Zealand Pharma Receives Milestone Payment from Helsinn Healthcare

Zealand Pharma A/S (NASDAQ OMX: ZEAL) (“Zealand Pharma” or “the Company”), a biopharmaceutical company dedicated to the discovery and development of innovative peptide drugs that recently listed on NASDAQ OMX, today announces the receipt of a EUR 500,000 (DKK 3.73 million*) milestone payment as part of its license agreement with Helsinn Healthcare for the development of ZP1846 for the treatment of chemotherapy-induced diarrhoea. This milestone payment has no impact on the Company’s outlook for 2010.

In November 2008, Zealand Pharma out-licensed ZP1846 to Helsinn Healthcare, a global cancer supportive care company. Helsinn Healthcare received a worldwide exclusive license to ZP1846 and assumed responsibility for all further development, regulatory approvals, manufacturing, marketing and sales of ZP1846. Under the terms of the agreement, Zealand Pharma will receive development and sales based milestone payments of up to EUR 140 million, of which EUR 10 million has been received to date post today’s announcement. Zealand will also receive a royalty on sales. In addition, Zealand Pharma has an option to obtain sales and marketing rights for the Nordic countries.

ZP1846 is a novel, potent and selective glucagon-like-peptide-2 (“GLP-2”) analog. GLP-2 is a naturally occurring peptide hormone produced primarily by the small intestine. It is secreted in response to food ingestion and acts by binding to the GLP-2 receptor, which is predominantly found in the gastrointestinal tract. GLP-2 plays a key role in intestinal growth and formation by promoting regeneration of the epithelial surface in this indication damaged by chemotherapy, the underlying cause of chemotherapy-induced diarrhoea.

Helsinn Healthcare recently initiated a Phase Ib trial in five centres in Europe involving colorectal cancer patients following the completion of a Phase Ia clinical study of ZP1846 by Zealand Pharma in the United States. The current Phase Ib trial has enrolled and will continue to enrol colorectal cancer patients until the trial objectives have been met and valuable dose information for the Phase IIa has been obtained.

David Solomon, President and Chief Executive Officer of Zealand Pharma, commented: “We are pleased with the development of this important program with our partner Helsinn Healthcare and encouraged by the data that has been generated to date, which has concluded that ZP1846 is safe and well tolerated. We look forward to continuing to work closely together on the further development of ZP1846, a novel therapy discovered by Zealand Pharma scientists which has the potential to address a severe unmet medical need for patients. ZP1846 is related to another GLP-2 compound under development at Zealand Pharma, ZP1848 for the treatment of Crohn’s Disease, with full rights still with Zealand Pharma A/S.”

* Figures converted into Danish kroner as supplementary information, based on the EUR/DKK exchange rate of EUR 1.00 = DKK 7.4553 on 8 December 2010 (LTM average was 7.45).