Zealand Pharma gets milestone from Helsinn on ZP1846 progress

Danish drugmaker Zealand Pharma A/S (OMX: ZEAL) says it has received a 500,000-euro ($669,150) milestone payment as part of its license agreement with Swiss partner Helsinn Healthcare for the development of ZP1846 for the treatment of chemotherapy-induced diarrhea. This milestone payment has no impact on the company's outlook for 2010.

In November 2008, Zealand out-licensed ZP1846 to Helsinn, a global cancer supportive care company. Helsinn received a worldwide exclusive license to ZP1846 and assumed responsibility for all further development, regulatory approvals, manufacturing, marketing and sales of ZP1846. Under the terms of the deal, Zealand will receive development and sales based milestone payments of up to 140 million euros, of which 10 million euros has been received to date post this latest announcement. Zealand will also receive a royalty on sales. In addition, the Danish firm has an option to obtain sales and marketing rights for the Nordic countries.

ZP1846 is a novel, potent and selective glucagon-like-peptide-2, a naturally occurring peptide hormone produced primarily by the small intestine. It is secreted in response to food ingestion and acts by binding to the GLP-2 receptor, which is predominantly found in the gastrointestinal tract. GLP-2 plays a key role in intestinal growth and formation by promoting regeneration of the epithelial surface in this indication damaged by chemotherapy, the underlying cause of chemotherapy-induced diarrhea.