Zealand Pharma's Q1 2025: A Turning Point in Obesity Therapeutics

Zealand Pharma A/S (NASDAQ: ZEAL) has positioned itself at the forefront of obesity drug development, leveraging transformative partnerships and a robust clinical pipeline to redefine its financial and strategic trajectory. The company’s Q1 2025 results, unveiled in its May 8 earnings call, underscore a pivotal shift toward sustained growth, driven by its collaboration with Roche and advancing drug candidates.

Financial Resilience Anchored by the Roche Deal

Zealand’s Q1 2025 revenue of 8 million Danish Krone (DKK), while modest, reflects its reliance on licensing agreements such as the Novo Nordisk deal for Segalog. However, the far more significant milestone is the anticipated $1.4 billion upfront payment from Roche, set to close in Q2 2025. This infusion will elevate Zealand’s cash position to an estimated ~18 billion DKK by mid-2025, a 113% increase from the 8.5 billion DKK held as of March 31.

CEO Adam Steensper emphasized the deal’s transformative impact: “Zealand has never been in a stronger position financially, organizationally, and in terms of our clinical development pipeline.” With net operating expenses for 2025 guided at 2–2.5 billion DKK, the company aims to achieve profitability without further fundraising—a stark contrast to its capital-raising history.

Pipeline Momentum: Betralentide as a Game-Changer

The crown jewel of Zealand’s pipeline is betralentide, an amylin analog targeting obesity. The Roche partnership, which includes co-development and co-commercialization rights in the U.S. and Europe, positions betralentide to compete directly with GLP-1-based therapies like Ozempic. Unlike these drugs, betralentide’s mechanism focuses on improving gastrointestinal tolerability and promoting satiety, addressing a critical unmet need.

Phase 2 trials (ZUPREME-1 and ZUPREME-2) are ongoing, with top-line data expected in H1 2026. Additionally, a fixed-dose combination of betralentide and Roche’s GLP-1/GIP dual agonist CT388 is slated for Phase 2 trials by early 2026, aiming to enhance efficacy and safety.

Other pipeline highlights include:
- Cervadutide: Phase 3 trials for obesity and non-alcoholic steatohepatitis (NASH) are nearing completion, with data due in H1 2026.
- Dapaglutide: Phase 1b data to be presented at the 2025 American Diabetes Association Scientific Sessions, with Phase 2 plans advancing.

Risks and Regulatory Challenges

Despite the optimism, Zealand faces headwinds. The obesity market is fiercely competitive, with Novo Nordisk and Eli Lilly dominating with established GLP-1 therapies. Regulatory hurdles also loom:
- Diazglucagon (for congenital hyperinsulinism) awaits manufacturing facility approvals, though contingency plans include alternative suppliers.
- Glpaglutide (for short bowel syndrome) faces delays in the EU, with a marketing authorization application expected only in H2 2025.

Market adoption remains another hurdle. Only 2% of eligible patients in the U.S. currently use pharmacotherapy for obesity, underscoring the need for education and reimbursement support.

Analyst Sentiment and Valuation

Analysts remain bullish. Zealand’s stock closed Q1 at $64.51, down from $69.53 in late 2024, but InvestingPro’s $4.5 billion market cap valuation deems it “slightly undervalued.” Consensus ratings of “strong buy” reflect optimism around the Roche deal and pipeline milestones, with price targets ranging from $110 to $169—implying potential 70–165% upside.

Conclusion: A Strategic Inflection Point

Zealand Pharma’s Q1 2025 results mark a strategic inflection point. The $1.4 billion Roche upfront payment solidifies its financial foundation, while betralentide’s potential to disrupt the obesity market—projected to reach $25 billion by 2030—positions the company for long-term growth.

Key catalysts ahead include:
- H1 2026 betralentide Phase 2 data, which could validate its efficacy profile.
- The December 2025 Capital Markets Day, where Zealand will detail its R&D roadmap and profitability plans.

While risks such as regulatory delays and market competition persist, the data supports a bullish outlook. With a cash-rich balance sheet, a first-in-class asset in betralentide, and a robust pipeline, Zealand is well-positioned to capitalize on the growing obesity therapeutics market. For investors, the question is no longer whether Zealand can survive but whether it can dominate—a goal within striking distance.

Data as of May 8, 2025. Analyst estimates sourced from InvestingPro and company disclosures.