Boehringer, Zealand team on €376M diabetes and obesity pact

Boehringer Ingelheim has struck a deal with Zealand Pharma that gives the German drugmaker access to early-stage Type 2 diabetes and obesity candidates. It's a pact that could support Boehringer's growing diabetes business, as some analysts say Zealand's lead compound has blockbuster potential.

Zealand says it is eligible to get up to €376 million in payments from Boehringer for ZP2929, which is the top compound in the deal, according to a statement. The developer also expects to get payments of up to €41 million in the first two years of the agreement.

Copenhagen-based Zealand, which also has an active collaboration with Sanofi in diabetes, is heading up a Phase I trial for the lead candidate in the pact. And Boehringer is expected to pick up the development tab for later R&D of the peptide, which is a glucagon and GLP-1 agonist that has demonstrated an ability in preclinical studies to increase glycemic control and spur weight loss.

Boehringer is upping its stake in the future of the market for Type 2 diabetes and obesity drugs after gaining FDA approval for its first diabetes drug, Tradjenta (linagliptin), on May 2. The company recently started U.S. sales of the Type 2 diabetes drug in partnership with Eli Lilly ($LLY), its collaborator on several diabetes candidates. While it's a ways from the market, Zealand's ZP2929 could be an encore to Tradjenta for Boehringer.

"We believe ZP2929 could achieve blockbuster status given further expansion of the ... market, which we estimate could reach over $4.5 billion by 2018," analysts at Jefferies wrote in a note to investors, as cited by Reuters.

"Our focus to develop innovative diabetes treatments is reinforced by the in-licensing of a very interesting compound from Zealand Pharma which complements Boehringer Ingelheim's pipeline in diabetes and metabolic diseases very well," Prof. Klaus Dugi, Boehringer's corporate senior VP of medicine, said.

- here's the Zealand-Boehringer release
- check out Reuters' coverage