Zealand Pharma cut 90% of its US staff after its first solo drug launch undershot

Zealand Pharma is a Denmark-based biotech whose FDA-approved products are Zegalogue, for severe hypoglycemia in diabetes, and the V-Go wearable for blood sugar control.

That it could commercialise its own drugs; when the launch flopped, Zealand restructured around its pipeline and sought partners to sell the two approved products.

Zealand grabbed an FDA approval in May 2021 for Zegalogue alongside V-Go, its wearable for blood sugar control, and bet it could run the US commercial launch itself in a hostile COVID environment.

Sales disappointed. Financials released March 10 guided 2022 product sales to DKK 190 million ($29.3M) plus or minus 10%, itself a downgrade from DKK 220 million ($33.9M); days later Zealand cut the figure again to DKK 115 million plus or minus 10% — a little more than half its initial estimate.

CEO Emmanuel Dulac was out, replaced by Adam Steensberg, previously head of R&D and CMO. Zealand culled 90% of its US workforce, said it would cut annual operating expenses by at least 35% versus 2021, restructure around its pipeline, and look for partners to handle Zegalogue and V-Go.

Running a first US commercial launch is a distinct, expensive skill Zealand had not yet proven, and the small operation could not hit forecasts.

Fierce Pharma noted a growing number of first-launch biotechs — Acacia Pharma among them — stumbled on the commercial side even when the science cleared the FDA.

Steensberg argued partnerships would generate more value per krone than a subscale commercial arm, letting Zealand refocus on its pipeline.

Discovery and commercialisation are different skills: a first solo launch that lands at half its forecast can force a biotech to shrink back to what it does best — the pipeline.

As of 2022-03-31, Zealand was searching for partners to handle Zegalogue and V-Go, restructuring around its pipeline, with operating expenses due to fall at least 35% from 2021 and its US commercial workforce cut by 90%.