Zealand Pharma has been boosted by the news that partner Sanofi has submitted a marketing authorisation application for the firms' diabetes treatment Lyxumia in Europe.

Lyxumia (lixisenatide) is a once-daily GLP-1 receptor agonist discovered by the Danish firm and the filing is based on the GetGoal Phase III programme, comprising data from nine studies and more than 4,300 patients. The firms are trying to get approval for the drug as monotherapy and as an add-on to existing type 2 diabetes treatments, notably Sanofi's blockbuster Lantus (basal insulin).

Zealand chief executive David Solomon said the European submission "represents a transformational milestone" for the company. He added that "we are confident that the drug will quickly find an important role in the management of type 2 diabetes". Submission for regulatory approval of lixisenatide in the USA is expected in the fourth quarter of 2012.

Under the agreement with Sanofi, Zealand is eligible to receive remaining milestone payments of up to $235 million (plus royalties) and though it will bank no cash associated with the European submission, completion of the full GetGoal Phase III programme, expected in the first quarter of 2012, will bring in more money.

The investment community welcomed the news and analysts at Danske Markets said the filing is "a very significant achievement". Brokers at  Jefferies issued a research note saying that the Lyxumia-Lantus combination will commence Phase III trials in early-2013.

They add that the combo "is likely to be a primary value driver for Zealand and represents a paradigm shift in type 2 diabetes treatment". Jefferies is predicting peak sales of $1.3 billion.