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

Great. Good afternoon, everyone. My name is Jess Fye. I'm a senior biotech analyst at JPMorgan. And we're continuing the 40th Annual Healthcare Conference today with Ascendis. I'm joined by the company's CEO, Jan Mikkelsen, who's going to give a presentation, and then we're go into some Q&A. If you want to ask a question for the Q&A, you can click the blue, "ask a question" button on your screen, that will send it to me, and I can ask the management those questions after they present. So with that, let me turn it over to Jan.

Thank you, Jess. It's always a pleasure to be here. Going to Slide #2. Today, I will be making some forward-looking statement. Please refer to the Risk Factors section of our most recent annual report Form 20-F, and our SEC filings for a list of factors that can cause actual results to differ from those in the forward-looking statements. Going to Slide #3. Every time I go to JPMorgan, we always come with a new kind of presentation for Ascendis Pharma. And this time, I believe, is a special time for us because, 2021 was this year where we saw a lot of results that we basically had worked for many, many years. I will give you a flavor how we're progressing with Ascendis Pharma to build and fulfill our Vision 3x3 to build up a leading biopharma company. But for the people that not really know us, I have to make a small introduction to Ascendis Pharma. We are a truly global company. We think globally, we act globally. We were founded in Copenhagen in 2007, and we got listed on NASDAQ in 2015. We are a platform technology company. All our product opportunities is built on our proprietary TransCon technology and the Ascendis algorithm for product innovation. Our mission is to really to develop best-in-class product opportunities, and we want to create a global leading brands of each of our product opportunities. We're really driven by our values, and the values we have is our passion, our scientific dedication, which I believe you're seeing through all our programs. And the passion, I'd say you can feel the passion for all the members that you ever have met from the Ascendis team. We're also an company that believes in having a lot of guiding principles. So every decision we make, how we are progressing the company is guided by our vision, our mission and our values. And the value is really simple for us, is the patient focus, our scientific part and the passion we have for everything. The last part, we ended our third quarter 2021 with over EUR 900 million in cash or similar, giving us a very, very strong fundament to continue and executing on our visions. Going to Slide #4. In January 2019, we announced our Vision 3x3. This is our strategic roadmap, how to build a leading biopharma company by 2025. The Vision 3x3 is built on, as achieving sustainable growth, not only just to develop one product, but build a sustainable company to multiple approaches. One of the key foundation is the regulatory approval for the first 3 independent endocrinology rare disease product. TransCon Growth Hormone compared that to growth hormone deficiency, TransCon PTH for adult hypoparathyroidism and TransCon CNP for achondroplasia. And 2021 was that transformative year because we managed to get the first approval with SKYTROFA here in the U.S. But we are not starting there. We will grow the endocrinology rare disease pipeline to global clinical reach; two, label expansion to life cycle optimization. And we also will add new endocrinology product opportunities. One other key cornerstone in the Vision 3x3 is that we will have 3 independent therapeutic area. We disclosed our move into oncology. And we now have 2 clinical program in oncology and want to continue to be in a position to grow it. But we're not stopping there. We also hope next year, we will give you the flavor what will our third therapeutic area be. Coming to Slide #5. This is our 5 independent product candidates in clinical development, and you can see, it's built in 2 therapeutic area. All of them built on the TransCon technology or an Ascendis algorithm for product innovation, all being designed, target to be in best-in-class product opportunity, highly differentiated and really addressing a major unmet medical need. Going to Slide #6. We basically wanted to sum up what is really a Ascendis Pharma's business model. You have seen a lot of business models from many companies, but building a viable, sustainable long-term business in biotech has been extremely difficult. We believe the solution is what we really have achieved in Ascendis Pharma. The first approval of Ascendis was not only an approval for the first once-weekly long-acting growth hormone in U.S. It was also the approval of the first product opportunity coming from the TransCon technology and our algorithm for product innovation, but also the first one, showing our integrated infrastructure. And this is why, I believe it's the time to do it now because I want really for you to give how we think, how we want to achieve and build Ascendis to the company as a leading biopharma company. We always focus on the unmet medical need. But we're doing in such a way that it also need to be in the area of rare diseases, and it needs at least to have a EUR 1 billion market potential. We wanted to develop highly differentiated product opportunities no one else can make. And we want to use our Ascendis form for algorithm to ensure we can be as successful in everything what we're doing. We want to get to sustainable growth to new therapeutic areas -- we want to have sustainable growth to the new therapeutic areas and adding in additional product opportunity in each single therapeutic area. But we don't want to have one therapeutic area and one single product. We believe to be highly profitable, you need to have synergies, economy of scale in each single product opportunity. We're doing that, then we believe we can also be a highly profitable company. Going to Slide #7, you can see our pipeline. And today, I will mainly focus on TransCon Growth Hormone. I will focus on how we basically are looking on how it belongs -- has happened here in the last 2 months in '21. We will tell and give you an update related to TransCon PTH and give you a small update related to TransCon CNP and our oncology product. We believe the pipeline we have now is already the basic fundament to build us up as a leading biopharma company, but we also want to achieve sustainability, and this is why we add a search independent therapeutic area. Going to Slide #10. And we are in a position we got our first approval. Our first approval in the U.S. with SKYTROFA. It was the first once-weekly product. And when I look on all the target products profile we had, we designed in 2008 when we selected that we wanted to move forward with TransCon Growth Hormone, we wanted to build in all the knowledge we have related to all programs that have been tried to be developed into this area and we designed what we believe are best-in-class product opportunities and with basic true clinical development through our CMC, would we basically managed to achieve everything. So I'm really proud when we got this approval. I'm also really pleased to see how we made our first launch. The labeling well exactly as we wanted it to be and hope for reflecting exactly the clinical data property of the product and is described in Slide 11. The dose is an understanding about the TransCon technology, how we liberate an unmodified somatropin molecule, but also in the same way, how we really achieved an outcome with higher annualized velocity related -- high velocity related to a daily growth hormone. We also see what we expected and what we should have for a product opportunity and low incident of antibodies, and we have our really and well functioned auto-injector with providing the once-weekly dosing in a low volume at the same, it has a really the smallest needle, you want to have a 31G needle but also have room temperature storage ability. Slide #12 describe how we're building our commercial on the game organization in the U.S., how we want to build a leading brand. So our sales are focused on the high-volume prescription. Our medical affair is building up how we're really building up the awareness about SKYTROFA. Our market access team is really having a major engagement, not only in the last 3 months, but basically in the last 2 years to really ensure that we get the optimal position. What is really important is the patient and the patient really interact to our hub. The ASAP program, which are really the one that is involved in the patient enrollment, activation, access, training or support, also providing the Fast Start program, where patients up to 6 months can get access to SKYTROFA for free until the reimbursement is getting in place. We believe this team, we believe the commercial team we have in the U.S. really are living up to everything what we wanted to have. And when we compare this team with a leading brand, we basically we are full on top where we should be. If we go to Slide 13, it gives you an idea about what we call the growth hormone prescribing market. As I said, the size of our established U.S. commercial organization is really on par with the current market leader. This is how we want to ensure we can build up a leading brand. When we look on the prescription, there's about 7,000 prescribers in the U.S., but is highly concentrated, about 20% are basic, being responsible for 80% of all prescriptions. Meaning is that our sales force is basically focused on the 1,400 prescribers. This organization is being built up really to support not only the launch of TransCon Growth Hormone SKYTROFA in the U.S., but also TransCon PTH. We hope we can get TransCon PTH in the market, in the U.S. next year. I would like to give you a small snapshot of the first 2 months of launch. First of all, the launch isn't coming in a period where we had major holidays, like Thanks Giving. But still in 2021, in the first 2 months, we managed to have 369 prescription, 130 target prescriptions. And if you go back to the previous slide, meaning is that I believe this is one of the important numbers, 10% of the target prescriber already in less than 2 months managed to prescribe one SKYTROFA prescription. Meaning is we're getting out there and we're getting access to the right people in the right manner, and 42% was repeated prescription. We also see our initial payer coverage is about 28%, and we will improve that next year. What I'm looking forward to -- are looking forward to 2 full quarter. After 2 full quarter, I feel much more confident about how the launch is progressing, and we can come up with much more firm number, both related to revenue potential for the coming years. But I'm really proud, already today, we have more than 400 prescription. But building up a leading brand, you need to invest, and that is what we are doing. A global leading brand is being built up on global penetration. And when we see, we have Europe, Japan and Greater China. We have now in Europe, a positive opinion, which we got last year, and we hope for approval here in January. Related to Japan and Greater China, we have both in Phase III, and we're looking forward also be possible for us to rest of the world to make TransCon Growth Hormone available. But to build the entire growth hormone market, we are executing on label expansion. We have our adult growth hormone deficiency trial. We are enrolling that, and we hope to be fulfilled the enrollment in Q2 next year. And we're taking up a new indication, Turner syndrome, which we hope we can initiate this trial this year. Going to the next slide, Slide 16. We are here to win in the growth hormone market. We're here to build up TransCon Growth Hormone as a global leading player. We believe the data we have from our Phase III is supporting that. And we are investing and building up all the clinical data that can really build up the product to the leading brand. For over 30 years, people have tried to solve this unmet medical need. But SKYTROFA is the first product in the U.S. that comes out as a one-weekly treatment option for basic, addressing the unmet medical need in developing a long-acting growth hormone product. When I see on the upcoming milestone for 2022, we expect an EU approval in first quarter. We will do the submission to FDA in Q2 to start the clinical development of Turner. We will complete enrollment in the adult growth hormone deficiency trial, foresiGHt, in Q2. We want to be the global leader in the growth hormone market. Turning to our next event product opportunity, TransCon PTH. Going to Slide 18. We're addressing a last rare disease population. Just when you look about U.S., Europe, Japan and South Korea, we have around 200,000 patients. HP is a rare disease that is what I call the last, last rare diseases where you will not have an hormone replacement therapy. And it's not because it's not been needed. This disease is a major complication, not only a long-term complication, short-term effect, but also quality of life. Going to Slide #19. We initiated a Phase II trial, and we have generated long-term data out from our Phase II trial. We have disclosed both 58 and 84 weeks data. I would like to give you some of the data from the 84 weeks update. At 84 weeks, we saw 58 subject completed treatment. We saw the effect of the hormone replacement therapy, where we saw minimum mean serum calcium in the normal range, while all subjects were off vitamin D and 93% was of therapeutic calcium. Meaning is, we are describing a true hormone replacement therapy. We saw very good safety profile, and we saw no discrimination of any kind of related to treatment. We also saw, which potentially was the most surprising part for me, how major impact and normalization of physiological PTH has on quality of life. And we already saw that after 4 weeks. We continue to see a major good retention in this. And today, we have 57 subjects in the open-label extension trial. Remember, that is more than 1.5 years after they went into the open-label extension. The safety days is more well described in Slide 1. And what we have seen, just to sum up, really excellent safety. We're now moving into a Phase III trial. It basically is similar to what you saw in Phase II. The trial is a 26 weeks trial, and the primary endpoint reflects hormone replacement. Meaning is that we want to do normalization of serum calcium and withdraw all the convention therapy. All the subjects can be titrated to the trial. When we look on the demographic in Slide 23, the basic are reflecting what we also saw in Phase II. So that is a really good alignment between both Phase II and Phase III. We really follow the signs in this area. We know TransCon PTH if we provide a physiological PTH, 24-hour, 7 days, we will restore a normal physiological PTH. Everything what we have seen with TransCon PTH is that we really can normalize. These patients life again, everything related to quality of life, short term. And we also believe we could see the long-term effect in our long-term extension trial that will go up to 4 years. Slide 24 describe the milestones we have here in '22. All the patients are now finalizing the Phase III trial. I think we only have a few patients that have not finalized the Phase III trial. And we expect here in Q1 to have all the top line data disclosed. If positive, we will move directly into an FDA submission in Q3 '22, and we'll follow up with a European submission. But we're not stopping there. We are also going to the pediatric segment, and we hope that we can file and expect to file an IND in Q4 '22 also to continue with label expansion in that segment. TransCon CNP, the last one of our rare disease endocrinology programs. In December and of our research and development Day, we gave you an update related to this program. Just to summarize, we had ACHieve, which was natural historic study, where we now have more than 230 patients in 14 countries. We have 2 Phase II trials going on, both double-blinded, placebo-controlled running for 1-year blinded, enrolling patient down to the ages of 2 and up to 10 years. When we looked at the demographic, you can see, and our research say, you see a high level of proportion of patients down to the age of 2. Really also indicate we want to initiate this treatment as fast as possible really to address the comorbidity of the disease. And this is why we will initiate and expect to initiate this year, ACcomplisH Infant, which will be treating children with achondroplasia down to the age 0 and 2 years, and we expect to enroll about 30 children there. We really want to address; the comorbidity, that is why we want to have so huge focus on the infant trial because we believe that is a lot of irreversible complication, which you cannot address later on. So as fast as possible, we can restore the normal growth, the normal genuine young, between the hyperactive if to treat signaling pathway and the CNP pathway, we will really do the benefit for the patients. Going to Slide 27, just a little bit of an update related to our ACcomplisH trial. The trial is completely enrolled. We have 57 subject. We have looked on the data in a guided manner. We have used a dose selection of 50 and 100 micrograms per kilo per week, which we used in cohort expansion, which are running and cohort ACcomplisH China. We have seen preliminary, PK and safety data on TransCon CNP, which really show how TransCon CNP is very well tolerated across all doses administrated. What we expect to present for you in 2022 is that we plan to have the IND for ACcomplisH Infant trial ready in Q2 2022. And end of the year in Q4, we will give you the topline data from the ACcomplisH trial, meaning 57 children going blinded for 1-year in 4 different doses. I'm really looking forward to have the presentation of this data to you. Moving to oncology. This is the new area that we entered. And I believe what we will have to see here in 2022. You will see the benefit for the last 2, 3 years' work, where we really invested in this year, where we wanted to build up product opportunities providing paradigm shifts. During in the 2 different technology platform, where one we call intratumoral delivery, which we're doing with our TransCon TLR7/8, where we want to have long term 4 weeks delivery of an unmodified TLR 7/8 inside the tumor and at the same time, provide low systemic exposure, therefore about any element of systemic toxicity. Initial data from our TransCon TLR Agonist was presented also in our Research and Development Day. We saw on the efficacy, we saw initial sign. It's a small patient population or what we saw, we was very pleased to see indicating potential the right target engagement and also starting to see some of the outcome. The PK and the technology works, as always, as we had expected to. We saw the right PK providing the long-term effect inside the tumor and also the low systemic toxicity as we have not seen any dose limit toxicity. We believe this product opportunity that is now running in a Phase I -- Phase II trial, both as monotherapy and combination therapy with checkpoint inhibitor, will really will come out with extremely its interesting data here in 2022. Our TLR7/8 program is being developed in combination with our IL-2 program, our TransCon IL-2 beta/gamma. In 2022, we will have 4 important or 5 important milestones for our oncology program. First, what will come in this quarter already where we both are dosing the first patient in both mono and combination therapy of our TransCon IL-2 beta/gamma. We will also have presentation of data from our topline data for monotherapy and combination therapy in Q3 2022. And we already this year will expect in Q4 to have the monotherapy data and topline result for our TransCon beta/gamma. Why is this coming so fast? Because we are in a position that we took our excellent safety program really couldn't stop in and those where we believe we already will see target engagement in the first dose. We will also continue to combine these 2 unique product opportunity, and we expect to initiate that in the end of the year. All of that lead to what I call perhaps, the most exciting 2022. 2021 was a major, major year for Ascendis Pharma. But when I look under milestones, you will see in 2022, I had to believe that it's going to really, you start to see the full effect of all our different -- 5 independent clinical program where all of them will come with major milestones. So for TransCon Growth Hormone in Q1, we expect the European approval for TransCon PTH in Q1. We expect topline results, and we will have the first patient dose in combo therapy and dose escalation in oncology. In Q2, TransCon Growth Hormone, we will submit the IND and the protocol for Turner. TransCon Growth Hormone adult, we expect complete enrollment. And TransCon CNP, we will start by submitting the IND for our newborn infant trial for TransCon CNP. TransCon PTH, we will submit the NDA for FDA, and we also will have data from our TransCon TLR 7/8 Agonist program, where we expect to present top line monothearpy, combo therapy data. And then Q4, what we're looking forward, what we have worked for years now, announcing our third therapeutic area. It will be announced in the same way that we did from both rare disease endocrinology, but also oncology where we come out and having a description of the different product opportunity, how we will build a pipeline up in this new area. And TransCon PTH, we will submit the European part there. TransCon CNP, topline data for our company's trial. This is really one thing I've been really looking forward to. And also TransCon IL-2 monotherapy topline, and we will initiate the combination therapy between our 2 oncology programs. So skip to -- 2021 was an extremely busy year. I believe 2022 will be so impressive where we see a lot of really important milestone coming up to really address some major patient unmet medical need.

Great. Well, thanks, Jan, for that presentation. Just as a reminder to everyone watching, if you want to ask a question, you can hit blue Ask a Question button that will send the questions to me. Maybe just start out, I appreciate the details on the SKYTROFA launch progress. I think one of the slides said that coverage is at 28% now. Where do you envision that going over the rest of '22?

What we are doing now is that we're having an effort to build up the right coverage is not only to get covered, we also need to be sure we're getting the right cover. Because in the end, we are responsible for developing the optimal long-term value for TransCon Growth Hormone as a global leading brand. By doing that, we need not only get covered, we also need to get the right cover, meaning is that we need to have the right structures of the cover and the right reimbursement system. And that is what we have achieved until now. And we're really seeing that we are getting into a position where the reimbursement system really are recognizing the value we are giving to the patient and seeing how we basic from a pharmacoeconomic are providing benefit even we have an responsible premium on our product. And that is what we're implementing in our discussion related to reimbursement to ensure that we are in position that we really develop TransCon Growth Hormone, not only as a global leading brand, but also a global leading value brand.

It's related to that, you also -- you talked about the number of prescribers and patients getting on drug. How many of the initial patients are going on to free drug?

In the beginning, basically, nearly all of them getting free drugs. But what we're seeing now is that we basically are in a position by getting turned over to patients now. And that is exactly what we're seeing from different ways of our coverage, but also in a high level from medical exception. What we're seeing here initial is switch patient, and I believe it's coming mainly for switch patients because it takes time if you are a new diagnosed growth hormone deficient patient because you first need to have time for that diagnose, you need to have time to basically get all the necessary physical examination done before you can get into the right group. So we see the majority of the prescription now coming from switch patient, much higher than we actually had expected.

Switching to TransCon PTH, and we're looking forward to that Phase III data in the first quarter. Any chance that you can refine when in the first quarter we should expect those top line results?

Yes, that is a good question, Jess. So I'm somebody trying to find the right data where we're doing it. I know everyone -- we know we're getting the last patient out now, meaning is that, people are starting now to clean the data, that they're locking their databases and then they're doing all the analytical. I think, quite sure it's going to be in Q1.

And I guess when we see those topline results, can you just walk through the primary and key secondary endpoints in that study? And maybe how they compare or differ from the primary endpoint in the NATPARA Phase III study for 1 folks inevitably kind of line up those 2 data sets?

This is completely 2 different profiles you're talking about. One had a [indiscernible], meaning is that you're basically keeping off the convention standard and just removing little bit away of that and then adding in. We have trying to achieve hormone replacement therapy. Meaning is you basically are stopping the convenience therapy. Why I call it a convenience therapy? Because there's no standard of care because there is basically no care for this patient, except trying to compensate complication by adding in calcium supplement and activated vitamin D, but this is not really addressing the disease in any way. So what we want to show in our Phase III trial is what we have agreed with regulatory agent is, is a hormone replacement therapy, meaning is that you basically withdraw all the convincing therapy. And this is why we say activated vitamin D and calcium supplement only to the level what you see in a normal population. And this is what we want to achieve, at the same time, ensure we need to achieve normalization of serum calcium. which are completely different profile. That is the key primary. Then you have everything else, studies are normalization. We want to see normalization of urinary calcium. We need to see normalization of phosphate, phosphate -- calcium phosphate complex. And I can continue basically doing the quality of life, we have different ways to look on different domains of quality of life, both our own patient recording system, but also more, you can see standard system like SF-36 that compared into a normal population. All that will be the integrated path. The second part of our finding is basically what we're seeing in long term. Our open-label extension, where we will have a lot of data from our open-label extension, the majority of the safety package will come from there because this is where we have all the patients here. From that perspective, it's combined, these 2 will be the integrated clinical package.

Okay. And we're just about out of time, but I don't know if you have a short way of answering this question. When TransCon CNP Phase II reads out in the fourth quarter, what should we -- like how should we think about a clinically meaningful improvement in annualized growth velocity.

That is a really great question because you're asking what -- how would I see the success of TransCon CNP. I will see the success in first looking on safety. You have a product that is extremely safe for patient. Meaning that there is no risk by using it and is safe in all different aspects. The other thing is efficacy, and the efficacy part need to be in a position that is basically providing a dose proportionality, meaning is that you can titrate each single subject to the optimal dose and basically address the majority of all patients and not only a smaller portion in it. There will be some patients, we know it already, that would need higher doses than others because the heterogeneity of a disease, you cannot only have 1 single disease. So related to growth velocity, you can say that it's basic in position, we want to be quite sure you can optimize the treatment received for each single subject to be optimum treated. And that is what we hope we can see through the top line data from the ACcomplisH Trial. It's double blinded for 1 year and providing extremely good way to look on both safety and efficacy because there a is placebo in each single of the groups.

Great. So we are out of time, so we'll leave it there. Thank you very much, and thanks, everyone, for listening in.

Thanks so much.

Thanks a lot, Jess.

Take care.