COPENHAGEN - Zealand Pharma A/S (NASDAQ:ZEAL), a biotechnology company specializing in peptide-based medicines, has announced an increase in its equity offering from the previously stated amount of approximately USD 900 million to USD 1 billion due to strong investor demand. The private placement, aimed at institutional and professional investors, is conducted through an accelerated bookbuilding process.
The offering, which commenced on Monday, involves the issuance of new shares and is expected to close with the registration of these shares by the Danish Business Authority on Thursday. Settlement and payment against delivery of the new shares are anticipated to occur on Monday, July 1, 2024, with the shares expected to be admitted to trading and official listing on Nasdaq Copenhagen A/S the following day.
Zealand Pharma, founded in 1998 and headquartered in Copenhagen, Denmark, focuses on the discovery and development of innovative treatments for obesity, metabolic diseases, and certain rare disorders. The company has a robust pipeline with more than 10 drug candidates in clinical development, two of which are already on the market.
The upsized offering reflects the investor confidence in Zealand's strategic direction and its portfolio of potential therapies. The funds raised are intended to support the company's research and development activities, as well as its commercialization efforts for its marketed products.
The completion of the offering is subject to the condition that it is not withdrawn prior to settlement and that an official announcement to that effect is made by Zealand. The company has not disclosed specific details regarding the use of proceeds from the offering or its anticipated cash runway following the completion of the placement.
In other recent news, Zealand Pharma has made significant strides in the healthcare sector with promising results from various trials and positive analyst outlooks. The company's drug candidate, survodutide, demonstrated efficacy in improving liver health in a Phase 2 trial, meeting its primary and key secondary endpoints. Survodutide has been recognized by the U.S. Food and Drug Administration with Fast Track Designation for MASH and fibrosis treatment since May 2021 and was accepted into the European Medicines Agency's Priority Medicine scheme for the same conditions as of November 2023.
Zealand Pharma also received a positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency for its dasiglucagon solution, a treatment for severe hypoglycemia in diabetes patients. This recommendation paves the way for potential marketing authorization by the European Commission for the European Union market.
The company's investigational drug, dapiglutide, demonstrated an average weight loss of up to 4.3% in a 12-week study. Additionally, Zealand Pharma received an Overweight rating from Cantor Fitzgerald and a Buy rating from BTIG, reflecting optimism about the company's potential in the obesity treatment market.
Furthermore, Zealand Pharma is also working on two near-commercial rare disease therapies with little competition, which are expected to be highly successful and potentially reach $1.9 billion in combined peak sales. The company's partnership with Boehringer Ingelheim on a GLP-1/GCG agonist is seen as a strong player in the obesity market with payor support.
InvestingPro Insights
As Zealand Pharma A/S (NASDAQ:ZEAL) garners investor attention with its upsized equity offering, a dive into the company's financial metrics provides a deeper understanding of its market position. With a market capitalization of approximately $7.9 billion, Zealand Pharma stands as a notable player in the biotechnology industry. Despite the optimism reflected in the offering, the company's P/E ratio remains negative at -70.48, indicating that investors are pricing shares without the expectation of current earnings, a common scenario for growth-focused biotech firms.
The company has exhibited remarkable revenue growth over the last twelve months as of Q1 2024, with a surge of 222.76%. This suggests that Zealand Pharma is rapidly increasing its sales, which may be a key factor driving the investor confidence that led to the expanded equity offering. Additionally, the one-year price total return as of a recent date in 2024 stands at an impressive 200.15%, highlighting the strong performance of ZEAL's stock price over the past year, which could further bolster investor enthusiasm.
InvestingPro Tips also shed light on the company's future prospects. With a fair value estimate from analysts at $119.11, which is higher than the previous close price of $116.38, there's an indication that some market analysts see potential for the stock. However, InvestingPro's own fair value assessment is at $72.03, suggesting a more conservative outlook on the company's valuation. Investors looking to delve deeper into the valuation and future performance of Zealand Pharma can explore additional insights, with PRONEWS24 providing a 10% discount on a yearly or biyearly Pro and Pro+ subscription to access these valuable resources.
Investors considering participating in the equity offering or holding ZEAL shares will find a treasure trove of data and analysis on InvestingPro, which offers 15 additional tips for a comprehensive understanding of the company's financial health and growth trajectory.
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