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

Great. Good morning, everyone. Welcome. I'm Jess Fye, biotech analyst at JPMorgan, and we are continuing the 43rd Annual Healthcare Conference this morning with Ascendis. I'm going to turn the mic over in a minute to the company's CEO, Jan Mikkelsen, but just a quick reminder, sounds your cell phone send me questions on the iPad. And yes, we're going to quick do a 20-minute presentation, about 20 minutes of Q&A. If you have a question, raise your hand or iPad. And let me pass it over to Jan.

No, I am Scott.

O, Scott.

Okay. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, statements regarding our commercialization, continued development of SKYTROFA and YORVIPATH as well as certain revenue and growth expectations, our pipeline candidates and expectations with respect to their costs, continued progress, potential commercialization and success, our strategic plans, partnerships and investments, our goals regarding our clinical pipeline, including timing and results of clinical trials and our ongoing and planned regulatory filings and expectations regarding the timing and results of regulatory decisions. These statements are based on information that is available to us today. Actual results may differ -- could differ materially from those in our forward-looking statements, and you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see our forward-looking statements section in today's press release and the Risk Factors section of our prospectus supplement filed on September 20, 2024, and our most recent annual report on Form 20-F filed with the SEC February 7, 2024.

Thanks, Scott. I will slow down a little bit compared to Scott. So I think it's -- for me, it's some way an emotional time to stand up here. I've been attending the JPMorgan for 25 years. We started Ascendis Pharma in December 2007. And I have now been the CEO of Ascendis Pharma for 17 years. In 2008, we designed TransCon Growth Hormone. In 2015, we designed TransCon PTH and TransCon CNP. So 17 years after this major effort, we're now sitting here for first time with such a strong fundament that we really can strive to drive really our revenue growth. And I call it the black hole to be in biotech. There's a big black hole you need to fill up before you can hit to profitability. And it's not even the chance and the success rate to hit that is really, really, really hard. We came there because we have 2 strong fundamentals. Our TransCon technology and our algorithm for product innovation that really manage us to develop 2 product opportunities that now is approved in U.S. and Europe and the last rare disease endocrinology product, we really have strong pivotal data, and we are in a position that we are coming to the next stage going for an FDA submission here in Q1, and we're going for an EMA submission in Q3. So short, SKYTROFA the best-in-class growth hormone in established market. We have shown how we really are driving revenue with this product, and I will go down in more detail of this product opportunity. Last year, we generated a little bit more on EUR 202 million, mainly driven out of the U.S. But we're not stopping there as we already have the PDUFA date for our first market expansion activity, the supplement BLA for adult with growth hormone deficiency. YORVIPATH, the only treatment that is indicated for the treatment in adults with hypopara. And we launched last year in the beginning of the year in Germany and Austria and through rest of Europe and also outside Europe, we have system like named patient programs that really are providing patients access to YORVIPATH. And we generated last year around EUR 29 million. We launched here in middle of December. People say we should never launch in middle of December. We did it because the need of the patient came to us, and we wanted to be out and giving the product to the patient. CNP, I will come up with some more data from that. I really believe this is a product that gives me a huge pleasure to see when I talk with the parents, when I talk with the patient, when I talk with the physician, how for first time they believe they can get a treatment for hypopara. But as I said, we're building up the TransCon technology. The TransCon technology platform is expanding and expanding. And you can see that we are also utilizing the power of the TransCon technology outside our focus area, rare endocrinology, forming Eyconis in ophthalmology and now have partnered with Novo Nordisk in metabolic and cardiovascular diseases. We have our internal development in oncology with a strong focus on our TransCon IL-2 beta/gamma. And we just expanded the TransCon technology. Last time, we talked about our new platform we call the Avidity platform, and we saw the results of that immediately with the collaboration with Novo Nordisk. It's easy to follow Ascendis Pharma because we follow our vision. This is our strategic road map in '25 to 2030. And you can see it's already built on 3 different bullets with all 3 different segments. The first bullet is really, really clear. We want to be the leading endocrine rare disease company, and we want have achieve blockbuster status of all our 3 independent products, and I will come back to that later in the presentation. We want to be a leader in growth disorder and hypopara, pursuing all different LCM and other activity to do it. And we're also starting to expand our pipeline now with new chemical entities. We still will be in the areas outside rare disease endocrinology because of the broad feasibility of utilization of TransCon technology in other areas. And we want to go for accelerated approval in oncology. It will be the focus on IL-2 beta gamma, but you also see how we pursue big indication like metabolic disease, obesity with the collaboration with Novo Nordisk. So when I think about what we want to do is we really want to outperform, make a new paradigm shift how to make drug development. We did that in our rare disease endocrinology, 7 years for start from the idea to approval for TransCon PTH. We have made 3 product preclinical, got 3 product approved. I do not know any company that had managed to do that. But it's only possible for us through the TransCon technology or algorithm for product innovation. So this is how we have expanded. And you can see we have Albumin Avidity. Now we have a Protein Degrader data. The Protein Degrader data is really going back to the fundamentals. Today, we have addressed a lot of diseases where there is deficiencies or what we need to do what we call pathway modulation. But many, many [indiscernible] diseases in rare diseases actually have too many things of a product. It could be in hormone, it can be cytokine. It can be in other ligand. So -- but if you give a protein degrader into that, and this is a classical protein degrader with one that bind to the liver, get it away and one that bind through the ligand, it disappear in a few minutes because of the extremely fast clearance. So if you have a continued produced hormone, you can never, never get it removed sufficiently because the degrader is back after few -- at least everything is done in less than 1 hour after you did the injection. So what we're doing is, we use the TransCon technology to establish normal algorithm for Ascendis Pharma. And then we totally shield it and then you liberate on a continued basis like a continuous infusion, the Protein Degrader data. So on a continued basis, you can basically turn up and down exactly where you want to have the hormone, in the level you want to have it, when you have a super physiological concentration and want to lower it. This is how we're building a new series of product opportunities. Going to our pipeline. You can see our pipeline. We have strong focus on label expansion. And you can see we are going into label expansion now mainly on growth hormone and CNP, strong focus on CNP, but it will expand further which you can also see in our partnered program. We have also the geographic reach everywhere; Japan, China and Europe and U.S. Going to our worldwide commercialization. Why do we do worldwide commercialization? Because we want to be where all patients are. And when we look on PTH, they're everywhere. When we look about CNP, we are building out the global commercialization for all our product now. And we do it by 3 different means. We have our direct commercialization where we do U.S., we do it in Europe Direct and we still have [indiscernible] consider that Danish. So we still took the right color on it this time here, the next year potential will be different. But from our perspective, this is the Europe direct and the U.S. And then we have partnerships with sales and distribution. You can see how we're covering the entire world. And then we have other partnerships like VISEN and Teijin where we both have a classical partnership and other one more as a JV-like type. But we will be everywhere. Growth hormone. We launched it in U.S. in end of '21, Germany in the Q3 '23. We have now done all the necessary clinical trials to be worldwide pediatric growth hormone deficiency. We are expanding now across multiple countries. And you can see that we generate a sales of EUR 200 million, mainly from the U.S. We have a strong activity on label expansion because with the pediatric growth hormone deficiency indication, we are only addressing around 50% of the market. We have positive results from our Phase II in Turner, and we're initiating a basket trial that likely will be in SDA, ISS and shock where we, for example, have Turner include in that, meaning is that in the next years, we basically will have a labeling expansion to the entire growth hormone market. And you can ask me, hey, how can you make that to a blockbuster status when you have this modest increase in revenue for '24? And I can say, yes, because the fundamentals is right. We still compare to a daily growth hormone, have a value creating 3x compared to a daily growth hormone, meaning is that we can expand the growth hormone market. We grow the volume about 84% from '24 to '25. And we still only have 6.5% of the market share in the U.S. So do a simple calculation, we believe So do a simple calculation, we believe a best-in-class product opportunity will go up to 40% to 50% of the market when we have the necessary label expansion through the entire market, meaning is that we will be in a position that we easily can make it to a blockbuster status. We are committed to growth hormone. We are committed to SKYTROFA, and we will continue to really get this out in all the different countries where it should be. Going now to YORVIPATH. YORVIPATH is one of the largest indications in endocrinology rare diseases where there's no treatment today. Think about having type 1 diabetes without insulin. Think about having growth hormone deficiency without growth hormone. Think about having hypopara without having PTH replacement therapy. And that is what we're providing to this patient group. When you look on the serious comorbidities this patient group have, you understand the need, the huge unmet medical need. So when you look on the guidelines, when we go to the guidelines, we believe 95% of all patients should be in treatment. And that's exactly what we also saw in our clinical trial. Independent on sub-analysis, we saw the benefit on all patient group. We launched in Germany in the beginning of last year. And you can see the growth quarter-by-quarter. We have a list price about EUR 100,000 per patient per year. We launched in Germany and Austria. And outside Europe Direct, we have system like named patient programs where you can take a single patient into a product that will be reimbursed. We're ready now to launch in 2025 to the majority of Europe Direct. So you will see a major acceleration in this region. We have 8 exclusive distribution agreement in 50 countries now. We have revenue recognization from 3 different regions; Central and Eastern Europe and Israel and Canada. Next year, it will expand dramatically, both in Europe Direct and our international market. We have around 700 patients on treatment. So when you look on this revenue increase, think about -- and people asked me 4 years ago, will you beat NATPARA? Will you be better than NATPARA? First of all, NATPARA was an adjunct, we are treatment. But when I look at NATPARA, after 4 years, NATPARA made in that treatment [indiscernible] million. When I look after 10 months and analyze that, we did it in 10 months. So what NATPARA did in 4 years, we did in less than 1 year. Just illustrate what is the treatment benefit we have with NATPARA, compared to NATPARA. So NATPARA is now available in the U.S. as the only treatment. This is the patient population. We define it in the segmentation, PTH experienced, the total group, newly diagnosed. There will be around 3,000 patients coming every year, mainly from the postsurgical part. So this was our initial launch. Remember, we started before Christmas. In beginning of December, we started with taking prescription for patient that was in our ERP program in our clinical trial. And in the middle of December, we basically started with the other group. The other group meaning is that it suddenly got available to patients that now was on conventional therapy. And what we saw here, we caught it January 9 at 1:00. Why did we caught at 1:00? Because of 2, there will be many more. So therefore, we caught it at 1:00. And we saw at that time, 324 prescriptions, where the majority was coming from conventional therapy. Meaning is that it really are expanding out in the big group as we have expected when we think about the unmet medical need and they have no treatment. And the other thing which are unique, we have 150 unique prescribers in our ERP program, in our clinical trial, we only have about 30, 40 prescribers, meaning it's expanding extremely well out. So when I look on the perspective on YORVIPATH, we have the perspective that we can make it in a blockbuster outside U.S. and inside U.S. When I look at the initial data, I'm feeling somewhat more confident about that statement. It's the first and only approved product for hypopara in adults. We are going on clinical regulatory approval in a series of country. Currently, we have 4 countries on regulatory approval outside the places where we already have approval. We have 700 patients in Europe Direct and international market end of '24, and we will launch in more than 5 countries in Europe Direct in '25. Strong enrollment and 150 unique prescribers from 38 states, meaning it's not centralized to a few academic places to just the U-shape, it is everywhere. There's still 51 states in U.S. CNP. We came out with the Phase III data of a pivotal ApproaCH. There were actually a copy of our Phase II data, but with much more patients. We want to develop a treatment, and that is what we want to achieve. I will not start to repeat what we saw on the primary endpoint growth because we are providing linear growth, amazing linear growth, exactly what we can do when we address the hyperactive tyrosine kinase. What we wanted to focus on today is what can we provide of benefit to help the patient related to the comorbidity they have besides linear growth. And this is where we want to focus. This is why we see this unique retention in our clinical trials. Why we could not recruit our pivotal trial in 3 months at site that had access to available products today and other clinical products today. 3 months, we recruited our pivotal trial. What they have seen there, they have seen it in the patient-reported outcome. We saw it against all the different domains. The other thing we have seen, muscle functionality. And you can say, why do we see this different compared to other things? Because how did TransCon CNP got designed. What was the fundament behind it? It was to give a continuous exposure of CNP 7 days a week, the entire year. And now, I'm really, really happy to see other companies accepting that. They're coming back and saying, now we want to develop the same profile that the Ascendis profile, continuous exposure, really also understanding and believing in the biologic about what is the benefit of continuous exposure. It's extremely well tolerated. And because we inject a product, injection site reaction is basically the same as placebo, meaning is that we have 0.5 injection site reaction mild in a yearly treatment and no risk of hypotension because we don't have high Cmax, we have a flat continuous exposure. I wanted to focus on some of the data we've seen. This is part of our analysis. We are looking and see what do we provide behind linear growth that is extremely meaningful for the patients. So one of the things we take up today, and you will see other things being presented by medical conferences and other thing, leg bowing. And when you look on the leg bowing, there's 2 different means you can look at it in 2 different ways you can measure it. And we presented both to you here. The one is the tibial femoral angle, and you can basically see if you decrease the TFA, the angle you're missing there, you actually are improving the condition with less leg bowing. So when you go over and look on the placebo, you can see in 52 weeks during the trial that it actually got worsened with plus 0.39 degrees. What did you see with the treatment arm? It improved with 1.4. Highly statistic improvement in it. And then you go out and say, are there other way we can measure this also with radiologically. Yes, we look on MAD. This is where you basically are seeing in between the distance of the knee compared to the line between the skeletal system. Is that getting less, meaning you're improving it. If it gets larger, it's getting worse. When you look on the placebo in 52 weeks, they got increased with 1.78 millimeter. When you see the treatment benefit for just 1 year, improved in 1 millimeter. All that is extremely meaningful for the patient. And this is why they continue on the trial. This is why we believe in continuous exposure of CNP is providing all the benefit behind linear growth. So we're filing now. We have a very successful pre-NDA meeting with FDA, and we're filing here in Q1. We are developing a lot of other clinical trials. Our infant trial between 0 and 2 are really getting enrolling with huge speed now really as we expected to see. We have our COAST trial. Why do we make our COAST trial? Because there will be patients that want more linear growth. And I'm not talking about the 5.5 to 6 centimeter. This is what you go when you start to interrupt the super active tyrosine kinase in the [indiscernible] You can get 5.5 to 6 centimeter. We want to combine it higher up. And this is why we're running the COACH trial where we combine it with 2 different mean. This is why Ascendis is positioned to be the leader in growth disorder because you have a big huge 2 fundamental TransCon Growth Hormone and TransCon CNP. So what do we do besides that? You saw the degrader platform. And one of the first one we were looking at and continue working on now where we really believe there is a huge unmet medical need. And Kennett, who you all will meet later on today, he will explain some of the unmet medical need and why we're taking this up. But its basic is that we want to remove the super physiological FGF23 levels down to a normal level. Same algorithm as we did in all our Ascendis programs, where there is already proven clinical program, clinical endpoint, and we just need to execute. We have made 3 out of 3. We want to make 4 out of 4. Our collaboration with Novo Nordisk. Yes, we wanted to be in obesity metabolic disease. The TransCon technology is the best platform ever to make once monthly product where we can take a semaglutide that have a proven efficacy, really go out and use the algorithm, derisk it because semaglutide will function because we liberate semaglutide, and we know we can do it over a once-monthly profile. We believe the economy for us is great, total funded by Novo Nordisk, and we're sitting with a royalties that really can be us also a player in obesity metabolic diseases without any kind of investment. I don't believe any biotech company ever can take the burden of being a player into this area because of a huge investment. Other investment, Eyconis in ophthalmology, Teijin is our Japanese licensee, VISEN, our Greater China licensee. So let's go to a little bit more of a fundamental thing. This is Scott's area, but if you wanted me to do it today. So you can see we ended with revenue about EUR 226 million. And what is more important is that when we take all the revenue we got for the different collaborations, we are ending up on EUR 364 million. We are really well founded in our financials. In cash, sitting with about EUR 650 million, including the EUR 100 million that we will receive from Novo Nordisk, meaning is that with our projected expenses, we will have really, really a well-capitalized company where we see the cash generation we are doing in the future. So milestone for '25. Yes, you can see it's going to be from the research and development. This is research and development. The revenue will come in, and that will be a major driving force in '25. But when we go to research and development, it's clear it's going to be a CNP year. Filing, FDA, top line codes submit European, and then we have hypochondroplasia submit in the end. Growth hormone, you can see first label expansion, and then we're going into further label expansion. So when I look at the future of Ascendis Pharma, we are here to build a leading biopharma and we will continue to do it in the next year and we're coming to the transition state where we really can grow the revenue now. So thank you so much.

Great. So I guess first question for me is, you gave us that initial stat on YORVIPATH having 324 patients enrolled in the U.S. in the special -- sorry, in the ASAP program or with specialty pharmacies. What does that mean? Do those patients have reimbursement? Is the reimbursement still in process?

So when we take patient in, we take them into our ASAP program, with our internal hub that basically do everything for the patient, however they go with the prescription to the SP. That meaning is that they are starting the reimbursement process. And our way we look on reimbursement is that we expect the waste majority of the patient will receive the level of reimbursement between 4 and 8 weeks. That is the time it takes. Some of them already came after 1 week, some came after 2 weeks. But when we look back and see what we have seen from other products, the vast majority is between 4 and 8 weeks from the prescription's being written.

Okay. And then of those -- the 324, there was a subset -- actually the majority, I think, who had not been on YORVIPATH in the past. How many of those have been on NATPARA in the past?

That is a good question, which we cannot answer because we don't have the insight in each single patient if they are for 5 years ago or 6 years ago, really have access to NATPARA. We don't know that. But we know that they're coming from conventional therapy, but we do not know if they are for 5 and 6 years actually tried NATPARA for just 4 weeks or 5 weeks or half year or something like that. We cannot see that.

Okay. And then I think the numbers you gave on those initial kind of patient enrollments also suggest that there may be like 50 or 60 YORVIPATH patients from clinical trials or the EAP who have yet to transition. Should we expect those? And if so, when?

It will come in the first next months, we believe. There is about 60, 80 patients that still need to be transferred, that also need to be transferred that currently is on YORVIPATH. It's something that just have been running for 3 or 4 weeks. So it's really pretty impressive because they need to come into the physician. And typically, what we learn, the big group of patients the 40,000 patients, which are what -- when you look at the status being controlled or in a severe or moderate manner, they are seeing the physician about up to 4, sometimes more, some of them seeing at least 2 to 3 times a year. And we ask the physician, are you starting to stockpiling the patient? They're saying, no, we are not doing that. We wait until they come in because the waiting line just to get an appointment is basically about 8 to 12 weeks. So they're just waiting to have already the regular appointment with the endos and then they meet and get the prescription.

Okay. So that kind of gets to my next question. How sustainable is this extremely rapid rate of enrollment that you've seen just over these first few weeks?

I think it will be stable. I cannot see anything that is going down. We only see it accelerating.

What about ex U.S. So you had a really robust rate of patient pickup in Europe already. I'm curious how you think about kind of volume for '25 from this level and also price. What's the right way to think about kind of the evolution of the price in Europe?