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

Great. Good morning, everyone. My name is Jess Fye. I'm a large-cap biotech analyst at JPMorgan, and we're delighted to be continuing the conference this morning with Ascendis Pharma. Presenting for the company is going to be their CEO, Jan Mikkelsen. But before I pass it over to him, we're going to let Tim Lee from IR come up and do the forward-looking statement.

Good morning. Before we begin, I'd like to remind you this presentation will contain forward-looking statements, and our actual results and events could differ materially from those in the forward-looking statements. For additional information concerning the factors that cause actual results to differ materially, please see our forward-looking statements section in the press release yesterday and our SEC filings for the associated risk factors. With that, Jan.

Thanks a lot, Tim. It's a pleasure to be here. It's nice to see the people, again, face-to-face. I will make it short today, just to focus on a few items today, which I think that is the key message we would like to come up with and also giving you a lot of opportunities and time really to answer questions. So there was what Tim covered in that presentation. So we really focus on the patient life, and we're building sustainable value. This is what we always have done in our strategic framework, first, our Vision 20/20 now our Vision 3x3. Coming to our global sec, yes, we are a global company. We want to think global, we want to be global, we will be where, where patients are. Everything we do is built on the TransCon technology. But TransCon technology is not a stational technology. It's quite different from when we started for about 15 years ago. We have expanded to the third, fourth, fifth generation. We had, at the same time, being in a position we have expanded not only to have our, what we call our soluble polymer technology, but also to the hydrogel, which we actually apply now both in oncology and also in our new topic era of ophthalmology. What is the core of the TransCon technology? It's basically a combination of a classical product technology and is predictable sustained with this technology. Combining these 2 elements, you have the TransCon technology. This is why when we start with a parent drug that basically have proven clinical data, proven safety data, proven biological action. When we take it into the system, we release the same unmodified entity. This is what we used in TransCon Growth Hormone, daily growth hormone, the same and [Indiscernible] growth hormone. PTH, TransCon PTH, we use FORTEO PTH 1-34, TransCon CNP, we're using the same thing. This is why we expect that we basically will be in a position, we have this high success rate because when you think about, we started with 3 preclinical candidates TransCon Growth Hormone, TransCon PTH, TransCon CNP in rare disease endocrinology, we are in a position now. TransCon Growth Hormone is approved with SKYTROFA in U.S. and Europe, we have priority review with TransCon PTH, and we expect an approval of TransCon CNP in 2025, mainly because we can get and hope 3 out of 3 because we not have the [ hypological ] risk. But we're not compromising that really making a highly differentiated product opportunities. No one else can make really addressing major unmet medical needs. This is the algorithm we have built up on that, which actually explains exactly what I did. So this is the pipeline we have built up. So going to our vision. This is the vision I presented to test. In 2019, we call it Vision 3x3, building a leading global biopharma company. You can really imagine 1 year from now on, we will have a new vision. I have not the name yet. It will not be Vision 5x5, it will be too boring. So we will find a new, new way. But what we did, there was our strategic pathway. And that is what we really have executed on in a time full manner. We had that we wanted to have growth hormone approved in '21. We got approved. We expect PTH to be approved in '23. That is what we hope to do. CNP, in '25. That was our plan from 2019. Global clinical reach, we have done it, pursue 9 indication because to develop #1 brand you need to invest, and this is what we're doing in both in label optimization, life cycle management, like TransCon PTH, we now have both a daily and a once-weekly product, and we focus on new endocrinology product, which I always get asked, always get asked, do you expand out from rare disease endocrinology because we are classical -- coming from a classical endocrinology company, which makes a lot of sense for us, but that will come in our next vision. Go to our oncology because I want to keep the commercial thing because I'm just aware of the main focus on SKYTROFA. So when I come to SKYTROFA, I will focus on that. Oncology, we're really making 2 highly differentiated products, which are now coming to the really, really interesting stage where we have recommended Phase II, and we are expanding in what we call expanding in single indication. And the third therapeutic area, we announced, and I will come with a few words about that. Going to SKYTROFA. SKYTROFA. Why it's a best-in-class product opportunities? Because for more than 25 years, people have tried to develop and address the unmet medical need. Why do you have a poor outcome in pediatric growth hormone deficiency? The primary endpoint has always been high. We are the only long-acting growth hormone that work within somatropin, so the same as in [ dosage ] growth hormone, the same as daily growth hormone. This is why when we look on all the endocrine benefit you expect to have half the treatment related to body composition. I'll come back to that, mental health, cardiovascular disease, fracture. We believe we will achieve all that because we're not changing the mode of action. And this is what we see in the U.S. We see how we highly differentiated to the daily growth hormone, a classical patient from us today because we have one commercial strategy when we wanted to go in, was to focus on 1 single element, how to build SKYTROFA to the leading brand in value in a growing growth hormone market, and as a highly profitable product. There was the 3 pillar. We launched SKYTROFA. And in Q2, I got asked, what is -- do you come with forward-looking related to revenue and say, no, we don't do it, but I can give you a simple algorithm. I said we saw what we did in Q1. I expect we can double the rest of the year. So in my mathematic algorithm is 2, 4, 8, 16, and we really achieved that. Much better than we actually have hoped for, much better than we thought so. We're still doing a lot of action to really, really, really move into a situation where we're getting more and more patients reimbursed. So what is the great part of this treatment instead? When a patient come on treatment, the typical will have a duration through 4 to 5 years. When I look at the patients, how many dropouts do we have? We have basics here. So when you think about and ask me, what is your algorithm now from '23. I will make it simple again from a mathematic perspective. Yes, we have 17.1 or 17.5 related to FX. It gives you -- multiply that before, then you basically have a baseline for the patient we have already established in '22. Then we will add on, which I believe at least the same amount of patient and reimbursed patient in '23. I think it's a really simple algorithm, which I feel pretty confident on. I have no doubt that what we have with SKYTROFA and how we're progressing. We can do it on a global basis. This is why we launching SKYTROFA now in the U.S., in Europe next year. We have a very interesting trial coming out next year in adult growth hormone deficiency is the trial where we basically have 3 arms. We want to prove that we not only are better than placebo but also will be in a position that we potentially like we did on the primary endpoint in adult, which are body composition, we also can have a potential superior product. This is why we have one-to-one between daily growth hormone, placebo and SKYTROFA. You don't get a leading global brand without investment. And this is what we're doing. We do label expansion. We have not only at our adult growth hormone deficiency trial. We also have a turner. We have also combined it with CNP because we are the only company that have 2 pillars in growth disorder, TransCon CNP, TransCon Growth Hormone, both are the pillars in more than 20-plus growth disorder. Some of them will be best treated with TransCon Growth Hormone, some will be best treated with TransCon CNP. Some of them will need a combination in different durations. And this is why we can be the leading global company in growth disorder. We will launch in Europe. Do what we did in U.S., start launching SKYTROFA next year, in the middle of the year in Europe. We have our Asian strategy where we're both finalizing the trials in China and Japan to be quite sure we also go as a global leader. [Indiscernible] with the summary, our next step, I think I have really seen. The current market today is a $4 billion, global, growing, and we believe we can increase that market. So coming to PTH. I will bring a lot of attention to PTH. When I have heard the patient story, when I see what the benefit we give to the patients. How the physicians are reacting, how the patients are staying on our trial? I have never seen a product like that. When you see of this series of morbidities, I understand that because we basically are addressing all of them because we're doing a normalization of physiological PTHs. It will be thinking about having a type 1 diabetes patient and not be in position to give them a basal insulin. This is how this patient [indiscernible]. This is 80,000 to 100,000 patients just in the U.S. Going to our trials. We actually have 3 trials now. We have our Phase II, our Phase III and we have our Phase III in Japan. All of them show everything what we have [indiscernible], and even in all the different demographics, you can see the Japanese trial is a little bit different because we have a much higher level of the genetic. For example, we have more ADH1 patients, which are hard to find because not many of them are really diagnosed as what we call chronic HP patient. And when we go out and look on the results, it pretty is impressive. Number of patients eliminate convention therapy. Why is that really important? Because eliminating, the conventional therapy is actually eliminating part of the course of the disease because the number -- a high level of active vitamin D, calcium supplement is basic part of facilitating the disease and many of its comorbidities. This is why it's so important to eliminate current conventional therapy. And you can see independent of active vitamin D basic 100 and nearly more than 90% went into basic to be in position that you only took a vitamin -- multivitamin tablet with our 600-milligram like Costco tablet, really impressive. And every element we looked on, we really see how it's benefited. Going to the Japanese trial, I just wanted to show from a single side. I like this because it really illustrate that even if you go to Japan, which have very different way to treat hypopara that take much higher active vitamin. You can see they have really high serum phosphate. And as soon as we normalize them, you can see normalization all the time. This is the patient population we have just in the U.S. We have priority review. We are in a position. We have an expanded access program now. We established -- we have a press release last week when we started to enroll patients. I believe the way that FDA had given us help, how they are helping the patient recognize that there was a product in the market that got taken away. And now the last patient that is on a compression use will be taken off of that product in '24. I believe there is such a huge unmet medical need that is really got recognized. 4,000 to 5,000 patients are PTH experience. This is the patient group we really want to go into our expanded access program as fast as possible because they are used -- basic to use PTHs. And then we have a 65,000 to 80,000 patients, which are the patients that mainly got recruited into a Phase II and Phase III trial. Newly diagnosed more than 3,000 a year. So this is a group of patient that will expand year-by-year. So what also was a key element last year was the change in guidelines. The basic -- come out with a recommendation in the last guideline that if you have any noncontrolled in any of the following symptomatic hypocalcemia hypophosphatemia, [Indiscernible] insulin, hypercalciuria, poor quality of life with exiting this 95% of the patient, then you should go to PTHs, which gives me also confidence that we will have a strong frontman to get a really optimal market assessed situation. So this is our next step. We have still 146 out of 145, with patients up to 3 years, pretty impressive. Some of them that step out was on the placebo treatment. I will move directly over to 1 single slide here. I will not go into some of CMP. If someone doing the Q&A, I can take some of the slide -- now I went -- too fast, now we need to go back. I want to say one thing on oncology. We are working on 2 unique compound in oncology, a kick starter of the [indiscernible] system where we use the hydro technology to take it into the tumor. The other one is general IL-2 beta/gamma. And you will be tired on looking and hearing about an IL-2 compound because there have been 25 companies. I think why does 25 company because people recognize the benefit that it can provide if it succeeds. We have moved, brought product to a state where we have recommended Phase II on our TransCon TLR7/8 Agonist. We actually have accelerated our IL-2 beta/gamma much more far than we ever thought about because of the safety and tolerability. And it's not because we are compromising efficacy. And this is what I believe, when we come here in the beginning of next year, we will declare [Indiscernible] Phase II also for our TransCon IL-2 and I really want to look forward to give you the data that really show how this also is a [indiscernible] product. So ophthalmology, why did we select ophthalmology? We selected ophthalmology up from that because we have a TransCon technology platform that basically can give us product opportunities that no one else can make, make them so highly differentiated. But because we can have a continuous load release back in [ the ice ], not for months, not for 2 months. I will give you the curve. When I look on ranibizumab, also known as Lucentis, which both have been used as a, what we call direct injection, but also in an implant. We are in a position that we can make and really address the high unmet medical need that is still in this $10 billion plus sector because there is still patient getting blind cannot comply with the treatment because of the huge burden. This is clinical validated programs, the compound is one. It fits directly on our algorithm, like we had in rare disease endocrinology, where we expect 3 out of 3. Going to our data. What we did, this is the best model. For first [ time thing ], you need to look on the injection volume, 50-microliter, we injected. We can see when we inject the 50-microliter, we are in a position that we are having coverage over the target level because it's pretty well known what target level you need to be on always to have sufficient anti-VEGF neutralization. And we can see we can have it more than 18 months. This technology platform open up for a lot of product opportunities that basically could be a pipeline as we have in rare disease endocrinology, but in a much larger market segment. Going to our milestones for 2023. If I look on growth hormone and our only take selected milestone after all the milestones because you can read the slides. What I really look forward to is our adult growth hormone data in the foresiGHt Trial in Q4. The key program where we will see a major development next year from commercialization will be our TransCon PTH. We have priority review, the 13 of April. We are in tense interaction with regulatory agencies, both in Europe and U.S. We expect still to keep this timeline. This is a combination product, but they're also building on a lot of proven technology. And we expect to launch directly afterwards. We're ready, we're manufacturing. Everything is built up. The first wave of sales force is established higher out there. End of the year Q4, we will get a decision from Europe. Europe, that is still the same high unmet medical need as the only approved product there will also disappear in '24. CMP, we got what we hope for in all our data, the 4 pillar, safety, efficacy, tolerability and convenience. No doubt, we believe this is the best-in-class product opportunity. We are enrolling a IIb, which we hope is a pivotal trial. We will be in a position that we aligning all the patients because there is a huge unmet medical need and a huge awareness about what is the profile. So we expect that we can enroll the entire trial in 4, 5 months, never happened before. Going to the Oncology, you can see a lot of blue marks because in '23, we really move into the indication expansion. And we will have the first analysis, which will continue into '24, where we really hope to prove that we have a paradigm shift in all our treatment. Yes, thanks a lot for giving me the opportunity to present today.

Great. So we're going to start Q&A here. You can raise your hand and someone will bring you a mic or you can submit a question electronically, and I can read it off the iPad upfront, but I'll start. So on your ophthalmology vertical. Can you talk about how your technology is differentiated from past efforts to make long-acting drugs for the eye?

So currently, what you're doing is that if you want to make it longer acting, you can nearly see going for Lucentis to [indiscernible]. You can also see the [ Kodak ] approach is to make the molecule larger and larger. But you're still doing a bolus injection meaning, it that [indiscernible] is dependent on how fast, back in the eyes, it's clearing the compound. And when you get older, when you have many of this disease, you have much faster clearing. So what we are doing is basically applying a complete paradigm shift where we're building particles that sit in hyaluronic acid inside back up by the eyes on a continuous manner day by day, release an unmodified ranibizumab molecule. By doing that, we total independent on the clearance in back of the eyes. And when we look on the profile we have, the profile, in my view, is providing 2 interesting elements in providing a higher concentration for more than 6 months, much, much higher than you really are taking as the target concentration. Just look at the half-life 100 days. At the same time, it's extremely well tolerated, meaning is that it opened up for many opportunities. It opened up for an opportunity to have better efficacy, better safety because of the risk of injection and tolerability, but also not for combination therapy because no one can inject in back of the eyes multiple compound on a twice monthly manner or every third month. So it both is an enabling technology, technology for combination product, but also acts just anti-VEGF treatment as our TransCon ranibizumab, a profile that never have been seen before, a profile that address one of the key element of inter-patient variability of clearance. So it really is a paradigm shift. Ken, do you have?

Yes. Maybe just a couple of parts. When we talk to retro specialists, what they mostly are concerned about is actually not new biology. It's extending the duration of action because people -- if you have seen somebody get an intravitreal injection, you understand why you don't want to be taking this on a monthly basis. So if you can extend it to every 6 months, you're much more likely to keep patients on drug and keep them above that critical level you need for [Indiscernible] neutralization. So to me, also this area reminds me a lot about our rare disease efforts because also you can't just make the molecule larger because it needs to diffuse to the back of the eye. The retinas at the very back, you have liquid flow that goes towards the front of the eye and drains whatever you inject into the vitreous. And there's abundance of literature showing smaller molecules diffuse better to the back of the eye. So being able to release a fab, we would expect to have much better efficacy at the back of the eye and not just neutralizing whatever is individual compartment. So to me, the combination of having a modular platform that allows us to take multiple different compounds together with releasing something that has the right size. We know size matters when it comes to tissue distribution and then being able to treat patients irrespective of vitreal composition because we know it thins with age. So I think those combined makes the TransCon hydrogel platform extraordinarily well fitted for localized treatment of vitreal diseases.

As an introduction. This is Kennett Sprogoe. He is our Head of Research and Development. He was actually one of founding people when we founded this company in 2017, so 7. So he really knows the technology platform in and out and all the benefit we can get it in all the product opportunity. He's basically the person that designed all our product opportunities.

So maybe speaking of other product opportunities, there's been a lot of buzz and I think maybe some anticipation in the market about Ascendis applying your capabilities to non-rare endocrinology. I think specifically, folks are sort of hoping you'll work on a GLP-1 and get into the obesity space. We obviously didn't hear something on that today. Is that on the table as something Ascendis might pursue going into kind of more prevalent endocrine conditions?

I think it's 2 different discussions. What we had in our Vision 3x3 was to move out to 3 different product area there from a strategic perspective. And that is what we did by moving into ophthalmology because we really can build up the pipeline in a huge, huge market segment of highly differentiated product that really will be best-in-class, really addressing some real unmet medical need. We are in rare disease endocrinology. And if we go outside and remove rare, for me, it's just something I would do and not really discuss it before this competitive environment that is that before I have data not waiting to say 18 months before we move into clinical development or anything like that. It's a highly competitive error, I'm here to win. I'm not here to give any advancement to any competitor. If we do it, we will do it. If we feel that somebody is fitting our pipeline, it's fitting the benefit of the patient, it's fitting the benefit of value creation, we will do it.

We got a question in my e-mail about PTH and maybe I'll wrap it in with another question that I was going to ask on the product. So you're starting this expanded access to help patients initiate on TransCon PTH prior to the approval. And presumably, that's create a favorable launch dynamic where you'll then be able to convert them over. So first question is, how do we think about the timing over which reimbursement for TransCon PTH could ramp up? Should that look different than TransCon Growth Hormone did? And second, this is the investor question, what's a good assumption for TransCon PTH price is not part of -- the right range to think about?

Yes. Let me take the first one because I think what we did in launch of SKYTROFA. We had in the war-room, we want to a lot of different strategies, how do we want to launch SKYTROFA in the U.S. We cannot go the rebate way, giving a lot of revenue in the beginning but less profit. We decided to build on the strength of the product because we have the best-in-class product that is highly differentiated to every daily growth hormone, but also other long acting. So we took the long term, long staying to an established market. We didn't go to a classical way to basically provide a lot of rebate, we went to the medical exemption pathway because we didn't accept that the rebate that was given to us. How can we do it and why we can do it extremely successful it's because we have the best-in-class product opportunity that really make a meaningful differentiation for the patient. So both our physician and everyone is willing to take their work to get their medical exemption because it's really benefited them. TransCon PTH is completely different. We're launching into a segment where the only opportunity that was there is taking away from the market, by launching into air where there is basic no competition. There is a huge recognization of the unmet medical need, there is a huge recognization of the benefit we can provide to the patient, which I think is supported by 2 things, and I call it validation, the guidelines. I have never been in a position, never been in a position that basically before you launch the problem, there is a guideline that's saying that you should utilize this product for most patients. First time guidelines is something that come 1 or 2 years after launch. The other thing is also being recognized at least from my perspective, is as recognized to the regulatory agencies by providing us a priority review, providing us the way of making an expanded program for the patient before we basically can launch the product really to help the patient. Yes. Now I forgot the second question.