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

Ladies and gentlemen, thank you for standing by, and welcome to the Ascendis Pharma First Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Scott Smith, Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you so much, operator. And thank you, everyone, for joining our first quarter 2025 financial results conference call. I'm Scott Smith, Chief Financial Officer at Ascendis Pharma. Joining me on the call today are Jan Mikkelsen, President and Chief Executive Officer; Sherrie Glass, Chief Business Officer; Jay Wu, Executive Vice President and President, Ascendis U.S.; and Aimee Shu, Chief Medical Officer. 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 and continued development of SKYTROFA and YORVIPATH for the U.S., European, and other markets, as well as certain financial expectations; our pipeline candidates, and our expectations with respect to their continued progress in potential commercialization; our strategic plans, partnerships and investments, our goals regarding our clinical pipeline, including the timing of clinical results and trials; our ongoing and planned regulatory filings and our expectations regarding the timing and the results of regulatory decisions; expected market developments, and our exploration of market opportunities and therapeutic areas outside of endocrinology rare disease. These statements are based on information that is available to us as of 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 statement section in today's press release and the risk factors section of our most recent annual report on Form 20-F filed with the SEC on February 12, 2025. TransCon Growth Hormone or TransCon hGH is approved in the U.S. by FDA, and in the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency. TransCon PTH is approved in the U.S. by the FDA for the treatment of hypoparathyroidism in adults, and the European Commission and the United Kingdom's Medicine & Healthcare products Regulatory Agency have granted marketing authorization for TransCon PTH as a replacement therapy indicated for the treatment of adults with chronic hypoparathyroidism. Otherwise, please note that our product candidates are investigational and not approved for commercial use. As investigational products, the safety and effectiveness of product candidates have not been reviewed or approved by any regulatory agency. None of the statements during this conference call regarding our product candidates shall be viewed as promotional. On the call today, we'll discuss our first quarter 2025 financial results and we'll provide further business updates. Following some prepared remarks, we'll then open up the call for questions. With that, let me turn it over to Jan.

Thanks, Scott. Good afternoon, everyone. In the first quarter of 2025, Ascendis continued the strong start of our global YORVIPATH launch as well as key development and regulatory progress supporting our long-term growth strategy to be a leading biopharma company. The strong U.S. launch of our YORVIPATH positions 2025 to be an inflection point for Ascendis, with a growing revenue base and a clear path to become cash flow positive. As of March 31, YORVIPATH was prescribed in the U.S. by more than 1,000 unique prescribers for more than 1,750 patients. This represents our first full quarter for the U.S. launch. YORVIPATH, the first and only FDA-approved treatment for hypoparathyroidism in adults is addressing the underlying cause of the disease by providing active PTH within the physiological range for 24 hours per day. SKYTROFA, our long-acting growth hormone, is firmly established as a high-value brand and the preferred treatment for patients, physicians and caregivers. SKYTROFA is well-positioned as daily treatment continue to exit the U.S. market and as SKYTROFA label has the potential to expand beyond its single indication. SKYTROFA is a key pillar in our strategy to become a global leader in the treatment of growth disorder. TransCon CNP, the first long-acting therapy in development for the treatment of achondroplasia, is set to become the second pillar in our growth disorder strategy. We believe that TransCon CNP has treatment benefits in addition to linear growth that addresses multiple aspects of the condition that are fundamentally important to patients. We submitted an NDA to FDA in March, and expect to file an MAA with EMEA in Q3 this year. Data from three randomized double-blind placebo controlled clinical trial show that TransCon CNP has the potential to transform the lives of people with achondroplasia. In my remarks I will discuss each of these products in detail, and comment on other recent development within our business. Beginning with YORVIPATH. First quarter total global YORVIPATH revenue grow to EUR 45 million, compared to EUR 14 million in the fourth quarter of last year. Following commercial availability in the U.S. in December of last year, we are seeing strong U.S. demand, reflecting both the deep unmet medical need in the market as well as the large patient population. As of March 31, more than 1,750 patients, including the 200 patients from our EAP and clinical program, have been prescribed YORVIPATH in the U.S. by over 1,000 unique healthcare providers. Enrollment of patients new to YORVIPATH continued similar weekly rate in April. The majority of patients who have received insurance approval for their YORVIPATH prescription received that approval in 4 to 8 weeks and we are pleased with the approval rate we have seen. We are beginning to see favorable payer plans put into place, and continues to see approvals across both commercial and government plans. The strong launch performance of YORVIPATH in the U.S. support our view of its excellent product profile and the major unmet medical need in the market, and we expect YORVIPATH to contribute significantly to our revenue in 2025. Outside of the U.S., we see steady YORVIPATH's revenue growth in both the Europe, direct and international markets, and we expect additional acceleration of the revenue growth when YORVIPATH reimbursement becomes available in additional Europe-direct countries in the second half of the year. The continued rapid uptake together with high rates of patient adherence give us confidence that YORVIPATH is well-positioned to uniquely address the unmet medical need of this patient population, and we are regularly reviewing input and data from patients to evaluate if there are additional ways to improve the treatment profile even more. We estimate there are over 400,000 patients globally and around 70,000 to 90,000 patients in the U.S. alone living with chronic hypoparathyroidism. Our claims analysis demonstrate that 10,000 to 15,000 of these U.S. patients are uncontrolled and 30,000 to 35,000 are partly controlled. Based on the latest clinical practice guideline, nearly all these patients are candidates for treatment with YORVIPATH. Our strong global launch give us high conviction that we can continue to build and lead this market and YORVIPATH can be a durable multi-billion Euro Direct wide product with a patent lifespan extending into the 2040s. Turning to SKYTROFA, Q1 revenues for SKYTROFA were EUR 51 million. With continued patient growth and global expansion offset by the typical first quarter revenue dynamic in the U.S., we have around 7% market share of the total growth hormone market in the U.S., and around 43% of the total U.S. nonacting growth hormone market based on third-party prescription data. The pediatric growth deficiency indication represent about half of the total growth hormone market. With our premium pricing and SKYTROFA's leading position in pediatric growth hormone deficiency, we believe we are well-positioned to expand the opportunity for SKYTROFA in multiple ways. A key near-term milestone is our first potential label expansion in the established growth hormone indications from our supplement BLA for the potential U.S. approval in adult growth hormone deficiency, where we have a PDUFA goal date of July 27, 2025. We are also on track to start a basket trial for SKYTROFA in a range of indications including idiopathic short stature, SHOX deficiencies, Turner syndrome and SGA. We are planning to discuss this trial with the FDA in an end-of-phase 2 meeting this quarter. Importantly, we are also investigating TransCon Growth Hormone outside the established growth hormone indication such as in a potential combination therapy with TransCon CNP for treatment of achondroplasia and other growth disorder, which I will address in a moment. Moving to TransCon CNP, TransCon CNP is the third key product in our endocrinology rare disease product portfolio. The genetic variant that causes achondroplasia change the way receptors work in multiple tissues throughout the body, not just in the growth plate and in bones, resulting in a wide range of serious medical complications in childhood and lasting throughout adulthood. Because TransCon CNP provides sustained therapeutic levels of CNP throughout the body, it has been demonstrated a unique product profile, giving it the potential to bring growth benefit and important new benefits beyond linear growth as well as reduce risk of hypertension and injection site reaction. In our pivotal ApproaCH trial, TransCon CNP demonstrated significant improvement in the primary impact of linear growth compared to placebo as well as significant improvement in other clinical endpoint meaningful to the achondroplasia community, including leg bowing, muscle functionality, body proportionality and health-related quality of life. Leg bowing is a common complication in achondroplasia that can result in chronic pain and impaired physical function, driving many to undergo complex painful corrective surgeries. I have been in meetings with patient organizations in Europe and the U.S. who have confirmed the importance of addressing the complication of achondroplasia beyond linear growth. Just as important to the achondroplasia community, TransCon CNP has shown a safety and durability profile compared to placebo with low frequency of injection site reactions, all which were mild and no evidence of symptomatic hypertension. After positive interaction with the FDA relating to the content of our NDA submission, we are pleased to have submitted TransCon CNP for the review in March. In the EU, we plan to submit an MAA during the third quarter of this year. Additionally, during the fourth quarter 2025, we plan to submit an IND or similar to investigate TransCon CNP or in combination with TransCon Growth Hormone for the treatment of hypoparathyroidism. Shifting to TransCon CNP and TransCon Growth Hormone combination therapy, we are committed to continue to drive even better outcome for people living with achondroplasia. This is why we are conducting the COACH trial. Being the first Phase II study combining CNP and growth hormone in achondroplasia, each of which stimulates different signaling pathway in the growth plates and other tissue in the body. We look forward to sharing top line week 26 results from the COACH Trial data this quarter, and see great potential to further raise the bar for clinical outcome. With TransCon CNP as the potential future backbone therapy, we believe we can achieve even greater growth while also addressing medical complications of achondroplasia. Fundamental to the development of each of our 3 medicines, YORVIPATH, SKYTROFA, TransCon CNP is Ascendis' proprietary TransCon technology platform. With the TransCon technology and our deep understanding of disease biology, it is possible to create medicine with highly differentiated treatment benefit not possible with other technologies. At Ascendis, our commitment has always been to the patient. It is one of the company's core values. I believe we have demonstrated multiple times over the history of Ascendis our resilience and our ability to adapt and find solutions to attain this goal. We remain as dedicated as ever to ensure that all our medicine become available to patients. Through our collaboration with Novo Nordisk, for the development and commercialization of TransCon-technology-based products in metabolic and cardiovascular disease, and our collaboration partner VISEN, Eyconis and Teijin, we continue to work to execute our Vision 2030 to create value in vast therapeutic areas and through innovative business model. In summary, 2025 is a transformative year for Ascendis, as we grow our global revenues from YORVIPATH, SKYTROFA and seek to obtain key regulatory approvals, deliver robust clinical data, and advance drugs with blockbuster potential to drive growth for many years to come. I will now turn to Scott.

Thank you so much, Jan. I will touch on some key points surrounding our first quarter financial results, but for further details please refer to our 6-K filed today. YORVIPATH first quarter revenue increased significantly to EUR 44.7 million, up from EUR 13.6 million in the fourth quarter of 2024. Steady sequential revenue growth outside the U.S. was augmented by the strong U.S. launch. As Jan discussed, the trends we saw for YORVIPATH in Q1 continue in Q2 both outside and inside the U.S. and we anticipate that YORVIPATH will have a substantial impact on our financial profile in 2025. Turning to SKYTROFA, revenue for this quarter was EUR 51.3 million. Sequentially, pricing and market share remained stable but revenue in the U.S. was negatively impacted by seasonal items including reduction in channel inventory and higher copay assistance. Those seasonal headwinds should reverse beginning in Q2. We also continue to watch the euro-dollar exchange rate for any potential impact related to reported revenue. Total revenue for the first quarter was EUR 101 million, which includes nonproduct revenue from our collaboration partners. Turning to expenses, for the first quarter, R&D costs totaled EUR 86.6 million, compared to EUR 70.7 million during the first quarter of 2024. The first quarter of 2024 included a favorable EUR 10.6 million reversal of prior period write-downs of TransCon PTH, prelaunch inventories. SG&A expenses in the first quarter of 2025 totaled EUR 101 million, compared to EUR 66.8 million during the first quarter of 2024. The EUR 34 million increase was primarily driven by global commercial expansion. Total operating expenses were EUR 188 million for the first quarter of 2025. As a result of the VISEN IPO, we recognized a non-cash gain of EUR 33.6 million as part of share of profit loss of associates, and we retained 39% ownership of VISEN. Net finance expenses for the first quarter of 2025 were EUR 15.9 million, driven primarily by noncash items. Net cash financial income for the first quarter of 2025 was EUR 3.3 million. We ended the first quarter of 2025 with cash and cash equivalents totaling EUR 518 million, compared to EUR 560 million as of December 31, 2024. Turning to the remainder of 2025, we expect substantial revenue growth driven by the global launch of YORVIPATH with a continued solid contribution from SKYTROFA. We are not providing revenue guidance for SKYTROFA or YORVIPATH at this time. For SKYTROFA, we believe that growth in prescriptions visible in third-party data will track sequential revenue growth for 2025 with expected stability in mix and pricing, including normal seasonality. For YORVIPATH outside the U.S., we continued steady revenue growth while inside the U.S. our launch is progressing exceptionally well. We will continue to look to help investors understand uptake in reimbursement dynamics as the year progresses. With that, operator, we are now ready to take questions.

[Operator Instructions] And our first question today will come from Jessica Fye with JPMorgan.

Congrats on the strong results with YORVIPATH. It seems like the number reflects very good execution on reimbursement. Can you talk about your latest expectation for the proportion of patients with a script, who you think will ultimately get reimbursed once YORVIPATH is, say, at steady state? And then the follow-up would just be was there any initial channel fill reflected in the 1Q revenue number? And if so, can you quantify that?

Thanks, Jess, for the questions. And Scott will take the easy one. The last one.

Yes, Jess. So channel inventory has averaged about 1 to 2 weeks at any one time. We ship once a week, so it's hard to get less than 1 week of channel.

The second one, and just why it's a little bit more complicated because in some way looking in the future, what we can see, we see a very, very positive trend. We see the adaption of the different PPMs, the different payer forms. And if I'm some way to come with my own guess about it, and this is more a guess because we don't know exactly, there will never be 100% approval of all the patients. And I believe, if we really are successful, and I hope we will and I believe we're going to be successful, I believe 17% to 18% will get reimbursed. But I think Jay, if you have another comment to it this way.

Yes, happy to chime in on that. I think as Jan mentioned, we are still early in the launch, right. So from that perspective, we're still seeing policies be set into place. So it is a bit early to be able to anticipate what that steady state will be. I do think a few examples that give us a lot of confidence that we are headed in the right direction is a couple. One, you're seeing policies, favorable policies be put into place both from a commercial standpoint as well as government. So we're seeing that start to take hold. And then 2, even absent of a formal policy in place, we do see patients get approved across the board. Again, agnostic of whether it is a commercial plan, or government plan, it just sometimes may take a few more steps whether it is through medical exception and in some rare cases even through appeal and or peer-to-peer. But largely we are seeing many patients get through. You will expect a long tail, just given that every payer plan is different, given the heterogeneity of it in the U.S. but overall we have a lot to be encouraged about. And I think more importantly, it just really emphasizes the clinical value proposition of this product, and the fact that payers, providers and patients are all responding to it.

I think -- but yes, I think some way when I talk about my feeling, my feeling is that I believe every patient that some way have a desire to go on treatment should come on treatment because I have seen, or heard, met patients that benefit that is on the on the treatment in it. But I also accept reality in this way here. But I also believe we are in a unique positioning. We are addressing a major unmet medical need. We have really a product that really are providing the benefit to the patient. We are in a position that patients are diagnosed with the disease. At the same time there is clear guideline saying there should be a treatment. Can you find a better case for any patient really not to get the ultimate goal if you get and want to be on treatment you should be on treatment.

And our next question comes from Tazeen Ahmad with Bank of America Securities.

Jan, can you give us a little bit of color on the split between U.S. and ex-U.S. revenue for the quarter for YORVIPATH? And can you give us a sense, because it seems like you do have some patients receiving drug in the U.S. what the length of time is? I know it's early but what is the length of time that you're seeing between when a script is written to when the patient is receiving therapy?

Yes. Let me first address the question between -- the split between Europe and U.S. And as you have seen, Tazeen, we are not really describing that in our numbers, but also believe that we give you good guidance how to potentially to calculate it. As we said, when we look on the ex U.S. we see a steady growth, a steady acceleration. But we first expect in the second half of this year to see an acceleration of the acceleration when we get more countries phasing into the situation that will be fully reimbursed. So when I look on the difference between Q3 and Q4 last year, it's something around the element of an increase around EUR 4 million to EUR 5 million for one quarter to the next quarter. So when you think about that we increased our basic revenue, from about EUR 14 million to EUR 45 million, then you can take basic the difference and then subtract about EUR 4 million, EUR 5 million and then I think you would get a number around EUR 26 million, which are someway reflecting the algorithm I would use if I should look at it.

And our next question will come from Gavin Clark-Gartner with Evercore.

Congrats on the very strong launch progress. First, just to follow-up on the payer point and the favorable access, have you finished negotiations with the majority of commercial payers at this point? And do you expect the remaining to-be-published policies to look similar to the ones that are already published? And has the rebating fallen in line with your expectations with those conversations?

Yes, it's a question. I will take the global perspective. As you heard about ex U.S. we are basic fully reimbursed now in Germany, there is a final list price you can find. We also have that for Austria. In France, we have an AP2 program. We also have a different program in Greece. So ex-U.S. we are working on really getting all country by country fully reimbursed. It takes time. It's something that some way both will happen here in '25 but also in '26. When we come into end of '26, we believe we will have the vast majority of the important country being fully reimbursed. If you come to the U.S., which there is a strong focus on, don't forget the more than 300,000 patients outside the U.S. I think Jay can give you more color about his discussion with the different plans in the U.S.

Thanks, Jan, and thanks, Gavin, for the question. Yes, to answer your question, the conversations with payers have been going very well. We have multiple commercial policies in place with our national accounts. So while we don't comment on policy by policy, that gives you a sense that we are gaining a lot of good traction there, and the policies that are put in place are favorable and consistent with label. While we don't comment on the gross to net arrangements that we have with each, what I will say is that it is commensurate with what we said before. This is a first and only approved product in a rare disease setting with clinical value benefit that we strongly believe in and we feel we've been able to convey with payers. And from that lens, it is commensurate with the incredible clinical value proposition that we bring. And we certainly lead with that and expect it to reflect that.

Okay, great. And then quick follow-up for the new prescriptions that are coming in, what proportion are NATPARA or PTH naive versus experienced?

I don't think we really have the full insight exactly how many there is coming from the NATPARA. Sherrie, you can potentially correct me if we have got more insight to that. There was some question we discussed last week. We know that the vast majority of patients coming from conventional therapy. But perhaps, Sherrie, you can discuss exactly how many NATPARA patients that we believe has been transferred over.

Yes, thanks for the question, Gavin. And yes, Jan's right. The data is not entirely definitive on this point but we know that we have the vast majority of our patients overall are coming from conventional therapy. So that's very clear. And we do have something like 10% to 15% of patients that have been on some sort of PTH in the past. And then a subset of those were more recently on NATPARA. But the bottom line is overwhelmingly coming from conventional therapy.

Yes. From that perspective, we believe that in Q2 and Q3 we will see the majority of the rest of the NATPARA patient coming over because Aimee you're sitting with the patients, you can explain that there has been data coming out explaining that you are in a position that they're stopping.

Right. They're still, as far as we know, there's still some supply. So they still may be on it but we know it will exhaust soon.

Yes. So the basic, when we look at the patient that's coming over, the 1,750, this is not NATPARA patients. This is basically patient that's coming from conventional therapy, the 35,000 patients we are addressing now. So there is a lot of deepness to go in this way.

Great. Congrats on the progress.

And our next question comes from Derek Archila with Wells Fargo.

Yes, congrats on the quarter. So maybe just first on, can you comment on the depth of prescribing and the number of docs that are really prescribing, maybe 2, 3, 4 patients with YORVIPATH. And then just to follow-up to the last set of questions. Just are you seeing patients that are newly diagnosed or well controlled on conventional therapies move over to YORVIPATH?

Yes, if I just could answer all your questions, I will be a happy person. I'm still a happy person. But when I -- some way -- and Sherrie, you can also some way add in. We cannot really know if they are well controlled, partly controlled or not controlled. That is not really anything we can see. We don't believe that it's really part of the reimbursement system. I actually think why we call them uncontrolled, we likely will see more of them because we had an algorithm that basically are saying that 10,000 to 15,000 of the patient we define as uncontrolled is because we are seeing an endo in a very, very, very high frequency. And this is why we know that we just went to this physician that will automatically have all these patients coming in. So when they're coming and control patients that see the endo on much, much less frequent, are they getting on NATPARA? I hope so but I cannot really know. But we know we really addressed the patient that sees the endo in high frequency. And I believe that is basically what I would call the genius part of our commercial organization really working on not getting patient into the endos. It takes too long time. As if I want to go into Aimee's practice at Stanford, I need to wait 3 months to get an appointment with her. And I think we cannot wait for patient for that. And that was why I think they made a really, really genius move in the commercial organization, go to the places where we know patient comes in very, very, very often. So my expectation is that I believe we have a high percent of uncontrolled, partly controlled but it's mainly only built on the algorithm because we are seeing the endo much more often than the other ones. So, Sherrie, do you have anything to add?

I think you covered it well, Jan. I would maybe just say we -- one of the things we're really excited about is, we know there are quite a good healthy number of those uncontrolled and partially controlled patients. So something like 10,000 to 15,000 uncontrolled and another 30,000, or so partially controlled. And as Jan said, the uncontrolled patients are seeing their endos 4x or more a year. So we know to Jan's point that they're getting in and therefore that we expect to see a steady flow of patients coming in, and having the option to get on drug over the course of the year.

Yes. And one of the reason why we don't know it is, because it's not part of being reimbursed or not. So if we're part of the reimbursement system to have this uncontrolled, partly controlled or controlled, we will know much more on it, but it's not a decision in the reimbursement system.

And the next question comes from Yaron Werber with TD Cowen. Our next question will be from Joe Schwartz with Leerink Partners.

Congrats on the very strong quarter. I was wondering if you have a sense of how many of your target endos in the U.S. have adequate resources at their center in order to be able to go back and forth with payers who might not approve reimbursement of YORVI right away. Just given there's so many patients in the U.S. and a finite number of physician offices who treat them, could their ability to navigate this process represent a cap on YORVIPATH revenue growth at some point?

Joe, it's something that Jay and the commercial organization had really a lot of thoughtful thinking about it. How can we ensure the journey for the patient, the physician, the office that's dealing with it is really going to be the most soft journey we ever could think about. And I think, we have so much experience in this area mainly out from our SKYTROFA the 10,000 patients, we took big portion of that to medical exceptions. And I think there was the learning we got. There was the system we're building on. And I think this is why we are potentially one of the best equipped companies really to deal with medical exception, from all the elements we learn from the SKYTROFA. Jay, you can go much more [indiscernible].

Yes. Just to add on and to reinforce what Jan said, our hub is a well-oiled machine at this point, right. Incredibly experienced. As we all know, the growth hormone deficiency space is a heavily managed space. So not only is our hub infrastructure equipped both from a volume and speed perspective, we also have a strong field reimbursement manager footprint that is constantly supporting these offices along the way as well. We feel good about our ability to resource and support our customer needs as needed. To your question directly, of course there's going to be some offices, particularly the ones where perhaps it's lower volume, they may see fewer cases. That's not I would say unique to many other specialties that experience the same type of office burden. But again, going back to what Jan was sharing earlier, we're well equipped and have the capabilities to ensure that we are allowing that to not be the bottleneck as to why patients will get on therapy.

And to follow-up, could I just ask what you hope to see in terms of clinical benefit from the combination of TransCon CNP and hGH in the COACH trial?

Yes. Joe, now you're asking about the future again and this is good. I'm covered by Scott's statement, even though it went a little bit fast for me to understand what he said. But I actually saw an interesting research, and why it was interesting for me because they tried to take which -- it was actually something I never thought about myself, and this is potentially why I thought it was really interesting. They looked on achondroplasia and hypochondroplasia. Achondroplasia, as you can see, the more severe form for achondroplasia, hypochondroplasia, little bit more you can say easy form for achondroplasia, less severe, less braked, because what FGFR3 super activation is, is really putting a brake on the system. So when you took on achondroplasia you have the break full down, hypochondroplasia partially down. And then they look what is the difference between growth hormone treatment over years with the 2 different therapeutic areas, achondroplasia and hypochondroplasia. And I actually think that it was very well done and you could basically, I can give you the numbers. So when you go to achondroplasia you get an 5, 6 cm, which are typical what we have seen. But when you go up to hypochondroplasia you are up on the 8 cm. And I actually think that it was really smart research, because in some way what we're doing with CNP we take an achondroplasia patient and remove the brake. So I don't know the results Joe but I thought that it gave me some strong belief that we're going to make a new standard for treatment, not only for height but also other places in the body where we really want to see a benefit in it.

And the next question will come from Paul Choi with Goldman Sachs.

Congratulations on the commercial progress. On YORVIPATH I wanted to ask if you have any color from the field as to what patient types it might be utilized in. Is it almost primarily post-surgical patients, or are you seeing other causes of disease like genetic and/or other patients utilizing it too? And my second question on TransCon CNP is just any updated thoughts or plans for development in the youngest patient population those shortly after birth through, let's say, 3 years old. Just kind of what you're thinking is there in terms of potentially expanding into that population?

Yes. Let's keep first up in the demographic on the U.S., because if you look on the demographic in the U.S. is that we have about 20% coming from, We could call the genetic immunological, everything else, and then about 80% coming from the post-surgical. And that was very much reflected in our clinical trial. So in our clinical trials we even have ADH1 patients. We actually had 2. Even they are extremely hard to find because there are so few of them that have hypochondroplasia. We actually managed to get them in. So out from that perspective is our clinical trial. This is basic reflected the numbers. I do not, Aimee, if you have any comments, you can come with all the different genetic variants we have there.

Yes, we had GATA3 mutations. We had autoimmune polyglandular syndrome type 1 and DiGeorge syndrome. These are all seen in the trial. We know that we were seeing them in the expanded access program. And we don't always get that information on the commercial. From what we hear from our clinicians who are -- with whom we speak, they're applying this to everybody.

Yes. So basically a hypopara patient is a hypopara patient and this is how I define it. And I don't think there is any kind of selection from the background demographic because in our clinical trial we have all the broad background demographic, and if you look on the labeling independent background, it's not restricted for not treating any kind of background. So we believe what we see in our commercial patient population really just reflect the mirror what we see in the U.S.

And the next question comes from Li Watsek with Cantor Fitzgerald.

I wanted to add our congrats as well on a strong launch. Maybe just first on YORVIPATH in terms of contracting in the future. I know you're still in the process, but any guidance that you can provide on sort of the trend for growth to net for the rest of the year relative to Q1. And I have a follow-up?

Scott or Jay, who will take that?

I'll just say some preliminary comments. So on gross to net, you can't get out of the mandatory government rebates. So the biggest driver is likely to be mandatory government rebates that you see in the Medicare and Medicaid channel, which probably average very low 20%. And commercial will depend on contracting of, which Jay can comment.

Yes. Jay?

Yes, just as I echoed before, the contracting should be fairly minimal, again reflecting the clinical value proposition that we have. So if there's a change, it won't be materially different just relative to the other markets we've been in.

Okay. And then just follow-up on the Phase II COACH trial. I know you have a starting dose for SKYTROFA. So is there sort of a titration scheme here that we should think about and what a top dose that you can go to?

No, it's basic is that we have a starting dose for the TransCon Growth Hormone in the combination with CNP, and they're also measuring IGF-1 as they do in all trial. And if there is any possibility that the physician desire to go up in dose or down in dose, they have the opportunity to do it. But Aimee you know the protocol better than I do.

Yes. And may I hear from Li, which condition was she asking?

As a combination?

As a combination. Yes. So there will be a starting dose that is informed both based on the Phase II trial that we're currently doing and the combination trial, and also from the many -- the conditions we're studying where they're short stature, but a sufficient growth hormone access, right. So this will give us. Based on what we're seeing so far, there can be a very good and safe universal starting dose typically.

And our next question will come from Eliana Merle with UBS.

Curious just the feedback from the early patient starts how the titration process has gone on YORVIPATH, just logistically kind of any color or anecdotes on how that's been going for physicians and patients, and any color so far on what you're seeing from the refill rate. I know it's early on, but curious any trends that you're seeing there.

What I'm typically looking on is numbers. And one of the numbers I look a lot is 2 things, adherence. Second number I'm looking on is how many patients are dropping out. I think its 2 good numbers to look if you have a successful meaningful treatment of the patient with really addressing a major unmet medical need and really do that. And when I look on the adherence is exactly as high as we saw it in the clinical trials, which was really unique. And drop out, we have given you the German numbers, under 1%, and we see the same thing everywhere. If you start on YORVIPATH, you stay on YORVIPATH and that is a chronic treatment rest of your life.

The next question comes from Kelly Shi with Jefferies.

This is Jose for Kelly. Congrats on the strong quarter. I have a question in terms of payer dynamics, what are the major reimbursement pushbacks. And based on these dynamics, what percent do you estimate you can capture in the mild, moderate and severe segments? And also on the clinical value proposition of YORVIPATH, would you consider running a clinical utility trial to facilitate uptake in milder patients?

Related to your first question, as the part we discussed before, being uncontrolled, partly controlled or controlled is not part of the reimbursement system. So you cannot -- we cannot really see that. We don't know exactly where they're coming from a different group, we believe many of them, the majority is coming for the uncontrolled, because they see the physician much more often. So that is not any part of the reimbursement discussion. The second question I need to understand a little bit more about what is -- exactly what you wanted us to address?

On the value proposition of YORVIPATH, the potential for preventing renal damage. Would you consider running a clinical utility trial to perhaps facilitate uptake in milder patients who are controlled on SOC, standard of care?

I don't think really this is the key element for going on a treatment. I have to think the key element to go on the treatment is the benefit you get as a person. You're getting normal again. The long-term risk, it's basically what we call a health economic discussion when we talk about the benefit of the treatment for the society. And we are evaluating exactly how we can do that in the best possible manner, to really show the financial benefit it is really to be on a YORVIPATH treatment not only for the patient, not only for the physician but basically for the entire society.

Some literature data already out there that we may be able to leverage showing that some of the conventional therapy itself is toxic to the kidney, right, and that -- when that is able to be lowered in whatever way, right, that the kidney function gets better. So there may not -- we'll see what the need is for demonstrating this yet again.

And the next question comes from Luca Issi with RBC.

Congrats on the launch here. Maybe quick one on competition. BridgeBio presented their data for their molecule earlier this week and I believe MBX will do the same next quarter. So wondering what's the latest thinking on both molecules and how competitive you think they can be versus YORVIPATH? And then maybe Scott, super quickly, how should we think about the SG&A for the remainder of the year given the meaningful jump this quarter versus last quarter. Any thoughts there much appreciated?

Yes. You mentioned 2 compounds, one is the Calcilytix, which are being positioned into a Phase III trial of ADH1. Currently ADH1 is being treated with YORVIPATH and they're coming on treatment today. It has been hard for us to find ADH1 patient. And Sherrie, you went into the claim database and how many patients you find with ADH1?

Yes, yes. Yes, there were something like 350 patients who'd had a claim associated with ADH1 in the past like 4 or 5 years and even fewer than that within the last year. So it was a very tiny number. This was from a large national claims database with hundreds of millions of lives.

So it's not going to change anything for us because we are addressing. The position of Calcilytix into the era of, for example, what we call chronic hyporpara patient, that is not ADH1. I really love science. I don't understand the science there. You're trying to position into a place of a patient that not have [ industrious ] PTHs. How can you increase the level of [ industrious ] PTH when they're not producing it? They're already producing on max. And there is actually very nice poster basically showing that. They are taking Calcilytix into 4 patients for 3 days or 6 or something like that. And it's really showing that you cannot increase the secretion of PTH. So it's not something I don't understand from a scientific perspective rational. But all the data I've seen is also indicating exactly the same thing. Scott was saying there were 5 patients. That is one thing. The MBX, this is the once weekly one. And we have the possibility to develop once weekly product for a long time. And now I'm talking of the content of once weekly first. We some ways stalled it a little bit because we couldn't see the unmet medical needs, and also because of the desire on different way of living with a hypopara patient where you sometimes need more or less and it can be done on exercise, seasonal activities, other things that change in your life and out from that we looked on patient how stable are they, how often do they titrate up and down and we see only a small part of the patient being stable. So if we wanted to develop a once weekly product, we would develop the asset baseline like basal insulin and then we still will have a daily product to really be sure they can adjust them up and down. The technology platform they're utilizing in the -- I always get it wrong, wrong MBX or BMX. I cannot remember what is that bike? But obviously wrong. But the element of that is basic. A technology, which are basic as an active entity is an isolated PTH that stays 99.9% associated to basic the element of albumin. I do not know how that ever can activate the phosphate receptor, how they can get into the brain and really restore normal industrious PTH level in the normal distribution you have out through the body. I'm also lost in the science there.

And our next question comes from David Lebowitz with Citi.

First of all, if you look at the NATPARA patients that were left from its withdrawal, how long do you think it takes until that whole population gets worked through? And then further looking back at NATPARA and looking what you've seen during your first quarter of launch, how would you, aside from the fact that the data is just superior, how would you characterize the difference in what patients are showing interest in this therapy?

First of all, you cannot compare the clinical benefit between NATPARA and YORVIPATH. NATPARA had a labeling as an adjunct therapy. Take a little bit of your daily calcium supplement away, take a little bit of your active vitamin away, and then you take NATPARA. You have no positive impact on kidney function. You have no positive quantitative manner on quality of life. I see this as 2 different products, and we can never compare these 2 together. First question related to when the NATPARA patient will be switched. We addressed it a little bit in the beginning of here, the discussion here where we know that there was a letter from Takeda indicating that they are getting their last shipment now. So and I think as to our knowledge, the shipment is 3 months. So we expect that the last series of NATPARA patients will become over in either end of Q2 or Q3. That is our expectations.

And our next question comes from Leland Gershell with Oppenheimer.

Great to see the strong execution on U.S. YORVIPATH. Couple questions from us. Just apologies if this had been asked before. But with respect to potential benefits on renal, I know Jan, you had said that you don't see that as a key driver for YORVIPATH uptake, but nonetheless, are you able to comment in the early days of the U.S. launch, are you seeing a more difficult or easier time to gain reimbursement or access to the drug for those patients who may have less or more renal impairment along with whatever needs they have in terms of conventional therapy? And there is a second question.

It's not a part of the reimbursement process. We don't see that it's the element that decide of reimbursement or not reimbursement. So it's like the same thing as we discussed uncontrolled, partly controlled, controlled is not part of the reimbursement process either. It's basic when you look on the labeling, most plans have adapted the way that we basically have in our labeling and is not defined any way of that. That is first one correction, Aimee, we didn't study in what we call severe renal impairment patients. And that is not part of our labeling and I think it's Stage 4.

That's right. CFR lower than 15 or 30.

Yes, yes. Which are a very, very low number, which are Stage 4 where we never started the drop.

Got it. Okay, that's helpful. And then just looking forward to the COACH data. Is there sort of a bar that you have in mind for linear growth, or is this something that you could see being driven forward principally on secondary benefits, say body composition or other? How are you thinking about kind of the mix of efficacy with the combination?

When we think about achondroplasia, the key element for us is to address complications but we cannot avoid also to address linear growth. So when we measure linear growth, which got established from another company that is established as the primary endpoint, I will personally have selected another endpoint if I could ever select that. But we will, because we are forced to do it, because it's the established clinical endpoint is that we will look on linear growth, and they will be part of the data we basically will report when we come up with the analyzed high velocity height as there is and other things for that. And as I said before, I have great expectation, I have a strong belief that we can reset the bar for what you see in achondroplasia treatment. And it's not only related to linear growth, but also the associated complications.

This is all the time that we do have for questions. This concludes today's conference call, and thank you for participating. And you may now disconnect.