efficacy of GLP-1 can be enhanced by co-administration with the incretin hormone GIP.
In preclinical studies ZP3022 has been shown to increase ß cell mass and improve glycemic control in db/db mice and Zucker Diabetic Fatty (ZDF) rats. ZP3022 produces a unique gene expression response compared to exendin-4 given alone or in combination with gastrin17 and may have therapeutic potential in the prevention/delay of ß cell dysfunction.
GLP-2 receptor agonists promote intestinal barrier function and can thereby help to reduce inflammation, associated with obesity and diabetes. The hypothesis that by adding the effect of a GLP-2 receptor agonist to the established beneficial effects of a GLP-1 receptor agonist on glycemic control, may therefore represent a novel strategy for treating diabetes. A novel Zealand invented GLP-1/GLP-2 dual agonist, ZP-GG-72 has been evaluated for potency on GLP-1 and GLP-2 receptors with pharmacological effects investigated in DIO (Diet Induced Obese) mice versus teduglutide (a GLP-2 analogue) and exendin-4 (a GLP-1 analogue). Results have shown that treatment with ZP-GG-72 cause an increase in intestinal weight and improved glycemic control.
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 employees: Charlotte from Pharmacology and Nina from Medicinal Chemistry working together in Zealand's laboratories.
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 | 34 |
|---|---|
| Senior management | 36 |
| Risk management and internal control | 38 |
| Corporate Governance | 41 |
| Corporate Social Responsibility | 42 |
| Human Resources | 43 |
| Shareholder information | 44 |
| Financial review | 48 |
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.
Chairman of the Board Chairman of the Remuneration and Compensation Committee Chairman of the Nomination Committee
PhD in Pharmaceutical Technology
Broad-based executive experience from positions in European pharmaceutical and biotech companies.
Orexo AB, Farma Holding AS and Basilea Pharmaceutica Ltd.
Biocrine AB, PledPharma AB, Premier Research Group Ltd and the Swedish Heart-Lung Foundation.
Vice Chairman of the Board
BA in communication from the State University of New York, MBA from Kent State University
Business insight and commercial understanding of the US pharmaceutical market.
Teva Pharmaceuticals Industries Ltd., Oswego State University Business School (Advisory board), The Foundation Board of Oswego State University (Advisory board), The Transplant House Committee at University of Pennsylvania (Advisory board).
Board member Chairman of the Audit Committee
Qualifications MBA from Yale University
Extensive experience with European biotech business models, financial strategy and reporting.
Member of the executive board of: Innate Pharma S.A.
Creabilis Ltd. (chairman), Ablynx S.A., Cerenis Therapeutics Holding S.A. and Imperial College Business School (Advisory Board).
Board member/employee elected Project Director Christian Thorkildsen
Qualifications Cand.pharm. PMP
Board member/employee elected Director of Business Development Helle Størum
M.Sc. Business Administration Diploma in Basic Pharmaceutical Medicine
Board member/employee elected Senior Application Specialist Jens Peter Stenvang
Qualifications Degree in biology
Board member
Qualifications MD in Cardiology and Anesthesiology
Medical insight, substantial clinical and strategic experience in the field of pharmaceutical R&D.
Chairman of the Board of: Hybrigenics
Member of the Board of: Valneva SE and Oxthera AB.
Advisor to: Kurma Biofund
Board member
Qualifications MA in Business Economics
Managing partner in: Sunstone Capital
Member of the Board of Arcoma AB., Alligator Bioscience AB. and Opsona Therapeutics Ltd.
Board member Alain Munoz Peter Benson Michael J. Owen
Qualifications PhD in Biochemistry
Broad operational, drug discovery and clinical expertise from the international biotech and pharmaceutical industries.
Blink Biomedical SAS, Ossianix Inc., Avacta Group plc and ReNeuron Ltd. plc.
Kymab Ltd., Qure Invest SARL and CRT Pioneer Fund LP.
| Name | Year of birth |
Natio- nality |
First time election |
Position | ownership per 1 March 2016 (no. of shares) |
|---|---|---|---|---|---|
| Martin Nicklasson | 1955 | Swedish | 2015 | Chairman | - |
| Rosemary Crane | 1960 | American | 2015 | Vice Chairman | - |
| Catherine Moukheibir | 1959 | British | 2015 | Chairman of Audit Committee | - |
| Alain Munoz | 1949 | French | 2005* | Board member | 5,250 |
| Peter Benson | 1955 | Swedish | 2007 | Board member | - |
| Michael J Owen | 1951 | British | 2012 | Board member | - |
| Christian Thorkildsen | 1968 | Danish | 2006 | Employee elected** | 15,000 |
| Helle Størum | 1967 | Danish | 2008 | Employee elected** | 7,500 |
| Jens Peter Stenvang | 1954 | Danish | 2014 | Employee elected** | 1,000 |
Zealand
* Resigned in 2006 and was re-elected 2007
** Employee elected board members are elected for a period of four years
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 (Danish, born 1973) joined Zealand as CEO in January 2015. Prior to joining Zealand, she headed the world leading Agilent-owned Danish diagnostics company, Dako, as the company's CEO.
Britt has extensive experience from a range of managerial positions within the life science industry, including 11 years of international experience with Novo Nordisk. At Novo Nordisk, she held various global leadership positions, including head of Diabetes Marketing Nordic, Global Diabetes Lifecycle Management, prelaunch commercial projects and more recently Corporate Vice President for Global Marketing, Market Access and Commercial Excellence.
Previously, Britt has worked for McKinsey and Company and within the EU Institutions in Brussels. She has a M.Sc. from Copenhagen Business School, Denmark and an MBA from Solvay Business School in Brussels, Belgium.
Mats Blom (Swedish, born 1965) joined Zealand as CFO in March 2010. Prior to joining Zealand, Mats served as CFO at Swedish Orphan International a leading European orphan drug company.
Mats has extensive managerial experience and has held CFO positions at Active Biotech and Anoto both publicly listed on Nasdaq Stockholm. Previously, Mats worked for several years as a management consultant at Gemini Consulting and at Ernst & Young's Transaction Services division.
Mats holds a BA in Business Administration and Economics from the University of Lund followed by an MBA from IESE University of Navarra, Barcelona.
Mats is Chairman of the Board for Medical Need AB.
Ownership: 100,000 warrants
Senior Vice President, Chief Medical and Development Officer
Adam Steensberg (Danish, born 1974) joined Zealand in 2010 as Head of Clinical Development. Since 2011 he has been leading all development activities and was promoted to Senior Vice President and Chief Medical and Development Officer in March 2015.
Prior to joining Zealand, Adam led clinical research teams as medical director at Novo Nordisk A/S, and worked as clinician at the University hospital of Copenhagen. Adam has served as medical and scientific advisor within endocrinology, cardiology, gastroenterology, and rheumatology. He has significant experience with leading regulatory strategies and has been instrumental in implementing a patient-centric discovery and development process at Zealand. Adam has published more than 45 peer-reviewed scientific papers in international journals.
Adam holds a Doctor of medicine followed by a Doctor of Medical Sciences (DMSc/ dr.med) from the University of Copenhagen, Denmark and an MBA from IMD, Switzerland.
Ownership: 72,000 warrants / 11,500 shares
Hanne Leth Hillman (Danish, born 1965) joined Zealand as Vice President for IR and Communications in 2011 and was promoted to Senior Vice President in March 2015.
Prior to joining Zealand, Hanne served in positions with responsibility for Investor Relations, financial market relations and corporate communications at two other publicly listed biotech companies. She has more than ten years of broadbased experience from Life Science banking, having held senior positions in equity research, asset management and corporate finance.
Hanne holds an MBA in International Finance from the Aarhus University School of Business and has studied International Economics at the University of Montréal's Business School and at École Superieure de Commerce in Marseille, France. She is Co-Chairman of the Board in the Danish Investor Relations Association (DIRF).
Ownership: 62,000 warrants
Carlos de Sousa (Portuguese, born 1958) joined Zealand in December 2015 as Senior Vice President, and Chief Business Officer.
For the last 25 years, Carlos held numerous senior management positions in the international pharmaceutical and biotech industries, including roles at Nycomed/ Takeda, Pfizer, Novartis, BBB Therapeutics and Newron Pharmaceuticals. Throughout his career, Carlos has worked extensively with business development including in-licensing, partnering, mergers and acquisition, corporate leadership, strategy, marketing and medical affairs.
Carlos de Sousa is a Medical Doctor by training and holds an executive MBA from the Stern School of Business, New York.
Andrew Parker (1965, British) comes from a position as General Partner and Scientific Director for the Life Sciences Investment Fund Eclosion2 & Cie SCPC in Switzerland. In parallel, he has held the position as CEO for Arisgen SA (an Eclosion2 portfolio company developing an oral peptide drug delivery technology).
Andrew has more than twenty years of experience from senior leadership and managerial positions in international pharmaceutical, biotech and start-up companies, including several years with Shire Pharmaceuticals, Opsona Therapeutics, and AstraZeneca to mention a few.
He holds a Ph.D. from the National Institute for Medical Research at Mill Hill, London, conducted post-doctoral research at Johns Hopkins Medical School, Baltimore, USA, 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.
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 attempt to address and mitigate such risks. Environmental and ethical risks are covered in our Corporate Social Responsibility reporting.
Doing business in the pharmaceutical / biotech industry involves major financial risk. The development period for novel medicines typically stretches over many years; costs are high and the probability of reaching the market is relatively low due to developmental and regulatory hurdles.
| Risk related to | Risk description | Risk mitigation During the course of the research and development process Zealand regularly assesses these risks through a quarterly risk assessment of all the company's research and development projects conducted by Management in collaboration with the department 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. |
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|---|---|---|---|---|
| Research and development |
Research and development of new pharmaceutical medicines is by its nature a very risky activity. The probability of discovering and developing an efficient and safe new medicine with strong IP protection is very low. |
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| Commercial activities |
Commercial activities relates to market size, competition, development time and costs, partner interest and pricing. By having the first products on the market the risks relating to pricing, reimbursement and competition has increased. |
From early on in the research phase and all the way through development, commercial risks are assessed to make sure that final products are potentially commercially 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 |
Zealand's management is responsible for implementing adequate systems and policies on risk management and internal control and to assess the overall risks and specific risks associated with Zealand's business and operations. Furthermore, Zealand's management seeks to ensure that such risks are managed best possible in a responsible and efficient manner.
Risks of specific/particular importance to Zealand are scientific and development risks, commercial risks, intellectual property risks, partner interest risks, financial risks and risks relating to financial reportings. Risk and mitigation plans are monitored by Management and this continuous risk assessment is an integral part of the quarterly reporting to the Board of Directors.
| Risk related to | Risk description | Risk mitigation Zealand's internal patent department work in close collaboration with external patent councils and partners patent councils to minimize the risks of patent infringement claims as well as to prepare any patent defense should it be necessary. Zealand employees are educated and kept updated on policies regarding the proper and legal management of external intellectual property. |
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|---|---|---|---|---|
| Intellectual property |
If Zealand or its partners were to face infringement claims or challenges by third parties, an adverse outcome could subject Zealand or its partners to significant liabilities to such third parties. This could 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. |
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| Partner interest |
Entering into collaborations with partners can bring significant benefits but also potentially involves risks. In addition, full control of the products is often given over to the collaborator. |
In order to mitigate these risks, Zealand strives to foster a close and open dialogue with its partners, thereby building strong partnerships that work effectively. 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. |
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| Financial | Financial risks relate to cash and treasury management, liquidity forecasts and financing opportunities. |
The financial risks are managed in accordance with the Finance Policy and regularly assessed by the company's management and reported to the audit committee and the Board of Directors. See also page 77; Note 21 – Financial and operational risk. |
Zealand has a number of internal control and risk management systems in place to ensure that its financial statements provide a true and fair view and is in accordance with the International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies. On a yearly basis, an evaluation – with special emphasis on risk management and internal control related to the financial reporting – is done to ensure that risks are managed in a responsible and efficient manner.
Zealand has several policies and procedures in key areas of financial reporting. The internal control and risk management systems are designed to mitigate, detect and correct material misstatements rather than eliminate the risks identified in the financial reporting process.
A review and prioritization of material accounting items is also performed. Items in the financial statements that are based on estimates or that are generated through complex processes carry a relatively higher risk for error. Zealand performs continual risk assessments to identify such items and to assess the scope and related risk.
The Board of Directors approves policies and procedures and senior management has the daily responsibility. The Board of Directors has established an audit committee with an advisory role relative to the Board of Directors. The Board of Directors has concluded that it is not relevant to establish an internal audit function in Zealand, considering Zealand's legal structure, size and the fact that operations are carried out at one single site.
Zealand has management reporting and internal control systems in place that enables it to monitor performance, strategy, operations, business environment, organization, procedures, funding, risk and internal control. The company believes that the reporting and internal controls are adequate to avoid misstatements in the financial reporting.
A full description of the risk management and internal control system in relation to financial reporting is included in the statutory report on Corporate Governance, cf. section 107b of the Danish Financial Statements Act, which can be found on the company's website:
www.zealandpharma.com/investors/corporategovernance
Nasdaq Copenhagen has incorporated the Recommendations by the Danish Committee of Corporate Governance, and Zealand intends to meet these recommendations in all respects of material relevance to our company. As part of our Corporate Governance policy, we apply the "comply or explain" principle as recommended.
Zealand regularly reviews its rules, policies and practices related to the overall governance of our company with the purpose of ensuring that we meet our obligations to shareholders, employees, regulatory authorities and other stakeholders, while serving to maximize long-term value.
It is the view of management that Zealand complies with the recommendations set forward with two exceptions, which is highlighted and explained below:
Recommendations section 3.4.8: The remuneration committee will be using the same external advisors as the executive management, even if this is against the Corporate Governance
recommendations. The reason is that the Board of Directors' is of the conviction that the external advisors will provide professional and unbiased advice in both their capacities as advisers to the executive management and to the remuneration committee.
Recommendations section 4.1.4: The Committee recommends that if share-based remuneration is provided, such programs should be established as roll-over programs, i.e. the options are granted periodically and should have a maturity of at least three years from the date of allocation. Some of the warrants granted to executive management can be exercised in a period from one to five years after grant.
Zealand's statutory report on Corporate Governance, which has been prepared in accordance with the Danish Financial Statements Act, section 107b, is available in full at the company's website:
www.zealandpharma.com/investors/corporategovernance
Photo features Zealand employee: Mette from Medicinal Chemistry working in Zealand's laboratories.
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.
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:
We prioritize the well-being of our employees and it is our policy to actively ensure the physical and mental health and safety of all our employees.
Our quality policies comply with international recognized standards and guidelines in all stages of research and development.
Zealand's culture and policy is rooted in a respect of diversity and is fully compliant with Danish regulation regarding equal opportunity employment.
Zealand is committed to hiring and retaining the most qualified employees without regard to race, creed, gender or age, but strives for diversity throughout the organization with respect to age, nationality and gender. Moreover, Zealand aims to achieve a reasonable representation of both genders on all management levels – from Board of Directors to head of departments. We will encourage female candidates' interest in taking on managerial tasks.
Our split of female vs. male employees can be seen on page 43 in the table "key employee ratios".
The executive management has an even split of female and male representation in 2015 (2014: 0% female representation), whereas the senior management team constitutes 40% women end of 2015 (2014: 40%). When looking at the gender split for the head of departments, 41% were female end of 2015 (2014: 27%).
Furthermore, when looking at the members of the Board of Directors, we currently constitute 3 women and 6 men, of which 2 women and 4 men have been elected at the Annual General Meeting (AGM) 2015 (33% female representation). The target in 2014 was a minimum of 25% AGM elected female board members within 2 years. This target has been achieved by the election of Rosemary Crane and Catherine Moukheibir at the AGM in 2015.
Zealand has in accordance with the Danish Financial Statements Act, section 99a and 99b, prepared a statutory report on CSR, which can be found on the company's website: www.zealandpharma.com/investors/csr
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.
We are dedicated Courageous We speak our
and determined to excel our goals mind and dare to challenge
Ambitious We challenge ourselves everyday
We approach every new idea and opportunity in an open and receptive way
Empathetic
We care for our colleagues and the people we discover medicine for
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.
We work with developing our employees' competencies as knowledge and experience are the key to our success as a biotech company. We believe that an experienced management team and a talented pool of employees' with profound experience in the pharmaceutical and biotech industry and with diverse backgrounds is the best way to drive performance and innovative thinking.
We have an even distribution of female and male employees and approximately 19% of our employees are non-Danish. >80% of the employees work in R&D and 37 of our employees holds a PhD.
| 2015 | 2015 Male Female |
2014 | 2014 Male Female |
|
|---|---|---|---|---|
| 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% |
| Other employees | 46% | 54% | 40% | 60% |
| 2015 | 2014 | |
|---|---|---|
| Employees in R&D | 91 | 78 |
| Employees in administration | 21 | 19 |
| Average age of workforce | 46,1 | 45.0 |
| % of non-Danish employees | 19% | 22% |
| Employees holding a PhD | 37 | 34 |
| PhD students | 3 | 3 |
| Other trainees | 3 | 1 |
| FTE at the end of the year | 110 | 103 |
| Number of shares, end 2015 | 24,352.769 |
|---|---|
| Listing | Nasdaq Copenhagen |
| Ticker symbol | ZEAL.CO |
| Index membership | OMX Copenhagen Midcap |
As per 31 December 2015, Zealand's share capital had a nominal value of DKK 24,352,769 divided into 24,352,769 shares with a nominal value of DKK 1 each. The share capital has remained unchanged in 2016 (as per 15 March).
In 2015, the share capital was increased by a nominal value of DKK 1,159,722 as a result of the exercise of employee warrants.
All Zealand shares are ordinary shares, belonging to one class. Each share listed by name in Zealand's shareholder registry represents 1 vote at the Annual General Meeting and other shareholder assemblies.
The number of registered Zealand shareholders has more than doubled during 2015 and further increased into 2016. From 4,549 registered shareholders on 31 December 2014, the number has grown to 9,689 on 31 December 2015,
representing an increase of 112%. In February, we crossed a milestone, when the number of shareholders passed 10,000.
On 1 March 2016, Zealand had 10,720 registered shareholders, representing a total of 21,917,836 shares or 90% of the total outstanding share capital of the company.
Of Zealand's share capital, 60% is held by Danish investors. Hereof, the two largest shareholders, Sunstone Capital and LD, represent combined 34% and retail investors about 19%. Of registered non-Danish shareholders, 15% are US-based and another 15% are European, with France and the UK representing the largest holdings.
Through 2015, there has been a slight shift in ownership from Denmark to Europe.
Of the 10% of non-registered shareholdings, about half is estimated to be held by US institutional shareholders and another half by non-Danish European institutional shareholders.
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
In 2015, Zealand's share price increased 83%, closing at DKK 151.50 on 30 December 2015 compared to a closing price of DKK 83 at the end of 2014. With this increase, Zealand shares significantly outperformed all relevant benchmark indexes, including the OMX Copenhagen Midcap index, the EuroSTOXX Pharmaceutical and Biotechnology index as well as Nasdaq Biotechnology index. With this share price development and the increase in share capital, Zealand's Market Value has almost doubled in 2015 from DKK 1.9 billion to DKK 3.7 billion.
The strong outperformance of Zealand's shares was driven mainly by a positive and high-frequent news flow through 2015 with considerable progress for both our portfolio of out-licensed products and our pipeline of proprietary investigational medicines. In particular, have the important advancements for lixisenatide, which was filed for US 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 collaboration with Sanofi, impacted positively. This positive development was accentuated in December 2015 with Sanofi's submission of LixiLan for regulatory approval in the US, redeeming a Priority Review Voucher in the filing to decrease the regulatory review time from 10 to six months.
In parallel, we succeeded in progressing and expanding our own proprietary pipeline, including the initiation of two new clinical development programs with ZP4207 for hypoglycaemia management and with ZP1848 for short bowel syndrome.
Our strong news flow has continued into 2016, where our share price, however, has been negatively affected by a strong deterioration in investor appetite due to growing macroeconomic uncertainly – in particular as a spill-over effect from a very negative sentiment among biotech investors in the US. During January and February, our shared underperformed both Danish midcap and biotech indexes in the US and Europe, but performance has picked up positively since mid-February.
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 14 million compared to DKK 1.4 million in 2014. In 2016, with the downturn in market sentiment and in particular a marked increase in risk aversion, liquidity in our shares has fallen to approximately DKK 12 million in daily turnover.
In line with the disclosure requirements for companies listed on Nasdaq Copenhagen, Zealand issues company announcements to inform publicly of material news relating to the company and its activities. This include issuance of quarterly interim financial reports. In addition, Zealand issues press releases to inform of business news of non-material character, and Investor News to inform of upcoming IR news and events.
Zealand's objective is to have an open, accessible and proactive interaction with the investor community. Our main IR activities consist of direct access to the management team via conference calls and webcasts, Capital Market Days, conference attendance and 1-to-1 meetings in both the US and the main cities in Europe.
In addition, we issue online IR newsletters on a regular basis to update on recent news and the status of our activities. Under the investor section of Zealand's website: zealandpharma.com/investors, we provide access to relevant information in the form of all our news releases, our IR newsletters. investor presentations, our IR event calendar, and recent financial and annual reports. Zealand can also be followed on Twitter and LinkedIn.
Zealand has shifted almost entirely to online communication and provision of information in order to protect the environment and minimize administrative expenditures. Therefore, we kindly ask all our shareholders to register their email address via our homepage under zealandpharma.com/investors/shareholder-portal
| Institution | Analyst |
|---|---|
| Bryan, Garnier & Co | Eric le Berrigaud |
| Danske Bank | Thomas Bowers |
| Goldman Sachs | Eleanor Fung |
| Handelsbanken | Peter Sehested |
| Jefferies | Peter Welford |
| Nordea | Michael Novod |
| Oddo Securities – Oddo & Cie | Sébastien Malafosse |
| Rx Securities | Samir Devani |
Hanne Leth Hillman, M.Sc., Senior Vice President and Head of Investor Relations & Communications:
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.
We encourage our shareholders, investors, analysts and other stakeholders to contact us with questions or enquiries relating to Zealand – and if there is an interest to meet.
Zealand Pharma A/S Smedeland 36 DK-2600 Glostrup
Denmark
Senior Vice President, Head of Investor Relations and Communications Phone: +45 50 60 36 89 e-mail: [email protected]
| Date | Event |
|---|---|
| 31 Mar | Oddo Biotech / Medtech Investor Forum, Paris |
| 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 |
| 7-9 Jun | Goldman Sachs 37th Annual Global Healthcare conference, Palos Verdes, CA |
| 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
| 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.
Since there is no significant difference in the development of the group and the parent company, except for the royalty bond, the financial review is based on the group's consolidated financial information for the year ended 31 December, 2015, with comparative figures for 2014 in brackets.
The net result for the year 2015 was a loss of DKK -114.0 million (-65.0). The decrease in net result is a consequence mainly of increased financial costs relating to interest on the royalty bond, increased net operating expenses partly offset by increased revenues.
Revenue in 2015 amounted to DKK 187.7 million (153.8).
In October, Boehringer Ingelheim selected a novel peptide therapeutic to be advanced into preclinical development under one of two ongoing collaboration agreements resulting in a milestone of DKK 22.4 / EUR 3 million. In December, Sanofi submitted an NDA for LixiLan leading to a milestone payment of DKK 136.6 / USD 20 million. Total milestones in 2015 amounted to DKK 159.1 million (133.5) corresponding to a 19% increase versus previous year.
Royalty revenue from sales of Lyxumia® continued to grow and amounted to DKK 28.6 million (20.3) corresponding to a 41% increase versus previous year.
Royalty expenses for the year amounted to DKK 22.3 million (13.8) and relates to royalty paid to third parties on received milestone payments and royalty income relating to the license agreement with Sanofi.
Research and development expenses amounted to DKK 215.0 million (180.0). The increase is related to accelerated development activities amounting to DKK 27.1 million, mainly development costs for the ZP4207 Phase I trial conducted 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 personnel costs amounted to DKK 93.0 million (85.7), an increase of DKK 7.3 million which is related to employee warrant programs granted in 2015. In 2014, only one program was granted to one member of senior management.
Administrative expenses amounted to DKK 44.6 million (39.8). The increase is mainly due to employee warrant programs granted in 2015.
Other operating income amounted to DKK 12.8 million (6.3). Other operating income mainly consists of funding from Boehringer Ingelheim covering the development costs in one of the research collaborations.
Operating result for the period was a loss of DKK -81.3 million (-73.5).
Net financial items amounted to DKK -38.5 million (1.0). Net financial items consist of interest income and expenses, amortized costs relating to the royalty bond financing, banking fees and changes in exchange rates. Of the net financial items DKK 32.0 million is related to interest on the royalty bond and DKK 9.3 million is related to amortized costs of the royalty bond financing.
Result from ordinary activities before tax came to a loss of DKK -119.8 million (-72.5).
With a negative result from ordinary activities, no tax has been recorded for the period. However, according to Danish tax legislation Zealand is eligible to receive DKK 5.9 million (7.5) in cash relating to the tax loss of 2015.
No deferred tax asset has been recognized in the statement of financial position due to uncertainty as to when and whether tax losses can be utilized.
Net result and comprehensive income both amounted to DKK -114.0 million (-65.0) in each case due to the factors described above.
No dividend has been proposed and the year's net loss of DKK -114.0 million (-65.0) has been transferred to retained earnings.
Equity amounts to DKK 252.2 million (252.8) at the end of the 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).
Investments in plant and equipment for the period amounted to DKK 4.0 million (4.5) mainly related to new laboratory equipment.
On 12 December 2014, Zealand raised USD 50 / DKK 298.7 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 as stand-alone product under its license agreement with Sanofi. Repayment of the bond is based solely on lixisenatide stand-alone royalty revenue with no recourse to future royalty revenue on LixiLan. Regulatory milestone payments, to which Zealand is entitled on lixisenatide and LixiLan, will as part of the financing be placed in a collateral reserve account, which can never exceed the remaining principal on the loan, and which will be released to Zealand upon full repayment of the bond. The outstanding principal of the loan at year end 2015 were DKK 341.5 million (306.1). The increase is a result of the strengthening of the US dollar versus the Danish crown.
The bond carries an annual interest rate of 9.375% and upon full repayment of the bond, all further future lixisenatide revenue will be fully retained by Zealand.
Cash flow from operating activities amounted to DKK -225.4 million (-42.2), and cash flow from investing activities amounted to DKK -4.0 million (19.8) of which DKK 0.0 million (24.4) relates to disposal of securities. Cash flow from financing activities amounted to DKK 96.4 million (272.2) and relates to capital increase due to exercise of warrants and the 2014 amount related to net proceeds from the royalty bond financing. The total cash flow for the full year of 2015 amounted to DKK -133.0 million (249.8).
As of 31 December 2015, cash and cash equivalents amounted to DKK 440.2 million (538.3).
| Income statement | 51 |
|---|---|
| Statement of comprehensive income | 51 |
| Statement of financial position | 52 |
| Statement of changes in equity | 53 |
| Statement of cash flows | 54 |
| Notes | 55 |
| Statement of the Board of Directors | |
| and executive management | 78 |
| Independent auditors report | 79 |
| DKK '000 | Note | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|---|
| Revenue | 2 | 187,677 | 153,773 | 22,491 | 141,585 |
| Royalty expenses | 3 | -22,267 | -13,776 | 0 | -12,129 |
| Gross profit | 165,410 | 139,997 | 22,491 | 129,456 | |
| Research and development expenses | 4, 21 | -214,959 | -180,036 | -214,167 | -180,036 |
| Administrative expenses | 4, 21 | -44,606 | -39,826 | -43,938 | -39,826 |
| Other operating income | 5 | 12,828 | 6,328 | 12,828 | 6,328 |
| Operating result | -81,327 | -73,537 | -222,786 | -84,078 | |
| Financial income | 6 | 3,889 | 3,064 | 1,444 | 3,064 |
| Financial expenses | 7 | -42,394 | -2,017 | -306 | -64 |
| Result from ordinary activities before tax | -119,832 | -72,490 | -221,648 | -81,078 | |
| Tax on ordinary activities | 8 | 5,875 | 7,500 | 5,875 | 7,500 |
| Net result for the year | -113,957 | -64,990 | -215,773 | -73,578 | |
| Earnings per share | |||||
| Basic | 9 | -4.82 | -2.87 | -9.13 | -3.25 |
| Diluted | 9 | -4.82 | -2.87 | -9.13 | -3.25 |
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Net result for the year | -113,957 | -64,990 | -215,773 | -73,578 |
| Other comprehensive income | 0 | 0 | 0 | 0 |
| Comprehensive income for the year | -113,957 | -64,990 | -215,773 | -73,578 |
| DKK '000 | Note | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|---|
| Assets | |||||
| Plant and machinery | 10 | 14,672 | 15,994 | 14,672 | 15,994 |
| Other fixtures and fittings, tools and equipment | 10 | 1,153 | 1,573 | 1,153 | 1,573 |
| Leasehold improvements | 10 | 628 | 1,060 | 628 | 1,060 |
| Investment in subsidiaries | 11 | 0 | 0 | 380 | 380 |
| Deposits | 2,666 | 2,693 | 2,666 | 2,693 | |
| Non current assets total | 19,119 | 21,320 | 19,499 | 21,700 | |
| Trade receivables | 12 | 141,120 | 25,031 | 313 | 12,843 |
| Receivable from subsidiaries | 0 | 0 | 3,549 | 11,727 | |
| Prepaid expenses | 13 | 2,262 | 2,209 | 2,242 | 2,209 |
| Tax receivable | 8 | 5,875 | 6,250 | 5,875 | 6,250 |
| Other receivables | 14 | 26,113 | 3,6733,673 | 10,627 | 22,694 |
| Cash restricted | 15 | 21,403 | 2121,424 | 0 | 0 |
| Cash and cash equivalents | 15 | 418,796 | 516,849 | 140,783 | 255,335 |
| Current assets total | 615,569 | 575,436 | 163,389 | 291,058 | |
| Total assets | 634,688 | 596,756 | 182,888 | 312,758 | |
| Liabilities and equity Share capital |
16 | 24,353 | 23,193 | 24,353 | 23,193 |
| Retained earnings | 227,878 | 229,635 | 117,471 | 221,044 | |
| Equity total | 252,231 | 252,828 | 141,824 | 244,237 | |
| Royalty bond | 17 | 312,951 | 267,170 | 0 | 0 |
| Non-current liabilities | 312,951 | 267,170 | 0 | 0 | |
| Trade payables | 21,676 | 18,487 | 21,580 | 18,487 | |
| Royalty bond | 17 | 0 | 5,000 | 0 | 0 |
| Prepayments from customers | 18 | 2,091 | 14,383 | 2,063 | 14,383 |
| Other liabilities | 19 | 45,739 | 38,888 | 17,421 | 35,651 |
| Current liabilities | 69,506 | 76,758 | 41,064 | 68,521 | |
| Total liabilities | 382,457 | 343,928 | 41,064 | 68,521 | |
| Total equity and liabilities | 634,688 | 596,756 | 182,888 | 312,758 |
| Significant accounting policies, and significant | |
|---|---|
| accounting estimates and assesments | 1 |
| Lease commitments | 20 |
| Information on staff and remuneration | 21 |
| Financial and operational risks | 22 |
|---|---|
| Related parties | 23 |
| Fees to auditors appointed at the Annual General Meeting | 26 |
| Significant events after the balance sheet date | 27 |
| DKK '000 | capital | earnings | Total |
|---|---|---|---|
| Group | |||
| Equity at 1 January 2014 | 23,193 | 292,948 | 316,141 |
| Warrants compensation expenses | 0 | 1,677 | 1,677 |
| Comprehensive income for the year | 0 | -64,990 | -64,990 |
| Equity at 31 December 2014 | 23,193 | 229,635 | 252,828 |
| Equity at 1 January 2015 | 23,193 | 229,635 | 252,828 |
| Warrants compensation expenses | 0 | 16,947 | 16,947 |
| Capital increase | 1,160 | 95,253 | 96,413 |
| Comprehensive income for the year | 0 | -113,957 | -113,957 |
| Equity at 31 December 2015 | 24,353 | 227,878 | 252,231 |
| DKK '000 | Share capital |
Retained earnings |
Total |
|---|---|---|---|
| Parent | |||
| Equity at 1 January 2014 | 23,193 | 292,948 | 316,141 |
| Warrants compensation expenses | 0 | 1,674 | 1,674 |
| Comprehensive income for the year | 0 | -73,578 | -73,578 |
| Equity at 31 December 2014 | 23,193 | 221,044 | 244,237 |
| Equity at 1 January 2015 | 23,193 | 221,044 | 244,237 |
| Warrants compensation expenses | 0 | 16,947 | 16,947 |
| Capital increase | 1,160 | 95,253 | 96,413 |
| Comprehensive income for the year | 0 | -215,773 | -215,773 |
| Equity at 31 December 2015 | 24,353 | 117,471 | 141,824 |
| DKK '000 | Note | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|---|
| Net result for the year | -113,957 | -64,990 | -215,773 | -73,578 | |
| Adjustments | 24 | 43,553 | 6,559 | 20,714 | 4,606 |
| Change in working capital | 25 | -138,871 | 15,521 | -20,827 | 13,722 |
| Cash flow from operating activities before financing items |
-209,275 | -42,910 | -215,886 | -55,250 | |
| Financial income received | 1,269 | 1,494 | 340 | 1,494 | |
| Financial expenses paid | -23,657 | -2,017 | 1,004 | -64 | |
| Tax received | 8 | 6,250 | 1,250 | 6,250 | 1,250 |
| Cash flow from operating activities | -225,413 | -42,183 | -208,292 | -52,570 | |
| Change in deposit | 27 | -123 | 27 | -123 | |
| Net finansing of foreign subsidiaries | 0 | 0 | 28 | -380 | |
| Purchase of property, plant and equipment | -4,040 | -4,497 | -4,040 | -4,497 | |
| Disposal of securities | 0 | 242424,383 | 0 | 24,383 | |
| Cash flow from investing activities | -4,013 | 19,763 | -3,985 | 19,383 | |
| Proceeds from issuance of royalty bonds | 0 | 298,675 | 0 | 0 | |
| Royalty bond issuance costs | 0 | -26,505 | 0 | 0 | |
| Capital increase | 96,413 | 0 | 96,413 | 0 | |
| Cash flow from financing activities | 96,413 | 272,170 | 96,413 | 0 | |
| Decrease / increase in cash, cash restricted | |||||
| and cash equivalents | -133,013 | 249,750 | -115,864 | -33,187 | |
| Cash and cash equivalents at 1 January | 538,273 | 286,178 | 255,335 | 286,178 | |
| Exchange rate adjustments | 34,939 | 2,345 | 1,312 | 2,344 | |
| Cash, cash restricted and cash equivalents at 31 December | 440,199 | 538,273 | 140,783 | 255,335 | |
| Cash could be specified as: | |||||
| Cash and cash equivalents according to financial statements | 418,796 | 516,849 | 140,783 | 255,335 | |
| Cash restricted | 21,403 | 21,424 | 0 | 0 | |
| Cash, cash restricted and cash equivalents at 31 December | 440,199 | 538,273 | 140,783 | 255,335 |
The financial statements of Zealand Pharma A/S (Zealand) for 2015 has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies. The Board of Directors considered and approved the 2015 Annual Report of Zealand on 16 March 2016. The Annual Report will be submitted to the shareholders of Zealand for approval at the Annual General Meeting on 19 April 2016.
The consolidated financial statements are presented in Danish kroner (DKK ´000) which is also the functional currency of the parent company.
During 2014 four subsidiaries were established by Zealand in relation to the royalty bond financing that was concluded in December 2014.
The notes comprise both the parent company and the group unless specifically stated otherwise.
At the date of the approval of the consolidated financial statements, a number of new and amended standards and interpretations have not yet entered into force or have not yet been adopted by the EU. Therefore, they are not incorporated in the financial statements.
IASB has issued IFRS 9 Financial Instruments, effective for annual periods beginning on or after 1 January 2018. IFRS 9 Financial Instruments is part of the IASB's project to replace IAS 39 Financial Instruments: Recognition and Measurement, and the new standard will change the classification, presentation and measurement of financial instruments and hedging requirements. Zealand is assessing the impact of the standard, but it is not expected to have any material impact on the future financial statements.
IFRS 15 Revenue from Contracts with Customers was issued in May 2014 and is effective for annual periods beginning on or after 1 January 2018. The standard has not yet been endorsed by the EU. Entities will apply a five-step model to determine when, how and at what amount revenue is to be
recognized depending on whether certain criteria are met. Before implementation of the standard, Zealand will assess whether IFRS 15 Revenue from Contracts with Customers has an impact on the current and new significant contracts. The new standard is not expected to have any material impact on the future financial statements.
IFRS 16 Leases was issued in January 2016 and is effective for annual periods beginning on or after 1 January 2019. The standard has not yet been endorsed by the EU. In the financial statements of the lessees IFRS 16 requires all leases (except for short term leases and leases of asset of low value) to be reognized as a right-of-use asset and lease liability, respectively, measured at the present value of future lease payments. The right-of-use asset is subsequently depreciated in a similar way to other depreciable assets over the lease term and interest shall be calculated on the lease liability similar to finance leases under IAS 17. Consequently, the change will also impact the presentation in the income statement and the statement of cash flows. As the standard is newly issued, Zealand has not yet assessed the impact on the future financial statements, but it is not expected to have any material impact on the future financial statements.
The consolidated financial statements and the financial statements comprise the parent company Zealand Pharma A/S and the group enterprises, for which Zealand is entitled to determine finance and operational policies and which normally applies on ownership interests of more than half of the voting rights. The consolidated financial statements are prepared based on uniform accounting policies in all group entities. Consolidation of group entities is performed after elimination of all intra-group transactions, balances, income and expenses.
Transactions denominated in foreign currencies are translated at the exchange rates at the dates of transaction.
Exchange differences arising between the rate on the date of transaction and the rate on the payment day are recognized in the income statement as financial income or financial expenses.
Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance
sheet date are translated by applying the exchange rates at the balance sheet date. Differences arising between the rate at balance sheet date and the rate at the date of the arising of the receivable or payable are recognized in the income statement under financial income and expenses.
Fixed assets purchased in foreign currencies are measured at the rate of the date of transaction.
The income statement is classified by function.
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 a consequence of this, no segment reporting is made concerning business areas or geographical areas.
Financial assets include receivables, securities and cash. Financial assets can be divided into the following categories: loans and receivables, financial assets at fair value through the income statement, available-for-sale financial assets and held-to maturity investments. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the investments were acquired. All financial assets are recognized on their settlement date. All financial assets that are not classified as fair value through the income statement are initially recognized at fair value, plus transaction costs.
The statement of cash flows shows the cash flow for the year together with the cash and cash equivalents at the beginning and end of the year.
Cash flow from operating activities is presented indirectly and is calculated as the net result adjusted for non-cash operating items, changes in the net working capital, financial items paid and income taxes paid.
Cash flow from investment activities includes payments associated with the purchase and sale of fixed assets and investments.
Cash flow from financing activities comprises new equity, loan financing and repayment of interest bearing debt.
Cash and cash equivalents comprise cash and bank balances.
In the statement of the carrying amounts of certain assets and liabilities estimates are required on how future events will affect the carrying amounts of these assets and liabilities at the balance sheet date.
The used estimates are based on assumptions assessed reasonable by management, however, estimates are inherently uncertain and unpredictable. The assumptions can be incomplete or inaccurate and unexpected events or circumstances might occur. Furthermore, the enterprise is subject to risks and uncertainties that might result in deviations in actual results compared to estimates.
Evaluating the criteria for revenue recognition with respect to the company's research and development and collaboration agreements requires management's judgment to ensure that all criteria have been fulfilled prior to recognizing any amount of revenue. In particular, such judgments are made with respect to determination of the nature of transactions, whether simultaneous transactions shall be considered as one or more revenue-generating transactions, allocation of the contractual price (upfront and milestone payments subscribed in connection with a collaboration agreement) to several elements included in an agreement, and the determination of whether the significant risks and rewards
have been transferred to the buyer. Collaboration agreements are reviewed carefully to understand the nature of risks and rewards of the arrangement. All the company's revenuegenerating transactions, including those with Sanofi S.A, Helsinn Group and Boehringer Ingelheim International GmbH have been subject to such evaluation by management.
In accordance with IFRS 2 "Share-based Payment," the fair value of the warrants, classified as equity settled, are measured at grant date and is recognized as an expense in the income statement over the vesting period and the period of delivery of work. Subsequently, the fair value is not re-measured. The fair value of each warrant granted during the year is calculated using the Black Scholes pricing model. This pricing model requires the input of subjective assumptions such as:
The expected stock price volatility, which is based upon the historical volatility of Zealand's stock price;
The risk-free interest rate, which is determined as the interest rate on Danish government bonds (bullet issues) with a maturity of five years;
The expected life of warrants, which is based on vesting terms, expected rate of exercise and life terms in current warrant program.
Zealand recognizes deferred tax assets, including the tax base of tax loss carry-forwards, if management assesses that these tax assets can be offset against positive taxable income within a foreseeable future.
This judgment is made on an ongoing basis and is based on budgets and business plans for the coming years, including planned commercial initiatives. The creation and development of therapeutic products within the biotechnology and pharmaceutical industry is subject to considerable risks and uncertainties. Zealand has so far reported significant losses, and as a consequence, has unused tax losses. Management has concluded, that deferred tax assets should not be recognized as of 31 December 2015. The tax assets are
currently not deemed to meet the criteria for recognition as management is not able to provide any convincing positive evidence that deferred tax assets should be recognized.
According to the IAS 38, "Intangible Assets," intangible assets arising from development projects should be recognized in the statement of financial position. The criteria that must be met for capitalization are that:
Such an intangible asset should be recognized if sufficient certainty can be documented that the future income from the development project will exceed the aggregate cost of production, development and the sale and administration of the product. A development project involves a single product 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 appropriate authorities. The future economic benefits associated with the individual development projects are dependent on obtaining such approval. Considering the significant risk and duration of the development period related to the development of biological products, management has concluded that the future economic benefits associated with the individual projects cannot be estimated with sufficient certainty until the project has been finalized and the necessary regulatory final approval of the product has been obtained. Accordingly, Zealand has not recognized such assets at this time and therefore all research and development costs are recognized in the income statement when incurred. The total research and development costs amounted to DKK 215.0 million in 2015 compared to DKK 180.0 million in 2014.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Sanofi S.A. | 136,600 | 81,191 | 0 | 81,191 |
| Boehringer Ingelheim Int. GmbH | 22,379 | 37,279 | 22,379 | 37,279 |
| Helsinn Group | 112 | 15,015 | 112 | 15,015 |
| Total milestone payments | 159,091 | 133,485 | 22,491 | 133,485 |
| Sanofi S.A. | 28,586 | 20,288 | 0 | 8,100 |
| Total royalty income | 28,586 | 20,288 | 0 | 8,100 |
| Total revenue | 187,677 | 153,773 | 22,491 | 141,585 |
All Zealand revenue can be attributed to other countries than Denmark.
§
Revenue comprises royalties and milestone payments. These revenues are recognized in accordance with the agreements and is recognized when it is probable that future economic benefits will flow to the group and these economic benefits can be measured reliably.
Royalty income from licenses is based on third-party sales of licensed products and is recognized in accordance with contract terms when third-party results are available and are deemed to be reliable.
The income from agreements with multiple components and where the individual components cannot be separated is recognized over the period of the agreement. In addition, recognition requires that all material risks and benefits related to the ownership of the goods and services included in the transaction are transferred to the purchaser.
If all risks and benefits have not been transferred, the revenue is recognized as deferred income until all components in the transaction have been completed.
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.
Royalty expenses comprise royalty paid to third parties on certain milestone payments and royalty income from collaboration agreements.
Research expenses comprise salaries, contributions to pension schemes and other expenses, including patent expenses, as well as depreciation and amortization attributable to the group's research activities. Research expenses are recognized in the income statement as incurred.
Development expenses comprise salaries, contributions to pension schemes and other expenses, including depreciation and amortization, attributable to the group's development activities.
Capitalization assumes that the development of the technology or the product in the group's opinion has been completed, that all necessary public registrations and marketing approvals have been received, and that expenses can be reliably measured. Furthermore, it has to be established that the technology or the product can be commercialized and that the future income from the product can cover, not only the production, selling and administrative expenses, but also development expenses. Currently, Zealand has not capitalized any development expenses.
Overhead expenses have been allocated to research and development based on the salaries to employees in research and development.
Administrative expenses include expenses for administrative personnel, expenses related to company premises, operating leases, investor relation, etc. Overhead expenses have been allocated to administration based on the salaires to employees in administration.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Research funding | 11,576 | 5,812 | 11,576 | 5,812 |
| Government grants | 1,252 | 516 | 1,252 | 516 |
| Total other operating income | 12,828 | 6,328 | 12,828 | 6,328 |
In 2015 and 2014, Zealand has, in addition to government grants, also received research funding from Boehringer Ingelheim International GmbH.
Other operating income comprises research funding from business partners and government grants. Research funding is recognized in the period where the research activities have been performed and government grants are recognized periodically when the work supported by the grant has been reported.
Government grants are recognized when a final and firm right to the grant has been obtained. Government grants are included in other operating income as the grants are considered to be cost refunds. Grants related to investments are set off against the purchase price.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Interest income | 139 | 719 | 132 | 720 |
| Exchange rate adjustments | 3,750 | 2,345 | 1,312 | 2,344 |
| Total financial income | 3,889 | 3,064 | 1,444 | 3,064 |
Financial income are recognized in the income statement with the amounts related to the financial year.
Financial income include interest receivable, as well as realized and unrealized exchange rate adjustments
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Interest expenses, royalty bond | 32,372 | 0 | 0 | 0 |
| Amortization financing costs | 9,689 | 0 | 0 | 0 |
| Other interest expenses | 333 | 2,017 | 306 | 64 |
| Total financial expenses | 42,394 | 22,017 | 306 | 64 |
Financial expenses are recognized in the income statement with the amounts related to the financial year. Financial expenses include interest payable, as well as realized and unrealized exchange rate adjustments.
Further, expenses related to the royalty financing are amortized over the expected duration of the bond and recognized as financial expenses.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Net result for the year before tax | -119,832 | -72,490 | -221,648 | -81,078 |
| Tax rate | 23.5% | 24.5% | 23.5% | 24.5% |
| Expected tax expenses | -28,161 | -17,760 | -52,087 | -19,864 |
| Adjustment for non-deductible expenses | 54 | 69 | 54 | 69 |
| Adjustment for exercised warrant programs | -8,357 | 0 | -8,357 | 000000 |
| Tax effect from subsidiaries | 0 | 0 | 23,621 | 2,583 |
| Reduction of corporate tax rate from 25% to 22% | 1,557 | 1,180 | 1,557 | 1,131 |
| Prior year adjustments | 0 | -1,375 | 0 | -1,375 |
| Tax effect on warrant programs | -318 | 0 | 0 | 0 |
| Tax effect on expired warrant programs | 6,500 | 0 | 6,500 | 0 |
| Change in tax assets (not recognized) | 22,849 | 10,386 | 22,837 | 9,956 |
| Total tax expenses | -5,875 | -7,500 | -5,875 | -7,500 |
| Breakdown of unrecognized deferred tax assets: | ||||
| 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 | 43,019 | 43,019 | 43,019 | 43,019 |
| Non-current assets | 57,543 | 51,329 | 57,543 | 51,329 |
| Other | 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 | -205,321 | -182,471 | -205,309 | -182,042 |
| Recognized deferred tax asset | 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.
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.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Net result for the year | -113,957 | -64,990 | -215,773 | -73,578 |
| Adjusted net profit/loss accruing to the company's ordinary shares |
-113,957 | -64,990 | -215,773 | -73,578 |
| Average number of ordinary shares | 24,203,657 | 23,193,047 | 24,203,657 | 23,193,047 |
| Average number of treasury shares | -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 |
| Diluted earnings per share | -4.82 | -2.87 | -9.13 | -3.25 |
Basic earnings per share is calculated as the net result for the period that accrue to the parent company's ordinary shares divided by the weighted average number of ordinary shares outstanding.
Diluted earnings per share is calculated as the net result for the period that accrue to the parent company's ordinary shares divided by the weighted average number of ordinary shares outstanding adjusted by the dilutive effect of potential ordinary shares.
| Other | Leasehold | Fixed assets | |||
|---|---|---|---|---|---|
| Plant and | fixtures | improve- | under | ||
| DKK '000 | machinery | and fittings | ments construction | ||
| Cost at 1 January 2014 | 57,807 | 7,201 | 10,346 | 2,180 | |
| Additions | 2,784 | 1,462 | 252 | 0 | |
| Transfers | 2,180 | 0 | 0 | -2,180 | |
| Cost at 31 December 2014 | 62,771 | 8,663 | 10,598 | 0 | |
| Depreciation at 1 January 2014 | 41,793 | 6,792 | 8,887 | 0 | |
| Depreciation for the year | 4,984 | 298 | 650 | 0 | |
| Depreciation at 31 December 2014 | 46,777 | 7,090 | 9,537 | 0 | |
| Carrying amount at 31 December 2014 | 15,994 | 1,573 | 1,060 | 0 | |
| Depreciation for the financial year has been charged as: | |||||
| Research and development expenses | 4,984 | 235 | 514 | 0 | |
| Administrative expenses | 0 | 63 | 136 | 0 | |
| Total | 4,984 | 298 | 650 | 0 |
| DKK '000 | Plant and machinery |
Other fixtures and fittings |
Leasehold improve- |
Fixed assets under ments construction |
|---|---|---|---|---|
| Cost at 1 January 2015 | 62,771 | 8,663 | 10,598 | 0 |
| Additions | 3,735 | 131 | 174 | 0 |
| Transfers | 0 | 0 | 0 | 0 |
| Cost at 31 December 2015 | 66,506 | 8,794 | 10,772 | 0 |
| Depreciation at 1 January 2015 | 46,777 | 7,090 | 9,537 | 0 |
| Depreciation for the year | 5,057 | 551 | 607 | 0 |
| Reversal of impairment and depreciation on disposed assets | 0 | 0 | 0 | 0 |
| Depreciation at 31 December 2015 | 51,834 | 7,641 | 10,144 | 0 |
| Carrying amount at 31 December 2015 | 14,672 | 1,153 | 628 | 0 |
| Depreciation for the financial year has been charged as: | ||||
| Research and development expenses | 5,057 | 413 | 455 | 0 |
| Administrative expenses | 0 | 138 | 152 | 0 |
| Total | 5,057 | 551 | 607 | 0 |
Plant and machinery, other fixtures and fittings, tools and equipment and leasehold improvements are measured at cost less accumulated depreciation.
Cost comprises acquisition price and costs directly related to acquisition until the time when the group starts using the asset.
The basis for depreciation is cost less estimated residual value after the end of useful life. Assets are depreciated under the straight-line method over the expected useful lives of the assets. The depreciation periods are as follows:
Profits and losses arising from disposal of plant and equipment are stated as the difference between the selling price less
the selling costs and the carrying amount of the asset at the time of the disposal. Profits and losses are recognized in the income statement under research and development expenses and administrative expenses.
The carrying amount of property, plant and equipment as well as non-current asset investments is reviewed for impairment when events or changed conditions indicate that the carrying amount may not be recoverable. If there is such an indication, an impairment test is made. An impairment loss is recognized in the amount with which the carrying amount exceeds the recoverable amount of the asset, which is the higher of the net 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 generating units). Impairments are recognized in the income statement under the same items as the related depreciation and amortization.
| DKK '000 | Parent |
|---|---|
| Cost at 1 January 2014 | 0 |
| Additions | 380 |
| Cost at 31 December 2014 | 380 |
| Revaluation at 1 January 2014 | 0 |
| Revaluation at 31 December 2014 | 0 |
Carrying amount at 31 December 2014 380
| Cost at 1 January 2015 | 380 |
|---|---|
| Additions | 0 |
| Cost at 31 December 2015 | 380 |
| Revaluation at 1 January 2015 | 0 |
| Revaluation at 31 December 2015 | 0 |
| Carrying amount at 31 December 2015 | 380 |
As a consequence of the royalty bond financing in December 2014 four new subsidiaries were established.
| Ownership and votes |
|||
|---|---|---|---|
| Name | Domicile | 2015 | |
| Zealand Pharma A/S subsidiaries: | |||
| ZP Holding SPV K/S | Denmark | 100 % | |
| ZP General Partner 1 ApS | Denmark | 100 % | |
| ZP Holding SPV K/S subsidiaries: | |||
| ZP SPV 1 K/S | Denmark | 100 % | |
| ZP General Partner 2 ApS | Denmark | 100 % |
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 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.
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.
64
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.
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.
Trade receivables are provided against when objective evidence is received that the group will not be able to collect all amounts due to it in accordance with the original terms of the receivables. The amount of the write-down is determined as the difference between the assets' carrying amount and the present value of estimated future cash flows.
§ ACCOUNTING POLICIES
Prepaid expenses comprise incurred expenses related to the following financial year.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Helmsley Charitable Trust (ZP4207) | 4,592 | 0 | 4,592 | 0 |
| Royalty income | 15,366 | 0 | 0 | 00 |
| Other | 6,155 | 3,673 | 6,035 | 2,694 |
| Total other receivables | 26,113 | 333,673 | 10,627 | 2,694 |
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| DKK | 66,239 | 227,922 | 64,900 | 227,542 |
| USD | 306,296 | 280,215 | 30,744 | 19,081 |
| EURO | 46,261 | 8,712 | 45,139 | 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.
| Share capital at 31 December 2010 | 22,871 |
|---|---|
| Capital increase at 12 December 2011 | 322 |
| Share capital at 31 December 2014 | 23,193 |
| Share capital at 1 January 2015 | 23,193 |
|---|---|
| Capital increase at 21 March 2015 | 121 |
| Capital increase at 11 April 2015 | 106 |
| Capital increase at 2 June 2015 | 51 |
| Capital increase at 20 June 2015 | 47 |
| Capital increase at 8 September 2015 | 383 |
| Capital increase at 26 September 2015 | 151 |
| Capital increase at 4 November 2015 | 61 |
| Capital increase at 13 November 2015 | 177 |
| Capital increase at 4 December 2015 | 63 |
| Share capital at 31 December 2015 | 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.
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.
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.
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.
Prepayments from customers comprise not yet consumed prepayments relating to the research collaboration with Boehringer Ingelheim International GmbH.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Severance payment | 613 | 18,802 | 613 | 18,802 |
| Employee benefits | 15,085 | 10,511 | 15,085 | 10,511 |
| Provision for clinical study on ZP1609 | 0 | 4,432 | 0 | 4,432 |
| Royalty to third-party | 18,713 | 0 | 0 | 00 |
| Interest, royalty bond | 9,516 | 00 | 0 | 00 |
| Other | 1,812 | 5,143 | 1,723 | 1,906 |
| Total other liabilities | 45,739 | 38,888 | 17,421 | 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.
| DKK '000 | 2015 | 2014 |
|---|---|---|
| Operating lease agreements: | ||
| Within 1 year | 3,940 | 4,376 |
| 2 to 5 years | 1,241 | 908 |
| Total | 5,181 | 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.
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.
| DKK '000 | 2015 | 2014 |
|---|---|---|
| The total staff salaries can be specified as follows: | ||
| Salaries | 105,336 | 98,740 |
| Pension schemes | 7,243 | 6,560 |
| Other social security costs | 10,752 | 8,763 |
| Total | 123,331 | 114,063 |
| The amount is charged as: | ||
| Research and development expenses | 93,039 | 85,684 |
| Administrative expenses | 30,292 | 28,379 |
| Total | 123,331 | 114,063 |
| Average number of employees | 110 | 103 |
Average number of employees has been calculated based on ATP expenses.
| DKK '000 | Base board fee 2015 |
Other 2015 |
Total 2015 |
Base board fee 2014 |
Other 2014 |
Total 2014 |
|---|---|---|---|---|---|---|
| Remuneration included above to the: | ||||||
| Board of Directors | ||||||
| Martin Nicklasson | 450 | 0 | 450 | 0 | 0 | 0 |
| Rosemary Crane | 200 | 0 | 200 | 0 | 0 | 0 |
| Catherine Moukheibir | 250 | 0 | 250 | 0 | 0 | 0 |
| Peter Benson | 150 | 0 | 150 | 150 | 0 | 150 |
| Alain Munoz | 150 | 0 | 150 | 150 | 715 | 865 |
| Michael Owen | 150 | 0 | 150 | 150 | 0 | 150 |
| Christian Thorkildsen¹ | 150 | 0 | 150 | 150 | 0 | 150 |
| Jens Peter Stenvang¹ | 150 | 0 | 150 | 75 | 0 | 75 |
| Helle Størum¹ | 150 | 0 | 150 | 150 | 0 | 150 |
| Daniel Ellens2 | 150 | 0 | 150 | 450 | 0 | 450 |
| Jørgen Lindegaard2 | 150 | 0 | 150 | 375 | 0 | 375 |
| Florian Reinaud2 | 13 | 0 | 13 | 150 | 0 | 150 |
| Jutta af Rosenborg3 | 0 | 0 | 0 | 150 | 0 | 150 |
| Hanne Heidenheim Bak1 3 | 0 | 0 | 0 | 75 | 0 | 75 |
| Total | 2,113 | 0 | 2,113 | 2,025 | 715 | 2,740 |
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.
| 2014 | Base | Pension contri- |
Other | Severance | Warrant compens. |
||
|---|---|---|---|---|---|---|---|
| DKK '000 | salary | Bonus | bution | benefits | payment | expenses | Total |
| Remuneration included above to the: | |||||||
| Executive management | |||||||
| David Solomon | 6,079 | 0 | 304 | 238 | 16,440 | 0 | 23,061 |
| Mats Blom | 1,735 | 400 | 137 | 242 | 0 | 0 | 2,514 |
| Total | 7,814 | 400 | 441 | 480 | 16,440 | 0 | 25,575 |
| Other senior management | 5,382 | 1,083 | 535 | 540 | 2,362 | 2,105 | 12,007 |
| Total | 5,382 | 1,083 | 535 | 540 | 2,362 | 2,105 | 12,007 |
| Total | 13,196 | 1,483 | 976 | 1,020 | 18,802 | 2,105 | 37,582 |
| 2015 DKK '000 |
Base salary |
Bonus | Pension contri- bution |
Other benefits |
Severance payment |
Warrant compens. expenses |
Total |
|---|---|---|---|---|---|---|---|
| Remuneration included above to the: | |||||||
| Executive management | |||||||
| Britt Meelby Jensen | 3,353 | 0 | 335 | 190 | 0 | 3,163 | 7,041 |
| Mats Blom | 2,400 | 200 | 240 | 260 | 0 | 2,372 | 5,472 |
| Total | 5,753 | 200 | 575 | 450 | 0 | 5,535 | 12,513 |
| Other senior management | 8,776 | 928 | 877 | 1,101 | 353 | 3,321 | 15,356 |
| Total | 8,776 | 928 | 877 | 1,101 | 353 | 3,321 | 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.
| DKK '000 | Program of 2010 02-Nov-10 |
Program of 2010 10-Feb-11 |
Program of 2010 17-Nov-11 |
Program of 2010 |
Program of 2010 10-Feb-12 19-Nov-12 |
Program of 2010 08-Feb-13 |
Program of 2010 01-Apr-14 |
Total |
|---|---|---|---|---|---|---|---|---|
| Number of warrants | ||||||||
| 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 | 0 | 0 | 0 | 0 | 0 | 0 | 100.000 | 100.000 |
| Forfeited during the year | 0 | -20.000 | 0 | -11.250 | 0 | -23.750 | 0 | -55.000 |
| Exercised during the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Expired during the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Outstanding as per 31 December 2014 |
595.406 | 403.000 | 227.085 | 220.250 | 214.883 | 343.512 | 100.000 | 2.104.136 |
| Specified as follows: | ||||||||
| Board of Directors | 134,024 | 0 | 0 | 0 | 0 | 0 | 0 | 134,024 |
| Executive management | 327,358 | 0 | 165,047 | 0 | 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 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Forfeited during the year | 0 | -7.500 | 0 | -3.750 | 0 | -17.500 | 0 | -28.750 |
| Exercised during the year | -589.237 | -383.900 | -121.826 | -64.759 | 0 | 0 | 0 | -1.159.722 |
| Expired during the year | -6.169 | 0 | 0 | 0 | 0 | 0 | 0 | -6.169 |
| Outstanding as per 31 December 2015 |
0 | 11.600 | 105.259 | 151.741 | 214.883 | 326.012 | 100.000 | 909.495 |
| Specified as follows: | ||||||||
| Board of Directors | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Executive management | 0 | 0 | 31.019 | 0 | 31.019 | 0 | 0 | 62.038 |
| Other employees | 0 | 11.600 | 74.240 | 151.741 | 183.864 | 326.012 | 100.000 | 847.457 |
| Total | 0 | 11.600 | 105.259 | 151.741 | 214.883 | 326.012 | 100.000 | 909.495 |
| Exercise period | ||||||||
| From | 3-Nov-13 | 10-Feb-14 | 17-Nov-14 | 10-Feb-15 19-Nov-15 | 10-Feb-16 | 01-Apr-17 | ||
| until | 3-Nov-15 | 10-Feb-16 | 17-Nov-16 | 10-Feb-17 | 19-Nov-17 | 10-Feb-18 | 01-Apr-19 | |
| Black & Scholes parameters | ||||||||
| Term (months) | 60 | 60 | 60 | 60 | 60 | 60 | 60 | |
| Volatility* | 56% | 33% | 34% | 44% | 56% | 39.3% | 37.5% | |
| Share price | 86.0 | 70.0 | 45.70 | 70.0 | 86.0 | 79.50 | 69.0 | |
| Exercise price DKK | 94.6 | 77.0 | 50.27 | 77.0 | 113.3 | 87.45 | 75.9 | |
| Dividend | 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.
| Program | Program | Program | Program | ||
|---|---|---|---|---|---|
| DKK '000 | of 2010 25-Mar-15 |
of 2010 5-May-15 |
of 2015 5-May-15 |
of 2015 5-May-15 |
Total |
| Number of warrants | |||||
| 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 | 0 | 0 | 0 | -3.000 | -3.000 |
| Exercised during the year | 0 | 0 | 0 | 0 | 0 |
| Expired during the year | 0 | 0 | 0 | 0 | 0 |
| Outstanding as per | |||||
| 31 December 2015 | 100.000 | 46.359 | 100.000 | 363.250 | 609.609 |
| Specified as follows: | |||||
| Board of Directors | 0 | 0 | 0 | 0 | 0 |
| Executive management | 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 | 25-Mar-18 | 5-May-18 | 5-May-16 | 5-May-18 | |
| until | 25-Mar-20 | 5-May-20 | 5-May-20 | 5-May-20 | |
| Black & Scholes parameters | |||||
| Term (months) | 60 | 60 | 60 | 60 | |
| Volatility* | 41.9% | 43.7% | 43.7% | 43.7% | |
| Share price | 115.50 | 92.0 | 92.0 | 92.0 | |
| Exercise price DKK | 127.05 | 101.2 | 101.2 | 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 have been established, which have to be settled in the enterprise's equity instruments, and are offered to a number of employees and the executive management. Incentive programs were offered in 2005, 2007, 2009-2015.
The program was established in 2010 for the Board of Directors, executive management, employees and consultants of Zealand.
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.
The program was established in 2015 for the executive management and employees of Zealand. The Board of Directors is authorized to issue up to 2,750,000
warrants until 20 April 2020. By December 31, 2015 2,283,750 warrants of the authorization have not yet been granted. Per December 31, 2015 463,250 warrants can be exercised.
In 2015 the fair value of warrants recognized in the income statement amounts to DKK 16.9 million (1.7) of which DKK 5.5 million (0.0) relates to the executive management. Further, costs for the warrant programs have been adjusted at the end of the year by DKK 0.2 million (0.4) due to actual attrition rate.
| DKK '000 | 2015 | 2014 |
|---|---|---|
| The amount is charged as: | ||
| Research and development expenses | 9.504 | 1.764 |
| Administrative expenses | 7.443 | -90 |
| Total | 16.947 | 1.674 |
The value of services received as consideration for granted warrants is measured at the fair value of the warrant. The fair value is determined at the grant date and is recognized in the income statement as staff costs over the period in which the final right to the warrant is obtained. The contra entry to this is recognized under equity. In connection with the initial recognition of the warrants, an estimate is made of the number of warrants that the employees are expected to obtain rights to. Subsequently, an adjustment is made for changes in the estimate of the number of shares that the employees have obtained rights to so the total recognition is based on the actual number of shares that the employees have obtained rights to. The fair value of the granted options is estimated by application of the Black and Scholes pricing model.
The goal of Zealand's financial policy is to create a set of general guidelines for the financial risk management in order to reduce the group's sensitivity towards fluctuations in exchange rates, interest rates, credit rating and liquidity.
Zealand's financial policy has been endorsed by Zealand's audit committee and ultimately approved by Zealand's Board of Directors.
Zealand is a biopharmaceutical company with revenues consisting of royalties, up-front payments and milestones received as part of Zealand's partnering activities. Zealand receives milestone payments from its current partners in USD and EUR and royalty payments in EUR.
Zealand is mainly exposed to research and development expenditures. In addition Zealand has an USD loan as well as a significant cash position, as such Zealand is exposed to various financial risks, which among other relate to foreign exchange rate risk, interest rate risk, credit risk and liquidity risk.
Most of Zealand's financial transactions are made in DKK, USD and EUR.
The EUR/DKK exchange rate has politically been fixed within very narrow limits and Zealand has evaluated that there are no transaction exposure or exchange rate risk regarding transactions in EUR. Although there has been some pressure on the DKK, Zealand does not expect the EUR/DKK exchange rate to be changed.
Zealand's milestone payments have been agreed in foreign currency, USD and EUR. However, as milestone payments are unpredictable in terms of timing, the payments are not included in the basic exchange risk evaluation.
As Zealand from time to time conduct clinical trials and toxicology studies in the US, Zealand will be exposed to the exchange rate fluctuation and risks associated with transactions in USD. Zealand's policy has up until now been to manage the transaction and translation risk associated with the USD passively, placing the revenues received from milestone payments in USD on an USD account for future payment of Zealand's expenses denominated in USD, covering 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 to hedge against this Zealand intend to hold a similar portion of its cash position in USD.
By 31 December 2015 Zealand holds USD 48.0 million in cash, while the value of the royalty bond is USD 50.0 million.
Zealand has the policy to avoid any financial instrument which exposes the group to any unwanted financial risk. Zealand does not speculate in the underlying trends in the basic economy.
The royalty bond has a fixed interest rate of 9.375%.
Zealand invests its free cash in fixed rate, time defined bank deposits. During 2015, interest rates have been negative on bank deposits in DKK and EUR.
Zealand is exposed to credit risks in respect of receivables and bank balances. The maximum credit risk corresponds to the carrying amount. Management believes that credit risk is limited as counter parties to the accounts receivables are large global pharmaceutical companies.
Cash is not deemed to be subject to any credit risks, as the counterparts are banks with investment grade ratings. (i.e BBB- or higher by Standard&Poors).
The purpose of Zealand's cash management is to ensure that the group at all times has sufficient and flexible financial resources at its disposal.
Zealand's short-term liquidity situation is matched with Zealand's quarterly budget revisions to balance the demand for liquidity and maximize Zealand's interest income by matching Zealand's free cash in fixed rate, time defined bank deposits with Zealand's expected future cash burn.
It is Zealand's aim to have an adequate capital structure in relation to the underlying operating results and R&D projects, so that it is always possible to provide sufficient capital to support operations and its long term growth targets.
The Board of Directors finds that the current capital and share structure is appropriate to the shareholders and to the group.
| 2015 Fluctuation |
2015 Effect |
2014 Fluctuation |
2014 Effect |
|
|---|---|---|---|---|
| USD | +/- 10% | 6,574 | +/- 10% | 10,399 |
| Interest rate | +/- 100 basis point |
4,735 | +/- 100 basis point |
3,074 |
The table shows the effect on the profit/loss and equity of probable changes in the financial variables on the statement of financial position.
A breakdown of the group and parent company's aggregate liquidity risk on financial assets and liabilities is given below:
| DKK '000 | <6 months |
6<12 months |
1-5 years |
Total* | Carrying amount/ Fair value** |
|---|---|---|---|---|---|
| Group | |||||
| At amortized cost | |||||
| Trade and other creditors | 18,487 | 0 | 0 | 18,487 | 18,487 |
| Royalty bond | 0 | 5,000 | 267,170 | 272,170 | 272,170 |
| Other liabilities | 38,888 | 0 | 0 | 38,888 | 38,888 |
| Total financial liabilities at 31 December 2014 | 57,375 | 5,000 | 267,170 | 329,545 | 329,545 |
| At amortized cost | |||||
| Total financial liabilities at 31 December 2015 | 67,415 | 32,000 | 417,486 | 516,901 | 516,901 |
|---|---|---|---|---|---|
| Other liabilities | 45,739 | 0 | 0 | 45,739 | 45,739 |
| Interests, royalty bond | 0 | 32,000 | 76,000 | 108,000 | 108,000 |
| Royalty bond | 0 | 0 | 341,486 | 341,486 | 341,486 |
| Trade and other creditors | 21,676 | 0 | 0 | 21,676 | 21,676 |
| DKK '000 | <6 months |
6<12 months |
1-5 years |
Total* | Carrying amount/ Fair value** |
|---|---|---|---|---|---|
| Parent | |||||
| At amortized cost | |||||
| Trade and other creditors | 18,487 | 0 | 0 | 18,487 | 18,487 |
| Other liabilities | 35,651 | 0 | 0 | 35,651 | 35,651 |
| Total financial liabilities at 31 December 2014 | 54,138 | 0 | 0 | 54,138 | 54,138 |
| At amortized cost | |||||
| Trade and other creditors | 21,580 | 0 | 0 | 21,580 | 21,580 |
| Other liabilities | 17,421 | 0 | 0 | 17,421 | 17,4211 |
| Total financial liabilities at 31 December 2015 | 39,001 | 0 | 0 | 39,001 | 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.
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.
The fair value of the royalty bond disclosed in the note is based on Level 3 in the fair value hierarchy. The fair value of the royalty bond is based on amortized costs.
In 2015 and 2014 there are no financial instruments carried at fair value.
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Categories of financial instruments | 0 | 0 | 0 | 0 |
| Trade receivables | 141,120 | 25,031 | 313 | 12,843 |
| Receivable from subsidiaries | 0 | 0 | 3,549 | 11,727 |
| Tax receivable0 | 5,875 | 6,250 | 5,875 | 6,250 |
| Other recivables | 26,113 | 3,673 | 10,627 | 2,694 |
| Prepaid expenses | 2,262 | 2,209 | 2,242 | 2,209 |
| Cash restricted 30,797 | 21,403 | 221,424 | 0 | 0 |
| Cash and cash equivalents | 418,796 | 516,849 | 140,783 | 255,335 |
| Loans and receivables | 615,569 | 575,436 | 163,389 | 291,058 |
| Royalty bond | 312,951 | 272,170 | 0 | 0 |
| Trade payables | 21,676 | 18,487 | 21,580 | 18,487 |
| Prepayment from customers | 2,091 | 14,383 | 2,063 | 14,383 |
| Other liabilities | 45,739 | 38,888 | 17,421 | 35,651 |
| Financial liabilities measured at amortized cost | 382,457 | 343,928 | 41,064 | 68,521 |
Zealand has no related parties with controlling interest.
Zealand's related parties with significant influence comprise of the company's Board of Directors and senior management.
Compensation to the Board of Directors and senior management is described in note 21.
No further transactions with related parties were conducted during the year. In 2014, transactions with the Board of Directors for consultancy fee amounted to DKK 0.7 million.
Zealand has in 2014, contributed all IP and rights relating to the agreement with Sanofi to its fully owned subsidiary ZP Holding SPV K/S. ZP Holding SPV K/S has then sold and contributed rights to 86.5% of the future annual royalties relating to
lixisenatide as stand-alone product and certain milestones to a second 100% owned subsidiary, ZP SPV 1 K/S. No gain has been recognized in the separate financial statements of Zealand and costs of the subsidiaries are the carrying amount of the assets contributed to the subsidiaries, i.e. the nominal value of cash contribution and nil with respect of the contribution of the intellectual property as the intellectual property was not recognized in the financial statements of Zealand before the transactions.
ZP SPV 1 K/S has then issued a royalty bond against these assets. The purpose of this structure is to make the royalty bond non-recourse to Zealand and at the same time protect the bond investors from a parent company bankruptcy.
Zealand has receivables from group companies of DKK 3.6 (11.7) million at year end.
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
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Depreciation | 6,215 | 5,932 | 6,215 | 5,932 |
| Warrants compensation expenses | 16,947 | 1,674 | 16,947 | 1,674 |
| Financial income | -3,889 | -3,064 | -1,444 | -3,064 |
| Financial expenses | 42,394 | 2,017 | 306 | 64 |
| Exchange rate adjustments | -18,114 | 000000 | -1,310 | 0 |
| Total adjustments | 43,553 | 66,559 | 20,714 | 4,606 |
| DKK '000 | Group 2015 | Group 2014 | Parent 2015 | Parent 2014 |
|---|---|---|---|---|
| Change in receivables | -215,594 | -25,467 | 6,631 | -24,027 |
| Increase in payables | 76,723 | 40,988 | -27,458 | 37,749 |
| Change in working capital | -138,871 | 15,521 | -20,827 | 13,722 |
| DKK '000 | 2015 | 2014 |
|---|---|---|
| Audit | 315 | 400 |
| Other assurance engagements | 30 | 61 |
| Tax advice | 104 | 818 |
| Non-audit services | 29 | 677 |
| Total fees | 478 | 1,956 |
No events have occurred after the balance sheet date of importance to the consolidated financial statements.
Today the Board of Directors and executive management have discussed and approved the Annual Report of Zealand Pharma A/S for the financial year 1 January – 31 December 2015.
The consolidated financial statements and parent financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
We consider the accounting policies used to be appropriate. In our opinion the financial statements give a true and fair view of the Group and the Parent's financial position as of 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.
In our opinion the management's review includes a fair review about the development of the Group and Parent's operations and economical conditions, the results for the year and the Group and Parent's financial position as well as a review of the more significant risks and uncertainty the Group and Parent faces, in accordance with the Danish disclosure requirements for listed companies.
We recommend that the Annual Report be approved at the Annual General Meeting.
Glostrup, 16 March 2016
Britt Meelby Jensen President and Chief Executive Officer
Martin Nicklasson Chairman
Board member
Christian Thorkildsen Board member Employee elected
Mats Blom
Senior Vice President and Chief Financial Officer
Rosemary Crane Vice Chairman
Peter Benson
Board member
Helle Størum Board member Employee elected
Catherine Moukheibir Board member
Michael J. Owen Board member
Jens Peter Stenvang Board member Employee elected
We have audited the consolidated financial statements and parent financial statements of Zealand Pharma A/S for the financial year 1 January – 31 December 2015, which comprise the income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, cash flow statement and notes, including the accounting policies, for the Group as well as for the Parent. The consolidated financial statements and parent financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
Management is responsible for the preparation of consolidated financial statements and parent financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies and for such internal control as management determines is necessary to enable the preparation and fair presentation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on the consolidated financial statements and parent financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and parent financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and parent financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks 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 considers internal control relevant to the entity's preparation of consolidated financial statements and parent financial
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 includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as the overall presentation of the consolidated financial statements and parent financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit has not resulted in any qualification.
In our opinion, the consolidated financial statements and parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31 December 2015, and of the results of their operations and cash flows for the financial year 1 January - 31 December 2015 in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
Pursuant to the Danish Financial Statements Act, we have read the management commentary. We have not performed any further procedures in addition to the audit of the consolidated financial statements and parent financial statements.
On this basis, it is our opinion that the information provided in the management commentary is consistent with the consolidated financial statements and parent financial statements.
Copenhagen, 16 March 2016
Deloitte Statsautoriseret Revisionspartnerselskab CVR no.: 33 96 35 56
Martin Faarborg State Authorised Public Accountant
Flemming Larsen State Authorised Public Accountant
Smedeland 36 DK-2600 Glostrup Denmark
Tel: +45 88 77 36 00 Fax: +45 88 77 38 98
[email protected] www.zealandpharma.com
CVR no.: 20 04 50 78
Established
1 April 1997
Albertslund
Deloitte Statsautoriseret Revisionspartnerselskab CVR no.: 33 96 35 56
Design and production: In-Mind Design
Smedeland 36 2600 Glostrup (Copenhagen) Denmark Tel +45 88 77 36 00 www.zealandpharma.com
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