Zealand Pharma A/S
Q4 2020 Earnings Call Transcript

Published: 11 Mar 2021

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to the Zealand Pharma Results for Q4 2020. At this time, all participants are in a listen-only mode. I must advise you this conference is being recorded today. And I'd now like to hand the conference over to your speaker Matt Dallas. Please go ahead.

[Matt Dallas:]

Thank you, operator. Welcome and thank you for joining us today to discuss Zealand's full year results for 2020. I am Matt Dallas, Senior Vice President and Chief Financial Officer at Zealand. With me today are Zealand's President and Chief Executive Officer, Emmanuel Dulac and Chief Medical Officer, Adam Steensberg.

[Emmanuel Dulac:]

Thank you, Matt, and thanks to everyone for joining today.

[.:]

2020 was a challenging year for the world, but we kept executing on our vision. In research, we made huge progress in the field of peptide therapeutics, improving on delivery, on targeting and understanding of the root causes of many previously untreated disease. With the support of our research engine, our platform and our scientists, we are advancing new and better treatment options to people living with a wide range of disease and large unmet medical needs. In the coming week, the dasiglucagon auto-injector and pre-filled syringe maybe approved by the U.S. FDA for the treatment of severe hypoglycemia in people with diabetes, one of the most feared complications of diabetes. Pending approval, we are fully committed to execute on even first independent product launch in late June. In anticipation of the potential dasiglucagon approval, we have built out a robust commercial organization in the U.S. through the acquisition of Valeritas. We have an experienced U.S. commercial team. We gained significant maturity in commercializing the marketed V-Go wearable insulin device. And we kept strengthening the capacity by hiring highly experienced and talented leaders to prepare us to execute on our vision. If approved, dasiglucagon in severe hypoglycemia will be the second product commercialized by Zealand in a vision to have five commercialized products by 2025.

[Adam Steensberg:]

Thank you, Emmanuel. And please go to slide number five. 2020, that was a transformative year for Zealand Pharma's pipeline. We continue to feed our leadership in peptide drug discovery and development by expanding the therapeutic focus of our early pipeline to include obesity and associated metabolic diseases, and we also brought forward new candidates for inflammatory bowel disease and other chronic inflammatory diseases within the GI franchise. If we start with dasiglucagon, then we are pursuing multiple opportunities to improve patients' lives to different product with editors. And later this month, as Emmanuel mentioned, we expect the approval of dasiglucagon auto-injector and pre-filled syringe for the treatment of severe hypoglycemia in diabetes. This would be based on three Phase 3 trials that all demonstrated a median time to recover from hypoglycemia only 10 minutes. As Emmanuel alluded to this is going to be our first potential launch of a product that had been discovered and fully developed by our team. On slide six, you can see the dasiglucagon Phase 3 program for congenital hyperinsulinism and also rare indication caused by defects in the pancreatic beta cells. As already reported, the first Phase 3 trial did not meet the primary endpoint. However, hypoglycemia was reduced by 40% to 50% with dasiglucagon as compared to standard-of-care alone when we assessed this by blinded continuous glucose monitoring. Also, we assessed dasiglucagon treatment to be safe and well tolerated and importantly, 31 out of 32 patients continued into the long-term extension study. We are conducting additional analysis and engaging with regulatory authorities to discuss the results of the trial while we await the outcome of the second Phase 3 trial in new neonates, up to 12 months of age, which we expect later this year.

[Matt Dallas:]

Thanks, Adam. On slide 13, you'll see Zealand's income statement for 2020 and how it compares to 2019. Total revenue for the year was DKK353.3 million or US$54.2 million. This was driven by net product revenue of the V-Go wearable insulin delivery device, as well as partnership revenue from our collaborations with BI and Alexion. The net operating result for the year was a loss of DKK792.4 million, but US$121.1 million, sales and marketing costs mainly relate to the commercial infrastructure in the U.S. to support V-Go, while R&D costs relate to our late stage clinical programs. Slide 14 illustrates our financial position and ability to grow our growing business through continued investments. Net operating expenses for 2020 were DKK1.09 billion, a US$166.9 million. At the end of the year, we had a cash position of DKK1.2, 6 billion or US$192.2 million, funding the company through several key upcoming milestones. Turning to our financial guidance on slide 15. In 2021, we expect revenue from existing license agreements. However, since such revenue is uncertain because of size and timing, we do not intend to provide guidance on such revenue. Net product revenue from the sales of our commercial products is expected to be DKK220 million with a range of plus or minus 10% as compared to 2020 net product revenue of DKK161.3 million. Net operating expenses in 2021 are expected to be DKK1.25 billion, with a range of plus or minus 10% as compared to 2020 operating expenses of DKK1.09 billion.

[Emmanuel Dulac:]

Thanks, Matt. As Matt outline, we are in a strong position financially, which is crucial as we head into these critical next few months. With the March 27 date in sight, we are already ahead on commercial preparation. And pending approval, we will be ready to execute on our first product launch -- first product from our own research and first indication for dasiglucagon franchise. As Adam outlined, late stage program milestones and R&D investment as we covered in detail at our R&D Day, which has been exciting in any year, but I am especially proud of our talented employees who are accomplishing this in the midst of a global pandemic that presented unforeseen challenge. With Zealand's agility and commitment to changing lives of patients with the next generation of peptide therapeutics is the reason Zealand is positioned to become a high performing commercial organization, supported by a world-class research engine and on track to deliver on our vision of offering five commercialized products by 2025. Thank you all for listening. I will now turn it over for questions.

[Operator:]

And your first question comes from the line of Michael Novod from Nordea. Please go ahead. Your line is open.

[Michael Novod:]

Yes. Thanks a lot. First question to the financial guidance and the product sales. So, just trying to get a bit more flavor also on how you see the trends moving forward for V-Go, because if you sort of landed at 220, and at least the most -- what assuming -- it assumes a significant decline in V-Go sales and also in that connection, regarding the real launch of HypoPal, how fast do we actually expect to be able to be in the market with HypoPal pending the approval on -- in late March? Yeah, I guess, that was actually …

[Emmanuel Dulac:]

Yeah. Thank you, Matt -- Michael. Matt, do you want to take this question on financial guidance?

[Matt Dallas:]

Sure. Yeah. So, on the financial guidance, as we communicated in our earnings release today, I think the plan is to launch for the dasiglucagon auto-injector and pre-filled syringe to be late June of this year. Our guidance on revenue was 220 and net product revenue. It is a blended number, but we're not breaking out the split between them just based on the fact that we're even ahead of right now that PDUFA date for the HypoPal or for the -- sorry -- the pre-filled syringe.

[Michael Novod:]

Yeah. Thank you.

[Matt Dallas:]

But it will be continued to be a blended Salesforce that will support V-Go throughout the …

[Michael Novod:]

But if that’s -- if that's just assume that, that you sort of see a decline and what would drive that decline -- is that because you are moving all your efforts into the pre-filled syringe or how should we see this?

[Matt Dallas:]

Yeah. I mean, I'm not sure. I would say it's totally declined. We did a 161 last year. There are efforts that will be -- that will move towards the pre-filled syringe, yes, while also kind of changing sales model within that.

[Emmanuel Dulac:]

Again, I think, Michael, it is a blended revenue target. But I would say that our focus to answer you also this year is on commercial excellence. We're building a company to allow us to launch pretty much one product every year from now to 2025. So that's really the focus. And I think, the proof is in recruiting. We have to really look at what's important for us, which is making sure that we can execute on these launches. And so, that's why these first launch starting late June is critical for us.

[Michael Novod:]

Okay. Great. Thanks.

[Operator:]

Your next question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead. Your line is open.

[Graig Suvannavejh:]

Hey. Thank you for taking my questions. I've just got a couple, please. And maybe just picking up on the last questions around the launch of pre-filled syringe. Maybe if you could give us a sense of where are we in that market right now, given the Lilly and Xeris launches, how do you think those launches have impacted growth in the market? I think on the R&D Day, you said the market maybe has grown 10% since those two products launched perhaps we would have thought that the growth would have been a bit more robust than 10%. And what additionally do you think that you will either can do or need to do to make your pre-filled syringe successful launch. And so, that's kind of my first question. And then just a second question I have, has to do with, Emmanuel your comments around, having a company with a commercial capability of launching a product every year to 2025. Can you just remind us specifically, which products you're pegging to each year, just want to make sure that we're thinking about things the same way that you are? And then my last question, maybe from Matt, just going back to the financial guidance, any way for us to be thinking, perhaps directionally as we go through 2021, how we should be thinking about R&D and SG&A. Thanks.

[Emmanuel Dulac:]

Great. On your first question regarding the market, the market, I think, that plus 10% growth during for two novelties being introduced during COVID-19 year, I think, it's actually not bad. We actually, of course, just like pretty much everyone listened to as well. Our competitors conference, and they mentioned that this -- the impact on COVID in 2020 for them during their medically launch operation was impairing their ability to really measure the impact of this market. I think what's really interesting in this market changes that, these new novelties have actually dedicated -- taken around 30% to 40% of this market in a year and a half time, which is a very nice conversion, assuming that this is a very stable, even apathetic market, which hasn't seen any innovation in the last 20 years. So, there's some prescription habits from prescribers and from the patients. So, this is a very interesting shift in the market. And I think this market will likely continue to grow and will likely continue to convert to these novelties. So, I think, for us the timing is right. On the launch year, I said pretty much year-after-ear. So, we have the goal to have five commercialized products by 2025, assuming -- and again, we're hopeful that we get a good response from the FDA. We would be launching one this year. And then we have three to go to 2025. So, yes, we have few products in late stage that we hope to be able to bring to the market in this same period. And then, I mean, CHI dual -- dual-hormone pump, we have not to dose as well. But yes, I think, we're pretty much looking at this product as dose that will actually help us achieve these goals in the next five years -- four years now. And on your last question, yeah, you take it, Matt.

[Matt Dallas:]

Yeah. So, Graig, if you look at our 2020 numbers, it was a 55% of our spending was R&D, 45% was SG&A. The sales and marketing component of that SG&A in 2020 was only for three quarters as the Valeritas acquisition happened on April 2. So, what you're looking at for that 2021 number is you're going to have a full year impact of the sales as well as launch costs. Does that helps?

[Graig Suvannavejh:]

Okay. Thanks so much. I'll get back into the queue.

[Operator:]

Your next question comes from the line of Jesper Ilsøe from Carnegie. Please go ahead. Your line is open.

[Jesper Ilsøe:]

Thanks so much. Just also to follow-up on Michael's questions on the guidance on the dasiglucagon. So, can you first just confirm that you will launch both HypoPal and the pre-filled syringe late June, so that you're not end up like Cerus with, I guess first launch the pre-filled syringe. So, just whether you can confirm that? And then I have a follow-up afterwards.

[Emmanuel Dulac:]

Yes, Jesper. We hope to be able to launch these two presentations. Yes.

[Jesper Ilsøe:]

Okay. Cool. Then just on the timing, so you said late to -- sort of steps -- two or three months out. So, if that's due to the pandemic in face-to-face promotion, is it due to production capacity constraints? So, why to intentional launch in late June, why not say April or May, just to get that. Thank you.

[Emmanuel Dulac:]

I think that's just the nature of the operations. When you get the response from the FDA, it takes two, three days for the FDA to post your label. We need to print label, packaging sheet distributes. And then at the same time we can actually operate -- we can operate right from the get-go with people in the field in parallel trying to engage prescribers. And so that we give prescriptions, but for us, what we define as launch is when the drug will be in the hands of patients. And so it always takes a few weeks operationally to get there. So that's why we are -- we're extremely precise, maybe a bit more over it, but that's actually the reality. It will be a late June launch for us.

[Jesper Ilsøe:]

Okay. Just on you’re net sales guidance also. So, will you use coupons on this? That's a dasiglucagon launch. And is that why you say sort of implicitly only expects to generate limited dasiglucagon sales in 2021? So, will you have any revenue from dasiglucagon, mostly say coupons to build out there a prescriber base?

[Matt Dallas:]

This point we can't comment on the breakout, or the gross to net assumptions on any of our programs for 2021 -- commercial programs.

[Jesper Ilsøe:]

No. But are you going to use coupons on this launch?

[Matt Dallas:]

Again, we can't comment on that given this time. We're not even at the PDUFA date, Jesper.

[Jesper Ilsøe:]

Yeah. Okay. Thank you.

[Matt Dallas:]

Sorry.

[Jesper Ilsøe:]

Yeah.

[Operator:]

Your next question comes from the line of David Lebowitz from Morgan Stanley. Please go ahead. Your line is open.

[David Lebowitz:]

Thank you for taking my question. By June, I'm guessing -- I guess, how high touch do you expect your sales operation to be? And given the nature of the product, how high touch does it actually need to be able to get an effective launch?

[Emmanuel Dulac:]

Yeah. Again, we cannot comment on anything related to the commercial operations as we still are expecting a response from the FDA on the approval. So, I think, based on what we know from the market, this is a market where there is a need for novelties and we know that the expectations are very high for things which -- solution that will simplify patient's lives and will bring them in potentially better if you could see. But again, on our own product, we cannot comment on the commercial operations or the commercial -- make predictions on commercial liability of the product before it's approved.

[David Lebowitz:]

With respect of the congenital hyperinsulinism coming up, given that the first trial was not successful. What is, I guess, the regulatory approach? Do you see a path to approval with the first trial, not succeeding if the second trial does happen to succeed?

[Emmanuel Dulac:]

Yeah. Adam, do you want to take this CHI question?

[Adam Steensberg:]

Yeah. Sorry. I was on mute. As we also explained at the R&D Day, our approach from here will be to discuss with FDA, the totality of evidence for dasiglucagon. And I'm going to say the ongoing second Phase 3 study uses the different primary endpoints. So, that is -- these are small children who are in the hospital having IV glucose infusion in order to stay out of hypoglycemia. And the endpoint is the ability to be less dependent on IV glucose infusion. So, we are hopeful that we will meet the endpoint on that study. And then, of course, we will use the evidence from the first study from the continuous glucose monitoring that was shows is 50 -- 40% to 50% reduction. But also the fact that we have so many children who chose to actually still be in treatment now for some two years later, and the evidence that we have connected in the long-term extension study. So that will be our approach. And it's still our vision to have this product ultimately approved with the FDA based on that totality of evidence. But as we also said, we now need to have the second Phase 3 study readout later this year. And then, you can say we can be much more clear on expected timing.

[David Lebowitz:]

Thanks for taking my questions.

[Operator:]

Your next question comes from the line of Lucy Codrington from Jefferies. Please go ahead. Your line is open.

[Lucy Codrington:]

Hi, there. Thank you for taking my questions. I've just got a few left. Firstly, just wonder if you can give any update on any potential ex-U.S. plans for HypoPal after Xeris product was recently approved in Europe. And then secondly, I believe Xeris also commented after a feedback from the FDA, that developments that exercising hypoglycemia there will be more straightforward than post-bariatric hypos. And there was a planning to start Phase 3 by the end of the year. Why might that be, if you have any thoughts? And also how quickly do you anticipate you could potentially get to Phase 3 for one or both of these indications. And then lastly, I know you can't -- you're not forecasting any milestones, but could you outline any possible milestones that you could receive without giving figures? Thank you.

[Emmanuel Dulac:]

Yes. Hi, Lucy. Thank you for your question. So, regarding the rest of the world or ex-U.S., market opportunity, we're still working on it right now. It is actually not very clear from the information we have gathered exactly what the potential is in these markets for solutions. So, we are actually still working on it. Of course, for us, the opportunity is open and we are actually working on it right now. We are, as well, looking at it in the scope of the pipeline we have, which is, it's not one product launch, which is succession of product launch. So, I think, it makes actually the potential opportunities a bit bigger, of course. And so, we're looking at it in the totality of the pipeline. And so, as soon as we are ready to communicate on it, we will. But we are actively working on it now. And -- yeah, you take the next question, Adam.

[Adam Steensberg:]

Okay. I can address the -- to meet those concept. And we also shared a little bit on that. So, you can say we are also pursuing both exercise induced hypoglycemia and post bariatric hypoglycemia. And so, these are two parallel routes. The interesting thing is also that it both will actually use the same injection device. So a pen, doable or multiple use pen, which we already have developed and which we expect we will take into clinical studies later this year. That pen will actually take the cartridge that we also use for the dual-hormone artificial pancreas pump that we are working on the Beta Bionics. So that product is also ready, and we'll be actually ready for Phase 3 study later this year. And the next clinical step for both of these indications, then we expect to actually do outpatient studies in PBH and exercise induced hypo this year. So, we will do two -- at least two studies -- Phase 2 study to assess how to use this concept in the best way. And what I would also highlight is that if you look to dasiglucagon that we have completed the chronic tox. We have completed the carcinogenicity studies, and all these supportive activities, we have the cartridge ready for Phase 3 study. So, all that, I think, should need to have in place before we can embark on Phase 3 beyond the clinical evidence. So, from the technical perspective, we are ready. From the clinical experience, we just need a few more studies before we would feel confident in how to best address this unmet medical need in these two situations. But we're moving forward steadily, as Emmanuel's also said, these are, you can say the upside opportunities that could actually lead to two additional approvals and within the next five years. So, we feel that we are progressing this in the right way. And whether exercise induced hypoglycemia is easier than PBH, I think that depends on how you do with it, normally for a rare disease, like PBH, you would expect less patients, but for -- of course, for a product -- current use product in type one diabetes, you would expect to have significant patient exposure before you can get it approved. We will get some of that from our bihormonal studies, which will be extremely supportive of the exercise induced hypoglycemia as well. So, we hope to provide more kinds of on our next steps that say what we are going to do in next year with regards to Phase 3, et cetera, later this year.

[Operator:]

Your next question …

[Matt Dallas:]

On the partnership milestones, we have not disclosed the tiers of milestones with either BI or Alexion deal. What I would say is that as a milestone would be the partnership were to become eminent that's when we would make that announcement, including the financial component.

[Operator:]

Your next question comes from the line of Etzer Darout from Guggenheim. Please go ahead. Your line is open.

[Etzer Darout:]

Great. Thanks for taking the question. Just maybe a switch things up a little bit. Adam, we saw some interesting updates from a recent oral integrant molecule. Just if you have any kind of projections on when an ID could be filed for your integrin inhibitor or any plans to sort of accelerate preclinical development based on what we've kind of seen recently?

[Adam Steensberg:]

Yeah. Thanks for the question. And it is, of course, also interesting from our end to manage -- you can say some of the progression made in this area. So, for our -- as a 4-beta-7 inhibitor, we have not provided guidance for when we was that -- this Phase 1 study, which of course, means that it will not happen this year, then we would have talked about it. But we are progressing steadily. And I think what is important to us, and that is what you will also notice for all our programs. Also, if you look in historic perspective is that we want to have it right from the start, because then you have much less issues in the end when it becomes extremely expensive. So, we are walking that extra mile here and the start to make sure that we get things right before we progress it into the clinic. And especially when it -- when you have to do it with all molecules, you don't want to take too many oral peptide. You don't want to take too many penalties because it's super expensive when you get further into development. So that is our focus right now. And it's actually -- it goes along with -- you can say what we also announced last week that we will step up our focus on oral therapies in the future, because we really think we have an edge here combining not only our peptide design capabilities, but also all the supportive activities that is -- that are needed in order to get both the peptide, but also the formulations to the level where they can actually become attractive drugs and not just research tool. So, I cannot give you -- I'm sorry -- I cannot give you a more specific date, but we are encouraged by seeing the development in the area. And we truly believe there's a huge opportunity here for Zealand also going forward, or peptide in an area where we have traditionally seen antibodies and where small molecules sometimes for them to actually make it all the way due to unspecific finding and so on.

[Etzer Darout:]

Great. Thank you.

[Operator:]

Your next question comes from the line of Joseph Stringer from Needham. Please go ahead. Your line is open.

[Joseph Stringer:]

Hi, everyone. Thanks for taking our questions. Wanted to ask sort of a general strategy question on glepa -- glepaglutide here. So, is it -- you mentioned that you -- it’s a long-acting GLP-1, GLP-2 and potentially -- potential development in SBS, and other indications. But is it a certainty that you would develop it in SBS sort of a follow-on to glepa, given that you have a once weekly arm in that glepa trial? Or I guess what's the prioritization -- what indications you would develop glepa forward? Would SBS be the highest priority or would you look to other indications first? Thank you.

[Emmanuel Dulac:]

Thank you, Joseph. Adam, do you want to take the glepaglutide and I can talk about some strategies around.

[Adam Steensberg:]

Yeah. Yes. I think -- maybe I will just address -- first of all, we have a very, very strong commitment to SBS. As you know, we've been in this space for a number of years and have deep -- you can say commitment to actually take treatment to the next level. We are extremely confident in our lead molecule with -- that as a model, GLP-2 analog can actually has a great potential for patients, but we also have noticed like in obesity and other indications, if you truly want to take them at a disease, like SBS to the next level where you are looking into complete enteral autonomy, for instance. So patients become completely independent occurrences support. Probably, we need to attack more than one receptor. And that's where we are extremely excited about the technical side, because it is aggressing to -- which looks to be too important aspects of the disease. So, in that sense, I would say we are committed to the SBS community. We also acknowledge that there is actually great opportunities for other indications, which we have not discussed yet, but which with a molecule that it could actually play a difference. So that is probably what I would say. And what we also said is that we'll be more clear on this guidance later this year once we have the phase 1b data. And Emmanuel, if you …?

[Emmanuel Dulac:]

Yeah. Just wanted to say that, I want you to draw a parallel between these -- basically dapiglutide create the franchise malnutrition. So, we're very excited to have not one, but two. And it's a bit -- draw parallel with the question from Lucy earlier on the geographic opportunity. I mean, it -- of course, it creates a lot of opportunities for us, these different locations or different geographies. Now we have to prioritize investments. We have to look at business cases as well, which, allow us to advance investments where we can actually sustain them for a long period of time and in this field. So, the excitement around dapiglutide and glepaglutide combined is the possibilities are enormous in SBS and beyond. So, we just need to prioritize actually now. But yes, very exciting times and programs. Thank you Joseph for your question.

[Operator:]

Your next question comes from the line of René Wouters from Kempen. Please go ahead. Your line is open.

[René Wouters:]

Hi, guys. And thanks for taking my questions. First question is on your current Salesforce. Can you remind us on the size of your current Salesforce, and will this number increase significantly assuming HypoPal approval? And the second question will be on the dual-hormone pump Phase 3 in collaboration with Beta Bionics. You indicated that the start of the Phase 3 program would be expected towards year-end. Can you remind us how long you would think it would take for such a study to be conducted from the start until data gets reported? Thank you.

[Emmanuel Dulac:]

I'll take the first one. And then, Adam will take the Phase 3 on Beta Bionics. On the Salesforce, I mean, I would say, Salesforce is limiting. It's bigger and bit more complex than only the Salesforce. We have actually field MSL -- field access people. We have actually nurse trainers who are supporting as well. So the combination of this team is actually aligned with the guidance numbers we communicated before. We're not planning to add more employees. We are right-sized now to be able to handle a potential launch for the rescue plan. And Adam, do you want to talk about the dual-hormone pump?

[Adam Steensberg:]

Yeah. So, the dual-hormone pump Phase 3 study, it's -- the primary endpoint is at 26 weeks. So every patient -- the last patient who was randomized will have to be in for 26 weeks before we can chose the database and then report the results. So that gives you half a year. And then you have to add time, it takes to randomize -- screen and randomize the patients. And that, of course, is the unknown right now. I think a good -- you can say benchmark is how fast Beta Bionics is randomizing into the insulin only people to study, which is ongoing. That's a 440 patients study. And what they had expected is I think, three to four months to randomize those 440 patients across 20 clinics. And we have more clinics in this study, plus the upside that we can actually randomize patients who were in the study as well. So, we expect quite rapid randomization once we get the study going, and then it's a six month study.

[René Wouters:]

Okay. That's very good. Thank you.

[Operator:]

Our next question from the line of Peter Sehested from Handelsbanken. Please go ahead. Your line is open.

[Peter Sehested:]

Yes. Thank you. Management, I have a couple of questions left. The first one is, just touch please again on the guidance. Is it fair to assume that your guidance is risk adjusted for the probability of approval of HypoPal? And secondly, in respect to your Alexion collaboration, have you've been in contact with people say from AstraZeneca potential where the due diligence of this particular collaboration product. Thank you very much.

[Emmanuel Dulac:]

So, on the -- I think the first question, maybe Matt, you can actually talk about the guidance. On the second question, I just want to clarify, Peter, which collaboration are you talking about?

[Peter Sehested:]

You mentioned Alexion.

[Emmanuel Dulac:]

Alexion? Okay. Maybe Matt actually address two questions.

[Matt Dallas:]

So, with the first one is the guidance being on risk adjustment on the guidance. And what I'd say is right now, it's a blended number and it does factor in kind of a mid tier scenario, if that makes sense.

[Peter Sehested:]

Okay. Yeah.

[Matt Dallas:]

And then, Emmanuel, do you want to comment on whether or not on AstraZeneca?

[Emmanuel Dulac:]

Yeah. Well, that's the -- yeah. And again, on this one we've been asked because there's an ongoing discussions between two companies, not to actually comment on the -- basically the ongoing discussion. What we know and what we can communicate is that we are very happy with the content we have advanced and we are actually encouraged by the reception and the discussions ongoing. But again, we cannot comment on these two company's activities right now, just because of the sensitivity of their discussion.

[Peter Sehested:]

Thank you.

[Operator:]

Your next question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead. Your line is open.

[Graig Suvannavejh:]

Okay. Thanks for the follow-up questions there. Just housekeeping in nature. And I've got two, they're very short. The first is, could you remind us of what the status is of the potential life? I believe it's last payment from Sanofi with regards to the prior collaboration you had with them. And I think we had modeled perhaps a payment in 2020, and just wanting to get a sense of what the latest is that you can comment around that. And then second, this is really about your Boehringer Ingelheim collaboration. Have you got your four, six -- sorry -- 456909 compound, which is referred to in the press release, but in the deck and I've seen it in the passage referred to 906. I just want to make sure I understood this from a numbering question perspective. Is it 909 or 906? Thanks.

[Emmanuel Dulac:]

Yes. Okay. Well, that's -- the second question will be addressed by Adam shortly. Matt, do you want to talk about Sanofi?

[Matt Dallas:]

Yeah. So, there's $15 million in gross milestones from that collaboration. It's a $5 million tranche and a $10 million tranche. Those are not the net numbers that come back to Zealand on this. I can't give you good guidance on the timing, because they're tied to cumulative sales. And I don't have -- I'm not -- we're not the sales engine for that. So, it's hard for me to provide any clarity on when we would occur those.

[Emmanuel Dulac:]

Yeah. So, Graig, thank you for reading our press release. I guess, . It's 456909. That should be the right number. So, sorry. If we've gotten enrolled in one of these releases.

[Graig Suvannavejh:]

No worries. Thank you.

[Emmanuel Dulac:]

We can probably correct on these -- on the what's posted. Thank you.

[Operator:]

There are no questions at this time. Please go ahead. There are no further questions. Please go ahead.

[Matt Dallas:]

All right. With that, we'd like to thank you all for attending all of your questions. We'll look forward to connecting on future announcements and updates.

[Emmanuel Dulac:]

Thank you.

[Adam Steensberg:]

Thanks.

[Emmanuel Dulac:]

Thank you. We conclude this call. Thank you very much.

[Operator:]

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