Royalties set to flow for Zealand Pharma's new drug

Thu Mar 14, 2013 7:33am EDT

Related Topics

* 2012 net profit rises to 36.4 mln DKK

* Says expects revenue from key drug Lyxumia this year

* Shares rise 3.4 percent

By Johan Ahlander

COPENHAGEN, March 14 (Reuters) - Danish biopharmaceutical company Zealand Pharma reported a near tripling in net profits last year on the back of rising revenues due to development milestone payments.

The group said full-year net profit rose to 36.4 million Danish crowns ($6.3 million) from 13.4 million in 2011, in line with the company's own forecast, while revenue rose 57 percent to 223.6 million crowns.

Revenue comprised milestone payments from partners including French drugmaker Sanofi, Germany's Boehringer Ingelheim and Switzerland-based Helsinn Healthcare.

The company's most advanced drug, Lyxumia, also known by its generic name lixisenatide, is being developed with Sanofi-Aventis for Type-2 diabetes.

Zealand Pharma gave no revenue forecast for revenues in 2013 but said it expects to see royalties to begin flowing with the first sales of Lyxumia and further potential milestone payments.

Under the agreement with Sanofi the company is entitled to "tiered low double-digit percentage royalties" on global sales of Lyxumia.

"With the prospects in 2013 of further commercial roll-out of Lyxumia, Zealand is now on a path to sustained revenues," Chief Executive David Solomon said in the statement.

The shares were up 4 percent at 91 crowns by 1123 GMT, outperforming a 0.3 percent rise in the Copenhagen market's main index.

Lyxumia was approved for sale in the 27 member states of Europe earlier this year, and has been accepted for review by the U.S. Food and Drug Administration.

Sanofi is set to launch the treatment in the European Union at the end of the first quarter of 2013 after receiving approval on Feb. 4. [ID: nL5N0B40X3].

However, the company said it expects net operating expenses in 2013 to rise to 210-240 million Danish crowns from 175 million in 2012, mainly because of intensified clinical research activities.

Zealand Pharma's cash and securities position stood at 486 million crowns at the end of 2012, up from 428 million a year ago, it said. ($1=5.7588 Danish crowns) (Editing by Greg Mahlich)