Zealand Pharma A/S (ZEAL)
Q4 2022 Results Conference Call
March 01, 2022 8:00 AM ET
Company Participants
Anna Krassowska - VP, IR
Adam Steensberg - President, CEO
Henriette Wennicke - CFO
David Kendall - CMO
Conference Call Participants
Thomas Bowers - Danske Bank
Brian Balchin - Jefferies
Michael Novod - Nordea
Jesper Ilsoe - Carnegie
Mark Purcell - Morgan Stanley
Presentation
Operator
Good day, and thank you for standing by. Welcome to the Zealand Pharma Results for the Full Year 2022 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Anna Krassowska, VP of Investor Relations. Please go ahead.
Anna Krassowska
Thank you, operator. Welcome, and thank you for joining us today to discuss Zealand's full year results for 2022. With me are the following members of Zealand's management team: Adam Steensberg, President and Chief Executive Officer; Henriette Wennicke, Chief Financial Officer; and David Kendall, Chief Medical Officer.
You can find the related company announcement and annual report on our website at zealandpharma.com. As described on Slide 2, we will be making forward-looking statements that are subject to risks and uncertainties.
With that, I will turn the call over to Adam Steensberg. Adam?
Adam Steensberg
Thank you, Anna, and thanks to everyone for joining today. I'll begin on Slide 3. 2022 was a transformative year for Zealand, and I'm proud of the progress our team has made since announcing the change in strategy to prioritize investments in peptide therapeutics R&D. We achieved key milestones across our clinical pipeline, reporting positive Phase III results for both our assets targeting rare diseases, potassic organ newborns and children with congenital hyperinsulinism and [indiscernible] short bowel syndrome.
We also advanced our portfolio of peptides targeting obesity. Following our decision to scale back commercial operations, we executed 2 partnerships for our marketed products. We sold the V-Go insulin delivery device to MannKind Corporation, and we entered into a partnership with Novo Nordisk to commercialize Zegalogue.
Finally, despite the challenging financial markets, we were able to strengthen our balance sheet through equity raises and extend our cash run rate into mid-'24. Continuing this momentum, 2023 looks to be a very exciting year for Zealand.
Turning to Slide 4. We have 3 key strategic objectives aimed at maximizing the value potential of our portfolio. Our first objective is to progress our rare disease assets, dasiglucagon and glepaglutide, towards regulatory submissions. Our second objective is to advance our BDC portfolio. For the Blue GLP-1 agonist BI 456906, [indiscernible] is planning to share the results of the Phase II obesity trial with the scientific community in the coming months. Werner has also informed us that in parallel, they are engaging with health authorities to discuss plans for Phase III for people living with overweight and obesity.
Regarding our wholly owned assets in obesity, we expect to present data from the amylin Phase I program during the year and initiate new clinical studies with all 3 assets.
Finally, our third key objective is to engage in partnership discussions in alignment with our change in strategy as we evaluate future partnerships, we will seek to continue to participate in the programs across the value chain, leveraging our strength and capabilities to maximize the value of the asset.
In addition to these 3 key objectives, we are also focused on activities that support our programs in Type 1 diabetes management. This includes submitting and marketing of application to the European Medical Agency for Zegalogue, which we are responsible for under the global agreement with Novo Nordisk.
I would like to spend a few minutes on our dasiglucagon program in children with congenital hyperinsulinism, or CHI, as we're approaching the NDA submission in the first half of this year, and we believe it represents significant opportunity for Zealand to address a major unmet medical need for children and their families.
Moving to Slide 5. CHI is a rare disease that affect babies and children. The effect in the pancreatic beta cells results in an overproduction of insulin leading to frequent episodes of severe hypoglycemia that may result in brain damage. Care for patients with CHI is complex and more than half may be suboptimally treated with current therapies. This compete Phase III program demonstrating the clinical potential of dasiglucagon administered as a continuous subcutaneous infusion via a viable pump. If approved, we expect to utilize the backer infusion pump to provide patients.
Shown on Slide 6, we estimate that there are up to 800 children with diffuse CHI that may be eligible for dasiglucagon treatment in the U.S. Most of these children are treated at -- or closely followed by pediatric technologies in a few centers of excellence. To the right of the slide, we present examples of other products targeting ultrarare diseases with high clinical burden that commands premium pricing in the U.S. And if approved, we do believe that dasiglucagon has the potential to provide comparable clinical value, thus also representing a significant opportunity for Zealand.
Advancing to Slide 7. I will now turn over the call to our Chief Medical Officer, David Kendall, to discuss the rest of the RF pipeline. David?
David Kendall
Thank you, Adam. Today, I will focus my remarks on our obesity portfolio. But first, I would like to provide a brief update on glepaglutide, our long-acting GLP-2 analog that is being developed for the treatment of short bowel syndrome and intestinal failure.
Please turn to Slide 8. As many of you know, in September of 2022, we reported positive top line data from the EASE-1 Phase III trial, which demonstrated that glepaglutide treatment given twice weekly when compared to placebo significantly reduced parenteral support volume required in individuals living with SBS and intestinal failure. In addition, we observed that approximately 1 in 8 patients treated with glepaglutide in EASE-1 successfully weaned off parenteral support within 24 weeks, achieving so-called enteral autonomy. While no placebo-treated patients were able to achieve the enteral autonomy, a feature we believe is differentiating from current treatments. We look forward to presenting the results of EASE-1 at upcoming scientific congresses in the coming months, including data on the response in specific subgroups.
A total of 96 patients who completed EASE-1 enrolled in EASE-2, the first of 2 long-term safety and efficacy extension studies. Interim data from these extension trials as well as from the EASE-4 study assessing long-term effects on glepaglutide on intestinal fluid and energy uptake will all be a part of the regulatory package for glepaglutide. We had previously anticipated interim results from EASE-2 before the end of 2022 and from EASE-3 in the first quarter of 2023.
However, having the positive results of the EASE-1 in hand, we made a decision to extend the interim analysis to include 24-week data from all individuals enrolled into EASE-2. This will include data from patients who are on placebo in EASE-1, and thus this will allow us to hopefully expand our understanding of the potential for glepaglutide to reduce or eliminate the need for parenteral support as we observed in EASE-1.
As such, the interim results from Ease-2, 3 and full results of EASE-4 are now anticipated in the first half of this year. Importantly, extending the follow-up period for Ease-2 and 3 will not impact the timing for a potential regulatory submission, which we anticipate in the second half of 2023.
Advancing to Slide 9 and focusing on our obesity portfolio. There is little doubt that obesity represents one of the most significant health care challenges of our time, and we are excited to have a rich and differentiated pipeline of novel assets for the potential treatment of obesity. Obesity is a complex disease that can be treated pharmacologically by targeting a number of unique metabolic pathways. While single modality therapies have shown significant effect on body weight, it is expected that dual or triple hormonal treatments will be necessary to achieve even greater degrees of weight loss comparable to that seen following bariatric surgery.
We are using 2 specific approaches at Zealand: dual pharmacology to target 2 receptors with 1 peptide and potent and differentiated single receptor agonist that can be used alone or in combination with other peptides as loose combination or in co-formulations.
Please turn to Slide 10. In this figure, we present a representation of our differentiated peptide molecules targeting obesity. Each peptide in our portfolio has been designed to target important neurohormonal pathways that are important in the regulation of body weight, including food intake, energy expenditure, food composition and satiety. any one of which can play important roles in achieving weight loss. Our therapeutic approach aims, one, to achieve increased weight loss; and two, to provide additional effects to address specific needs or co-morbidities of obese or overweight individuals.
Our novel dual hormone candidates are designed with GLP-1 receptor agonism as a foundation to provide weight loss through reduced food intake and delay the gastric emptying and to offer the potential to improve glycemic control while adding agonism to a second receptor for complementary effects. With each of these molecules, we are targeting weight loss that can exceed that observed for GLP-1 receptor agonism alone with the potential based on nonclinical and clinical observations to date to be on par with other dual hormone candidates currently in development.
Turning our intention to BI 456906, an asset co-invented with Boehringer Ingelheim, where the additional effects of glucagon receptor agonism are designed to complement GLP-1 agonism and are postulated to stimulate energy expenditure and improve the trafficking effect with the potential to further improve weight loss and target disorders of liver fats. BI 456906 is in active clinical development with our Boehringer Ingelheim partners for the management of obesity and NASH. In 2022, very encouraging data on both glycemic control and weight loss in patients with type 2 diabetes were reported following only 6 weeks of treatment -- 16 weeks of treatment. We very much look forward to having BI share the results from the 46-week Phase II trial of BI 456906 in overweight and obese individuals at a scientific congress in the coming months.
Dapiglutide is a first-in-class dual GLP-1, GLP-2 receptor agonist, leveraging the effects of GLP-2 agonism of peptide hormone that is co-secreted with GLP-1 following meals. The rationale driving use of dapiglutide is the potential to provide weight loss through potent GLP-1 receptor agonist activity, combined with the known effects of GLP-2 agonism on intestinal barrier function. It is postulated that improvements in intestinal barrier function can improve gut function and target the low-grade inflammation that is associated with syndromes of obesity. We are actively investigating a number of these mechanisms through an investigator-led clinical study due to start in the coming days.
We also believe based on data from clinical studies the GLP-2 receptor agonism can also contribute to improve tolerability of the associated GLP-1 agonist.
And in closing, we note that our portfolio also includes 2 single receptor agonists: the idle hormone [amylin] is known to play an important metabolic role and is a validated target for the potential treatment of obesity. Amylin treatment results in weight loss by reducing food intake by increasing satiety, and amylin is known to restore leptin sensitivity, which may contribute to more lasting weight loss events.
We believe the amylin agonism can play an important role both as a stand-alone treatment for obesity serving patients who may not tolerate or adequately respond to GLP-1-based therapies and amylin as a nonincreasing hormone can be used in combination with other incretin-based treatments to provide additional weight loss. Zealand's novel long-acting amylin analog is specifically designed to allow for once weekly administration and for co-formulation or co-administration with other peptide-based therapies. We are currently advancing our amylin analog ZP8396 through Phase I multiple ascending dose studies and plan to share clinical data from this program this year.
Finally, we are planning to bring our unique stand-alone GIP receptor agonist into clinical studies in the second half of 2023. We are both excited and encouraged by the strong momentum across our development pipeline in rare diseases and obesity and look forward to providing additional updates as we advance our programs in 2023.
I will now turn the call over to our CFO, Henriette Wennicke, to review the full year financial results for 2022. Henriette?
Henriette Wennicke
Thanks, David, and hello, everyone. Let's move to Slide 11 and the income segment. Revenue for 2022 was DKK 104 million, driven by the development agreement with Alexion and the partnership agreement made in Q2 2020 with Novo Nordisk. Zealand received an outcome payment of DKK 25 million for Novo. The operating expenses for the period were DKK 941 million within our guidance for 2022. This is slightly above last year when comparing the continued operations. The increase is driven by the progression of our research and development activities, especially our late-stage clinical programs. The sales and marketing expenses decreased compared to last year, following the amount restructuring in March 2022.
Other operating items increased due to restructuring costs related to continued operations and costs related to the U.S. NASDAQ delisting in September 2022.
Net financial items for the parent resulted in a loss of DKK 135 million compared to DKK 25 million for the same period in 2021. These costs are primarily driven by the own agreement with Oberland As a result of the line restructuring, all income and expenses related to commercial efforts related to V-Go and Zegalogue accounts for a discontinued operation. Net results for these discontinued rate in 2022 was a loss of DKK 237 million.
Let's move on to Slide 10, growth and the cash position. In 2022, we were able to strengthen our balance sheet with gross received worth more than DKK 1 billion despite very challenging financial markets. We also paid down half of business facility with Oberland and made significant investments in progressing our pipeline. At year-end 2022, cash equivalents and marketable securities were approximately DKK 1.2 billion. With this, we have a cash runway to mid-2024, which allow us to continue investments in progressing our R&D pipeline in 2023.
Talking about 2023. Let's move on to Slide 13 and the financial guidance for the year. As Adam said, 2023 looks to be a very exciting year for Zealand. We will invest in progressing our rare disease assets towards regulatory submission in 2023 while at same time investing in our portfolio. Consequently, in 2023, we guide net for net operating expenses of between DKK 800 million to DKK 900 million. This is somewhat lower than recent years expense level and do reflect the restructuring initiatives implemented last year. In 2023, we will also engage in partnership discussions, as Adam mentioned. in line with our change in strategy. However, we will not provide guidance on revenue anticipated from its systems and new license and partnership agreements due to uncertainty related to the timing as well as the size of such revenue.
And with that, I will turn the call back to Adam.
Adam Steensberg
Thank you, Henriette. 2022 was a year of significant evolution for our company. And through our strong clinical progress and successful partnering efforts, we are well positioned to achieve our strategic priorities in 2023 and beyond. We look forward to NDA submissions for our rare disease programs and significant progress for our clinical programs targeting obesity, while driving to be the world's best peptide drug discovery and development company.
Thank you all, and I will now turn it over to the operator for questions.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question comes from the line of Thomas Bowers from Danske Bank.
Thomas Bowers
A couple of questions here from my side. So just kick off with BI 45. So you comment in the report that BI is currently engaging with health authorities to discuss the Phase III plan. So could you maybe just add a bit of color on advancements made by BI recently and also the reason for you to now be able to communicate what seems like quite material increased certainty that this candidate will go into Phase III? And secondly, just on this being -- you could say, devil's advocate here. So that Phase III planning comment you made, I guess that's, of course, related to obesity and not just interactions for type 2 diabetes obviously, just to rule out any misunderstanding here.
And then my last question relates to CHI. So of course, the partner situation. I noticed you have raised your [peak series] expectation due to, yes, of course, all the drug pricing strategy and then after some payer feedback. But so where -- what does this actually lead you regarding the out-licensing, the partnering situation? I sort of sense a change of mind here. So can you maybe just elaborate what's your plan A and Plan B, so so to say? So anything that could, first of all, materialize pre-NDA or preapproval? And then -- and also if you actually end up going alone here, is this actually something that maybe could even also have some impact on your OpEx guidance for '23? Yes, I think that was basically it.
Adam Steensberg
Thank you, Thomas, for your questions. And I will start out and I may hand over also to today David at one point. But if you just start with CHI as the first thing. It is -- with the new strategy we have, it is our clear ambition to have a commercial partner of the CHI. And as we approach an NDA submission in this first half year, and we would hope to see at review round of 6 to 8 months with FDA, it is, of course, important to have a partner onboard this year in order to become -- to be fully ready to launch in the first half of next year if we can continue to pursue those time lines. So it is clearly our plan A to have a partner. And I -- as we also have shared, we had very good interactions and are making good progression on these discussions, but we've also been clear that we wanted to get the NDA filing case before we truly activated these discussions because it is more simple to have a dialogue with multiple parties if you have the full data set in an NDA format. So we feel very confident on this path, and that is our strategy.
Having said that, as we also shared in our -- shared here in our prepared remarks, and it is our ambition to pay a loan in these strategic partnerships. We are not just looking for strategic opportunities on paper. We actually do it is our ambition to continue to play a role, but to collaborate with companies who have rare disease commercial infrastructure in place so we will not have to build that, meaning [indiscernible] will still play a role there. But of course, that also depends on the discussions as they progress. And I would also say all the activities, commercial activities needed this year for prelaunch activities, they are built into our budget. So there should be no impact here. When considering our [indiscernible], the BI 456906 molecule that Boehringer is developing, we have been very clear for a long time. And of course, it's based on our own review of the early data that the product looks extremely strong, and we have also communicated and based on feedback from Boehringer, that they have a lot of confidence in the molecule.
You are right that now they actually allowed us and informed us that, first of all, they expect to share the data in the coming months from the obesity Phase II study and that they are having parallel discussions on Phase III planning for overweight to obese individuals with health authorities in our mind, that's, of course, a stronger messaging than what we have done before but it is in line, it's a step forward in the messaging, and it just underscores the confidence we believe that Boehringer have the program and also have towards the opportunity to move into Phase III. But as you know, I cannot comment further on these -- the details because we have not seen the Phase II data yet, and it is up to Boehringer to to provide the further details to the program. But we sense a lot of confidence in the program and also confidence towards the opportunity to move towards Phase III.
Operator
Your next question comes from the line of Brian Balchin from Jefferies.
Brian Balchin
It's Brian from Jefferies. Just a quick clarification on BI 906 in obesity. Is that a potential milestone associated with the initiation of that Phase III?
Adam Steensberg
Thanks for that question, Brian. So we only guide on the, you can say, outstanding milestones and royalties. And we have around EUR 350 million in outstanding milestones and high single to low double-digit royalties to the program. I think it's fair to assume that it's a classical preclinical deal that we made. And we have received milestones, as you can see in our earlier reports when we initiated Phase 2, which was around EUR 20 million. So I think it's fair to assume that we would get something also when we pass specific development steps and also the gradual turn commercial. But we do not guide on this specific value. So that is back to what Henriette said. Those will only come once we know them.
Operator
Our next question comes from the line of Michael Novod from Nordea.
Michael Novod
So a couple of questions from my side as well. First, on dapiglutide. Would you expect that it's possible to have the initial results available sort of by year-end 2023 or early 2024 from the investigator-sponsored Phase II trial? And secondly, on BI 456906, given sort of traditional time lines, would then it be fair to assume that data will be out at ADA? And secondly, also that at that point in time, Boehringer will have like clarifications of the ongoing discussions regarding Phase III plans with the regulatory authorities, i.e., that they would also like to be able to communicate around ADA whether it's a go or no-go decision to start the Phase III. It definitely sounds like a go decision, but we just need the firm announcement and the timing of that. And then lastly, maybe just sort of, of course, a smaller question to Zegalogue. Now it's in the hands of Novo. We haven't seen any sort of notable traction thus far. When would you expect that we start to see something on Zegalogue? I know it's not a key drug for you guys, but still it would be nice to see that it gained some traction in the U.S.
Adam Steensberg
Thank you, Michael, for good questions. If I just start on You can say we handed this product over to Novo Nordisk in the second half of last year. And of course, we would expect to see some traction coming into the year once they get their hands around it. So -- but as we have also all the time that it is not the most important part of our value or equity story. To see -- it's an incredibly important product for patients, and we are extremely happy to see that it's in the hands of Novo Nordisk. But of course, we would expect to see traction and also that the products start to provide some contributions to our revenue in the future. And one of the activities that we have focused on this year is the marketing [expectations] applications, so we could also potentially get the product into the European market.
On the Boehringer collaboration, 906 and assumptions around when BI will make decisions and so on, I'm really sorry that I cannot make more comments. I think we have gone as far as we can go right now in the commenting. But as I said before, we feel really confident that BI is confident in how we move this product and forward. And I think we -- it's also clear that they see it as a very important potential product in their pipeline. So I cannot comment further on this that those regulations, I will have to leave with you guys. On dapiglutide side, we are just about to start the study, as David said. And maybe, David, maybe you can share a little bit more light on what we intend to achieve here, but I think it's more likely in '24.
David Kendall
Yes. Michael, thanks for the questions around dapi. The investigator-led trial, we have successfully navigated the requirements now in Europe for [PTAs, DCIS.] And as I said, we anticipate the initiation of the first patient within the coming days. The timing of the final data availability of this closure, to Adam's point, is very likely to fall right around the change in years. So we would anticipate that in early 2024, we would have those data. And obviously, we, ourselves, are planning progression to the dose ranging and titration study Phase Ib. So all of that is in play for this calendar year, and we look forward to more comprehensive data availability from the investigator-led trial and our own programs in the first part of next year.
Michael Novod
Okay. Great. Maybe I can just throw in one additional follow-up question to sort of the partnering preferences. Because you're getting Phase I data for your amylin analog during the year, you're getting dapiglutide data during sort of turn of the year or into early 2024. What would be sort of the partnering preferences? Is it to do a potential larger strategic collaboration where you sort of also pay a very smaller role? Or would you rather prefer to do individual partnering on these projects like the amylin, dapiglutide also the GIP?
Adam Steensberg
That's a very good question, Michael. And I would say we are open to both scenarios. I think the most important part for us is we believe -- especially for the 3 assets, the proprietary assets where we have all rights, we believe this represents a very, very significant value potential for the company and we are in a unique situation here. It's actually not that often that biotech companies finance well in a situation where even though still early clinical programs, it is -- they are quite mature when you compare across the industry.
If you look outside [indiscernible] and Novo Nordisk. So -- and we know there is a large pharma, a group of companies who we would normally expect to be in this space, but they do not have the richness of the pipeline you would expect. So we are in a very, very unique situation. And we also, as we have said today, fully committed to continue investing and putting all the efforts into these programs as needed in the next couple of years when we -- before we end of Phase II, it would be very logical to have a partner onboard. And I would say also, of course, it could also be logical to have a partner onboard earlier for these programs because of the potential value they carry. But our focus is perhaps not so much if it's 1 partner for all key assets or -- and even stuff we have in the preclinical pipeline or the individual partnerships. The most important part for us is that it's the right partnership. It's 100% committed large pharma company, and we have the opportunity to continue to contribute and thereby also retain more of the value for these programs because of the value potential we see with them.
Operator
Your next question comes from the line of [Sushil Hernandez] from [Van Lanschot]
Unidentified Analyst
So for the M&A analog single spending and multiple ascending dose data set that is coming out in H1 and H2, respectively. Can you provide some context on what we should expect in terms of number of subjects and metrics and biomarkers? And what is, in your view, key to show in the study? And also a second question on the partnership. So could you further elaborate on your plans for glepaglutide? Where are the discussions now versus late last year? And what do you look for in a partnership? And what should we expect in terms of timing?
Adam Steensberg
Thank you. [indiscernible] then, and then I'll hand over to David. On partnerships or glepaglutide, it's a little bit the similar situation as we have with CHI. We really like to have all our data in place before we open up data room. But having said that, we have multiple interested parties as with CHI, and we have progressed dialogues. But we do not anticipate to open up data rooms until we have all data in place. basically, it makes it too complicated if we have big data stories. So that will give you a little bit of an idea on the time line for that. And I would say for glepa, it's a little bit the same type of partnership as with CHI. Perhaps you can say for glepa, you need organizations who have a little bit stronger commercial footprint because it is going to be a competitive situation. Whereas for CHI, it's a more -- it's -- we are going to be potentially the first that introduce something for these patients. So there is enough just to have the raises infrastructure to support the product set to the market. On the time lines and the data and studies on amylin because it is 1 of our key obesity assets, I will ask David to just comment a little bit on that.
David Kendall
Yes. Thanks for the question. And Phase I, as you well know, is not always the space for the most creative study designs. So safety and tolerability and ensuring we have adequate exposure to our amylin analog that will inform dosing for Phase II is obviously key to those studies. But as we have reported, we've completed the single ascending dose study. And those data, we believe, will give us the first glimpse at the potential impacts on body weight, much as you may recall, for our dapiglutid assets, despite relatively short exposure, one gets an early perspective on the potential for its impact on body weight.
And Phase Ib will give us even greater insights into dosing, dose escalation and longer exposure that will allow an even more granular look at the potential clinical impact specific in terms of body weight loss targeting this asset for obesity. So I won't overpromise from a Phase I -- Phase Ib set of studies. But much as we've seen with other assets in the obesity space, I think we can get significant insights as to their clinical effect even in the safety, tolerability and dose finding studies.
Operator
Your next question comes from the line of Jesper Ilsoe from Carnegie.
Jesper Ilsoe
A few follow-up questions from my side. So firstly, on partnership deal updates, just to understand you guys here on the call. Is it still the base case to start partnership discussions on glepaglutide during Q2? Or is that more Q3 now due to these gathering of the full 24-week interim data on glepaglutide? So is it -- will you start the progress with structural partnership progress in Q3 now? Is that fair to assume? Then on CHI, can you just confirm, are you still in partnership discussions and would, in that case, be fair to assume a potential deal during the second half of this year? Or could it still be earlier? Then I have some follow-ups afterwards.
Adam Steensberg
Thank you, Jesper. So let me try to clarify. So for both CHI and cocopaclutide, we have had multiple interactions and we have multiple interests and have discussions at several levels. Regarding moving to the diligence phase and getting into the very detailed discussions, we have -- first of all, we are prioritizing to have the data and phase. For CHI, that is going to be the case, as you know, very, very soon because we are hopefully soon to submit the NDA. So -- and also, we expect a fast review with the FDA.
So the CHI partnership is our first priority this year because we expect to have a partner to launch with potentially already in first half of next year. Another key priority for us is, of course, to -- once we have all the data in-house, engage in discussions in more data and diligent discussions on glepaglutide. And whether that's going to start in the second or third quarter, I think it's not something I can comment on. But it's -- I can comment on our priorities, and that is basically due to launch timing. Like for CHI, it's important for us to have a partner base before [later] because, as you know, we expect a 12-month revenue and only submission in the second half. So we have more time. And then for obesity, it's a little bit opportunistic to where we just keep dialogues ongoing. So that is my stead of priorities. And yes, I hope that answers your question.
Jesper Ilsoe
It does. Just a follow-up then to the sales opportunity. So based on your slide and you've also previously shown this, it indicates a $400 million to addressable markets or more. Do you think that we underestimate this sales opportunity? And based on the discussions you've had with partners so far, do these partners agree with this? Or is this just the theoretic sales potential and not what could be the base case?
Adam Steensberg
Yes, sure. So I would say we have not shared market research yet. So what we have done is we have a pretty good idea about, at least as good as you can have for a rare disease, which really don't have any good treatments today. How many patients would be available in the key centers? And then when we took that down to say who are the ones of these patients who we truly could be candidates because they have insufficient response to current ways of managing the patients. Then we get to a number of [800], and that is within the target population of the patients that we would hope to have in a potential label. Having said this, very often for rare diseases and other rare diseases, once you start to have treatment opportunities available, you will start to see public patients in centers and smaller clinics. So it could be a higher number, but this is a number which we believe is centered around the key centers, and it doesn't even account for this European opportunity.
So I would a number that we are pretty comfortable with, but I could also easily see that the number of eligible patients would be higher once we start to -- if we have a product that is available to patients. And then I would say another thing that we are looking into when it comes to hardware insulin business, also if we should start to consider programs for adult patients because we think there's an opportunity to expand into those as well.
So on the value opportunity, we have only so far decided to provide examples of comparable products, which have launched into rare disease -- ultra rare disease markets, and we have not shared any specific market research on our program. But I would say if we provide sufficient clinical benefits, which we believe our program has demonstrated. But of course, ultimately, we have to see a potential label, then we think it's good comparisons. So I would say later this year, we would share more on this. And this is, of course, as you can imagine, also the conversation that we would enter partnership discussions with. This aligns with some of the ideas that I shared here.
Operator
Your next question comes from the line of Mark Purcell from Morgan Stanley.
Mark Purcell
It's Mark Purcell from Morgan Stanley. I have 3. Firstly, on 906, I wonder if you could help us understand the initial impact you see in the heart rate with that asset, if you can share that based on the 16-week diabetes data. And is this increase in heart rate a reason why you believe BI is likely to start trials in obesity but potentially not in type 2 diabetes until further titration work has been done? I know a parallel here to what's going with Lilly's triple [G] agonist. The second one on dapiglutide. Can you help us understand how much further you're going to likely push the dose in your 13-week dose ascension study versus the investigator-led DREAM study? I'm just wondering which additional benefits you expect you might be able to see as you push up the dose, both on the GLP-1 and the GLP-2 component.
And then lastly, on the amylin analog, 8396, 2 parts. Have you seen any potential here in CKD? Other companies that are playing in this space have mentioned potential benefits in renal patients. And then part B, when you talk about combination studies, are those within your own portfolio? So with dapi, are they potentially with Boehringer? Have they shown any interest in combining amylin with 906? Or is this already in an early stage looking to seek partners who have complementary assets?
Adam Steensberg
So I'll start and then I'll hand over to David. Thanks for the question, Mark. So if we just start with the 906. Then I think I'm very certain that the heart rate observations in the type 2 study has nothing to do with Boehringer's priorities regarding obesity. I think it has been the key focus for them all the time. I think it's extremely encouraging to see the very glucose control the product also provides. But as such, diabetes management is more saturated today and more [indiscernible]; whereas in obesity, much bigger need for new and novel treatment. So that is the goal for them. And -- and maybe just one more. And Dave, do you want to comment on the heart rate observations? Because...
David Kendall
Yes. Mark, thanks for the question. And as you're probably well aware, virtually across the panel of potent GLP-1 receptor agonist, and I've had exposure to a few of them over the years, particularly as the doses pushed on that increase in heart rate is a known consequence of these long-acting GLP-1 agonist. But obviously, there are plenty of encouraging data on cardiovascular risk with the same agents in the type 2 diabetes space reducing cardiovascular risk, likely reducing the risk and progression of renal disease. So despite that known effects on heart rate, as Adam said, it has been clear to us and made it quite clear, we think, by BI that their priorities have been obesity and NASH. But given what is known about the GLP-1 receptor agonism, having a clear understanding of its potential impact in type 2 diabetes and perhaps informing future life cycle management decisions. But the focus is obviously obesity than NASH for that asset.
I'll also address your other 2 questions dapiglutide dose escalation. Obviously, the investigator-led study is in great part in the hands of that investigator. And because many of the outcomes are mechanistic, they have a somewhat different dose escalation and maximal dose that we would anticipate will be slightly lower than that's planned for our Phase Ib study. So as with all of these GLP-1-based therapies, it is really looking to achieve a balance between optimal dose exposure at the highest dose possible given its tolerabilities, but also having an understanding of what titration scheme will allow you to get there. So our efforts in Phase Ib will be, first and foremost, to assess safety and efficacy, but also to gain a clearer understanding of what dose scheme, meaning filtration and maximal dose can be used in type 2 -- or in Phase II and beyond. So I hope that gives you some clarification.
Finally, to amylin, the 8396, the combinations, as I alluded to in my remarks, really this opens a number of possibilities Our assets, as you know, is co-formulatable. We've presented nonclinical data co-formulations with the GLP-1 receptor agonist with our dapiglutide assets as a co-administration. So really, the opportunities to combine with any and all other incretin-based therapies something we don't see likely with cagrilintide given now it is being assessed and likely forth for submission. But that freestanding or loose combination opportunity -- and ultimately, if there is interest to co-formulation possibility for fixed-dose combos, really do exist based on what partners may be most interested. Your comments about the CKD. Obviously, any weight loss agent that lowers the burden fat amylin body mass and also can reduce blood pressure like we've seen with the SGLT2 inhibitors, the GLP-1 receptor agonist. So yes, we are intrigued by that potential opportunity. But first and foremost, as we've said, our focus will be on assessing our amylin agonist in the obesity space. But these other value adds, if you will, will certainly be on our radar as we get into Phase II and beyond.
Mark Purcell
And just going back to the heart rate increase, if I may. So with [indiscernible], you're seeing up to 30 bps per minute with stand-alone, it's like 6 to 7 beats per minute. Obviously, it comes down the BG over time in mass detail over time. But it's something regulators have cited some concerns around. I guess if you look at the Altimmune asset, you don't see increase in hard rate because they're pharmakinetics. I just wondered with this BI asset, what level of hire increase you've seen? And whether from your position, you think this is something that's going to be important to address through a different dose titration regimen in Phase III.
Adam Steensberg
Yes. I think it's another important aspect here is to recognize that diabetes study was a study where they did very fast dose. So it was really suboptimal dose titration for our molecule with a lot of noise and vomiting. So all that has, we believe to the observations that was also seen in halfway. So -- and I think the key difference here is that we have a lot of GLP-1 onboard. Just as David said, the other GLP-1. So we are perhaps not -- we don't buy too much into the TK argument for other GLP-1. We think it's actually more a question that you have onboard, then you will get we will observe the same pharmacology as has been seen with other ones. If you don't have GLP-1 onboard, then you might more see what you could expect from that [indiscernible]. So -- we think it -- yes, it represents quick and maybe too fast dose escalation in order to get to the efficacy readers. And this is, of course, something as you also mentioned, when you get into longer-term studies, you can address this and titrate in a more sensible way.
David Kendall
Yes. And Mark, to add to that, you're right with the long-acting agonists, particularly with the slower titration schemes that have ultimately been brought to market, if you remember back to dulaglutide, Lilly's Trulicity and I was with Lilly at the time that these are public domain information but they actually -- we actually had an adaptive Phase II/III design that included both the titration scheme and included heart rate increases as part of that decision freeze. To Adam's point, both the total exposure to GLP-1 and the rapidity with which you increase the GLP-1 exposure can have significant impacts on heart rate. So I would not overread into particularly shorter-term studies that push the dose quickly. And obviously, we'll have -- we hope of the data from the obesity population with BI 456906 very soon to get a broader look at a much longer exposure in the 46-week study, which for us is obviously an important piece of data to understand the full safety and efficacy profile.
Operator
There seems to be no further questions. I would like to hand back for closing remarks.
Adam Steensberg
Okay. With that, we would like to thank all the attendance and for all the good questions, and we look very much forward to connecting on future announcements and updates. Have a great day.
Operator
This concludes today's conference call. Thank you for participating. You may now disconnect.
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Zealand Pharma A/S (ZEAL) Q4 2022 Earnings Call Transcript