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

Hi. Good afternoon and thank you for joining us today. My name is Michelle Gilson. I'm one of the biotech analysts here at Canaccord Genuity. I'm so happy to introduce Jan Mikkelsen, the CEO of Ascendis; and Scott Smith, the CFO of Ascendis, a company that we're very excited about as they've really taken the platform to the next level over the course of the last year or so. So to take us off here, Jan, perhaps. You can just tell us a bit about what you guys are up to at Ascendis. Some of the exciting milestones you have coming up here in the next year or so.

Thanks a lot, Michelle. It's a real pleasure here and attending the conference. We at Ascendis, we're a company that is built on a transformative tube technology platform called the TransCon technology. And by applying this TransCon technology platform, we have built up a pipeline in rare disease endocrinology. The pipeline consists of 3 independent product opportunities. TransCon Growth Hormone for growth hormone deficiency; TransCon PTH for hypocalciuria; and TransCon CNP, which can address multiple indications, one of the most advanced one we're addressing is [indiscernible]. So we use the TransCon technology to make highly differentiated product opportunity, which we basically have been impossible to make the form. And we have taken the TransCon technology from idea states now completely to BLA filing. And the pipeline we have in rarities endocrinology has been developing over the years. So now all the product opportunities now in its late-stage development. At the same time, we have continued to develop this company. We have developed a new pipeline in oncology. On the same principle that has been highly successful in rare disease endocrinology. And we really stood true that we're starting to start initiate all the clinical development. We will start the first clinical trial with our TransCon TLR7/8, which are a true intratumoral delivery system, where we can have [indiscernible] small molecule peptides, proteins, antibodies inside tumor. So we basically can change the hematological system inside a tumor to be reactive, and this exposure can happen over months. The other compound is our TransCon IL-2, a best-in-class product opportunity that we developed in a way that we have an optimal balance, non-health really are specific for the beta-gamma receptor, but we also, through the TransCon technology, are developing it so we take optimal exposure. Low [ stiff neck ] and long-acting. So the transplanting technology has been dedicated to make highly differentiated product opportunity, really address major unmet medical need. We work on a pipeline approach, a pipeline first in rare disease endocrinology that now is late stage, building out the commercial organization on a global perspective. And now it's initiating our oncology and we also will continue with our [indiscernible] when we come so far.

Great. Maybe to start off on the questions. Could you -- you've achieved a lot of big regulatory milestones in the last couple of months for TransCon Growth Hormone. You filed your BLA. You had a PIP approved. Maybe you can just tell us what gives you confidence in your regulatory package for TransCon Growth Hormone? And what are some of the key differentiating aspects of this program versus those other programs that you talked about before? How long-acting growth hormone has been largely unsuccessful effort? So maybe you can tell us a little bit about what makes TransCon Growth Hormone different.

So when I first saw the TransCon technology, it was for about 12 years ago, 13 years ago. When I saw it. What I got an inspiration was the same. People have, for long time, trying to develop a long-acting growth hormone because it's a huge unmet medical need. While it has been possible to develop a long-acting [indiscernible] -- long-acting hemophilia product, long-acting interview analysis, [indiscernible]. You can continue doing that. Why it has never been successful for end customer. The basic scientific physiology in growth hormones is extreme contents. So every time you are changing the molecule, you're basically are getting unwanted effects of that. The TransCon technology is unique in this way that you basically combine the benefit of a cohort with a predictable release code. So when we design the TransCon Growth Hormone, we basically have an entity that is exactly identical to the somatropin you'll find inside the body being secreted for the pituitary gland, also identical to daily growth hormone. But because of the TransCon technology, we can make an inferred entity that can be injected without in any kind of injective [indiscernible] reaction, they can go into the body, setting the [ glove compartment ] and release the same unmodified somatropin. By doing that, we're not changing the underline physiology, meaning is that we get the same tissue [indiscernible] book. The same receptor activating throughout the entire body, the same balance between direct and indirect effect. And if basically has been our success, why we look to have such a successful pipeline businesses because we have been in a position that we have very low-risk related to the how the mode of action is function because we already is working on static product opportunity like growth hormone, which is the same as baby growth hormone, PTH 1-34, the same as FORTEO CNP is wild-type CNP. What we -- because of the TransCon technology can make highly detested product opportunities that no one else can make, we really can address some of these major medical needs that you have in each of these indications.

Great. And your -- now that you filed your BLA. How do you think about preparing the market here in the U.S. for a launch? What are some of the key hurdles that you foresee blocking and tackling from here to a potential approval?

First of all, we are not that fully focused on the U.S. market. We have a global picking. So we filed the BLA We're filing the M&A, the European filling here in the next months. We are preparing our -- the regulatory contrate China, we are through our partnership with VISEN Pharmaceuticals, they are conducting the Phase III trial in greater China. They are enrolling all the patients. So we really can -- hopefully we will get all the patients enrolled in the beginning of next year. We're getting ready in Japan to the Phase III trial, where we will be getting a unique position because we're getting allowed to start on a higher dose than you actually see the daily growth hormone. So we're basically building the local leading shift of TransCon Growth Hormone. So from the U.S. perspective, and it's coming back to our commercial strategies. The commercial strategy is paying in U.S. and selected European market, we will build up our own conversion organization. It only makes sense for us to do it because we have a pipeline [indiscernible] single product. All the 3 product opportunities in rare disease and [indiscernible] can give us the economy of scale, the big offer commercial optimization in some of the key markets where we can do it ourselves in the U.S. and selected European countries. Rest of Europe, we will go to sales and distribution appointments, and we're really [indiscernible], which has been noticed and really making global brands as well as leading brands and he's building out our inspired strategy. In areas where we basically want to be in a position where we need local knowledge, no good way of operating. We will do, as we did with VISEN Pharmaceuticals where in Greater China and mainland a company jointly owned, where their expectation that all the operations expertise to ensure that we get an optimal position of our endocrinology rare disease products also in Greater China because it -- don't forget it, the second largest pharmaceutical market shipment. And you will see the same thing happening also in other Southeast Asian markets like Japan, South Korea and other areas like that. So we are really rolling out of what I call our global strategy. So we can build other leading brands, not only for TransCon growth book but also TransCon PTH, which there is a huge patient population and no really any treatment option.

So you've mentioned VISEN, your Chinese partner, a few times now. So maybe you can help us understand where they are in terms of the rare endocrinology development programs? And also, what is the advantage of using this kind of structure to access the Chinese market with the current macro climate?

Yes. I think people that have operated inside China is also understanding the complexity where we need local expertise, local knowledge, the right connection, to really ensuring that you'll have an optimal position success. And this is where we make this year. Joint company where we came with the product opportunities and people that both could provide capital, but also provides the right knowledge, the right infrastructure to be successful. And so we really saw there was a win-win situation. It give us also the opportunity not only to get our product inside greater channel, they even conducted a clinical trial at leading to regulatory approval there, but also giving us an opportunity, for example, in [indiscernible] because of the last patient population, but also the centralized system for rare diseases to conduct trials that is basically is impossible for other companies that don't have an affiliate in China to come back. So this is a way where we use our innovative adaptive way of thinking to ensuring to think out of the box, how can we have a financial value creative at the same time, we can conduct tests that is [indiscernible].

Great. And we don't have a lot of time here, so I also want to talk about your TransCon PTH program. You have an upcoming readout in the third quarter from your open-label extension portion of the Phase II study in hypoparathyroidism. I guess, can you help us understand this molecule? And also, can you help us understand what the endpoint you're evaluating for TransCon PTH is? Or what you're reporting on, I guess, at 6 months? And why is that a good endpoint for hypoparathyroidism? Why is 6 months a good time point for this update from your long-term extension study? And what are we looking for in terms of what's going to be a good result?

Well, Michelle, I actually believe that the 6-month data is so much, much more meaningful and important for proving our target product profile than the 4 weeks is. As the 4-week data could clearly show we have a new patient therapy, which shows that we could normalize say on [indiscernible] and at the same, may complete withdrawal of activated vitamin D and calcium supplements down to a level what we see in a normal coverage. What we can show with the 6 months that is really transformative too, we can -- after the 6 months, a single subject have been optimized to the optimal, TransCon PTH dose inside the range of 6 to 13 microgram per day of PTH. What we will expect to see is that we will still expect to see that the map or location now on data blind in an optimal [indiscernible]. We will also see the withdrawal goal of the activated vitamin D and calcium supplements. But on top of that, we really start to see the effect of the [indiscernible]. And what we hope to see is that we can start to see normalization of [indiscernible] case. In the 4 weeks, we can see a positive effect on PTH, TransCon PTH on the kidney system. But we could not see a normalization because there isn't time to have an immune status being built up the normal person immune status being built up, which we expect to take 4 to 5 months. So when it comes to the 6 months, our hope is that we can really see, in addition to all the other benefits, we can see a normalization of urinary calcium, either being measured by 24-hour urinary calcium or being measured by heat check. The 24-hour urinary calcium is potentially more by noted by a lot of physician and FDA order thing, and there is a clear threshold what is known 250, 300 milligrams dependent on general time. But it also -- there is a great association between 24 hours urinary calcium and comorbidities. This is where we will hope to see if we can do normalization of both of the patient at that time. If that is really coming true, we have all the integrated [indiscernible] of taking on a replacement therapy. Not only normalization, not only withdrawal of activated vitamin D, not only withdrawing on [indiscernible], but also happened normalization of urinary calcium, normalization of phosphate label, [ phosphate condensate ], having a hope that really are recognizing the [indiscernible] benefit this patient group have on really having a first-time [indiscernible] and normal physiological level of PTH 24 hours, 7 days. And when I look at the trial today, I'm really extremely positive. First time in my life I've ever been part of having 58 patient going to 6 months own label extension, even through a COVID-19 epidemic and still have 58 patients in treatment. Despite that people described it that we're bidding on when we discuss this product opportunity and trying to make a grading of the disease severity to [indiscernible], if you take low month of actually the vitamin, low-rate of calcium, it would take more use of here. But it's not really meaningful because we see all the patient group still in the trough, despite the burden of the daily injection, they'll still see a huge benefit to have continued everything.

So you just mentioned 58 patients still on the study. What does this say about the unmet need in hypoparathyroidism, the burden of this illness? And what -- why is it important that there should be a PTH replacement therapy on the market? And how is TransCon PTH differentiated from standard of care and the previous PTH treatment, call it a replacement therapy, but the NATPARA that was previously on the market, but pulled last year.

Yes. So if anyone has spoken with the patient, the patient group, looking on the data that is from the patient group related to the burden of the change, that no doubt, we're talking about a huge burden for all the patient group to have this disease. Just look at single parameter at 30%, 40% complete stop work. Then you have a vehicle that can go [indiscernible] but loses every effect of normal life. And then, talking about other short-term symptoms, or not at all on the long-term complications, both related to [indiscernible] complications related to cardiovascular, related to [indiscernible] and other things like that. So there is a huge burden and with all the data indicated. But it has never been possible to make an optimal treatment medicine. The only way you can see it was basically to buy an insulin pump, buy some short-acting [indiscernible] if you can get a hold on and use it off-label in an insulin pump. And that is actually what you have done specific for children which have a genetic disease because there was the way that basically could come in and basically survive and live. So what we had before back in the U.S., when we talked about [indiscernible], we had a joint product. A joint product is something you put up on standard of care. Standard of care is calcium supplement and activated vitamin D. And it is a lot of -- so actually, patients take [ 8 grams ] of calcium on top of activated vitamin D. The problem with that is that in some way can normalize CM calcium and gives some benefit on short-term diseases. But given this huge load of activated vitamin D and calcium supplement, basically building up long-term [indiscernible] because the activated D is also absorbing a lot of phosphate. So you basically are building a phosphate level, you need to eliminate the calcium to the kidney, and therefore, you'll get the renal damage and you get the calcification. So you basically is in this choose dilemma, do you want to try to take the [indiscernible] of short-term system. If we want ed to, we basically built up their parts on long-term complication. And this is why the big part of the patient group was treated with bare load CM calcium just to balance it. And this is what we see with the TransCon PTH, now they're coming up to the normal level of [indiscernible]. The current [indiscernible] was an adjunct meeting that could save some of the calcium supplement, say some of the activated vitamin D but not make it out to a normal load. At the same time, it didn't have a major impact on -- during a section. And this is why for first time, TransCon PTH is really just trying to be a true replacement therapy, meaning is that it raises all the spec of [indiscernible] disease. And when we think about that, that's 200,000 patients in Japan, U.S. and Europe, just that alone. And when we look at our data from the 58 quarantined, even -- in defined of the severity of the disease, if you look at it from a clinical perspective, which I believe is wrong. Then you see all of them have a huge [ benefit ]. So if we got can treat, half of them, 50% of them, I believe, all of them basically should have it, because all of them will see a benefit and normalization of their life, to have normal physiological level, 24 hours a day [indiscernible].

Great. And there is a regulatory precedent for hypoparathyroidism. And you guys are obviously planning to run a Phase III. What given -- if you see this great result, we've never seen results like what you've just described before in hypoparathyroidism. What options might there be to accelerate the path forward and build this on that need?

I believe that we need to conduct the Phase III trial because we need to have a global reach. The size of the Phase III trial look really very, very small trial, less than perhaps 70, 80 patients. We do not know. We need still to get record for feedback from Europe for 6 months. So it's a very, very short time. The question is that when we are coming out with the 6-month data, and discuss that with FDA because this is a place where you can potentially get an accelerated approval, will that be sufficient for them to give it? Or they'll want to see the time it takes to make this short Phase III trial. And that is what we will see here in the call. For me, it's not really the important thing of getting 1 year faster accelerating to the market in [indiscernible]. For me, it's looking at the holistic view that we basically can help 200,000 patients that have no treatment options. That is what we really contribute with TransCon PTH. And we also know that whatever we do, we need to have a Phase III approval, a Phase III approval for getting Japan with us, getting Europe with us and all other areas, South Korea and all other places where we can visit. But I think more from the patient perspective, short unmet medical which TransCon PTH can solve, which we really would go as fast as possible.

Great. Well, unfortunately, we are out of time here. But thank you guys so much for joining us today and for your time and your insights today. I know I always learn a lot when I talk to you guys.

Thank you so very much, Michelle. Always a pleasure.

Thanks a lot, Michelle. Have a great day.