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Zealand Pharma A/S (NASDAQ:ZEAL)
Q2 2020 Earnings Call
Aug 13, 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 Q2 2020 Call. [Operator Instructions] After the speaker presentation there will be a question and answer session. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Mads Kronborg. Please go ahead, sir.

Mads Kronborg -- Head of IR & Communication

Thank you, operator. Welcome, and thank you for joining us today to discuss Zealand's first half of 2020 financial results. I'm Mads Kronborg, Head of Investor Relations and Communications at Zealand.

With me today are Zealand's Chief Executive Officer, Emmanuel Dulac; Chief Financial Officer, Matt Dallas; and Chief Medical Officer, Adam Steensberg. The team will respectively provide business, financial and development highlights from the first half of 2020. After the prepared remarks, we will open the call to take your questions.

You can find our first half of 2020 interim report, the related company announcement and additional supporting information on our website at zealandpharma.com. As the company headquartered in Denmark, our financials are reported in Danish krone, also referred to as kroner. Key figures may have been converted to US dollars for convenience.

I would like to 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 except as required by law. Please refer to recent filings for a more complete picture of risks and other factors.

With that, I will turn the call over to CEO, Emmanuel Dulac.

Emmanuel Dulac -- Chief Executive Officer and President

Thank you, Mads, and thanks to everyone for joining today. As announced last week, Mads joined Zealand earlier this month as the Head of Investor Relations and Communication. And we are very happy to have recruited such a strong and experienced professional to help us continue to build our organization.

Turning to slide three. Zealand has had a very strong first half of 2020 despite the unprecedented situation created by the COVID-19 pandemic. We have made significant progress toward our goal of becoming a fully integrated biotech company by leveraging our innovative pipeline to address unmet medical needs in metabolic and gastrointestinal disease.

Notably, the new drug application for the dasiglucagon HypoPal rescue pen was accepted in May and is under review by the US FDA with a target PDUFA date of March 27, 2021. As we await an approval decision, we accelerated the build-out of our commercial team. First, through the acquisition of the Valeritas assets and commercial infrastructure, including the already marketed V-Go device. And second, with strategic investments made to strengthen our commercial presence with the establishment of a new US headquarters in Boston and the appointment of Frank Sanders, our new President of Zealand Pharma US.

With four late-stage assets, we also continue to execute on our clinical development pipeline. I'm proud to share that we now completed the recruitment of our first Phase III trial for children with CHI. Fueled by the commitment to make a difference for these children and despite the extraordinary circumstances created globally by the COVID-19 pandemic, the team continued to deliver to allow us to meet the goal that we had set prior to the pandemic.

Finally, underscoring our commercial preparations and development efforts is a solid balance sheet, recently strengthened by an additional DKK657.7 million through direct issue and private placement, the largest fund raise for Zealand ever, as well as a EUR20 million milestone payment from our Boehringer Ingelheim GLP-1/Glucagon dual agonist partnership program that was triggered in June.

Turning to slide four. I would like to take a moment to provide an update on potential areas of impact from COVID-19. Zealand continues to monitor the COVID-19 pandemic and take precautions to keep our employees, patients, business and clinical partners safe. We quickly adapted the way we work, to keep our laboratories open, support our partners, our community efforts and protect our employees against COVID-19, while continuing to provide patient care and maintain employees engagement and business continuity.

During the second quarter of this year, several clinical sites paused enrollment of new patients into trial to accommodate the pressure on hospital systems caused by the initial phase of the outbreak. However, we have seen a gradual reopening of new patient enrollment. We expect this positive development to continue over the coming months, assuming that there is a continued reduction of the pressure on hospital systems.

I'd like to actually extend a special thanks to the patients, families and investigators who are joining our study, trusting us, trusting dasiglucagon, glepaglutide, and also want to extend a very big thank you to the Zealand team who kept performing during these testing times, keeping our studies, laboratories and key activities running. I'm particularly proud of the new US employees who joined us earlier this quarter, embraced our organization, added to a culture and for the work they did to secure continued access for patients to our V-Go wearable insulin delivery device.

And with that, I will hand over to our CFO, Matt Dallas, to review financial results for the second quarter of 2020.

Matthew Donald Dallas -- Senior Vice President and Chief Financial Officer

Thanks, Emmanuel. On slide five of our webcast deck, you will see Zealand's income statement for the first half of 2020 and how it compares with the first half of last year.

Net operating result for the first half of 2020 was a loss of DKK230.9 million, $34.7 million. R&D costs mainly relate to the regulatory efforts to support the NDA filing for the dasiglucagon HypoPal rescue pen, clinical development of dasiglucagon and glepaglutide programs as well as preclinical research activities.

Slide six illustrates our financial position and ability to support our growing business. Net operating expenses, shown on the left, were DKK437.2 million, $65.7 million for the first half of 2020. You see that our cash position remains strong. As of June 30, cash, cash equivalents and marketable securities amounted to DKK1.65 billion or $247.2 million. In Q2, we raised DKK657.7 million, $99.3 million through a direct issue and private placement. And in June, we also triggered a milestone payment of the amount of EUR20 million from our Boehringer Ingelheim partnership program.

Moving to slide seven. Net operating expenses in 2020 are expected to be within the range of DKK950 million to DKK1 billion. There is no change to the operating expense guidance announced on May 14, 2020, which reflected an increase for 2020 net operating expenses due to the completion of the asset purchase agreement for Valeritas, which closed on April 2 of this year. The acquisition increased Zealand Pharma's personnel by 110 employees in the US and added the V-Go program to the Zealand commercial portfolio.

Total revenue in the first half of 2020 was DKK233.4 million, or $35.3 million. Revenue related to the incurred BI milestone was DKK149.1 million, or $22.7 million. Net product revenue from the sales of the V-Go wearable insulin delivery device, during the period of April 2 to June 30, was DKK58.1 million or $8.8 million, with net product revenue expected to be within the range of DKK150 million to DKK175 million for the period beginning on April 2 and ending on December 31 of 2020.

Zealand also expects revenue from existing license agreements. However, such revenue is uncertain in terms of size and timing, and Zealand does not intend to provide guidance on such revenue.

I will now turn the call over to our Chief Medical Officer, Adam Steensberg to discuss highlights from our pipeline.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Thank you, Matt. On slide eight, you'll see our robust pipeline of peptide drug candidate for metabolic and gastrointestinal diseases. In the first half of the year, we have seen significant progress across all programs. And before I go into more details on the dasiglucagon franchise and glepaglutide for short bowel syndrome, I would just like to share a few other highlights from the period.

First, we were pleased to see that Boehringer Ingelheim dosed the first patient in a Phase II study of BI 456906, a long-acting GLP-1/glucagon dual agonist for treatment of Type 2 diabetes, obesity and NASH. We are also seeing good progress in the preclinical pipeline, including our collaboration with Alexion on complement C3. Earlier this quarter, we announced a two year research agreement with Intomics. The agreement will enhance our ability to use Big Data, artificial intelligence and machine learning in the discovery and development of next-generation peptide therapeutics.

Our dasiglucagon franchise is presented on slide nine. Starting with adjustable mini dose pen program. In March of this year, we reported positive Phase II data for prevention of meal-induced hypoglycemia in patients with post-bariatric hypoglycemia. As previously shared, we have initiated the development of an adjustable mini dose pen, allowing patients to self-administer dasiglucagon to prevent or treat mild to moderate hypoglycemia. And we are therefore now excited to announce that -- today that a Phase II trial for the prevention of insulin-induced hypoglycemia in people with Type 1 diabetes was initiated in June. And this trial will expand the opportunity for the adjustable mini dose pen program, and we look forward to providing more updates as we progress.

For the dual-hormone artificial pancreas program, we now expect initiation of the pivotal Phase III study to slide into '21. We are encouraged that in spite of COVID-19, Beta Bionics has been able to complete the development of the iLet device and achieved FDA acceptance for initiation of the Phase III trials. They have also managed to screen all 440 patients in the pivotal insulin-only bionic pancreas trial. And it's our understanding that dosing of the first patients in that study is planned for later this quarter. Completion of patient enrollment will guide initiation of the pivotal dual-hormone artificial pancreas trial with dasiglucagon.

Moving to slide 10. An update on the HypoPal rescue pen. As highlighted by Emmanuel, earlier, in last quarter, the NDA for the rescue pen was accepted by -- for review by the FDA with a PDUFA date of March 27 next year. And the HypoPal rescue pen is designed to offer patients with diabetes a fast and effective treatment for severe hypoglycemia. And in the pivotal and confirmatory Phase III trials, the primary and all secondary endpoints were successfully achieved with a median time for blood glucose recovery of only 10 minutes. And median time to recovery of 10 minutes was also demonstrated for pediatric patients.

Moving to slide 11, and our efforts to change the life for children and families living with congenital hyperinsulinism by developing dasiglucagon as an infusion pump therapy. The goal here is to reduce or eliminate the need for intensive hospital treatment, reduce the frequency of dangerous low blood glucose, the need for constant feeding and to potentially delay or eliminate the need for pancreatectomy.

We are running three Phase III studies in children with CHI, covering an age band from seven days to 12 years. The first Phase III trial is with 32 children with CHI, age three months to 12 years. With the enrollment of the last patient here in August, we achieved a major milestone for the program. The last patient, last visit is planned for October, and we are happy to reconfirm that results from this trial are expected later this year. The second Phase III trial, which is in 12 children with CHI from seveb days to one year. And here, we are pleased to see that the first patients were randomized into this study in July, and we expect all sites to be enrolling patients in the coming months.

Please move to slide 12. Our lead candidate in the gastrointestinal franchise program is glepaglutide, a long-acting GLP-2 analog, which is being developed in an autoinjector with potential for convenient weekly administration for patients with short bowel syndrome. As you know, short bowel syndrome is a rare chronic debilitating disease affecting up to 40,000 patients across US and Europe, and we believe that glepaglutide has the potential to serve as an important new treatment option with a unique drug profile and once weekly dosing via autoinjector. The Phase II results showed significant increased intestinal absorption following only three weeks of treatment with a good safety profile.

For the ongoing Phase III trial, we are encouraged that a number of sites have been able to randomize new patients in the second quarter despite COVID-19 restrictions. As we continue to see sites that were paused -- were paused are now opening up for new patient enrollment will maintain our guidance that we will see results from this trial in the second half of '21.

I will now turn the call to Emmanuel for his closing comments.

Emmanuel Dulac -- Chief Executive Officer and President

Thank you, Adam. Thank you, Matt. 2020 is a significant year for Zealand, and I'm thrilled to see the progress we are making on all fronts. We gained significant momentum on our US build-out earlier this year with the Valeritas acquisition. We accelerated our transformation into a fully integrated R&D and commercial biotech company, kept our lab running, continued to advance four late-stage assets into the final stage of clinical development and restrengthened our finances.

Zealand is growing and transforming every day. We continue to invest in our R&D and the robust early pipeline standing from our innovative peptide platform. We now have over 300 fantastic employees in Denmark and the US combined, and the company is on a positive trajectory. We have delivered on our commitments, and we are well poised to realize our ambition to have five products on the market by 2025. I'm looking forward to the future.

And with that, we're now ready to take your questions. Nadia, please open the line for questions for participants.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, we'll now begin the question and answer session. [Operator Instructions] And your first question comes from the line of Michael Novod from Nordea. Please go ahead, your line is open.

Michael Novod -- Nordea -- Analyst

Okay. Thank you very much. And I have three questions. This is Michael from Nordea. So first to the V-Go and the guidance. And I just see in your release that you comment that if you're not able to sort of meet with the stakeholders, then obviously, it will have an impact on sales. How should we understand that in terms of beyond, let's say, 2020, just to get a feeling for how much of your efforts will go into continuing the push on the V-Go product?

And then secondly, on CHI, maybe you could just describe sort of the commercial perspectives on this in -- sort of in greater detail how we should try to work with this on the commercial side? And then on the Beta Bionics, just a feeling for -- on the Phase III for the dual hormone, how fast you expect it can sort of be initiated and started and run as soon as it's going so we could see data perhaps, I guess, early -- late 2021 or something like that? Thanks a lot.

Emmanuel Dulac -- Chief Executive Officer and President

Thank you, Michael. Maybe I can take the V-Go, and Matt can add something as well to it, and then Adam will take the next two. But on the V-Go, too early to tell, I would say. The results are encouraging. But I think what's really -- I think the more positive thing about V-go knowing that Q1 was a quarter where we didn't capture the sales. It was actually under Valeritas management, and they were running through some stocking issues. Q2, we've been running under this COVID-19 pandemic situation. So it's very easy -- very difficult to actually see what is the steady revenue from the operations.

What's really encouraging is the team now in the US has been fully integrated into Zealand organization. We have a governance. We have actually leadership. We have hired a new President for the US. And so, there is a very strong momentum. They have embraced the culture and the company and the vision and the pipeline that goes with it as well. So I think that's what I was really looking for, less numbers, but more about the momentum, the engagements and as well the behavior of people. And this is really encouraging. Of course, it's difficult to put on paper, but this is -- this is what I think we should focus on.

Matthew Donald Dallas -- Senior Vice President and Chief Financial Officer

Yeah, this is Matt. And for 2021, I mean, we're not going to comment on revenue expectations right now. But the sales force, there's duplications of call points with V-Go as well as the rescue pen launch. So we would not anticipate a reduction in efforts for supporting V-Go in next year and future period.

Emmanuel Dulac -- Chief Executive Officer and President

Yes. It's more synergy, yes.

Michael Novod -- Nordea -- Analyst

Okay. And that was also my point because I was actually a bit surprised to see that V-Go is doing that well during the pandemic?

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Yeah. Okay. I can address the next two questions. And CHI first, as you know, we have actually not provided our company perspective on the commercial potential for CHI yet. And of course, you can say one thing is, we need to see the data from the Phase III study. What I can say is that we are dealing here with children, where there is a significant unmet medical need. And of course, our expectation is with the program that we demonstrate that we address that need, as also exemplified by the fact that we have been able to actually get patients in despite all the circumstances. Most of the patients, close to all, have decided to enroll also in the extension study, suggesting that it's actually a treatment that is doing a difference to these patients. We have patients who have been on treatment for more than a year now. So we are, you can say, hopeful and very encouraged by the progress of this program. With the number of children being an ultra-rare indication, of course, there's also opportunities for having pretty high sales around -- cost around the product because it is an ultra-rare indication. So the only guidance we can say, this is an ultra-rare product. It's a product which we believe will make a huge difference to the children, if approved. And that's probably where we can go to on the commercial perspective right now.

On Beta Bionics, as you saw here, we are seeing the Phase -- initiation of the Phase III to slide into '21. On the encouraging side and what really you can say is extremely important for us is that, first of all, Beta Bionics have managed to complete development of the iLet -- the commercial iLet that will go into Phase III, which is a major milestone. They also managed to screen 440 patients in, I think, less than six weeks during the pandemic. And now very, very soon, it's our expectation that they will randomize these patients. So they're ready to get randomized into the study. And as we have communicated all the time, we will not initiate the Phase III for the dual hormone until they have completed that enrollment into the Phase I -- sorry, into their Phase III study for the insulin only. So it really depends on the speed with which they can enroll these patients. But, we are hopeful that it will be early '21 that this study will start.

Michael Novod -- Nordea -- Analyst

Thanks a lot.

Emmanuel Dulac -- Chief Executive Officer and President

Thank you, Michael.

Operator

And the next question comes from the line of Thomas Bowers from Danske Bank. Please go ahead. Ask your question.

Thomas Bowers -- Danske Bank -- Analyst

Yes. Thank you very much. A couple of questions for me here as well. So just on HypoPal. So I'm just wondering if there's any -- well, in regards to the prelaunch preparations for this, I'm just wondering if you've started to sort of engage with payers. And if that's the case, do you have any feedback so far? And also, I guess you're up for sort of a mid-cycle review here next month. So I'm just wondering if is it fair to assume that you -- we should not expect any outcome on this one?

And then just turning to the amylin analog. So I understand that you can co-formulate with move to GLP-1s. So I'm just wondering if this potentially could become part of the clinical pipeline in the near-term or maybe looking for a different profile for this candidate? And then maybe just lastly, just on glepaglutide, the recruitment here. I'm just wondering, how does the US look -- I'm just wondering if you are still in for at least a 30% S patients in that study, and if not, any indication that it could become a problem for the FDA. Thank you.

Emmanuel Dulac -- Chief Executive Officer and President

Yeah. So on the HypoPal prelaunch activity, the team -- actually, we have a full team working on it now. So a marketing team, medical affair. We have MSLs in the field. We have a sales team as well, but the -- I think the most important thing is that they are actually -- we had -- and I think we -- I shared probably some of these data with you before in terms of perception of drugs, preference by physicians, prescribers, nurses, families and patients. Big preference for the injectable route and the autoinjector versus syringes and versus nasal. But since now, there has been these new entrants, we had not rerun this analysis. And so we are actually running a whole batch of analysis, including the access because the access actually picture has changed lately because of the new entrants. So we are doing this work now.

And at the same time, we are actually doing multiple things like mapping the entire territories. We actually ran this -- during the division of Valeritas, we ran this analysis to see what was the overlap between existing prescribers for V-Go and the rescue pen. So we are completing this analysis now and -- but we have a full team. We are actually fully, fully staffed. And so people are actively working on all that right now. We will share when later during the year. And again, we will not share everything because it's competitive intelligence, but we will share what's relevant for you guys.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Yes. Maybe just a follow-up. I mean we have no indication that there would be an outcome even for the rescue -- for the HypoPal. On amylin, we are still -- I mean,[Indecipherable] we just received all repos. So we are still evaluating this asset, and we'll not be able to comment further until in the coming months. We remain excited about the target and as many would be. So -- and we look forward to provide further updates when we have the full overview of the data.

For glepaglutide, we are and we actually have seen a number of US sites being able to randomize patients or they have started to communicate that they will be able to randomize again now. It's still a fact that most of the US sites have been closed down during Q2. Whether we will end up having 30% of patients in the US, I think it will not be an issue. As you also know, I mean, with this situation of COVID-19, there are many things that where you're allowed to kind of go a little bit beyond where you would normally be with things like this. So we do not foresee any issues with, if we would not have, let's say, 30% US patients in the trial.

Thomas Bowers -- Danske Bank -- Analyst

Okay, perfect. Thank you very much.

Operator

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

Graig Suvannavejh -- Goldman Sachs -- Analyst

Great. Good morning, good afternoon. Can you hear me OK.

Emmanuel Dulac -- Chief Executive Officer and President

Yes, we can hear you well, Graig. [Multiple Speech]

Thomas Bowers -- Danske Bank -- Analyst

I've got two questions, actually. My first, just trying to get a better gauge of what a potential HypoPal launch could look like? In the past, you've talked about what you've seen the market do with the introduction of two new entrants within the past year. I think you've said that you've seen kind of the market grow about 30%. I'm wondering if you have a latest kind of update on what the market looks like right now and whether there's been any inflection either up or down in terms of what the market is doing right now? Also with regards to that, how you are currently thinking that the HypoPal launch in the US might look like relative to the two other products in terms of kind of the slope of those trajectories?

And then my second question just has to go back to V-Go. I'm just curious as to how much commercial -- intensity is not the right word, but how much commercial effort you are going to put behind that product? I know you provided guidance, but I'm just trying to get a gauge of how much of a priority it is or not in terms of driving sales of that product? Thanks.

Emmanuel Dulac -- Chief Executive Officer and President

Yes. So the last data I had on the market was that there was a very fast inflection and growth of the market at the launch of Baqsimi, which I think grew by around 20% in six months. I think since it was rather flat. So the 20% growth was actually stabilized. So it was still growing by 20%, but didn't go further than that. And then that's where I stay in terms of understanding the market, which actually needs to be correlated to data that I don't have because, again, that's the work that, as I was just mentioning Thomas before that we are gathering, which is what's behind this -- how much effort is being put or the teams on the other side still fully focused. I think it probably went from P1 to -- back to a P2 or P3.

And at the same time, we saw a disease awareness campaign being launched around hypoglycemia, which is really good because I think it's elevating the awareness for a need for reduce. So I think it's uncomplete picture right now for -- to understand the full market behavior. However, I think the interactions we have with KOLs still tell us that there is a high awareness in KOLs we know for the need. There is a big expectation for a simple solution injectable. And so I remain confident that with the data we have provided the FDA that we will be able to deliver a product that meets all these preference for patients. That's where we are.

In terms of how much efforts we are planning to, it will be actually as well somewhat linked to this analysis that we're running right now. And again, having a new head of the US helps a lot, I can tell you. because before that, the team was, actually everyone was engaged with it. And we were spending maybe half of our time on it. Now we have a full-time dedicated corporate management leader helping the US team focus on the preparation for this HypoPal pen launch, which for us is -- you were saying how does it prioritize for us, it's a top priority. I mean this is our first launch and this will be the only launch for -- until we bring CHI. So we will put all our efforts and energy and focus behind this HypoPal launch next year.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Just to clarify, with respect to HypoPal, do you have a sense of how the market for the other two products has fared in a COVID-19 environment? And just the other follow-up was, just as a clarification, I was just curious about how much intensity the company might be putting behind V-Go. Thanks.

Emmanuel Dulac -- Chief Executive Officer and President

Yeah. On V-Go. You mean, in the mix of the launch with HypoPal.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Yes. Kind of prioritizing...

Emmanuel Dulac -- Chief Executive Officer and President

So in terms of activity during the COVID-19 pandemic from the competition, I don't have the data. I don't know what's going on. That's missing. The one information I have is that now there we should be marketing the autoinjector, but I didn't get any feedback from that either. So it looks like it's very quiet, but that's difficult to see, there is numbers anyway. And regarding the V-Go synergy with HypoPal, as Matt said before, there is actually a huge overlap in terms of call. And it's very simple for reps to manage two products, very simple. But definitely, the HypoPal launch will be as a launch -- as every launch will be priority. It's top priority for us, but it's easy to carry two products.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Thank you.

Operator

Thank you. And the next question comes from the line of Alan Carr from Needham & Company. Please go ahead, your line is open.

Alan Carr -- Needham & Company -- Analyst

Hi. Thanks for taking my question. A couple of them actually coming back to the dual pump. You mentioned that there's a delay into '21. Is it just a matter of the collaborator there having or taking longer than expected to enroll that? And then also, you mentioned the 20-patient Phase II trial that you're starting with dasiglucagon. Can you talk a bit more about that? And what else you have planned in terms of other opportunities for dasiglucagon? I noted that you'd looked at bariatric surgery earlier too. So just trying to get a feel for how broad you might go with dasiglucagon? Thanks.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Thanks, Alan. I'll try to answer these questions. So if we just start with Beta Bionics, I think as with any other business, COVID-19 did have impact on the time lines in the sense that they had to modify the insulin-only protocol, and I think it's actually an outstanding achievement that they managed to screen 440 patients during the midst of the crisis across more than 20 sites. And they only were able to achieve that by introducing virtual screening protocols and so on. And the same goes for the study, the randomization of the study, they had to make significant changes to how they conduct the study in order to conduct clinical research across more than 20 sites in the US. So it is, I would say, yes, it's a delay on their side.

But on the other hand, something that I think is extremely impressive that they have been able to push through despite all these challenges. So we are actually, as I said in my opening note, really encouraged also by the fact that Beta Bionics now have finalized the development of the pumps also during these times and are basically ready to dose patients. So of course, it's always disappointing when you see some months delay. But on the other hand, you see -- we actually see much more firmness now because a lot of the risk has been removed from the program. So that is really good.

On the other program, that was the mini dose program, where we just started a smaller Phase II study, where we look into carbohydrate replacement. So the opportunity to use a mini dose of dasiglucagon instead of carbohydrate to correct mild to moderate. And you should see it has a broader scope, as we also shared at our last call, we are developing an adjustable mini dose pen right now, which we would hopefully have in clinical trials within a reasonable time. And that is something which we have been pursuing for some time, and we -- as I also said at my -- in my opening notes, we look very much forward to share more light on what we intend to do with this program, as Emmanuel said.

We have the post-bariatric surgery hypoglycemia, where the -- it's an ultra-rare indication, there's a clear need among these patients. That is one avenue for this program. And then there are the many patients with Type 1 diabetes, who do not yet have access to a dual-hormone pump who could truly benefit also from a pen, which could correct mild to moderate hypoglycemia in situations where ingestion of carbohydrates are not really a good solution. So we expect to talk more about that. And I will then add lastly, all the activities we have with dasiglucagon, especially when it relates to the mini dose pen and so on will actually contribute significantly to the NDA -- to the file of the dual-home artificial pancreas because we create both efficacy and safety data with smaller doses of dasiglucagon, which is the same way a dual-hormone device would deliver dasiglucagon.

Emmanuel Dulac -- Chief Executive Officer and President

And we keep exploring all the effort for on-demand V-Gos for dasiglucagon that this product can meet, but we're still actually looking at regulatory routes to get this product to the market. So more to come. But I think the Phase II exploratory efficacy is critical right now. Thank you, Alan for your question.

Alan Carr -- Needham & Company -- Analyst

Thanks. Actually, if I can get in one other one. I'm wondering about Intomics, your deal with them. Can you talk a bit more about how you plan to leverage that collaboration specifically? Thanks.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Yeah. So it's basically leveraging their know-how in handling Big Data and that we will utilize more. And I think it's coming back to, I would say, also a question that we get more and more on our peptide platform and our, you can say -- we are talking a lot about our late-stage assets. But the fact this is also highlighted by Emmanuel in the introduction. We have a very, very exciting platform here, which we hope to explore and, you can say, enrich even more in the years to come. And so you can say, this is probably something you should expect to hear more about our efforts in the early pipeline than what we have talked about before because -- you want to add?

Emmanuel Dulac -- Chief Executive Officer and President

No. We are discussing to organize, I can tell you, an R&D day, and this is where we will actually disclose a bit more details about this platform search. So stay tuned, but we'll -- you'll get all the information when it's firmed up.

Alan Carr -- Needham & Company -- Analyst

Great. Thanks.

Operator

And your next question comes from the line of Etzer Darout from Guggenheim Securities. Please ask your question.

Etzer Darout -- Guggenheim Securities. -- Analyst

Great. Thank you for taking the question. Just a couple of quick ones. First, on the dual-hormone pump, are you able to provide any details on the design of the Phase III, i.e., number of patients, length of treatment period for the primary analysis? Or I guess when could we get those types of updates? And a question on ZP7570, if you can remind us of the potential advantages of the dual agonist and what the no -- the go I guess, no-go profile for that molecule could look like to advance that program? Thanks.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Right. On the Phase III trial, we have already shared, I think, some of the insights. And the primary endpoint will be on HbA1C. It's clear that, that is also what FDA still expects. We will, of course, have continuous glucose monitoring on these patients and the device is connected to a CGM, but primary endpoint is HbA1C. And we -- it would be designed as a superiority trial that will show that the dual-hormone -- set out to show that the dual-hormone pump is superior to standard of care, but also superior to an insulin-only pump with -- on HbA1C.

And then of course, we also hope to show that we would even have reduced hypoglycemia at the same time. It's going to be a six month primary endpoint, and then there will be an extension part to the study of another six months to collect further safety data because we're dealing with a new chemical entity like dasiglucagon for chronic treatment. We are -- we are aiming to include both children, adolescents and adults from the go in the same study, basically. And the exact size, we still need to make it, but you can say, the insulin-only study, that is a 440-patient study and the dual-hormone will be somewhat bigger, not a lot bigger, I guess, it will be two yarns as I said. So we have a pretty good idea around this study, what it will look like.

Yes. On the 7570, we still expect to have the full results from the Phase Ia study later this year. The profile, why we are super excited about this is, first of all, in our preclinical animal models, we signed not only on the -- you can see also in the disease models, we are starting to have some very good data. The key thing here is we already have clinical proof-of-concept by the fact that investigators have combined GLP-2 with GLP-1 and have shown synergistic effects on their ability to reduce parenteral support. Our hope is that this molecule will also be very effective on reducing the fecal output, which is a major burden for these patients and hopefully also improve the overall metabolic components for these patients who actually have a disruptive increase in response because they get some of the nutritions not by the oral route.

So -- but the main thing will be better efficacy on the primary endpoint we also have in Phase III, but then additional benefits on energy absorption and less diarrhea. So -- and you can say, we only get a signal on those parameters from humans once we have done the Phase II study. From Phase I, it's basically, as you know, a matter of showing that it's safe. And we can get into that dose levels where we expect to see [Indecipherable] in Phase I. So we will be able to assess if we are in the range of Phase I to do with the molecule.

Etzer Darout -- Guggenheim Securities. -- Analyst

Thank you for the updates.

Operator

And your next question comes from the line of Jesper Ilsoe from Carnegie. Please ask your question.

Jesper Ilsoe -- Carnegie -- Analyst

Thanks so much. Three questions from my side. First one on glepaglutide, following up on the questions on the US recruitment. So just in general, looking more globally, have you seen any changes in recruitment in recent weeks or recent months? And I also recall that you had some sites not being opened up yet, have that changed? Have the sites [Indecipherable] just to get a feeling for the overall recruitment with glepaglutide? And the question on V-Go, again, I also appreciate a lot the guidance you gave. So DKK150 million to DKK175 million in nine months, is there any one-offs in that number? Or does it reflect the underlying nine months? And then, again, of course, can we just extrapolate that and say, in a 12-month basis, the underlying number will be one-third higher? And also following up on V-Go, I appreciate, of course, that you don't give out a 2021 guidance. But would it -- so looking at the underlying drivers, will it be fair to assume that the V-Go growth can track and follow the growth in the underlying diabetes population, i.e., the 3% to 4% year-over-year growth?

And then just a last question on the program we have here with Boehringer Ingelheim, the BI 456906. Given current time lines, when to expect that we could actually see some Phase III -- Phase II results, sorry? Would it be fair to assume that in the late part of 2021, or is it a 2022 thing? Thank you so much.

Emmanuel Dulac -- Chief Executive Officer and President

May be you take take the [Indecipherable].

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Yes, I can take the [Indecipherable]. So thanks for the question on the sites. And you can say, as we said, when the -- and when it hit us, our main focus was to maintain patients in the clinical studies that were already enrolled, and this is what we were able to do very successfully. One thing was with this study, we actually have a very long screening period where we optimized the patients before they were randomized. So a number of these patients also in the US, they were put on [Indecipherable], which was something we were able to negotiate with regulators, meaning that we had been pooling up, being in that screening period and then we had to wait until the sites could actually randomize.

And the good news is that several of these sites in the US and also in Europe, where we had to put the patients in [Indecipherable], they have now -- we have to actually now randomize these patients. So that's addressing a little bit the question, how are they opening up. A lot of these sites actually were able to do that now. So however, it's shifted, it is a fact that we have -- it's in Europe actually driving most of the randomization and new screenings in the last period.

Especially, I would say, we have seen Denmark, Germany, France standing on board very well now and the countries that have contributed so far also. UK and EU are the ones, where we still need to -- you can say, in US, it's extremely regional. Some sites have been active all the time, actually. Some sites have informed us that they expect to really be able to open up here in August and early into September. So but -- yes. So that's what it is. And we are actually encouraged right now with what we see with regards to sites being able to randomize new patients.

On BI, I mean, it is, of course, up to BI to communicate on when they have Phase II results. But I think it sounds probably fair what you suggested, it could be a late '21 event. But it is up to them to comment on that, and we don't have any insights beyond the clinicaltrial.gov at the time now.

Emmanuel Dulac -- Chief Executive Officer and President

Maybe on V-Go, Matt?

Matthew Donald Dallas -- Senior Vice President and Chief Financial Officer

So if you look at the V-Go guidance of DKK150 million, DKK175 million for 9 months, that's Qs two, three and four. Q2 was DKK58 million. So approximately third of the range within that guidance. So it looks like -- I mean, we're not going to comment on how quarters, just the 9 months themselves. I can't comment on a full year number. Q1 was pre-acquisition. It was a Valeritas incurred piece. They're not revenue number -- audited numbers. They will not be reported in our financials in this manner.

And then looking out at 2021, it's a little early for us to publicly comment on growth expectations. We've only had the -- the acquisition just closed on April 2. There's just one quarter with revenue in the books. So it's a little early there.

Jesper Ilsoe -- Carnegie -- Analyst

Thank you.

Emmanuel Dulac -- Chief Executive Officer and President

Thank you, Jesper.

Operator

And your next question comes from the line of Eric Le Berrigaud from Bryan Garnier. Please ask your question.

Eric Le Berrigaud -- Bryan Garnier -- Analyst

Yes. Thank you. The first two questions were on V-Go. And actually, Matt, since you just said that V-Go was DKK58 million in Q2, probably the reconciliation is not correct on my side. I was expecting total revenue to be the $20 million from BI and then the rest to be V-Go. But I'm not sure it sum up right. There may be something else. But if the DKK58 million is correct, then if we compare the DKK58 million with the cost of goods of DKK28 million negative, this brings us to a gross margin of about 50%, is that correct? Anything onetime, one-off in there? Or could we get this 50% gross margin going forward as being the right one? And the last question is on the alpha four beta seven integrin inhibitor since Roche released this week the top line results with etrolizumab, which, well, are mixed, but somewhat disappointing and a bit negative. Does it require more caution on your side before moving forward with your compound? Or is it good news? Does it clean up the competition landscape? Thank you. Let me address your revenue questions right now. Right now, revenue is comprised of three components. It's the BI milestone, right? It's the V-Go product revenue, but there's also -- we recognize revenue from our Alexion partnership. So that's -- I think that's the confusion, missing. And for the first half of this year, that was DKK26.2 million. So that's the delta, right? And then the gross margin, you're correct, is approximately 50% for the period. And historically, as a device, it had a margin within that range. It's hard for us to again -- to give you any forward-looking projections on gross margin for V-Go at this time.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Yes. And then maybe on alpha four beta seven, the Roche program was, of course, an injectable. And what we are trying to do here is to take a typical -- like an alphafour beta seven which has been injected and to make that an oral therapy. So whether it will -- it's good news or bad news for us, that they feel with regards to competition, I think it's hard to say because I think it -- if we are successful with our oral delivery of such a molecule, I think that is transformative biology for patients with inflammatory bowel disease. So I guess at that time we would just wish the market is as big as possible in order to capture our share of that with a novel oral therapy. We, of course, need to be cautious, and we already know that integrin biology is difficult. Our molecule has the same target as the already approved products. So that gives us some confidence.

Emmanuel Dulac -- Chief Executive Officer and President

Thank you, Eric. Any follow-up?

Operator

And your next question comes from the line of Lucy Codrington from Jefferies. Please ask your question.

Eric Le Berrigaud -- Bryan Garnier -- Analyst

Hi there. Thank you for taking my questions. I've just got a few left. Firstly, the second CHI study, would it be possible to -- or can you disclose how many patients have been screened? And just can you confirm do you need data from those studies before you can file for this indication? And secondly, is it possible to provide any more granularity on the sales and marketing split regarding preparations for the HypoPal versus V-Go? Thank you.

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Maybe if I just start with CHI. So it was -- we have actually randomized and dosed and completed the first few patients. So they have completed the study and have been enrolled into the extension study. We do not comment on the exact number. It is the first few patients. It's not most patients. And as I said, although we expect all sites to be able to randomize new patients in the coming months, It's a 12-patient study.

But again, super encouraging that the patients have completed the study and have enrolled into the extension study. There was 12 enrolled. Whether we can file on one study or not, ultimately, it depends on the data, I would say, from our first study. It's, of course, something we are thinking about, and we will also be in a dialogue with regulators on this. But ultimately, it will depend on the data and the strength of the data. We have -- the good thing is we have a lot of safety data because, as I said before, we have several patients who have been dosed for more than a year now. So that, of course, is reassuring, yes.

Emmanuel Dulac -- Chief Executive Officer and President

Yes. And on the V-Go side, so what the V-Go and HypoPal share is the -- because of the overlap of targets, they will be sharing sales team and MSL teams like medical affair teams. They have a different marketing team. So we have different teams, again, to make sure that they are focused on the analytics and on driving the programs for each one of these. And then the allocation of resource usually is based on position. So primary position versus secondary position. So primary position will probably capture around 60%, 70% of the time and the cost allocated to this shared resource. And the second product will actually capture around 30% of the cost. Right now, we only have V-Go. So 100% of the cost of the investments is actually V-Go. I don't know if it answers you in terms of modeling.

Matthew Donald Dallas -- Senior Vice President and Chief Financial Officer

At the moment, we're not breaking out sales and marketing between product lines, and this will apply right, as we start preparing for the CHI launch as well, as we with positive Phase III data. At the moment, it's just kind of a bulk Zealand US driven number.

Lucy Codrington -- Jefferies -- Analyst

Okay. That make sense. Thank you.

Operator

And our next question comes from the line of David Lebowitz from Morgan Stanley. Please ask your question.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you very much for taking my question. Given that you're going to be launching dasiglucagon into a fairly uncertain environment and you can't be 100% certain, I guess, what the marketing world is going to look like there? How is your team prepared to launch the product, given it could be virtual, it could be sort of hybrid, it could be in person, any thoughts on that?

Emmanuel Dulac -- Chief Executive Officer and President

Yes. Very good question. Actually, because we don't have a huge team and structure like some of big pharma, for example, it's very easy for us to actually now invest in these new virtual digital tools. So the team right now, the HypoPal rescue team is actually focusing a lot on making sure that we have in place all these programs and tools available for the product at launch, regardless of it -- if we are still in the same situation, probably likely, and as I'm an optimistic guy, but probably likely will be -- actually I think, in June next year or July next year will be in a much better situation. But I think we are preparing for, I would say, a new normal and the new normal is going likely to include some of these tools anyway. So we are planning for it, and we will be ready next year for that.

Matthew Donald Dallas -- Senior Vice President and Chief Financial Officer

Yes. And one thing here, too, is we're having a commercial team already out there selling V-Go. They're utilizing these types of strategies in this new environment. So that when that does V-Go launch, you're having a lot of the similar strategies. We have the experience. They've got a year in the -- in this type of environment. We will have a sales team that's quite experienced with the kind of the touchless model where need be.

Emmanuel Dulac -- Chief Executive Officer and President

So actually, the team has been running already with some of these tactics and tools for the last three months successfully in the field. And they got a lot of attention because I think we were one of the first company to actually implement some of these. And so yes, I think we'll be -- well, not only we'll have them, but we will know how to use them as well.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you for that. And one additional question. Is there -- I mean, at this point, given that the inspections for the submission are probably still far away. Considering that the FDA right now is not traveling overseas for inspections, is there any thoughts on how you might manage that going forward, if they continue not with their travel ban?

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

I think -- I mean, FDA, they have introduced virtual inspection. So it should not be an issue. We went through one, so we know.

David Lebowitz -- Morgan Stanley -- Analyst

Okay. Sounds great. Thank you.

Emmanuel Dulac -- Chief Executive Officer and President

Yes, we went through one successfully.

Operator

There are no further questions. Please continue.

Emmanuel Dulac -- Chief Executive Officer and President

Well, thank you. And as usual, we remain available for any follow-on questions off this line. But -- I think, Nadia, I think that's it.

Operator

[Operator Closing Remarks]

Duration: 60 minutes

Call participants:

Mads Kronborg -- Head of IR & Communication

Emmanuel Dulac -- Chief Executive Officer and President

Matthew Donald Dallas -- Senior Vice President and Chief Financial Officer

Adam Sinding Steensberg -- Executive Vive President of Research and Development and Chief Medical Officer

Michael Novod -- Nordea -- Analyst

Thomas Bowers -- Danske Bank -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

Alan Carr -- Needham & Company -- Analyst

Etzer Darout -- Guggenheim Securities. -- Analyst

Jesper Ilsoe -- Carnegie -- Analyst

Eric Le Berrigaud -- Bryan Garnier -- Analyst

Lucy Codrington -- Jefferies -- Analyst

David Lebowitz -- Morgan Stanley -- Analyst

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