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Zealand Pharma A/S (NASDAQ:ZEAL)
Q4 2019 Earnings Call
Mar 12, 2020, 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 Full Year of 2019 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

And now I would like to hand the conference over one of your speakers today Lani Morvan. Please go ahead.

Lani Pollworth Morvan -- Director, Head of Investor Relations and Communication

Thank you, Priscilla. And thanks, everybody for joining today. Welcome to Zealand Pharma's conference call for results of full-year 2019. Participating in today's call are Zealand's CEO Emmanuel Dulac; and Chief Medical Officer, Adam Steensberg. Our CFO, Matt Dallas, had plans to participate. However, due to recent developments related to the coronavirus pandemic and international travel, it was decided late last night that Matt should return to the US from Denmark immediately. To adjust for this, Emmanuel will provide both business and financial highlights from the full year 2019 and the period thereafter. Adam will follow with updates from our R&D programs. After the prepared remarks, we'll open up to take your questions.

You can find the Annual Report for 2019, the related Company announcements and additional information on our 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 1, 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 expect as required by law. Please refer to our recent filings for a more complete picture of risks and other factors.

Hence with this, I will turn the call over to our CEO, Emmanuel.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Lani, and thank you everyone for joining today. Before turning to our 2019 results and business highlights and because it relates to Zealand Pharma operations, I want to provide an update on the situation of the coronavirus outbreak. As a responsible company, we are following the Danish authorities recommendations and on how to reduce the risk of virus spread, this implies travel restrictions, allowing office workers to work from home and organize work at Zealand to further reduce contamination risk for employees that works in our laboratories.

We are actively monitoring the situation and proactively implementing specific measures to ensure business continuity and mitigate the net impact. We continue to be in a close dialog with all clinical trial sites in Europe and US and are putting in place measures to address potential local restrictions that are implemented to address the corona outbreak. That's it for this.

Now please turn to Page 3, where you see the many milestones that made 2019 a transformational year for Zealand Pharma. I would like to highlight some of our achievements from this slide, while Adam will speak to out later in his presentation.

First, it was a major accomplishment to complete the Phase 3 program for dasiglucagon to treat severe hypoglycemia. Results from several Phase 3 studies consistently supported the potential of the dasiglucagon HypoPal rescue pen as a fast treatment for severe hypoglycemia. These results provide a strong base for our application to the FDA, and we are on track to submit the NDA by the end of this month.

Our agreement with Alexion to develop peptide therapies for complement-mediated disease was a big milestone secured early in 2019. This partnership with an industry leader has increased visibility for our peptide platform throughout the biotech community. While giving us an opportunity to develop peptide therapeutics for even more patients.

Acquiring Encycle was the first time in our Company history that we had invested in external innovation to strategically expand our pipeline. We acquired alpha-4-beta-7 integrin inhibitor adds exciting new opportunities for our research and development teams to work in additional GI disease, as well as possibly for developing peptide therapeutics taken orally.

Finally, we secured funding to help us accelerate the build of the US operations to prepare for our Company first product launch anticipated next year. Establishing commercial and medical operations is the final step to our transformation. In the second half of 2019, we successfully on-boarded key personnel, selected a site in the Boston area to complement our New York office and commence the early build of our infrastructure. The momentum of these activities has carried into 2020, where we continue to execute a SaaS-based plan to ensure our US organization is fully operational by year-end.

On Page 4, these achievements are part of the exciting journey that Zealand is taking. With a clear strategy and successful execution of our strategy, we are poised to deliver on our commitment to improving patients' lives by providing leading peptide therapeutics. We have made achievements throughout the four strategic areas, supporting our vision. Our peptide platform was expanded through a strategic acquisition, while additional candidates progress into preclinical studies.

We remain focused on developing therapeutics that address severe medical needs for patients with gastrointestinal and metabolic disease. In 2019, we took big steps toward our ambition to become a fully integrated biotech with R&D operations and a medical and commercial organization and infrastructure in the US.

Turning to Page 5, you see the major milestones that we expect to achieve in 2020. By the end of this year, Zealand transformation into a fully integrated biotech company will be complete. We will be capable of taking our own products from discovery to development, and through registration and commercialization, we will be prepared to execute four exciting launches planned over four years, beginning with the first anticipated launch in 2021.

Now advancing to Page 6, I will cover for CFO, Matt Dallas, to review financial results for the full year of 2019.

On Page 7, you see Zealand's income statement for fiscal year 2019, and how it compares to 2019 -- to 2018, sorry. The net result for financial year 2019 was a loss of DKK571.5 million. Further developments of the late stage clinical programs and expansion of the early pipeline combined with pre-commercialization efforts for the dasiglucagon HypoPal rescue pen and driving the cost base for Zealand -- are driving the cost base for Zealand. These factors have resulted in an increase in R&D expenses of DKK123.2 million and an increase in G&A expenses of DKK24.3 million compared to 2018. The 2018 operating result was mainly due to an increase in other operating income as a result of the sale of future milestones and royalties related to the Sanofi license having a net gain of DKK1.1 billion in the period. That's for reference.

Page 8 illustrates our financial position and ability to support our clinical programs. Net operating expenses shown on the left were DKK628.9 million for the year. Estimated guidance for 2019 was exceeded due to the increased level of support needed in internal staffing, as well as professional advisors and external service providers as the Company prepares for product launch and subsequent commercialization. On the right of the slide, you can see that our cash position remain strong. As of December 31st, 2019 cash, cash equivalents and securities amounted to DKK1.4 billion -- DKK1.38 billion or $206.8 million. The increase in cash and cash equivalents is mainly due to the net proceeds from the issue of shares in the year of DKK683 million and the upfront cash and equity investment the Company received of $40 million from the initiation of the partnership program with Alexion Pharmaceuticals.

Moving to Page 9, you see guidance for 2020. Net operating expenses in 2020 are expected to be within the range of DKK790 million to DKK810 million. This is an increase compared to 2019 and is due to the rise in administrative expenses, as we prepare for the product launch and commercialization of the dasiglucagon HypoPal rescue pen. It is further due to the clinical development costs associated with Phase 3 programs for Glepaglutide and Dasiglucagon for congenital hyperinsulinism, and the dual artificial pancreas. Zealand does not provide guidance on revenue from current or potential partnership agreements due to the uncertainty in terms of the amount and timing.

Now, going to Page 10, I will turn the call over to Adam to discuss highlights from R&D.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Thank you, Emmanuel. So on Page 11, you will see an overview of Zealand's robust pipeline, reflecting the significant progress we had with all our programs in 2019, also as shared earlier in this call by Emmanuel, we expect 2020 to be a news flow rich year with submission of our first NDA to the FDA and continuous firm progress across our other programs.

Turning to Page 12, you can see the treatment modalities that we are pursuing with dasiglucagon beyond the HypoPal rescue pen and driven by our ambition to transform management of type 1 diabetes and reduce the burden of living with this serious condition, we are working with Beta Bionics to develop dasiglucagon for the use in the iLet Bionic Pancreas. We believe that the results from the Phase 2 study announced in Q2 last year demonstrated unprecedented glycemic control by the bihormonal iLet compared to an insulin-only setting, and we continue to make good progress with the FDA interactions and look forward to the pivotal Phase 3 trial that is expected to start later this year.

Our first dasiglucagon program aims to change the life for children and their families living with congenital hyperinsulinism. In our first Phase 3 study with children aged three months to 12 years, recruitment has continued to make strong progress, and now we expect patient enrollment to be completed in Q2 this year. The second Phase 3 trial with up to 12 CHI children from newborns to one year were initiated last year, and we could see results from this year later in 2020 as well.

Finally, as announced in our Q3 call, we are evaluating the potential for many doses of dasiglucagon as a novel treatment for patients with post bariatric surgery hypoglycemia and we are happy to announce that we completed patient enrollment into this Phase 2 study in February this year and expect results from this clinical proof of concept dose finding trial within the coming months.

On Page 13, we have summarized the results from the three Phase 3 studies with the dasiglucagon HypoPal rescue pen for treatment of severe hypoglycemia in diabetes. The median time to plasma glucose recovery from hypoglycemia was only 10 minutes from injection across all studies. Importantly, the same dose of 0.6 milligram of dasiglucagon was used both in pediatric patients and adults. And we believe that time to rescue is going to be a very important factor for patients and caregivers when considering rescue solutions for severe hypoglycemia, and we are looking forward to sharing more results from our programs at upcoming scientific conferences. With the clinical program concluded last year, I'm very happy to report that we remain on track for submitting the new drug application to the FDA by the end of this month.

Moving to Page 14, here we review our clinical programs for treatment of short bowel syndrome. Glepaglutide is our long-acting GLP-2 analog with potential for weekly administration in an auto-injector, and we expect to complete enrollment for the pivotal Phase 3 study by the end of this year. Results are expected in the first half of 2021 and we are continuing to work toward an NDA submission in late '21. ZP7570 is a unique dual-acting GLP-1/GLP-2 agonist, which we believe represents the next innovation in the treatment of short bowel syndrome. We expect to have results from the single ascending Phase 1 trial here in 2020 and plan to initiate the Phase 1b multiple ascending safety and solubility trial later this year.

With Page 14, I will now return the call to Emmanuel for his closing comments.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Adam. So Page 16, shows the anticipated news flow around achieving major milestones for Zealand in 2020. We will continue to see the strong clinical progress of our late-stage program. We also look forward to providing updates as our US organization becomes fully operational and ready to support the launch of the rescue pen.

Lani?

Lani Pollworth Morvan -- Director, Head of Investor Relations and Communication

Yes.

Emmanuel Dulac -- President and Chief Executive Officer

Do you want to conclude?

Lani Pollworth Morvan -- Director, Head of Investor Relations and Communication

Yes. Thanks. This concludes the prepared remarks and now we would like to open up for your questions. So Priscilla, if you can please open the lines.

Questions and Answers:

Operator

Thank you so much. [Operator Instructions] And the first question comes from the line of Thomas Bowers from Danske Bank. Please go ahead.

Thomas Bowers -- Danske Bank -- Analyst

Yes, thank you very much. A couple of questions from me here. So firstly, just to kick off with the revenue guidance, so you do expect some additional revenue, and I'm just wondering, aside from this EUR20 million milestone from BI on the Phase 2 start, so is there any other potential reimbursements C3 program starting Phase 1? Anything else that could materialize in 2020? And then maybe secondly, just remind me on the Sanofi $50 million payment, is that costly? Or also something that could be triggered for this fiscal year?

And then second question just on your opex guidance. So I'm just wondering on the Valeritas takeover, I know it's still pending, of course, but could this one have impact on your guidance or is this somewhat included in your current outlook? And then just lastly on the pipeline, just a question on the dual hormone pump. Could you maybe just add a little color on where you are right now with the FDA dialog on the Phase 3 design and maybe also, how should we think of additional non-exclusive deals? Is that still something that we should or could expect here in 2020? Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Thomas. So, I'll take your first question regarding the revenue. So in 2020, we expect revenue from existing license agreements. However, since these revenues are uncertain in terms of amounts and timing, we don't guide on revenues -- such revenues. And your question was related to the fact whether or not it's baked into our numbers. It is not, because again, we are actually -- we will actually put that in the guidance when it's happening. So...

Thomas Bowers -- Danske Bank -- Analyst

My question was more related to if there is? Because we, of course, are aware of the EUR20 million milestone from BI when the Phase 2 starts, but I'm just wondering if you see other potential milestones in the numbers, which potentially could be triggered also just on -- in regards to also the Sanofi payment that we also are expecting?

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

I think, Thomas, what we can say is that there could be other milestones, but we don't guide on it. But that could be.

Thomas Bowers -- Danske Bank -- Analyst

Okay, thank you. And and then the Valeritas, just on the opex?

Emmanuel Dulac -- President and Chief Executive Officer

Yes, so the Valeritas is actually, process is ongoing. The timeline -- the current timeline for the acquisition is that on March 12. It was a bid deadline for other interested bidders, so today. And so, March 16, the bids will be confirmed as meeting the qualification for bidders. So we are actually a qualified bidder, but we don't know about any others. And -- until from this 16 to the 20, that will be the auction time. And on the 20, basically the -- that would be the auction completion, if there is any other bidders. If there is no other bidders, basically, I mean we will know by today and we will know if basically we're moving forward with Valeritas acquisition on that.

Thomas Bowers -- Danske Bank -- Analyst

Okay. So if you meant to take over Valeritas, will that have any impact on the current '20 outlook?

Emmanuel Dulac -- President and Chief Executive Officer

So right now, we are two different -- two separate companies. So our opex is actually including build of the commercial US entities from scratch. So that's actually our opex. [Speech Overlap] Once we access the Valeritas, I would say, balance sheet and revenue lines, then we'll have to integrate that into our own strategy and revenues, but there will be, of course, some revenue coming from their product line sales and as well the expenses that we will have to align and deduct from our projected investment for the build of the US organization. And we expect this to be clarified, I would say, probably few weeks following this final integration or acquisition.

Thomas Bowers -- Danske Bank -- Analyst

Okay, perfect.

Emmanuel Dulac -- President and Chief Executive Officer

So you have other questions, one on the dual-hormone pump, and maybe Adam will take this one.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Yeah, so what I can say is that we -- as you know we are collaborating in a non-exclusive collaboration with Beta Bionics and we are making good progress with the interactions with FDA as it's also been communicated to both by at Beta Bionics, but also by us, and Beta Bionics will start an insulin-only study first. So that is the first study that you will see occurring. And then we will follow with the dual-hormone studies together with Beta Bionics. Our interactions with FDA is that we are in final discussions and we made the final discussions on the Phase 3 design, which developing very positively and then Zealand has started preparing for an end of Phase 2 meeting with the FDA to align on the supportive, you can say, drug development activities that will be needed for accrual.

So all of that is still anticipated to be concluded this year and then also to have the Phase 3 trial started. As you also remember, late last year, Beta Bionics they received breakthrough designation on the device where dasiglucagon was specifically mentioned. So these are of course also things that we are pursuing and discussing with FDA.

Thomas Bowers -- Danske Bank -- Analyst

Okay. So there's nothing right now that are surprising you in regards to the length of the study, so you still believe that is going to be fairly swift also -- with all the data you already have compiled from the other trials?

Emmanuel Dulac -- President and Chief Executive Officer

Yeah. From -- there are no change in what we have said so far and I think we have to continuing it along the same lines. It seems to be a quite limited study that could allow for ultimate registration of this product.

Thomas Bowers -- Danske Bank -- Analyst

Okay. And just finally on the -- on other non-exclusive deals, is that something that potentially could be triggered or could happen here also in 2020 or?

Emmanuel Dulac -- President and Chief Executive Officer

Yeah. Again, these are things that we cannot guide on, I can say -- what I can say is that Beta Bionics is the partner that we are pursuing this with as a first, you can say, partner in this non-exclusive of course and beyond dialog with other device companies. I think with the results we released last year, a lot of companies have kind of started to consider how this could have indicated for their future business. But we cannot guide further on what will happen with the potential additional partnerships.

Thomas Bowers -- Danske Bank -- Analyst

Of course, perfect. Thank you very much. I'll jump back into the queue.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Thomas.

Operator

Thank you so much. And the next question comes from the line of David Lebowitz from Morgan Stanley. Please go ahead.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you very much for taking my question. How would you characterize the market opportunity for dasiglucagon just within the context of the HypoPal rescue pen versus the opportunity in the dual pump?

Emmanuel Dulac -- President and Chief Executive Officer

I mean, very different markets even though they are both playing in the same sandbox of, I would say, type 1 diabetes. Thank you, David, for your question. The rescue pen markets to-date in the US is fairly undeveloped. So there has been this all kids market -- not marketed by two big companies. With the injection of new products, so we've seen the approval of two new products last year and the finding of the rescue pen. We expect this market to transform from a sleepy, undeveloped market to the fast-growing market. So right now, the market is growing by 20% and there is still, I think around, probably 500,000 patients to 600,000 patients who are buying these solutions for roughly 6 million patients in the US potential.

And these patients are buying on average two kits, so that they can have one at home and have one in their bags, or one in their schools or sports club. So that's actually a very vast market for us, but as I said, it's undeveloped. As you know, it takes time to develop markets and we are a small company, so we have to make -- we have to put ambition where it means. So for us, this is a great opportunity, we have a very differentiated product, we believe we will have meet what the patients' needs and require for this situation.

So looking forward, we are fairly positive, but at the same time, I would say, that it's not going to be a multi-billion dollar market, far from it actually. So, I would say, if you want to model that you should, I would say, take low expectations in the short-term and increase your expectation in the longer term. And what I mean is that for me, the dual-hormone pump is a massive opportunity to transform the type 1 diabetic market and management of patients. We see that to-date in the US, out of 1.3 million type 1 diabetic patients, around 500,000s are defined as pumpers, they're using a pump to manage their diabetes.

And so these are, for us, the obvious, again lowest hanging fruits for patients that would be looking at the dual-hormone pump. But with the penetration of -- we believe that the closed-loop pumps, the closed-loop monitoring with the CGM as well as the availability of the pump that can work on the highs and on the lows as well and bring more patients in target and allow them to be more aggressive on their numbers and be more aggressive on lowering their numbers for blood glucose level, and being more in range without any human intervention. I think we believe it has the potential to really transform the management of diabetes and I wouldn't be surprised to see a lot more patients adopting pumps beyond the 500,000 out of 1.3 million. So right now, 40%, 45%. I think it's going to grow fast. So that's why -- and that's chronic treatment. So chronic demand for dasiglucagon is very substantial opportunity for us.

David Lebowitz -- Morgan Stanley -- Analyst

Being that it's chronic treatment, how would that -- should that be looked at differently from a modeling perspective?

Emmanuel Dulac -- President and Chief Executive Officer

So again, rescue pen, to me, it's a bit like bit like mimicking the EpiPen [Phonetic]. So it's like any attack -- any patients can have an attack and any attack can be deadly, so you have to equip yourself. The utilization, though, is actually a very difficult to measure exactly who is actually using these pens? How frequently are they using them? But at least, they need to have one to prevent any event.

On the chronic use, I think right now, it's -- if you look at the insulin use, I think that the patients will be using around two cartridges a week probably, changing cartridges every two, three days for life. So that's a substantial utilization there, of course, that's insulin. For dasiglucagon, we still have to define it's probably less use, less volume, I would say than insulin, but we still have to exactly define it in the -- Phase 3 will actually be telling that.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you for that. Very helpful.

Operator

Thank you so much. And the next question comes from the line of Etzer Darout from Guggenheim. Please go ahead.

Etzer Darout -- Guggenheim -- Analyst

Great. Thanks for taking my question. Just quickly, I wondered if you could maybe just talk about, sort of, expectations for, sort of, two readouts that we could get in 2021 for the congenital hyperinsulinism. I wondered if you could maybe discuss what the clinical benchmarks we should be thinking about to help interpret the results once we get them? And then -- and maybe just in terms of the bariatric surgery hypoglycemia, what that market is like and what the market opportunity would be for dasiglucagon with sort of that -- with the Phase 2 readout expected in the upcoming months?

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Thank you for the question. Maybe I can start by addressing them. And if I start with post bariatric surgery hypoglycemia then, as you correctly said, we started this study Q3 last year and have been enrolled the last patients in February and expect the results within the next month or so or two months. I would say what is important for this indication is, also -- and what you have to pay attention to is that we are using a mini-dose pen. So that is actually a product that we have in active development right now.

So -- and why is that important that is, you could actually even consider such a solution being used in other indications. If you speak again to both caregivers and patients with type 1 diabetes, there is a huge desire for an option that could give mini doses of dasiglucagon to correct moderate hypoglycemia in situations, where you can actually ingest food, and you could consider situations, where a kid is throwing up or just after exercise etc., where it could be not a preferred solution to just take additional carbohydrates are actually impossible.

The reason that we started post bariatric hypoglycemia -- post bariatric surgery hypoglycemia is because the unmet medical need here is extremely clear. We have patients, who have undergone bariatric surgery for obesity, and a fraction of -- portion of these patients, they will develop this condition, meaning that every time they eat -- a few hours after they've eaten they will develop very serious hypoglycemia. And here, it's simply is not a solution to eat again, because then the hypoglycemia will just get even worse. So for these patients, they have a miserable life. They have to -- some will have to have surgery redone. So we installed the normal intestinal system. And others are trying to be managed by eating very, very small meals and so on. So that is very, very clear unmet medical need for these patients, and we would expect it to be a very small program that could allow for a product to be registered to support these patients.

When once the product has been registered in this indication, we could expand into the wider use in type 1 diabetes, which of course will require larger studies. And this is also then putting it into the light of the dual hormone artificial pancreas, which together with what we're doing in post bariatric surgery will establish the chronic use of dasiglucagon in different patient population. So you have to view the dasiglucagon opportunity as a portfolio of products that actually support each other in both the regulatory and development perspective.

In post bariatric surgery hypoglycemia, we also -- and in any mini-dose condition, we recognize that it has to be a simple solution. So that's why we are focused on making a mini-dose pen that is easy to use for the patients. It's also not an option in our mind that you have to inject yourself thrice to overcome the hypoglycemia. And that's actually, where the profile of dasiglucagon looks to be very interesting. And what I would hope to see with the post bariatric hypoglycemia studies is that a single injection was -- which is what we test is a enough to correct the hypoglycemic events in these patients. So that is what I would be looking for, and then of course that we are able to keep them out of the serious hypoglycemia.

In CHI, which is a very different condition, where patients by themselves produced too much insulin, the current study, which is in patients aged three months to 12 years have included patients, who have a significant number of hypoglycemic events every week. And the primary endpoint looks into our ability to reduce that. And you can say, in my mind, any reduction is important, but I would be looking for numbers of at least a 30% or more reduction. If you look into -- also you can see this on clinical trials that got the key secondary endpoint as the ability to fast. And many of these patients' families will have to wait up every night and see them every second hour to prevent them from developing hypoglycemia. So if we can extend the period, whereby they can fast, and here I would say, any hour would count, but imagine if you could take it in two hours to four hours or six hours that would completely change the life of these patients and their families. So that's what I would -- that is the level of response that I would be looking for in the CHI.

Etzer Darout -- Guggenheim -- Analyst

Great, and Thanks, Adam. That's helpful.

Operator

Thank you. And the next question comes from Jesper Ilsoe from Carnegie. Please go ahead.

Jesper Ilsoe -- Carnegie -- Analyst

Thank you very much. And Just first question on capital. So we have DKK1.4 billion in net cash by year end 2019, and it just remind us just internally how many years of cash we expect to have. And also when looking forward, do you have any internal threshold on the cash position, for example, minimum DKK500 million or the like? That's the first question.

The second one is just -- I appreciate your comments on COVID-19. I know it's very uncertain times, and all that. Okay, just perhaps give some color on sort of which programs are the most exposed to potential delays? And also on particularly looking at the Glepaglutide Phase 3 readout, where you see results in H1 2021. I assume that it's Q2 instead of Q1 and what's the uncertainty or probability that it could move into, for example, Q3? I know it's only a few months in the the three quarters, but just give me some color there. That would be very helpful. Thank you.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Thank you, Jesper. Maybe I can start with the coronavirus [Indecipherable], and then Emmanuel can follow-up on the capital question. But -- so as we stated that we have implemented and that we are of course following health authorities and government guidance. So as a company we are operating according to those guidances, and we don't see any impact. When it comes to our clinical studies, what we have ongoing right now is the Phase 3 study for Glepaglutide across 37 sites in Europe and US, and then we have the CHI studies across seven or eight sites in Europe, US and one site in Israel.

So what we can say so far is that -- so far there has been no indications with regard to the virus outbreak in our studies. But we are, of course, monitoring this very closely and, of course, this is down to a local focus as well. Right now, when you have a country like Italy that is completely closed down, that is not a good time to recruit patients, and of course, if you have very stressed care systems, you could be in a situation where you would see some implications on patient recruitment, where you would make, I mean, sure to -- you basically be demanded by clinical sites to be focused on such activities.

Our focus, if that would happen, of course, is to secure drug supply and keeping patients in this study. So far, we have, as I said, not seen any implications, and it would be highly unlikely and it would be all sides or whatever that would be take it. And so that could be one or two or few sides, who -- which would have to scale down on recruitment and cause activities, and that we will monitor closely. And I can only say if there are updates, then we will provide it to the markets. But right now, there are none, because -- we have not seen any indications.

Emmanuel Dulac -- President and Chief Executive Officer

Yeah. [Speech Overlap]

Jesper Ilsoe -- Carnegie -- Analyst

Yeah. Sorry.

Emmanuel Dulac -- President and Chief Executive Officer

Yeah, please follow up.

Jesper Ilsoe -- Carnegie -- Analyst

Yeah. Okay. So I've seen until the trials that you have some sites in Italy. So I think that you haven't seen those sites being impact or is it because they haven't recruited here?

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

So the good case of those cycles that they got through again.

Jesper Ilsoe -- Carnegie -- Analyst

Okay.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Likely, there are few sites that have not been activated. So that is of course are good in that, or in this situation is pretty good.

Jesper Ilsoe -- Carnegie -- Analyst

Thank you.

Operator

Thank you. And the next question comes from the line of Alan Carr from Needham. Please go ahead.

Alan Carr -- Needham -- Analyst

Hi. Thanks for taking my questions. One on CHI, and then the other on the dual pump. With respect to CHI program, you've got a couple of trials. It sounds like the first one in the older kids coming along fine. What -- do you have any other details on the second trial? I think you hinted that you might be able to have data by the end of the year. But can you elaborate on that. And what you're thinking on -- what's needed for registration, do you need both? And on the dual pump, what else is gaining to starting that Phase 3 trial, other than wrapping up this into Phase 2 discussion with the FDA? Thanks.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

First, I'll start with dual hormone and then -- I think for me the key thing -- the news -- the key news flow what I would be looking for is when Beta Bionics announced initiation of the insulin only Phase 3 study, because that means that they are ready from a device perspective on Phase 3 trials. That is a major thing. And I am very certain that we will start after that follow with the dual hormone study. So that is what I can say.

From a drug perspective, we are ready, and I think also with the interactions with FDA, we will be ready. So that is what I would be looking for. And that is something we expect to happen, of course, within the coming months, and probably the summer or whatever. Yeah. So I think that's the key thing. But I think we are on track. That's how we see it right now.

Alan Carr -- Needham -- Analyst

After they finish it?

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

No, I mean, they will have the recruitment going. So we will not wait for results, but they will start -- they will get the recruitment started and -- with the insulin only first. I think it's also fine, when we get some of the earnings before we start to do a hormone study. So that actually [Technical Issues].

And is it -- for the second study in CHI in neonates up to one year. We have the first site, you will see that activated and ready to treat children when they hop on, but this is a study where you need new bonds with CHI to come into the sites. We will have -- I cannot remember now if it's six or seven sites recruiting for these 12 patients. So it is, of course, extremely hard to guide on when to expect -- or when and how to expect enrollment to happen in these studies. But in reality, it is a few patients for each side, and it's a very short study. So that's why we feel quite confident that we will have the patients enrolled and also results this year when we look at the normal rate of patients appearing at these sites with this condition.

Emmanuel Dulac -- President and Chief Executive Officer

Yeah. And the good and bad part in this trial is that the of course, we are depending on more patients being born with the CHI congenital. But I must say as well that the good thing for them is that their medical need being so high. I mean this -- I mean the solution we're offering is a very, very attractive to them. So the sites in which we are in contact with are very eager to actually initiate patients on dasiglucagon.

Alan Carr -- Needham -- Analyst

Do you need any data from both of these to submit an SNDA or an NDA or do you think you need the neonate data too?

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

It's a very good question. Our base case has been dose studies. But I -- I'd also say that once we have the results from the first Phase 3 trial, we have to evaluate if we could submit just in that data set. I think, it's an open label study and people were enrolled into the extension study, and what we see is that I think all but one has decided to enter the extension study, and that suggest that this is actually something that provides a lot of benefit for these patients. So -- and as Emmanuel said, these children are in such need that, if this first Phase 3 trial comes out very positive, then we have to have a dialog with the FDA, if we should just submit based on one study of [Technical Issues].

Alan Carr -- Needham -- Analyst

Thanks for taking my questions.

Operator

Thank you so much. And the next question comes from the line of Lucy Codrington from Jefferies. Please go ahead.

Lucy Codrington -- Jefferies -- Analyst

Hi, there. Thank you for taking my questions. I've got a couple, please. And firstly, I was wondering if you could give us some guidance on your opex outlook in terms of the split between administrative expenses and R&D. And then within R&D how to think about the split between the different programs? And secondly, if you could give us some guidance as to the potential cost or anticipated costs of the Phase 3 program for the artificial pancreas? And then finally, just having looked at this kind of prescription data for Xeris' and Gvoke's product and the launch is perhaps not as exciting as it could have been. I wonder if you have any learnings or what you're taking from that launch, and in preparation for your launch? Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

Yeah. Related to the split, if you go back to [Technical Issues] of the deck, we have actually provided an income statements, where you see details of royalty expenses, research and development expenses and maturity expenses. So we have the sweep there. So that's for 2019. Related to 2020, there is actually some changes, of course, because the studies -- the clinical studies are -- Phase 3 are different -- and the -- and as well, the increase in expenses related from 1920 is mostly due to the build of the US operations. So basically you have a definitive split here. The only, I would say, continued spend between 2019 and 2020, which is flattish Glepaglutide study, which is running through as well full year. So I think this is the details on the split, as far as we communicate today.

Lucy Codrington -- Jefferies -- Analyst

That's helpful. Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

You had another question though? You don't?

Lucy Codrington -- Jefferies -- Analyst

Yeah. I -- the second question was just on potential or anticipated cost for the Phase 3 artificial pancreas. And then the third question related to this and the various launch.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

And maybe on the dual hormone artificial pancreas, as Emmanuel said, the biggest single cost in R&D is, of course, the later Phase 3 study. Then we have CHI, which are also big post. And then I would say, the rest of the study is meaning concluding -- and concluding -- the last payment in the single diversity in the Western European program, some of those have come in -- have included into this year and then the ZP7570 and the rest of the research activities, they will carry a substantial part as well. [Technical Issues]

I think Emmanuel, he will -- he can -- he is better to give that. But again, I guess about preparedness.

Emmanuel Dulac -- President and Chief Executive Officer

Yeah, I think it's about -- it's an aggregate of factors that put -- in this situation. I think it is -- yeah, it is the pointing the -- I think it's a mixed factor of being ready ahead of time. It takes a long time to secure access with payers, and we've known that for some time. Yeah, it takes some times to have people in the field, mapping their territories, knowing where the the prescribers are. It doesn't necessary come out from only data base when you have, for example, the big prescribers of insulin, assuming that these big prescriber of insulin are in prescribed massively, as well glucagon rescue medicine. Some of these prescribers don't see reps. Some of these prescribers solely work with other companies or they only work with companies they have known for a few weeks or a few months. So you can't expect to enter an office and just get prescription. So it takes time, and it takes a lot of learnings.

So I think readiness is one factor. The access is a big factor. I think in terms of positioning as well, you have to actually have a, I would say, a product that meets patient expectations. And something that's, for example, vaccine, we have done really well during their launch, is to promote the ease of use and the ready to use fact, which patients want -- they want something in this critical time, which is very stressful of the patient being in the coma under these circumstances can be rescued by someone, a third person, who is highly stressed next to them with something which is ready to use and simple to use.

So I think they push this very much. I don't think it was very clear on the other side of the communication. So not having people ready, expecting that your field is going to pick you up. I think -- clear communication is very important. And on top of that, I think, you have to have good label. I think the label for the product has to be allowing your product to be used and distributed in the year -- in the world, in the vast majority of the situations that the patients are facing. And so I think the combination of all that put very -- in a difficult situation.

Lucy Codrington -- Jefferies -- Analyst

That's helpful. Thank you.

Operator

Thank you so much. And the next question comes from the line of Michael Novod from Nordea. Please go ahead.

Michael Novod -- Nordea -- Analyst

Yeah. Thanks a lot. It's Michael from Nordea. Just a bit of a follow-up to the Valeritas follow-up questions and Thomas' question around the deal. But just to get a feeling when you implement these, of course, you're going to do some adjustments to your own build but maybe just to get a feeling whether this is going to be taking opex DKK100 million higher, DKK200 million higher than what you're guiding now or whether we could see within the range of where you're guiding now?

And then secondly also on the Valeritas acquisition and the revenue stream you're getting in because it's obviously a product that was sort of suffering. And it's a Company that had problems with manufacturing and sourcing of their manufacturing. So, can we expect that the revenue stream you're going to book is sort of 50% of what they were been booking in the first nine months? Or is it close to the nine-months number? Just to get a feeling of where are we in the next month when this is potentially closing. Thanks a lot.

Emmanuel Dulac -- President and Chief Executive Officer

So, I'll first take the Valeritas. So, Valeritas is again a process. It's a company right now in this Chapter 11 process, we have access to some information, but not the full-size information. They have had some a combination of low cash, low revenues as well as issue manufacturing which put them in a situation. When we went forward in this making this bid for the acquisition of Valeritas. We had two conditions attached to it. One of them was that they had to fix the manufacturing issue. And the other one is that they can retain a certain number of employees 75% of the employees.

And these are walkaway conditions meaning like if this is not met we can decide to walk away. So, far as we know the manufacturing issue that they had which was related to actually a specification making a certain specification criteria was linked to a change in the manufacturer of one piece of the devices that they had. So they identified this issue. They reverted back to the previous manufacturer of the device and it looks like they have fixed it. So, that's one condition which is gone.

The other condition is the retention of 75% of the employees. We're actually right now running the again the bid and the offer. So, we don't know where it's going to finish and we don't know when it's going to finish. And if there is there will be any other bidders. But it looks like again this is something which is actually again I have strong expectation that this is going to be met as well. We'll see but this is going in the very good direction right now. So, that's it for Valeritas.

The other thing on the guidance is right now our guidance I mean the guidance we expect will be within DKK790 million and DKK810 million range. So, again, this increase compared to 2019 is due to our increased confidence and our rise in administrative expense to the preparedness for the commercial launch. Our rising confidence came from the fact that we delivered better-than-expected results on the rescue pen with storage condition and reproducibility of the results in the Phase 3 that we had. And this actually gave us more I would say confidence in the potential of this program. That's why we decide to invest more on the commercial launch. We have as well initiated late last year this mini dosing approach in PDH we've a multi-dose pen that has multiple indications. And so as a result we have as well increase our investments into our device platform because we think it's really worth it. And that's -- so -- but the guidance we gave you is the best guidance we have to-date. There's nothing else to define it.

Michael Novod -- Nordea -- Analyst

No, no I fully understand that. But I think both Thomas and I were sort of looking for an answer regarding, well you know, let's say you complete the Valeritas acquisition, you take over the employees. And just to get a feeling they don't come back to the market and many say OK now the operating expense is going to be DKK1.2 billion instead of DKK810 million. So just to get a feeling of how much does this guidance in fact incorporate the build up?

So are you going to -- is this going to increase substantially? I know you're going to have less of your own internal build up but just to get a feeling of the number how it looks in May? Whether it's still going to be an odd kind of million?

Emmanuel Dulac -- President and Chief Executive Officer

I get it, sorry. I think the -- to be frank, I don't know numbers. I have no numbers right now because we don't have access to the full balance sheet. What I'm guessing is that we will have a build in our balance sheet which is basically almost the delta between 2019 and 2020, which is our commercial build.

And so I think we'll have to deduct some of that from the cost of the commercial structure Valeritas. And then we'll have to add on top of that the revenues, whatever revenue will be generated by this product in 2020. And so that will give us the final number of to-date, I don't know what number it's going to be. Again my gut feeling is that it will be more because we're spending right from now instead of building slowly.

But I think the benefit of that and it's more investment potentially. But the benefit of that is that we will be ready and we will be mapping the territories and we will be doing -- avoiding the mistakes that some others have done. The big benefit we see with -- and that people forget we have the launch of Maxine [Phonetic] is that Lilly has had people in the field with relationships, with contracts with payers knowing their territories really well. And so basically with Valeritas, this is what we're acquiring, we're acquiring a team who has been calling in this field for eight years now. They know their prescribers. They know the territories. They know their competition. And so that's actually very, very helpful for us.

Michael Novod -- Nordea -- Analyst

Got it. Thanks a lot.

Operator

Thank you. And the next question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Hey, good morning, gentlemen. Good afternoon. Thanks for taking my questions. Congrats on the progress. I've got several questions. Some of it goes back to the questioning around COVID-19 and potential implications. Thanks for the comments you provided earlier. But I just wanted to get at -- maybe not so much the clinical trial that might be impacted but can you perhaps give us a sense of whether there is exposure from perhaps drug API or parts for the pen device for dasiglucagon that could be impacted?

And what if any plans do you have in place in terms of redundancy? So that's my first question. And then my second question has to do really more from a commercialization perspective. And clearly the timing of when you might be able to launch dasiglucagon rescue pen is still some time away but could you perhaps give us a sense of if this tends to be a more prolonged situation, where your sales reps are not able to go out and do the traditional selling and marketing and promotion.

Can you give us a sense of what kind of other marketing or selling tactics could be implemented to kind of -- be used instead of the traditional selling that we're used to by salesforce? And then my last question, which is really more on a pipeline perspective. I'm really intrigued by the 7570 program. Could you just remind us where we're in that program and when we might get some data there? Thank you very much.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Thank, Graig. Maybe I can start addressing the corona [Phonetic] on the first as we also shared in the database, Emmanuel shared the impact on our business need to thus see any impact on our business on coronavirus right now and with regard to API drug product devices and so on, we have of course discussed this over the last few weeks, we also do not see that that would cause any issues. We believe we are not very exposed here.

So that is what we can say and so we are not being affected right now. What we are implementing right now is procedures to make sure that we try to support the Danish society and others the Government dictation that we help containing the virus. So it doesn't spread around the country and other countries. And on the HypoPal launch or approval, we -- as I said, we will submit the NDA later this month and then accordingly we can launch first half next year a product like this. 7570 we expect to have results of the single-ascending Phase 1 study as long as that is progressing. That is a good sign as you know, because it's a safety study that goes higher and higher and we expect to have the results of that Phase 1 study this year and then start the Phase 2b single-ascending multiple-ascending dose study. It is also a program that we find highly interesting. As you -- in the sense that we believe that we could take management of SBS patients to the next level beyond what a single GLP-2 agonist can do.

Maybe I will hand over to Emmanuel now to reply to the tactics around using a potential salesforce before a launch of dasiglucagon.

Emmanuel Dulac -- President and Chief Executive Officer

Well, yes, I mean, again, we don't expect right now delays in reviews from the FDA unless the FDA goes -- shuts down for coronavirus. But everything right now is managed electronically for many years it's been. The finding is our electronics. So I think the FDA can manage it probably from being working from home as well just like most of the countries are guiding right now. I mean, stay home.

So I think this should be on the FDA side, there shouldn't be delays. On our side in terms of quality of the file, we are very confident that with the clarity of the data set allows us to be highly confident that we have met the criteria for the FDA to meet. So we don't expect delays, in case of delays, you were asking any other strategies that commercial are using, actually not really there's no real strategies, the only advantage we may have in this situation is that there is a product generating revenues from Valeritas.

If the deal goes through that will be actually one support to offset the cost of the structure and keep the people busy in the field. Usually these delays don't take more than few weeks. And then as well because we have multi-shot on goals and one of them is CHI, which is just behind. We talked about CHI potentially being even like surprisingly accelerated if the results show a huge medical unmet medical needs of this patient population. I wouldn't be surprised that this is a product that could be fast tracked. Right now we have no indication for that. So it's only speculative. But in this type of blue ocean rare disease, no other therapies are there and having an agent which does exactly [Technical Issues].

Operator

[Operator Instructions]

Emmanuel Dulac -- President and Chief Executive Officer

All right. So sorry for that, we were disconnected due to technical reasons. So I think this is the only -- Graig, the only strategy that basically you offset your sales force by giving them something else to chew on. But of course the -- I think as you know you can use the coming soon now as well within a short period of time knowing that you will be approved. So there's a lot of actually strategies we would be using with the salesforce to offset potentially the delays. But right now, I don't expect that.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. And just a quick follow-up if I may just on Adam's comment about 7570. Adam I think you said that the Phase 1 single-ascending dose, safety study would read out this year. And then you said assuming positive data there that you would go into your Phase 2b. Is that something we could expect for this year or next year? Thanks.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

I think we can expect the initiation of Phase 1b. So the multiple-ascending dose study. And then Phase 2 activities the year after, if things goes as planned.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Thank you.

Operator

Thank you so much. And the next question comes from the line of Peter Sehested from Handelsbanken. Sorry for that, Handelsbanken. Please go ahead.

Peter Sehested -- Handelsbanken -- Analyst

Yes, thank you. Apologize for difficult last name and the company from I have four or five questions. I know you talked this before could you just give us a reminder about the timelines for the year overall clinical program for the dual-hormone home system? Thank you. Second question relating to the Alexion partnership. Some flavor regards to what we should expect about progress here and potential for milestone payments over the next couple of years? Second question, sorry third relates to the salesforce side that need for the HypoPal? I guess the numbers -- the sales numbers will be a function of prescriptions and price at the prescriptions again a function of how many physicians that you're going to prescribe? And I guess this is again a function of how many physicians that you're going to visit which again is a function of how many salespeople that you're having on the field.

So if you could provide us a little bit of numbers that could go into that calculation? And secondly, with respect to the 75% of employees that you want to retain from Valeritas, I mean they had roughly 22% in manufacturing, 75% in commercial and 3% in admin. So those 75% that you want to maintain could you just give us a bit -- is it manufacturing people? Or is it the commercial people that you want to retain? And the final one is basically I guess, Thomas and then Michael's question sort of rephrased and now try to keep it very simple. In your guidance on the costs, do you have any cost from the Valeritas acquisition in there? Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

Okay. So Adam you should take the timelines of the dual-hormone.

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

For the dual-hormone timelines with the Phase 3 study we -- as we have communicated we anticipate that will start later this year. It's six months to the primary endpoint and then we expect another six months follow-up to connect over safety data. So it's a -- so the duration of the full study is one year and then it will take some time to recruit and then I mean that is of course the question mark will that take three months, Will it take one year? And that is -- so that's something we still need to work on, on our guidance. So we don't guide on when we -- right now we have results from this study. So -- but in our models the timelines for the clinical studies that defined -- for this clinical study that defines when you can submit the NDA.

On the Alexion partnership, we're making very good progress with Alexion. And since it's their product now and we are still of course working tightly together it is actually up to them for them to communicate on the progress, but we're hopeful that we can provide more flavor on the progress later this year. And as you also know with this deal, it actually provided the opportunity for Alexion to work with Zealand three additional targets. We didn't complement each of those opportunities if they selected to trigger them would carry milestones. So we cannot be more clear on that. But of course within the next few years, we would expect additional milestones from this program.

And then I will hand over to Emmanuel for the last three questions.On the salesforce size and number of physicians targeted to launch the rescue pen these are I mean one thing, competitive intelligence. So we will not provide that. And at the same time, I can tell you that we have numbers but they are not refined yet. So we have numbers of for example diabetologists who are prescribing insulin as I said before high prescribers. We have numbers we have numbers, names, addresses and volumes of prescribers of existing kits and we will see the same information for [Indecipherable] and competitive intelligence on the risk.

Emmanuel Dulac -- President and Chief Executive Officer

Because these are ready information that you can buy and you can aggregate that. That's the work we haven't done yet, is you need them to aggregate these data into database and really manage as well field information to be able to know if these doctors are executively prescribers or if these are patients are being referred to them by other doctors. If these doctors are seeing reps and so there's a lot of qualitative you have to add to that to be able to refine your target and define your efforts.

But roughly right now, we believe that the existing field force that we would be inheriting from Valeritas would be roughly sufficient to do what we're supposed to do. So we're not looking to -- there will be some adjustments, but I think we will not necessarily expand much more than what we have. On the Valeritas, 75% employees I want to be clear actually this was a condition for us to go forward with the acquisition but it's not what we are going to do we did not -- this is a minimum number. This is not what we want to retain. So basically we're interested by the Valeritas structure. So structure system, governance, processes, people, payroll, finances, field, medical affair, access team, compliance, legal. So, all the, I would say, the front office, so the field people which are around 90 total as well as the some of the back office to support this operation. But again, the back office we have a lot in the Copenhagen office and that's where I think we have made some I would say synergies in terms of choosing who will retain and who we are potentially have overlaps in the double counting.

So, that's where we are. But again, these numbers are not public because they don't exist, because we're still to-date two different entities. Only the judge will actually basically decide by the end of this month, if we're successful on the acquisition or not. And on the costs, again, the cost guidance we gave for 2020 is our cost with the full intelligence of what we know we're going to spend in 2020. So, we cannot speculate beyond that. But we have actually the $23 million acquisition cost that we said we would pay for Valeritas is actually embedded in this, in terms of projected spending. So, we have that in our accounts. But not the operational cost because, we don't have access to this information yet.

Peter Sehested -- Handelsbanken -- Analyst

Thank you. If I could just wind-off with one final and this is sort of a general high level thing that everyone likes to ask. I mean, all the projects in the pipeline are sort of your babies, but which one are you most excited about?

Emmanuel Dulac -- President and Chief Executive Officer

I mean this -- we are all different. So, I think it's different to choose between your kids. So, my favorite ones is the next one because, we're launching something which is real. It's a -- the rescue pen has a very clear differentiated profile. And it's -- and I can tangibly take it in my hands and see it. So, it is actually really exciting for someone with a commercial background like me.

If you ask my CFO, he loves the CHI because, he knows that that's where the unmet medical need is largest and we have met with patient associations in CHI and I can tell you that, it gave us a lot of energy to work even harder to help them in their daily challenges. And I think from the get-go, we're all extremely excited by the dual-hormone pump. And I know, Adam has been the one who when I was actually doing my duties on the Company, really convinced me to join the Company when he actually explained me how revolutionary this dual-hormone pump was going to be for type 1 diabetic management. So, I think it's -- I'm giving you an answer which is not an answer because, I like all of them. And my background in commercial is on rare disease. And I was at Shire, when we acquired NPS. So, I wouldn't leave behind Glepaglutide which to me is the next best thing for these patients something that allows them to reduce the burden of treatment and potentially improve the outcome, improve compliance, that's actually an amazing product for them. So, yes, sorry for this answer.

Peter Sehested -- Handelsbanken -- Analyst

You covered all the basics as you should do. Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

It was not the trap. It was a good question. I loved these questions.

Operator

Thank you, so much. And the last question comes from the line of Jesper Ilsoe from Carnegie. Please go ahead.

Jesper Ilsoe -- Carnegie -- Analyst

Yes, it was just a follow-up on the capital and net cash. So, how many years you expect to have? And whether or not, you have internal threshold? I can't recall whether you answer it. So, just if you can explain it again. Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you, Jasper. Again, we have a cash position of DKK1.38 billion. This position is as of December 31 and excludes potential development milestones coming in from partner programs. And then, we actually guided that our net operating expenses in 2020 are expected to be within the DKK790 million to DKK810 million range, this which gives us roughly 18 months of cash if you make this calculation. So, I think that's it.

Jesper Ilsoe -- Carnegie -- Analyst

So, 18 months so you do expect some kind of revenue, right? So, it's just whether you have two years or three years at the base case?

Emmanuel Dulac -- President and Chief Executive Officer

Yes. I mean, again the potential non dilutive cash from partnered programs. We don't put that in our numbers because, we don't know when it's going to come and how much. So that's why it's not in the numbers.

Jesper Ilsoe -- Carnegie -- Analyst

Okay. Thank you.

Emmanuel Dulac -- President and Chief Executive Officer

And equity new fields as well, so. Yes.

Operator

Thank you. There are no further questions at the moment. Please go ahead.

Lani Pollworth Morvan -- Director, Head of Investor Relations and Communication

All right. I thank everybody for staying on the line. We've got a bit of run time, but hopefully the Q&A session is helpful for you all. So, with that, I will end the call and say thank you very much.

Emmanuel Dulac -- President and Chief Executive Officer

Thank you very much. Have a great day.

Operator

[Operator Closing Remarks]

Duration: 78 minutes

Call participants:

Lani Pollworth Morvan -- Director, Head of Investor Relations and Communication

Emmanuel Dulac -- President and Chief Executive Officer

Adam Steensberg -- Executive Vice President, Research & Development, and Chief Medical Officer

Thomas Bowers -- Danske Bank -- Analyst

David Lebowitz -- Morgan Stanley -- Analyst

Etzer Darout -- Guggenheim -- Analyst

Jesper Ilsoe -- Carnegie -- Analyst

Alan Carr -- Needham -- Analyst

Lucy Codrington -- Jefferies -- Analyst

Michael Novod -- Nordea -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

Peter Sehested -- Handelsbanken -- Analyst

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