Zealand Pharma secures $1B for obesity drug development

Zealand Pharma has successfully raised $1 billion through the issuance of new shares, bolstering its efforts in advancing several obesity-related drug candidates. The company sold approximately 8.4 million shares at a price of DKK 843 ($121) per share. This offering exceeded the initial target of $900 million due to strong investor demand.

The primary focus for the raised funds will be the progression of Zealand Pharma’s obesity programs into Phase IIb trials. Among these programs is the glucagon/GLP-1 receptor dual agonist, survodutide, which is a late-stage asset licensed to Boehringer Ingelheim. Additionally, the company's pipeline includes the amylin analogue petrelintide and the GLP-1/GLP-2 receptor dual agonist dapiglutide.

Zealand Pharma plans to initiate a Phase IIb study of petrelintide in the latter half of 2024. This decision follows promising early-stage results, where participants receiving higher doses of petrelintide experienced an average body weight reduction of 8.6% from baseline. In contrast, those on placebo only saw a 1.7% decrease.

Dapiglutide, another significant candidate in the pipeline, is also set for further mid-stage trials at higher doses. Results from the Phase IIa DREAM trial, which was investigator-led, indicated that participants taking 4 mg and 6 mg doses of dapiglutide saw mean weight loss changes of 2.9% and 4.3% from baseline, respectively. These results, however, were not significantly different from the 2.2% reduction observed in the placebo group.

The proceeds from this share offering will enable Zealand Pharma to fund petrelintide and dapiglutide through various essential research milestones. Additionally, the company will continue to explore strategic partnerships for the commercialization and co-development of these drugs. The financing will also support clinical development in related indications and facilitate other early-stage research efforts.

Earlier this year, in January, Zealand Pharma raised just over $200 million, which was projected to extend the company’s financial stability into 2027. This recent influx of funds significantly boosts their ability to invest in their promising pipeline and further their research and development goals.

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