Ascendis Pharma A/S (ASND) Earnings Call Transcript & Summary

Thank you very much for joining us at the 2020 Virtual Wedbush Healthcare Conference. My name is Liana Moussatos, and I'm one of the senior health care analysts at Wedbush. It's my pleasure to introduce Ascendis Pharma. Today, we are joined by the CEO, Jan Mikkelsen; and the CFO, Scott Smith. Thank you for joining us. We will start with a fireside chat, and then we'll transition to Q&A. [Operator Instructions] Jan and Scott, please provide a quick overview of TransCon technology.

Thanks, Liana. It's a pleasure to be part of this virtual show here now, and we always would like to come back to a life where we can meet face-to-face, but I think we even really function pretty well in this way here. And going back to the TransCon technology. TransCon technology basically is the fundamental of our platform how to develop unique, highly differentiated product opportunity in a low-risk manner. The TransCon technology provides the benefit of the classical product combined with a predictable, sustained release technology. And we have advanced the technology to such a level that we both can work with small molecule, peptide, protein, even full-length antibodies. And that is what we are showing and building up in our pipeline now. We neutralized initially our TransCon technology in building up a rare disease endocrinology product, built on 3 independent product opportunities. TransCon Growth Hormone. The first ones will be long-acting growth hormone that can provide the same unmodified somatropin that you know, from dosage growth hormone that you know from daily growth hormone. So we can really address endocrine health with all the spec that we -- with an easy to remember once-weekly administration. TransCon PTH, a product opportunity that's really addressing the last of the last rare disease endocrinology diseases, hypoparathyroidism. And all the data we have seen until now is really supporting that we will have hormone replacement therapy that can really normalize PTH in the physiological level, 24 hours, 7 days a week. The last one is TransCon CNP. The product opportunity where we liberate an unmodified CNP in a way that it can give a continuous exposure over 1 week, providing a safe, effective CNP level that can normalize and restore with normal yin and yang in bone growth. It was the pipeline we built up in rare disease endocrinology. Now we are moving further on our Vision 3x3, not only taking these 3 unique product opportunity out to a global base, but also pursuing multiple indication in rare disease endocrinology. We're now taking up our second therapeutic area of oncology, and our 2 most advanced product opportunity are building on also TransCon technology, but we actually develop a different aspect of the TransCon technology that we're now utilizing in providing intratumoral delivery, where we instead of using a soluble care, we used hydrogen and coupling peptide, protein, small molecules and providing the opportunity to have an effective dose inside the tumor without high level of systemic exposure. Meaning is that we totally change the efficacy to safety ratio. That is that what we're doing with TransCon TLR7 that will be -- expect to have an IND filing later this year. And the next one is coming up is our bias IL-2 compound. I strongly believe in IL-2 should be the cornerstone in oncology treatment, if you have the right properties. And this is what we thought we have developed with TransCon IL-2. And we expect to have a filing of that 6 months later. So the TransCon technology are basic -- developed at Ascendis to develop highly differentiated product opportunity that no one else ever had been possible to make. And by building on parent drug with already proven efficacy, proven safety, many cases already a parent drug that already have been through regulatory approval. We have been proving that we can develop product opportunity in a highly successful manner. And this is why we now have continued a 3 independent product opportunities moving along from our dear States now to BLA filing in rare disease endocrinology, and we will continue to execute the same principal that was highly successful in a rare disease endocrinology now in our second therapeutic area, oncology, with TransCon TLR7/8 and our bias IL-2, and we will also continue in the future in our therapeutic area.

That was a great overview, Jan. So with the lead program, TransCon hGH, what's the important of a pediatric investigation plan? And what are the next steps to file an MAA in Q3?

Yes. Going back to our most advanced product approved opportunity, TransCon Growth Hormone, that is initially being positioned into pediatric growth hormone efficiency, and we will expand from there. So we got our BLA filing here in Q2 and we have accelerated our M&A filing. We are in a position that we already have the discussion with the regulators from different countries that will be part of that. And it really was a game-changing event for us that we as the only one of long-acting growth hormone area got approved. Getting approved in pediatric indication give you the belief that there is a sufficient benefit to risk that really can endorse and move forward and keep us happy. So we feel that this is just part of the science. Follow what we have seen in all the preclinical assessment, safety in our extensive Phase III trials, safety we have seen across the TransCon technology. And the efficacy that we saw which are superior to daily growth hormone. This is the benefit we see because we basically are providing the same mode of action as somatropin. Same as the dosage optimum without creating superphysiological either growth hormone centration or IVF formula. That is why we have this integrated safety to efficacy benefit.

Okay. What the commercial plans for pediatric?

We have a commercial plan and our commercial or global commercial organization is headed up by Jesper Høiland who's have really a long career in building up leading brands in endocrinology from some of his former jobs. And I really, really have high confidence when he is rolling out the global commercial strategy that we can build not only a leading brand in the U.S., but across all countries. We have a strategy that is saying, we will go directly building up internal commercial organization in selected country. Why U.S.? The largest pharmaceutical market, single country. We will also do it in selected countries in Europe. There will be 3 to 5 countries. And like all cost-efficient companies we'll benefit of sales distribution, contracts in areas where we're not going directly. But we're also building new innovative ways to get our product out to all patients on a global perspective. What we did in China was to be making a partnership with VISEN Pharmaceuticals that give us the benefit to be in a position that we not only can get our rare disease endocrinological product commercialized inside Greater China, but also gives us this unique opportunity that we can conduct clinical trials, which are very hard for other company to do with -- if they're not having a present in Greater China. And this is, for example, what we're doing in achondroplasia. When we come to other geographic regions like typically where you bundle the country like Japan, South Korea, Indonesia, some of the major markets. You will see we're also -- execute on innovative strategies where we basically have one thing in common, how can we really be part of the value creation we're doing across our rare disease endocrinology. So we basically are running a commercial strategy the same where it makes sense for us to go alone, we will go alone and building up the infrastructure. And we're only doing that because of one single reason, we are not a single product company. It makes no sense as a single product because it's never providing the economy of scales for a commercial organization with one single second product. We're doing that because we have a pipeline of product opportunities in rare disease endocrinology. One coming directly after each other that give us this opportunity that we can gain the right economy of scale that can justify that we can go and building up a commercial infrastructure in U.S. and selected European countries. Other places like Greater China or rest of the world, you will see how we are innovative, how we will build on local knowledge, local way how to execute. So we also can be exactly successful in all different geographic regions.

That's great. And for adult GHD, their unique attributes for adults compared to pediatrics. And the competition has failed in adult clinical trial. Can you talk about your trial design and enrollment and what the unique attributes are for adults?

So why is so adult important for us? It's important because you have a different clinical endpoint. If you look on the pediatric indication, the common part of that, if you go [indiscernible] I can take the list of the pediatric indication. The primary endpoint will, in many cases, be hybrid. But that is not because it's the only important thing that total endocrine health is extremely important to something like the right effect of exercise capacity, fat distribution, cognitive effect. I can go on, quality, I can continue, continue. But what you're doing in adult growth hormone deficiency. You have a different primary endpoint. The common primary endpoint is measured trunk fat reduction. It can actually be either absolute or percent wise. But that is completely different endpoint because its basics are measured. The direct effect on growth hormone going out in deep compartment like the trunk fat and having effect on that. We also saw that the 2 other long-acting growth hormone product have really issues in this adult growth hormone deficiency. We saw the OPKO-Pfizer product basically failed and not showing statistic significant towards even placebo. We saw Novo showing statistic significance against placebo, but couldn't really match daily growth hormone, even if they went out and got the same amount of IGF-1, the actual had basic on an absolute level, only half of the effect compared to a daily growth hormone. And this is why we designed our adult growth hormone deficiency because we don't think it's really important just to be better than placebo because you're not competing in the adult growth hormone with placebo. You need to show that you at least is as good as daily growth hormone. This is why we're designing a randomized trial where we basically have the same strength in all 3 arms, 1 to 1 to 1, because we think from a regulatory perspective, the barrier is to show that you're better in -- than placebo. But we believe from a commercial patient focused, you should at least show that you can get the -- at least the same benefit as daily growth hormone with an easy to remember once-weekly administration.

Okay. Since it looks like COVID is resurging. Do you anticipate any delays in the adult trial or in VISEN's Phase III and what are you doing to reduce any kind of impact?

We have been, I think, working in such a manner that we already have been used to think in a better, better global perspective. Meaning is that a lot of times our trial have never been localized to one single geographic region. When you think about our TransCon PTH trial, where we have patients in Italy, one of the fastest in Europe at that time, we had patients everywhere. We still managed to keep all our patients in the PTH trial. Also because -- because it got also qualified as that driven condition which give us opportunity to. But we're working in a way where we are sometime are adapting to the situation because that is basically when you are successful at that. And how we're doing is that we, for example, are incorporating in our protocols adaptions related to off-hospital treatment, where we can take them into the Ascendis spots, where we have all the equipment to do all the outpatient treatment. And this is how we trying to involve in each of our clinical trial that even if we are in a situation where the region getting hit, we have opportunities still to work with the patients in this region. But we also will be in a position because our global thinking that we can recruit more patients in areas where the potential will not be so much impacted by COVID-19. The same thing we did on manufacture, being quite sure that we are placing manufacturing in multiple sites, but also quite sure that we're building around capacity, storage capacity. So we always have the right situation if that will be impacted, if that will be delayed. So until now, we will have had no impact of COVID-19 related to our time line and we will continue to work with that by adapting in a continue method, new procedure, new ways of doing. So we already -- if we're having a region that will be affected, and there will be region won't be affected. One question is how many? And how severe? And therefore, I think we are really well prepared too. Well, when it's not same thing we can be also in comfortable position where there will be impact. But until now we have not seen any impact on our time lines. All our corporate time line of 2020 has been kept, even some of them have been accelerated, for example, our filing on our European filing related to TransCon Growth Hormone.

That's great. Let's move on to TransCon PTH. Can you talk about the current treatment landscape for hypoparathyroidism? Is there anything?

If you're going to account hypoparathyroidism. It's basically on the course of you not have sufficient amount of endogenous PTH. You have severe short-term solutions and long-term complications. And if you go to the standard of care today, where is the rest majority of patient getting is active vitamin D and calcium supplement. They are basically by tweaking the short-term symptoms, you basically are inducing long term complications. So if you are a physician and having a great understanding on the physiology and the treatment you are providing, you will balance between 2 things, how to provide short resolution for or short-term solutions without getting to a high level of complications. And this is why you are in a position that you're trying to balance that. And therefore, you often have treated patients the standard of care that are hypocalcemic. So the rationale behind TransCon PTH is to be in a position that we restore the physiological level of PTH 24 hours, 7 days a week. So this is really a hormone replacement therapy and there is no way you're going to achieve today, except by buying short-active PTH and provided in a [indiscernible]. That is what you are doing with -- if you can get the patient to accept this huge burden, you can be in a position that you are such in advanced place that you have the resources to do it or you cannot do that with more than 200,0000 patients, just in Europe, U.S. and Japan. That is impossible. And this is where we come in with TransCon PTH. We provide the same continuous exposure of PTH that providing physiological level of PTH 24 hours, 7 days a week, with an simple insulin blood treatment routine, one single subcutaneous injection with a nice pen device every day. This is why we believe treatment in hypoparathyroidism can really be solved now. We will be a hormone replacement therapy that basically can move this disease, hypoparathyroidism, with a major short-term complications -- long-term complication into an area where they basically can have a normal physiological PTH level and provide them the benefit exactly of what we would have. And nothing today can achieve that, except that if you buy a short-active PTH product and provided in infusion.

Great. Is the end of Phase II meeting with the FDA scheduled for TransCon PTH yet? And can you go over the Phase III trial design? Are you on track to start the Phase III in Q4? Or any -- I mean, you mentioned that you're pretty good with COVID, but are you still on track for Q4?

So when we talk about end of Phase II meeting, we have a global team. This is not only go to United States. It's also going to the European Countries. It's also going to Japan. So what we have now, we have already had our end of Phase II meeting with FDA. In the beginning of September, we will have the end of Phase II meeting with selected European countries, and we will have the Japanese regulatory feedback later. What we have learned from U.S., yes, they understand we have a replacement therapy. While that is different to compared to a standard of care that we have a great discussion related to primary endpoint, and there's no difference in what we have said before, we still want to show that we are replacement therapy, meaning that we normalize it in the normal serum calcium level. We can withdraw all the activated vitamin D, we can be in position that we only take calcium supplement as a [ norm ]. Then we will see the benefit of this replacement therapy. We will do that by looking on that positive effect on normalization of urinary calcium, providing the effect that so we don't have any real damage, not in a position that we see patients really have major issues in kidney function. We look on a phosphate complex, which are strong indicator of long-term complications related to calcification, everything from cataract service, basal ganglia cataract, et cetera, et cetera. And then we'll be looking on the patient report outcome. The patient reported outcome is important too, because it give us the benefit that you cannot only evaluate the patients on [indiscernible], there is a huge CNS effect. We see that. This is why when we started this product opportunity, people would do characterization of the disease and severity of disease by just looking at the pupil, you are mild, if you take this much of activated vitamin D and calcium supplement. If you take not so much, you are mild and moderate, if you take more and you're severe. What we see ended on what kind of group you're belonging to. Because in our Phase II own label extension, we have patients coming for all 3 groups. But when we now see here 6 months after, all 58 patients are still in open label treatment. They all see the benefit of being in a position that they can get the benefit of TransCon PTH. Seeing, yes, having a normal physiological PTH level is providing a benefit to all that. And this is why we have a huge believe that there will really be a major benefit for the patient. Remember, that's more than 200,000 patients, just in U.S., Japan and Europe. And this is where we really can see a major opportunity to helping all these patients.

Okay. In our last couple of minutes, can you talk about when we could see data? This is for TransCon CNP for achondroplasia. When can we see data from the Phase II accomplished trial?

I have to say it's much easier with TransCon PTH because we can some way take 6-month data, exactly 6 months later after. So we know in September, we can come out with really all the unique data for TransCon PTH. The TransCon CNP, after 3 months of treatment, we have database lock. We look on the data in that. But as I do not know exactly which the cohort will be absolute, the optimal cohort is very hard for me to really come out with a specific time line. That is going to end of this year, beginning of next year or late next year. I cannot say that because I do not know what is the cohort [ to ] give optimal disease. What I know is that it looks well tolerated this far, really providing not any safety concern at all, no injection site reaction, no intolerances and other things like that. And that is also what we are looking for safety in a pediatric population is one of the key elements we are looking at.

Great. So we're pretty much out of time, and I want to thank you both for joining us virtually here today. And with that, we'll conclude the presentation. Thank you very much, you guys.

Thanks a lot, Liana.

Thank you so much.

Bye-bye.

Bye-bye.