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

Great. Good morning, everyone. My name is Jess Fye. I'm one of the Senior Biotech analysts at JPMorgan. And we're continuing the health care conference this morning with Ascendis. I'm joined by the company's CEO, Jan Mikkelsen, who's going to give a presentation. And to the extent there's time for Q&A at the end, you can submit questions to me on the portal by using the blue, ask a question, button. But without further ado, let me turn it over to Jan.

So first, thank you a lot, Jess. And thank you to everyone for joining here today to hear about Ascendis. And as a reminder, Slide 2, I will make forward-looking statement. Please refer to our SEC filing for associated risk factors. So now I move to Slide 3. Yes, not as a big surprise. We are really sticking to our visions, our strategy. What we all are doing at Ascendis Pharma is to create best-in-class products. At really addressing unmet medical need, we do it by our TransCon CNP technologies and we're utilizing parent drugs with clinical proof-of-concept of clinical validated pathways. This has been our success behind our rare disease endocrinology, where we started with 3 product opportunities where we -- as preclinical candidate. And now we have matured them to a state where our most advanced one, TransCon Growth Hormone, we have a filing both in the U.S. and Europe, and we're conducting 2 Phase III trial in what we call global expansion. And we also are in a situation where we're doing label expansion by our adult growth hormone deficiency trial. Our next one, TransCon PTH. We both have shown last year our data related to the Phase II trial, but perhaps more important, the open-label extensions, where we really show data that give us a strong belief that with TransCon PTH, we are in a situation, we can develop a hormone replacement for one of the largest leftover rare disease endocrinology diseases. TransCon PTH, we're now advancing it, and we are initiating our second Phase II trial here this year. Will -- really will provide us with a strong clinical package of 2 independent trials, both placebo-controlled and are providing hopeful the data that really showing our belief that we really providing for first time and product opportunities that not only are helping the patients with the deficit in high, but also addressing their propeptides. But it was how we started in rare disease endocrinology. And now from our effort that started in 2018, where we took the initiative to start our second therapeutic area, oncology. And now our 2 most advanced product opportunity, TransCon TLR7/8, we filed the IND last year in December. And this year, we will find the IND from our second product opportunity in oncology or bias IL-2. We have really hoped and we believe that the way we are addressing oncology can make a paradigm shift for the benefit of the patient. Related to cash and cash equivalents, you can see from September 30, we are well financed with a cash equivalent following more than EUR 950 million. Going to our vision. We believe that the way you are developing Ascendis Pharma to a leading biopharma company is to follow a strong strategic pathway with basic in a 5-year pathway outlet, what is important to achieve every year. And this is what we have followed in our previous vision, the vision '20. By '20, which was our strategic vision from the last 5 years, and now we are working from our vision from 2019 to 2025, where we really are addressing and marching towards our goal to be a leading biopharma, but we want to achieve it by sustainable growth. We don't want to be a single product company. We don't want to be in a single therapeutic area. We want to build a sustainable growth through multiple approaches. Some of the key milestones that is basically approval of TransCon Growth Hormone in pediatric growth hormone deficiency. TransCon PTH in adult hypoparathyroidism, TransCon CNP in achondroplasia. This is the first indication we are addressing for each of these 3 independent product opportunity. But we will still grow our rare disease endocrinology pipeline by our global clinical reach, and this is where we believe we want to be, we want to be everywhere where there is patients. And not only that, we started with 3 different indications for the 3 independent product opportunity, and we want to expand them more and more, not only to indication, live label automation, but also life cycle management. And we are not stopping there, we also need to go to new endocrinology products. We have matured as a company, starting to be preclinical. Then we went to Phase I, Phase II, then we went to Phase III. We've made validation batches. And now we're building on the last step. The last step is that multiple approaches we will do at global commercialization. Some places in the world, we have built out our own commercial organization, as we would do in the U.S. Other places in the world, we will have strategical way to ensuring that we can still be part of the value creation of our product opportunity, which we did with our investment in recent pharmaceutical in Greater China. And our oncology pipeline, we have a strong mission to start and still continue. We'd have 1 IND filing from a new chemical entity each single year. And also during this 5 years period, we will come up with our third therapeutic area. Slide 5 gives you a snapshot of our pipeline and our initial indication. And you can see in rare disease endocrinology, it's really starting to be a late stage. And where the 2 most advanced product opportunities really getting near commercialization. For PTH, we expect to have our Phase III results this year, meaning that it will be -- have an expected launch really near after our TransCon Growth Hormone. But this is how we built the company. We've built the company on 5 independent product opportunity where we will expand. Meaning is that this multiple approach, where we're building on validated target or validated parent drugs, really have given us this success that we have seen with our first 3 rare disease endocrinology problem. But we expect that we can continue that. I will now provide a small update related to our endocrinology rare disease, and I will go directly to Slide 8. Just as a reminder, just as a reminder, you are using growth hormone to support overall endocrine health. Even if in pediatric growth hormone deficiency, as a primary outcome, you are measuring height. You expect that the growth hormone treatment will provide you with the positive effect on body composition, mental health, cardiovascular diseases and fractures. And when we come to the adult growth hormone deficiency, the primary measuring is not more height as obvious reasons that you are not growing in that direction, but basic on-body composition. So short update, we continue to harvest data from our enliGHten Trial, which other Phase III trial where all the patients from our heiGHt Trial and fliGHt Trial transferred over. And what we continue to see, our expected safety, which are really aligned with what you see with daily growth hormone. And what we saw, which I think is pretty impressive from the patient in the heiGHt Trial, where we saw a superior growth velocity for the first year, we basically can observe that is being sustained when both arms are being treated with TransCon Growth Hormone. So even after 2 years, 104 weeks, we can see that. We're also seeing more and more patients starting to come to what we call final height. I think the first 5, 6 patients now have reached what we call final height, meaning is that the patients status continue on TransCon Growth Hormone, continue to see the expected outcome related to efficacy. But also, we've seen the expected and observed safety we have seen in previous trials. So that is basically summed up here in Slide 10. And this is a lot of data we're accommodating just this single slide. But what we have seen with TransCon Growth Hormone? It has demonstrated the same safety profile compared to daily growth hormone. And I have to say daily growth hormone is an extremely safe compound. We have seen the superior analyzed height velocity in the heiGHt Trial. And we believe that we're not changing the mode of action. Because when we look on the direct to indirect effect, we see the same relationship that we see with daily growth hormone. But we believe that the PK profile we're providing is providing a much better utilization of each single daily growth hormone molecule. This is why we see the superior effect. What we have seen with our daily growth hormone, in the heiGHt Trial, where we started with naive patient. We also observed the same thing when we switched from daily growth hormone. So we are the only company that have provided patient data, not only in naive patients, but also taking patients that already were started on daily growth hormone and switched it. And we see the same benefit related to outcome and the same safety base. Going to the next slide, Slide 11. Why do I take it up? Because we believe when we come to adult growth hormone deficiency, we are measuring a different primary outcome that you basically are measuring in pediatric growth hormone deficiencies. But why it's really, really important? It's because we are in a position that although long-acting growth hormone, when you go back to look on some of the old ones that liberate unmodified growth hormone, Some Nutropin Depot hG, they have no problem to show really the right effect on fat cells on the primary endpoint. But when we see some of the other long-acting that basic are changing the molecule, we have seen either they're failing, just a hit to be better than placebo or showing much lower effect. This is why we really are thrilled to be in the foresiGHt Trial. The foresiGHt Trial on Slide 12 is our largest growth hormone trial, where we basically have 240 patients. And we do randomization 1:1:1, which seem once weekly TransCon Growth Hormone, once weekly placebo, a daily growth hormone, because we believe this is exactly as important to show the superior profile against placebo, but at least also showing that we can at least get the same effect towards daily growth hormone. We expect to enroll this last trial end of this year, beginning of next year. And we cannot look forward to share this data with you, which really, I believe, will provide really the clear evidence how we are different compared to all along axis. So Slide 13 and summary. How are we progressing through the regulatory approval? In FDA, we had our mid-cycle court hear in December 2020. We don't expect any advisory committee, and we had our PDUFA on June 25. EMEA process is also going as we have expected. And we have a high level of confidence after we got the PIP approved from children down for 6 months up to 18 years that also have a strong pathway forward in Europe. Global reach label expansion, 2 Phase III trial, ongoing pediatric growth hormone Phase III trial in China to VISEN Pharmaceutical, we initiated our own trial in -- for Japan, and we have our foresiGHt at that growth hormone efficiency. Commercial manufacturing are running on max speed to ensure that we have sufficient product opportunity of TransCon Growth Hormone for our expected launch in Q3 this year. Going to TransCon PTH. Slide 15, the burden of the disease. When we talk with the patients, when we talk with groups that work with patients in this, we really understand this huge burden this patient group have. And it's not only related to short-term symptom, long-term complication. This is the group where we believe we are, for the first one, and this is the data we have seen in our Phase II trial and open-label extension that we really are providing a huge benefit for them in all aspects. The patient population is large. In U.S., around 70,000 to 100,000. Europe, much larger; Japan, 25,000 to 30,000, South Korea. So we talked about more than 250,000 patients that should be treated. And what we saw, independent on pill burden, all of the patients had a benefit of our TransCon PTH trial. There was our Phase II trial that we had in Slide 17. And I would give you just a fast snapshot of some of the data because I think they really, really are impressive. But let us go to the safety front. All the safety we saw was that -- was well tolerated as a compound exactly as we had hoped for. But going to the efficacy. And this is how we are highly differentiated to anyone that every had trying to develop or had developed a treatment in hypoparathyroidism. First time basic or the patients are out of activated vitamin D. No one personally don't take activated vitamin D. And this is why when we normalize PTH in the physiological level, 24 hours, 7 days a week, yes, they don't need activated vitamin D either. Go to calcium supplement, Slide 20. We can basically drop them down to a level where we believe that you only need to take calcium supplement if your food intake is not high enough to give you subscription of calcium supplement from the food. Going to 21. This is the urinary calcium. You can see to the left that we basically are normalizing their serum calcium. But what is observing is that at the same time, we can also normalize the urinary calcium. I only seen that effect when you have sustained PTH level, 24 hours, 7 days a week. And it's only been seeing data before that is showing the same effect when you go to taking PTH, and take it into an insulin infusion pump. You can see the same effect. But what is really the effect on the short-term symptoms? That is really well illustrated in 22 where you basically look on SF-36, where you compare to normal person. And when you look on the number that is larger than 47, you basically are being as a normal person. And what you can see, all subdomains and/or domains, you basically are making a normalization on it. That is exactly what we had hoped for. The short-term symptoms. This is why 40% are not working while 40% more can partially manage a part-time work. This is why they have short-term symptom. This is not because of long-term complication. And this is where you see the CNS benefit and the calcium stabilization that's really providing the benefit for the patient. Then going over to some of the long-term complications. That is both related to what we saw on the urinary calcium, where you get [indiscernible]. But the other thing is also a lack of remodeling of both. And HP patients have a high bone density. And then people say, is that really good? Not that's not really good because it's a poor quality of bone. This is a bone quality that only have high bone density because it basically are in a position that is not getting turned out as a nonbone structure. And what we're seeing is that when we initiated the treatment, the 2 makers -- now we talk on bone turnover markers. The anabolic one, P1 and P, it started to increase. Yes, it's increasing because you have sleeping bone and you suddenly wake them up and the catabolic is also going up. But when you look at the normal level, then, they're basically in the normal level because they start very, very, very low because they have sleeping bone. And then the interesting part. This is a really interesting new data. Going to Slide 24. Look on bone density. And typically, you divide it in 2 different kind of bone structure in a bare problem manner. Trabecular and cortical bone. And some of the best representing of cortical bone is 1/3 radius, and other one is trabecular bone. And where you see the biggest effect is where you also have the highest bone density. So when you look on trabecular bone, looking for example, the lump on spine, you can see how it's starting to trend to and set score of 0. As set score of 0 is what you've seen in a normal reconcilitive population. So what do you want to do? You want to be in a position that you basically are in the treatment, not only doing an optimal treatment related to short-term symptoms, but also having a positive effect of a lot of other elements. One of the elements we have now shown, which are long-term complication indicator, urinary calcium. Now you look on the other one. How we basically also are normalizing the bone turnover. More and more to have the bone structure of a normal person. Everything of that indicating is that we have a physiological hormone replacement. That's providing PTH 24 hours, 7 days a week, like you see in a normal person. And now we have fully initiated our Phase III trial. Our Phase III trial is basically a copy of our Phase II trial, where we discussed with regulatory agents about the primary end point and we came up to an agreement that we focus on basically the 3 element normalization of calcium, serum calcium 8.3 to 10.6, which are the normal range now down to 7.6 independent of activated vitamin D and independent of calcium supplements. And sure, if you not have sufficient calcium intake in your food, which a lot of people basically not have, you can take up what you take in a multivitamin. That is what we call a hormone replacement therapy because that is basically what you see in a normal population. And then we see the effect on it, effect on urinary calcium, phosphate label the 2 elements that basically are describing the short-term effect on quality of life, the SF-36, our own patient specific scoring system. This is the data where we expect that we will be in a position that we can provide top line data to you in the end of this year. So when I sum up PTH on Slide 26. All the data we have seen from Phase I, Phase II, all the label thing are indicating that TransCon PTH is a potential PTH replacement therapy for hypoparathyroidism. We have seen that when we look under open-label extension data from the patient, that were under 6 months. This is the same time that we will have in our Phase III trial. 86% of them basically fulfill the criteria that we're using in our Phase III primary endpoint. We also see that all the patients that basically started in the 58 under 59, all 58 are still in the trial. And that is independent on pill burden. And I believe it's because when you look on short-term symptoms. At least, I have not found any good correlation between short-term symptoms and pill burden. So all independent on pill burden have a huge benefit to have a normal physiological level of PTH. We also expect to give you open-label extension data here in Q2 this year, where I believe there will be important data coming up, where we hope to see element that we have observed under 6 month continues to see the positive trend in urinary calcium. But at least, we will start to see some kind of stabilization related to bone turnover, which we know will take 1 year, 2 years, 3 years before we basically see the right bone stabilization. We also file -- expect to file the CTN for the Japanese adult trial in Q2 this year. So I believe for the benefit of the patient, we are trying as hard as possible to get this product opportunity out to the patient as fast as possible. So many patients, more than 250,000 patients in the region that we are addressing with our clinical programs. We see the huge unmet medical need, and we believe that we have the solution with TransCon PTH. This is why we are so dedicated to move so fast as possible and get it out to the patient. Moving to our third endocrinology product, TransCon CNP. And I have only taken one slide about TransCon CNP. That is not because it's not important. I actually believe that TransCon CNP is such a unique product opportunity. And we believe that 2021 potentially is the year for TransCon CNP. We have a clinical strategy of 2 independent Phase II trials, both placebo-controlled. And one is a dose escalation and the other is the dose expansion. So when we are in the dose escalation, finding what we call and believing in is the optimal treatment dose, we will basically do a dose expansion with up to 60 subject, potentially over 60 subjects. This is what we hope to initiate this year. And we are looking forward in the end of this year to give you a clinical program update, where we hope we can share with you some of this strong data, we believe, we can generate with a TransCon CNP project that provides physiological CNP level, 24-hour, 7 days a week In a way, so you really can restore the normal growth balance between the FGFR3 hyperactive cyclone pathway and way how CNP can control it. Really looking forward to 2021. Now we go to oncology. And I actually wanted to spend a little bit more time on oncology today. Because I actually believe that we have tried twice now. When we started with TransCon Growth Hormone, we started to build up a pipeline about TransCon PTH and TransCon CNP. And people came and saying, okay, it's just preclinical data. And 2 years after they basically came back and told me, potentially, we should have brought a little bit more attention to your preclinical data because it looked like the TransCon technology, there is a good transferability between preclinical data and basically what you are observing in clinical developing later on. I believe that is because we're building our product opportunities on validated parent drug or validated clinical pathway. But doing that, you basically are in position that you have a higher -- much higher level of predictability related to scientific success. Our vision in oncology is basically to be part of this paradigm shift where we are hopefully can develop a cure. And how can we develop a cure? Yes, we know that for the many, many years, it's really impossible nearly to eliminate a tumor. You need to basically part of getting the body to fight the tumor. And that is what we want to do. And we use 2 technology platforms, the soluble technology platform you are seeing enabled with growth hormone, PTH and CNP and the new one, which we call our TransCon technology sustained localized release, which you have in 31. What is really unique with this technology platform. This is that in a localized environment, we place a hydrogel system with our TransCon linker, where we can take a small molecule, a peptide, a protein, an antibody fragment or antibody, and that it release for weeks and months. What is really the benefit of that? Yes, with one single injection, you basically can see in Slide 32, we can have a equalized environment where you basically have high effective concentration. And then at the same time, systemic, you can have a very, very low concentration. By doing that, you basically can activate the tumor in such a manner that you really are triggering your right system inside the tumor without systemic toxicity. This is the key for us to combine the 2 technology platform and built and pipeline up exactly as we have done in rare disease endocrinology, on validated target and validated parent drugs. And what we want to do? This is a circle you have seen so many times. And you can see now there is 7 steps. We have built 4 out of the 7 now. And obvious reason you're taking the 2 year data on. This is what we want to do. We want to build a system where we basically can address each single point in a best-in-class manner to ensure that we basically have a synergy treatment that can be optimal for the patient. I will give you a few flavor of our TLR7/8 agonist program. Go to Slide 35. With one single injection, we take a TLR7/8. And people told me, we have seen some massive intertumoral delivery. I personally believe I'm not seeing any intertumor delivery. I see it as intertumor injection, which are very different for intertumor delivery because what we are providing is, for weeks and months, an active TLR7/8 that basically are providing an effective concentration inside the tumor without systemic toxicity. Therefore, you dose limit in getting the right efficacy inside the tumor. And that is what we have seen in all our preclinical data. And you can go through it in from our oncology research day, where you see a lot of data, how that is proven. And now we are in clinical development. I don't want to go out and talk about our classical design 3x3 but what we're doing now, we initiated the clinical development now. We are opening a lot of site. We are moving forward. And we are extremely enthusiastic of this product opportunity where we first start with monotherapy, then we combine it with checkpoint inhibitors, and then when we have finished that, we are also moving over to when we have our own IL-2 developed, we can also make in combination therapy with that. We will start with HPV-associated cancer, but we also believe that is a good space to start because there is a strong scientific rationale to start there. But we also believe there is a benefit from many other tumors, as we illustrated in Slide 37. So we're showing up summary in our Slide 38. We really believe it's a new treatment paradigm, single IT provides exposure for week and months, low systemic exposure, what we have seen, and you can go down to our research date, complete tumor regressions, including abscopal effect, immunological memory against re-challenge observed in mouse model. So we have filed the IND in 2020 -- in December 2020. And you can see we expect to give you data from our oncology pipeline in this year. We will initiate the combo trial here in Q2, and we expect to have the initial results on our dose escalation in '21. Going to IL-2. This is one of my favorite product opportunities because we're integrating not only TransCon technology, but also the new steps that we have developed in Ascendis Pharma, what we call progene bioscience. We designed the optimal compound and then combine it with the TransCon technology. We optimized the IL-2 bias and potency to permanent PEGylation. But we did in such a manner that we basically took directly in the alpha region. We took different kind of pick, and then you can see the effect here. All of them have basically the same bias. But you can see how we basically are reducing potency when you go for 5 kilodalton to 30 kilodalton. So therefore, we selected the 5 kilodalton because it has optimal potency. And then we combine it with the TransCon technology, half-life about 32 hours in primate. But what is more important, low Cmax, low Cmax. That is what we are seeing with the TransCon technology. So we don't have a high, high concentration that can potentially activate the alpha receptor in a nonspecific manner. And then we see, in my view, what I have seen, best-in-class product opportunity in a nonhuman primate system. First of all, 20-fold increase in absolute lymphocyte count. Minimal impact on eosinophils. No capillary leak syndrome observed up to 0.9 milligram per kilo. In vivo proliferation, cell expansion up to 0.3 milligram per kilo. When we hit 0.3 milligram and go to 0.6 and 0.9, yes, we also have hit max cell expansion. But when you see the numbers we're getting the max cell expansion, this is 17 fold for CD8, is nearly 25 fold for NK cells. But what is also more important, nearly 100% of our cells are activated. But then go to Slide 43. What you really want to do, you want to change the [indiscernible] between CD3 cells and Treg ratio because you want to have more CD3 cells than T cell break. Because this is the cell that you want to get activated. So you really can press the system to immunological activation and see there, 5 to 7 fold expansion between both the T cell, CD8+ and NK cell compared to Treg. I believe that is impressive data. Then we go to the sum of the system I really like. We go into the mouse data. And you will see, you've seen a lot of mouse data here. But I believe the mouse data here is really showing me some -- really the power of the combination that potentially we can do with a TLR7/8 and an IL-2. We take and combine them in one single treatment. Then we give them CT23. (sic) [ CT26]. And then we basically look on complete response a day, 73 days after we rechallenge them, again with the same tumor. But what we do then, with our thing is the most important part for mine. We take another tumor and we challenge them with another tumor. And see the data first. First of all, we get 6 out of 8 complete response, meaning 80% is a complete response in Slide 45. Then we take the sixth one. And then you rechallenge them with CT26. But more important, I believe, if we take a tumor not related to the colon, but from a mammary-derived tumor cells, we also see the same complete response. Going to our potential paradigm shift in how cancer is treated. You see that it's like 47. We are thrilled with our TLR7/8 agonist. We are thrilled with our IL-2 beta/gamma, where we believe best-in-class product opportunity. And we will continue to build our pipeline. Global commercial strategy, multiple approaches. We will do it by basic different ways. Some places, we would do ourselves, for example, in U.S., in a few European countries. We will see what we did in Greater China with our recent investment. And you will learn about how we are basically exploring the same way, how to be part of the value creation in other part of the world, in Japan, in South Korea and other places. But we will not have a one single approach. We will have multiple approach to be quite sure we really create the value creation of our product opportunity. VISEN Pharmaceutical is in one single slide. You can go through it. But we really are seeing VISEN Pharmaceutical as a strategic investment with only -- not only give us the opportunity to be in the second largest pharmaceutical area, but also being positioned that we can conduct clinical trial that other companies cannot do. So we really believe the strategic effort we did with VISEN Pharmaceutical really was a major thing. Going to Slide 50. We are basically coming to the key milestones. And if you believe that 2020 was a unique year, I think 2020 (sic) [ 2021 ] can be much more unique. Look on growth hormone, FDA approval, expected approval of the BLA, we have an expected U.S. commercial launch in Q3, and then we expect to have an approval in Europe in Q4. Go to P -- to our TransCon PTH, we will indicate the Japanese adult HP trial in Q2. We will expect to have top line from our Phase III trial end of the year. TransCon CNP clinical program update in Q4 and then coming to the situation of oncology. We would initiate the checkpoint inhibitor combo. We will have a situation where we submit the IND or similar for our TransCon IL-2 beta/gamma specifically, and you will see the initial results for our combination monotherapy dose escalation in Q4. Really showing 5 independent product opportunity, all of them will start to generate major milestones each single year, really believing in how we're building up a leading biopharma company by a multiple approach. So thank you a lot today.

Great. Thanks, Jan. I think we can wrap it up here, and I know you guys are around this week for folks that have questions.

Thanks a lot, Jess.