Zealand Pharma A/S (ZEAL) Q2 2019 Earnings Call Transcript

Zealand Pharma A/S (ZEAL)
Q2 2019 Earnings Call
Aug. 15, 2019, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Zealand Pharma Results for the First Half of 2019 Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answers session. At which time, if you wish to ask a question you will need to press *1 on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, Thursday the 15th of August 2019.

I would not like to hand the conference over to your first speaker today Lani Morvan, Head of Investor Relations and Communications. Thank you. Please, go ahead.

Lani Pollworth Morvan -- Head of Investor Relations and Communications

Welcome to Zealand Pharma's conference call for the first half of the fiscal year 2019. Leading today's call are Zealand's CEO Emmanuel Dulac and Chief Medical and Development Officer Adam Steensberg. Emmanuel will provide financial highlights through the first half of the year as well as business highlights from the second quarter and the period thereafter. Adam will follow with highlights from our research and development programs. After the prepared remarks, we will open to take your questions. Joining for the Q&A will be the rest of the full corporate management team.

You can find the company announcement containing the first half interim report and additional supporting information on our corporate website at zealandpharma.com.

As a company headquartered in Denmark, our financials are reported in Danish Krones, also referred to as kroner. Key figures may have been converted to US dollars for convenience. On page one, I will point out that we will be making forward-looking statements that are subject to risks and uncertainties. These statements are valid only as of today and the company assumes no obligation to update them unless as required by law. Please refer to recent filings for a more complete picture of risks and other factors.

Advancing to page two, I will now turn the call over to Emmanuel.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Lani. Thanks to everyone for joining the call today. In the second quarter of 2019, we continued strong execution across all of our company objectives. For me, it's been now four exciting and busy months since starting at Zealand. I remain honored by the opportunity to grow this leading biotech and impressive team with a strong track record. I look forward to building upon the relationship that we have established with our key stakeholders and investors.

Turning to page three. Over the last 20 years, Zealand Pharma has proven that our peptide therapeutics platform and know-how is providing us a competitive advantage on the discovery side. We have one of the most productive and promising platforms in biotech. Over the last 10 years, we have proven that we can take multiple programs through the clinics and execute on them according to industry benchmarks. To harvest the benefits of these years of investments and efforts, we are now preparing to take our own products through registration and commercialization. We have retained the full commercial rights for our late-stage programs. Assuming that we get approval for Glepaglutide and Dasiglucagon in all indications, we are contemplating full launches in three years starting in 2021.

After a thorough assessment of market potential and partnerships, we concluded that building our own commercial presence in the US to market all of the products coming from our fully owned programs is the best way for Zealand Pharma to maximize the value of our company and grow our assets. Of course, right now all eyes are on the Dasiglucagon HypoPal rescue pen. We have strong reasons to be encouraged by Dasiglucagon based on the consistent promising results that we have seen from the rescue pen throughout the clinical studies as well as all the programs with Dasiglucagon. The unmet medical need and expansion potential of our hypoglycemia rescue market is further validated by the recent approval of the nasal Glucagon from Lilly.

The Dasiglucagon rescue pen is now expected to be the first product commercialized by our own organization. If all indications are approved as planned, we will enter the market with a rescue pen, gain further momentum with Dasiglucagon to treat CHI and culminate our efforts with a significant potential of transforming life with diabetes with use of the dual-hormone artificial pancreas.

To fulfill our ambition of becoming a fully integrated biotech company we have an added strategic decision to realize the full value of the combined Dasiglucagon opportunity. We are accelerating the buildup of our US operations and preparing for the transition into a commercial-stage company in 2020. This is an exciting and pivotal time for our company history. We will update you in the coming quarters on our commercial readiness efforts in much more detail.

Moving ahead to page four, you will see key financial metrics and business insights from the first half of 2019. Beginning with financial results through the period ending June 30th, Zealand recognized just under DKK 20 million in revenue attributable to our agreement with Alexion. With net operating expenses of DKK 292 million, we ended the half with a net operating loss of DKK 272 million. We are taking the opportunity to adjust our guidance on net operating expenses for the year now expected to be within DKK 580 million to DKK 600 million changed from the previous DKK 550 million to DKK 570 million. Changing guidance is mainly related to strong clinical progress resulting in additional spend on ZP7570 and Dasiglucagon CHI programs as well as the accelerated buildup in the US to prepare for commercialization of the Dasiglucagon HypoPal rescue pen.

For business highlights, we saw overall strong progress and solid results made across our pipeline. Adam will go through the details shortly. I will simply point to the encouraging results delivered by two Dasiglucagon program and the expanded development of potential novel treatments for short bowel syndrome by advancing both Glepaglutide and ZP7570 in clinical studies.

This leads me to discuss further our organization on page five. We are now recruiting for two of our top management positions. The candidate choices for CFO have been narrowed to finalists. Recruitment for CSO has been initiated as Andy Parker will be departing as Zealand's Chief Scientific Officer. During his time at Zealand, Andy has contributed greatly to advancing our peptide platform and research organization. And on behalf of all Zealand Pharma, I want to thank Andy for his hard work and wish him the best in his endeavor.

In line with the progress of our pipeline, our organization has grown by 16% this year at 172 employees. We have more resource to support growth in both research and development while continuing to be a lean and agile organization. This quarter I have accelerated the first steps for building commercial operations in the US. We are recruiting for the top leadership roles and starting executing on our medical and commercial launch strategy. I look forward to welcoming new team members into these critical roles and establishing our footprint in the most important market for our potential products.

On page six, we have a visual for our financial position which remains strong. The chart on the left has been adjusted to reflect the updated guidance on net operating expenses which remains in line with our ambitions to bring several fully owned programs to the market. On the right, you can see that our cash position also remains strong with about DKK 1.1 billion after the first half of the year.

Move to page seven. I ask that you please hold any questions until the Q&A later during the call and I will now ask Adam to update on our development programs. Adam?

Adam Steensberg -- Chief Medical and Development Officer

Thank you, Emmanuel. Page eight is an overview of Zealand's extremely robust pipeline. Each of the four late-stage programs will be covered on the next slides, but notably, there is an advancement of ZP7570 into clinical testing as well as the completion of phase 2 for the dual-hormone pump for Dasiglucagon in this advanced quarter. The early stage clinical programs with Boehringer Ingelheim continue without changes. We expect BI to conclude this year phase 1 for their once-weekly GLP-1 dual agonist for the treatment of obesity and diabetes. We further await their decision regarding phase 1 initiation for their other once-weekly Amylin Analog also for the treatment of obesity and diabetes. The work has begun on the complement inhibitor program and is progressing according to plans.

Now on page nine, Glepaglutide is our long-acting GLP-2 analog being developed for the treatment of short bowel syndrome in an auto-injector with potential for convenient weekly administration. In 2018, we initiated the pivotal phase 3 study which remains on track to announce results in 2020. We look forward to the continued steady enrollment of patients throughout the remainder of the year.

Moving to page 10, Dasiglucagon is a potential first-in-class stable glucagon analog invented and developed by Zealand in a ready to use HypoPal rescue pen for easy, fast, and effective treatment of severe hypoglycemia. Last quarter, we reported top-line results from a confirmatory phase 3 study with a median time to glucose recovery of only 10 minutes from the injection. This study was important because it was conducted with the auto-injector that is intended for the market and it demonstrated similar results to the pivotal phase studies used in previous studies. Results are expected in September from the ongoing phase 3 pediatric trial using the same dose as administered to adults. Thus, we remain on track for submitting the NDA to the US FDA in early 2020.

Please, turn to page 11. In dual, we were extremely pleased to see the results from the phase 2 trial in patients with type 1 diabetes with Dasiglucagon in the iLet Bionic Pancreas. This was the first-ever out-patient home use clinical study of a true dual hormone artificial pancreas using both insulin and Dasiglucagon. We believe that the study demonstrated unprecedented glycemic control. We are excited by the disruptive innovation and believe it holds the potential to transform the lives of people burdened with type 1 diabetes. As a next step in the development, we look forward to the pivotal phase 3 trial that is set to begin in 2020.

Page 12 provides an update on our Dasiglucagon program focused on treating congenital hyperinsulinism. A child with CHI is born with a genetic defect in the pancreas causing continuous high levels of insulin and thus persistent episodes of dangerously low blood glucose. The burden of this disease on the children and their families is immense and they must constantly battle against the low blood glucose with EG nasogastric feeding and frequent feedings during sleep etcetera. Therefore, we were very pleased to see during the summer increased traction in the recruitment into our first phase 3 study evaluating Dasiglucagon's potential to prevent episodes of hypoglycemia in CHI children aged 3 months to 12 years. We now expect to have the results of this study in 2020. The second phase 3 trial we enrolled 12 children with CHI from newborn up to one year and that study remains on track for initiation later this year.

Now, on page 13, I will return the call to Emmanuel for his concluding remarks.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Adam, for this overview and congratulations for the progress. It is very good to see the programs are advancing as planned.

Page 14 shows the objectives for 2019. Halfway through the year and with updates just provided you can see that Zealand Pharma is well on track to deliver. On page 15 it shows the accomplishments already made in 2019 and the upcoming news items we anticipate for the rest of the year. We believe there are significant opportunities on the horizon to create further value for our shareholders and Zealand continues on a clear path for 2019. We all remain enthusiastic about the progress being made.

Lani Pollworth Morvan -- Head of Investor Relations and Communications

Thank you, Emmanuel, and Adam. This concludes our prepared remarks. Thank you all for your attention thus far. Tom, we're now ready to take questions. Please, open the line.

Questions and Answers:

Operator

Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, you will need to press *1 on your telephone and wait for your name to be announced. We have questions on the line.

The first one comes from the line of David Lebowitz. Your line is now open.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you very much for taking my question. A competitive product BAQSIMI with a nasal treatment for hypoglycemia was just approved. How do you see the competitive dynamic shifting up in the space given the convenience that a nasal approach might offer?

Emmanuel Dulac -- President and Chief Executive Officer

First of all, it's very good news for patients that a new drug is approved in this field. It shows the large unmet medical need as well that several companies are coming up with solutions for these patients. As you know, the price is kind of set in this market already from preexisting treatments. So, I think the pricing of BAQSIMI doesn't necessarily change anything for the rest of us. We still believe that there was actually no real promotion for these products in the past so now having an active compound and injecting a newness in this market will actually really help transform this market. There is vast potential as patients are not necessarily equipping themselves with these solutions and because there will be several solutions there will actually be potential to differentiate between the products. We believe that speed of response will be a very major differentiation point in the future.

David Lebowitz -- Morgan Stanley -- Analyst

Thanks for taking my question.

Operator

The next question comes from the line of Graig Suvannavejh. Your line is now open.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Great. Good afternoon and good morning. Congrats on all the progress. I've got a few questions if you don't mind. My first question just has to do with your decision to now go ahead and formally launch Dasiglucagon HypoPal as well as the rest of the franchise. Could you give us just a little bit more color around that decision and what was the partnership interest that was generated around the product in those discussions and was that the reason why you decided to launch on you own? And then I've got a few follow-ups. Thank you.

Adam Steensberg -- Chief Medical and Development Officer

That's good. I will try to answer all of these in one answer, actually. First of all, we saw earlier this year fantastic results from the dual-hormone. The long-term prospect of the Dasiglucagon franchise significantly increased based on these results. Since I started conducting a thorough assessment of market potential and partnerships, we came to the conclusion that building our own commercial presence in the US is the best way to maximize the value of our company and grow all of our assets. So, while we remain open to dialogue with partners and especially for example rest of the world, we are preparing to build and launch RSS which actually fulfills on one side the long-term strategy to become a fully integrated research, development, and commercial company as well as maximizing the value of our assets.

Does that answer your question?

Graig Suvannavejh -- Goldman Sachs -- Analyst

It does. Thank you very much. Also, just on the topic of business development. The company has been fairly vocal about business development opportunities. Obviously, it's hard to predict the outcome of any discussions that you're having. But my question is are you still expecting or hoping for additional business development activities in the second half of the year and are they more around out-licensing or in-licensing opportunities?

Emmanuel Dulac -- President and Chief Executive Officer

That is a great question. I am actually going to pass this question to our Chief Business Officer, Marino Garcia.

Marino Garcia -- Chief Business Officer

Hi. As you mentioned, it's always difficult to predict what transactions you're working on may actually come to fruition and get announced. What I am comfortable saying is that we have multiple initiatives going on both from a licensing and acquisitions in and out-licensing, I should say, as well as potential acquisitions to enhance our pipeline. We're looking at other options as well to help us with our ongoing strategy that Emmanuel has highlighted, for example, building in the US. The mandate is very clear. The support from Emmanuel and the executives and the board is very clear. We hope to have some announcements and more news in the coming weeks and months ahead.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Thank you very much. And then maybe the last question before I'll jump back into the queue. I'm intrigued about the once-weekly GLP-1/Glucagon combination as well as the once-weekly Amylin Analog for obesity and type 2 diabetes. I'm trying to just get a better sense around that opportunity especially relative to potential positioning versus an oral semaglutide. Thanks.

Adam Steensberg -- Chief Medical and Development Officer

Thanks, Graig. This is Adam. Maybe I can put a little color on that. So far, of course, we only have first integral data to build our assumptions around and then maybe you can add to that other combinations were also showing similar targets. What we have seen both with the GLP-1 and the glucagon and also the Amylin Analog is weight loss could potential that exceeds what we have otherwise seen with other compounds. So, it's very promising on that end. Then, at the same time, providing very good glycemic control. The model is as such and especially for the tier one work and I think from a scientific point of view also very attractive in the sense that it targets directly the liver and the concentrations in the liver which is a major problem with these patients.

Of course, we are in dialogue with BI and what we can say is that they are completely committed to these programs and see a nice potential regardless of the oral compounds that you mentioned. I think what we're looking at here is molecules that will provide efficacy beyond what we are seeing in clinical developments from competitors so far. So, we look very much forward to the next steps and BI making decisions on the next steps. Of course, we will inform the market when we have that information.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Great. Thank you very much and congratulations, again, on the progress.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you.

Operator

The next question comes from the line of Alan Carr. Your line is now open. You may ask your question.

Alan Carr -- Needham and Company -- Analyst

Hi. Thanks for taking my questions. I have one around your plans to build your commercial operations. Is this something focused just in the US or do you plan to also build in Europe? Is there going to be expanded effort in Europe too? And then coming back to a question earlier. Is the decision more of function in the change in management or in strategy or is it issues with finding a potential partner? And then, also, if you can talk about what's next for the dual pump program for Dasiglucagon. Do you need to meet with the FDA for a pre-phase 3 meeting? Where does that stand and what do you think the scale and nature of this phase 3 is going to be? Thanks.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Alan. I'm going to respond to the first one and I'll pass it next to Adam. On the first one, we are right now only focusing our attention no the US market and deploying our commercial operations in the US. At the same time, and you know, especially on the rare business side we will actually try to make our product available on a per-patient basis or even on a country basis if we find an avenue there. But the commercial deployment of patient services, salesforce, medical affair, market access people will be mostly in the US. The goal is to support the rest of the world on an opportunistic basis from people that we have here based in Copenhagen.

For the next two questions, I'm going to give them to Adam.

Adam Steensberg -- Chief Medical and Development Officer

Okay. Thanks, Emmanuel. On the first one, I think you asked about the focus on launching the HypoPal and the reasons behind that. And Emmanuel, you will follow up again after I just contribute a few things here. I think, as Emmanuel put it, we had some fantastic data with the dual-hormone artificial pancreas released in June just before ADA which in our mind demonstrates the potential of using Dasiglucagon dual-hormone pumps to really achieve something that has never been achieved before in type 1 diabetes. That is, close to full control without having to use medication all the time. With those data set, you can see the confidence that we have had in the dual-hormone opportunity for some time just grew even larger. And of course, in this context, the value of the full franchise of Dasiglucagon goes far beyond the HypoPal rescue pen. That of course changed a little the dynamics of how you look at this.

And then as Emmanuel also said when he came in with his background from the US. We, of course, had the chance to look at the oral for how it performs maybe in a localized service. With regard to your last question on the next steps for the dual pump. So, already last year we had a very positive interaction with the FDA and we have been writing, as we have also communicated to the market, that they actually do consider both us and our partner Boehringer engaged in phase 3 development. Since then, we have conducted the study with just a start and furthermore BI has raised a significant amount of funds so they're fully funded. When that product, that dual-hormone artificial pancreas should through the last stages of development and also engage in commercialization and have a clear path to that.

Our next steps with the FDA is that we will have a meeting with them to discuss the phase 3 program. We actually believe it will be a program that is limited in size compared to what you would normally expect for these kinds of indications. But we will not comment on the complete details before we have had this meeting with the FDA. But in sense of the aspects of the study, we are actually very, very positive. Some of the aspects of the study have already been discussed. But we would like to have it a little bit more firm and approved by the FDA before we put more flavor into this. What I will say is that both teams, both the Boehringer and the Zealand team is fully engaged and fully in preparation mode to get the phase 3 studies started next year. We are working diligently toward that milestone and we will have meetings with the FDA later this year to finalize the plans.

Emmanuel, do you want to add more?

Emmanuel Dulac -- President and Chief Executive Officer

Alan, do you need more information about the franchise? Again, I think Dasiglucagon is seen as a franchise even though we have the rescue pen, and the CHI, and the dual-hormone pumps. I would say if you look at it from a broad view, it's like one diabetic market patient group in which there are subgroups in it. We believe that there are real synergies taking this approach as a whole as a franchise. We will benefit a lot from the experience of marketing and commercializing the first two indications before bringing the dual-hormone pump. On the basis of the latest results, we definitely wanted to retain.

Alan Carr -- Needham and Company -- Analyst

Okay. With respect to the dual-pump, will you be making an announcement after you've confirmed phase 3 trial design or will we need to wait until you start the trial next year?

Emmanuel Dulac -- President and Chief Executive Officer

I'm sure we will talk about it. We'll be more specific once we've had the meeting. There's a meeting that we have planned as we said before and we will make more firm announcements maybe after that. That is to be seen if it's going to be an announcement or just part of a quarterly update. But we definitely plan on being launched as planned after we have had the meetings for those.

Alan Carr -- Needham and Company -- Analyst

Great. Thanks for taking my questions.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Alan.

Operator

Our next question comes from the line of Thomas Bowers from Danske Bank. Your line is now open.

Thomas Bowers -- Danske Bank -- Analyst

Yes. Thank you very much. A lot of follow-up questions for me. Just to get a clear idea on how you think of commercialization in Europe, did I understand correctly that you will not build any salesforce or anything in Europe? How should we see -- Are you not even going to file for approvals for flavor in Europe? Basically, are you planning on doing an in-patient program and then partner the program for the rest of the world and then Europe? I guess that also goes for the rescue pen.

And then secondly, what are your exact plans on when you enter the US market. I mean, for rescue pen it does reflect that you need quite a significant salesforce. So, how do you plan to attack the US market? You have plus DKK 1 billion in cash. So, I guess it is quite a large investment that you need to do for 2021. Are you still in negotiations for doing some out-licensing outside the US that could go to the balance sheet or how should we see that? Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Thomas. Regarding your first questions about Europe commercial presence, you're right. But it's not Europe. We'd say the rest of the world. It's wider than Europe. So, we will not deploy commercial presence in the rest of the world, per se. But we will actually try to provide access through the existing channels. And there's a lot actually especially in ready to be filled, but not for Dasiglucagon approach. What we are and we say earlier as well, we remain open to dialogue in terms of partnerships for rest of the world. I think this could be a matter for a base in the future. We are definitely going to fund in Europe in the other dossier and we will do that as a next step. But again, we are taking the US-first approach.

Related to your financing questions, we are continuously evaluating financing options to support the ambition and our vision of the development plan. If the need arises for additional funding, we will actually formally announce such an opportunity to the market. Of course, we're not guiding on it, but you can be sure with the ambitious plan we have we will have to go back to the market one day. But we have two years of financing right now in the bank. We're in a very comfortable situation. And should support us easy for the next two years.

Thomas Bowers -- Danske Bank -- Analyst

Okay. Just on what's the size salesforce do you think you will need for the US market to cover that? Maybe also going to take some higher-cost maybe?

Emmanuel Dulac -- President and Chief Executive Officer

Again, we don't communicate firm numbers right now but I can tell you when we look at the Dasiglucagon rescue pen and CHI and even the dual-hormone pump, we're talking about a market today that doesn't really exist in terms of active promotion. It's a very big potential market which is diabetes but at the same time, we're not competing against the insulin. We have to look at this market in a way that it's a niche within a very large market. We're going to take ways to achieve the size of our efforts accordingly to maximizing the return on investments for this opportunity. We don't have to compete against all the insulin makers. We have to actually appropriately position our product in the largest opportunity areas.

And just to guide you, if you look right now at this market, which again hasn't developed as a promoted market but as naturally developed. Around 70% of the users of existing kits today are kids. So, it's family with type 1 diabetic kids who are buying around 70% of these kits. So, you could actually definitely launch within a very niched approach and it actually aligns very well with our CHI indication that is coming behind because CHI is again in this field of pediatric diabetes. I think it prepares us really well for the dual-hormone pump which is where we say over and over that's where we really want to go. I would only guide the market to actually say that basically, we will not provide revenue and targets. We have to actually still define what type of KPIs we will provide the market with. But I think I would say that I would lower your short-term expectation and I would increase your long-term expectations on the company based on the dual-hormone pump potential.

Thomas Bowers -- Danske Bank -- Analyst

Okay. Got it. Thank you very much.

Operator

Our next question comes from Lucy Codrington of Jefferies. Your line is now open.

Lucy Codrington -- Jefferies -- Analyst

Hi there. Thank you for taking my questions. There's just a couple. I just wondered if you could comment a bit more on the rate of recruitments for the Glepaglutide trial and the Dasiglucagon CHI trial? Are you happy with the current rate? Should we, therefore, be thinking about data toward the second half of next year for those trials?

And then I would appreciate if we'd come back to the product. I was just wondering for the nasal approach for the glucagon rescue, do you know if the Lilly device requires the patient to actively inhale or is it a case of just squirting the glucagon up the patient's nose via somebody who's with the patient? Thank you!

Emmanuel Dulac -- President and Chief Executive Officer

Hi, Lucy. I think Adam is the best equipped to respond to you.

Adam Steensberg -- Chief Medical and Development Officer

Your last question first. Our understanding is that it will not require the patients to inhale that you just have to spray it up into the nose the Lilly device. So, that's that answer. And with regard to recruitment, I'll start with CHI which is actually where we have seen a significant ramp-up in recruitment and also screening this summer. It's also the first time I should note that we actually start to guide more firmly on results in 2020. So, here we have managed to have all the centers running now that are participating in this study and we see a lot of excitement. And of course, one thing is the randomized number of patients, but we also have more importantly the number of screened patients who are anticipated to enter the study soon. That's why we have much higher confidence in the speed of recruitment than we had just a quarter ago.

And for Glepaglutide is a similar story in the sense that we have now managed to get most if not all of the sites activated over the summer. We also have a number of patients in the screening and it's a study which takes actually up to a few months of screening absolutely randomized because there's one in phases. So, here we are also very confident that we will reach the target that we are guiding on with regard to recruitment and expect the numbers will grow as we said steadily over the next months. Definitely, I think that's also what we guided last quarter is the results will be expected in the second part of 2020 and not the first because it's a six-month study.

Lucy Codrington -- Jefferies -- Analyst

Okay. Very helpful. Thank you.

Operator

The next question comes from the line of Peter Sehested from Handelsbanken. Your line is now open.

Peter Sehested -- Handelsbanken -- Analyst

Yes. Good afternoon. It's Peter from Handelsbanken. Thank you for taking my questions. I have four and I apologize if they have been asked before. I have been in and out of the conference call.

Emmanuel Dulac -- President and Chief Executive Officer

Hi, Peter. Can you speak closer to the phone? We can't hear you.

Peter Sehested -- Handelsbanken -- Analyst

Is it better now?

Emmanuel Dulac -- President and Chief Executive Officer

Yeah. It's slightly better.

Peter Sehested -- Handelsbanken -- Analyst

Okay. My first question relates to your backup compounds for short bowel syndrome ZP7570. Would you give us an overview of what kind of data you would have on that compound when you announce the phase 3 data for Glepaglutide? That is my first question. My second question relates to pricing for glucagon and the dual-hormone pump. What is your strategy for demonstrating the added value of glucagon in that pump relative to payer discretions? That is my second question. My third question relates to peak sales prognosis for Dasiglucagon in the rescue pen setting. And finally, my fourth question relates to your commercial infrastructure. In the US I guess you need two different infrastructure setups to market Dasiglucagon and Glepaglutide. Could you be so kind as just to briefly highlight what kind of -- Might not give some guidance on numbers but just to give us a sense of where's the overlap here and where do you need some different resources to market those two products? Thank you very much.

Adam Steensberg -- Chief Medical and Development Officer

Thank you, Peter. This is Adam. I can start by answering the first two questions. Your first question was regarding our GLP-1/GLP-2 compound ZP7570 also in development for short bowel syndrome. What data would we have available once we have the phase 3 data from Glepaglutide? So, we initiated this phase 1 study which is a classical study on safety and solubility dosage relations study here in June. Of course, we expect to conclude that also hopefully get into the marginal ascending dose. So, have a full safety as the phase 1 study is concluded at the time when we have phase 3 data. And based on these data and how the dose-escalation goes, we as a company will have to discuss when and how to do phase 2 and how it relates to the Glepaglutide phase 3 outcome.

On the dual-hormone versus insulin only, I think we have only released top-line results from the study that we announced in June. But if I just look back into the key glycemic parameters then it was a short-term study but one of the main things I would focus on is that in that study if you just kind of model how that would look in a longer-term study then we could actually get 90% of the participants on the dual-hormone system into the range of glycemic control that is recommended by the American Diabetes Association versus only 50% in the insulin only system, which was also a semi-automated system. So, this is a system that actually allows patients to achieve the glycemic levels that the ADA recommends. And we did that with actually having lower incidents of hypoglycemia and also half the number of dangerously low blood glucose.

So, we achieved this recommended glycemic result with less hypoglycemia. Because it's a dual-hormone system it will also require less efforts by the patients and their families because the system itself corrects the dose. In the insulin only systems patients will have to snack and intervene in order to correct the dose which will happen now and again in the insulin only system. That's why we are super excited. It's not just a question about getting into the target. It's actually a question about getting into the target with less efforts and much, much less hypoglycemia. We see this as a truly disruptive technology which would actually place the opportunity in a very different level than the existing systems which all provide, I would say, great clinical results in clinical studies. But once you release the products into real life, it's such a struggle for patients to be on them also as seen by real-life evidence-based.

Emmanuel Dulac -- President and Chief Executive Officer

And I will take your last two questions, Peter. You wanted to know the sales prognosis for the rescue pen. I just wanted to point you to the size of the market today. Today there are about 1 million existing kits sold annually in the US and there are around 7.2 million insulin-dependent patients. The predictions from various entities as well from Lilly and from other companies is that this market will likely triple and reach around a billion in the coming years simply because there will actually be several products that will offer valuable solutions for patients versus the existing kits. There will be an active promotion from potentially three companies in this field. And there will be actually product differentiation between these products. Again, we believe we have a compound that has a very strong differentiation profile by being really fast and effective. And so, I won't guide you on the sales prognosis for our own rescue pen, but we think we have potentially a drug that could establish the standard of care.

On the fourth question which is your salesforce structure in the US. There are synergies between the different indications. One of the big synergies I want to point out is for the rare disease you have to deploy a very active and elaborated patient services team. I think it would be very innovative to use some of these experts to help with very specific cases of diabetic managements whether it's the rescue pen or the dual-hormone pump. I think it's not used right now because there's somewhat a separation between rare disease management the way it's being done and the rest of the market in the US market. But I think there's a big value in learning and trying to implement best-practice from one side to the other. Again, I told you there would be synergies as well in the call plan. Some of these experts are crossing over. But ultimately, the bulk of the salesforce will be deployed in terms of the number of people deployed on the diabetes side.

They don't have the same profile as the rare disease folks there. You don't need extras as you need in rare disease. In rare disease, you can achieve very good promotional efforts in the US with a handful number of people. You don't need an army. You can take a very targeted approach based on the concentration of patients in key centers. We have a product on the market in FDS, so there's a lot of market information available right now knowing where these patients are and where these key centers are. So, I think we can build from that knowledge and get to market really fast. Again, assuming we have a differentiated product and with a superior profile.

Does that answer your question?

Peter Sehested -- Handelsbanken -- Analyst

Yes. Thank you very much. Thank you.

Adam Steensberg -- Chief Medical and Development Officer

Thank you, Peter.

Operator

We have no further questions at this time. You may continue.

Lani Pollworth Morvan -- Head of Investor Relations and Communications

Thank you, everybody, for participating and joining us today. If there are no more questions, I think we will go ahead and end the call.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, everyone. Thank you for participating.

Operator

Thank you and that does conclude our conference for today. Thank you all for participating. You may all disconnect.

Duration: 49 minutes

Call participants:

Lani Pollworth Morvan -- Head of Investor Relations and Communications

Emmanuel Dulac -- President and Chief Executive Officer

Adam Steensberg -- Chief Medical and Development Officer

Marino Garcia -- Chief Business Officer

David Lebowitz -- Morgan Stanley -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

Alan Carr -- Needham and Company -- Analyst

Thomas Bowers -- Danske Bank -- Analyst

Lucy Codrington -- Jefferies -- Analyst

Peter Sehested -- Handelsbanken -- Analyst

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