Zealand hands off disappointing diabetes revenue from Sanofi in exchange for a $205M injection to back a new pipeline
Danish biotech Zealand Pharma is cashing in its royalty chips on its lackluster diabetes drugs. The company, which has switched focus to its rare disease pipeline, is grabbing $205 million from Royalty Pharma in exchange for $85 million in commercial milestones and its revenue stream due from Sanofi on Soliqua and Lyxumia.
Once the money comes through, Zealand plans to pay off a bond to become debt free as it pursues a new future in much more narrowly targeted markets.
Soliqua, a combo of insulin and Zealand’s GLP-1, has been a particular disappointment for the companies involved, failing to live up to some high-flying expectations from sell side analysts. The drugs fell well behind rivals years ago, and never caught up.
Now, Zealand is taking what it can get and moving on. The company has been lining up late-stage tests of its newest therapies, including a Phase III for dasiglucagon, a treatment for congenital hyperinsulinism.
Over the last 12 months Zealand’s stock $ZEAL has cratered, falling 37%.
“We are grateful for the collaboration with Sanofi, which has been fundamental for our growth during the past 15 years,” said CEO Britt Meelby Jensen. “The sale of the future royalties allows us to accelerate our activities to take our own fully-owned product candidates all the way to market, in line with our long-term strategic objectives. These include two leading rare disease programs, glepaglutide for short bowel syndrome and dasiglucagon for congenital hyperinsulinism, each with a Phase III study planned to commence this month.”