By Jesus Calero and Vera Dvorakova
May 7 (Reuters) – Danish drug developer Zealand Pharma on Thursday unveiled share buyback plans and flagged expected milestone payments from Roche, easing investor concern about how it will fund late-stage obesity trials.
Shares in Zealand rose as much as 18% after the company announced a $200 million buyback and said it expected to book $700 million in milestone payments from Roche this year.
The move marks a shift in sentiment from March, when Zealand shareholders were disappointed by mid-stage trial results for its petrelintide obesity drug designed to compete with Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound.
Petrelintide is a once-weekly obesity drug that works through a different hormone pathway from Wegovy and Zepbound, which Zealand hopes could mean fewer side effects. Wennicke said it could appeal both to GLP-1 dropouts and first-time obesity drug users.
NO COMPROMISE ON R&D SPEND
Zealand could afford the buyback after recent drug trial progress and incoming Roche payments, without cutting back on research spending, Chief Financial Officer Henriette Wennicke told Reuters.
Wennicke told Reuters that the company planned to invest about $800 million in research over the next five years.
“We will not compromise on our R&D investments,” she said.
The company kept its 2026 operating expense guidance unchanged at DKK 2.7 billion to DKK 3.3 billion.
Zealand reported an operating loss of DKK 539 million for the quarter and said its cash position stood at DKK 14.5 billion at the end of March
The buyback, milestone payments and spending plans drew attention away from Zealand’s quarterly earnings and back to the strength of its funding base.
Analysts said the buyback demonstrated confidence in Zealand’s pipeline. Investors are also watching survodutide, its obesity drug partnered with Boeringer Ingelheim, after late stage data showed weight loss of up to 16.6%.
($1 = 6.3581 Danish crowns)
(Reporting by Jesus Calero and Vera Dvorakova; Editing by Matt Scuffham)
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