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

I'm Jess Fye, a biotech analyst at JPMorgan. We're so excited to be starting the 44th Annual JPMorgan Healthcare Conference this week with Ascendis. The company's CEO, Jan Mikkelsen, is going to give a presentation, that's going to be followed by some Q&A. But first, it looks like I'm going to pass it over to Scott Smith, the CFO, for a forward-looking statements.

Thanks a lot, Jess. It's my honor to read the first FLS of the year for Ascendis Pharma. Before we begin, I would 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 partners, partnerships and investments, our goals regarding our clinical pipeline, including timing and results of our clinical trials and our ongoing and planned regulatory filings and expectations regarding the timing and results of regulatory decisions. These statements are based on the information that is available to us today. Actual results 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 our press release dated January 9, 2026, and the Risk Factors section of our most recent annual report on Form 20-F filed with the SEC on February 12, 2025. And with that, I'll hand it over to Jan.

Thanks Scott. There was the first 2 minutes. So this actually with extreme proudness I'm standing up here today. It started actually in December last year because we really had a celebration. Ascendis Pharma turned out to be 18 years. At least in Denmark, it means one thing, you throw your children away and they are financially independent. That is the key thing. You don't fund them more. That was exactly what happened at that time for Ascendis. After 18 years. We came to the states, building on our TransCon technology, build it on our R&D engine, building on our late stage clinical development, building on what we call the last states of the rocket, how really to do global commercialization. We came to the stage where we 2 quarter of profitable business. I call it going over the black hole because so few companies managed to come to that. So when you think about we basically are the edge of growing up. We're on the edge really to be an come a leading biopharma company. Looking on the numbers, Q4 product revenue above EUR 240 million with the entire year of about EUR 683 million. And Scott, which are really strong in numbers calculate that it really impact a major increase in the year of '25. And that will continue. This revenue base is built mainly on two products, YORVIPATH and SKYTROFA. This is like having two bullet being fired and you already see the benefit on it and now the last bullet in coming, where we basically have our PDUFA date for TransCon CNP here end of February. But we're not stopping there because I think this is the key thing with Ascendis Pharma. We got built on a strong technology platform, the TransCon technology. And we will sustain leadership to new product development, LCM activity and other patient offering we can do. But we also creating value outside where we're known from our rare disease. We have in ophthalmology, our spin-off company, Eyconis, in obesity and metabolic working with Novo Nordisk. And in oncology, we have our own internal development. I will come back to some of this later on. So -- but I always like to take vision up because this is our guiding principle, where do we really want to come. And it gives us really the strategic road map for the next years until 2030. And you can see we basically have changed single bullet. Is the first bullet? Because we're now feeling confident that we can take and have a revenue of more than EUR 5 billion in 2030. It will be a global revenue where we aiming of having a split between U.S. and ex U.S., where we believe the majority will come from the U.S., but that will be a major, major contribution from ex U.S. We will be the leader in growth disorder in hyper power. We are already there, but we will continue to an investment in new chemical entities in our LCM activity and other element in it. And as Kennett will explain later on, we're now expanding our rare disease endocrine pipeline with two to three product opportunities. Don't forget to the TransCon technology are in a unique position. The way we use our algorithm is that we basically have got basic now, expect to get three out of three, start with three preclinical candidates and get three products to approval. And they are highly differentiated and no one ever can really repeat and make them. And I think that is the value you see in Ascendis Pharma. This is a sustainability with durability because of our IP and other things and also this is combination product. We will still go through our areas of business model where we're still investing in other areas rare disease endocrinology. For example, in obesity with our collaboration with Novo Nordisk in ophthalmology, where we really see the applicability of the TransCon technology also making highly differentiated product. But we will always be working on the fundamentals for us. [ Outcome ] outperformed industry drug development benchmark, try to be extremely successful and really live up towards values the patient signs and the passion. So this is what everything we're doing is built on. And that is a technology platform expanding year-by-year. We see being expanded again. Now the latest one is for protein degraders, where we basically can take hormones other things away from the body in a continual manner. This is our late-stage pipeline. This is our current pipeline internally only in basic in from our rare disease endocrinology products. Going to our R&D platform. Today, we have two products approved. We have three indications: two new launches, label expansion, partnerships, we have an aspiration for 2035, 8-plus new chem approved that all durable long IP, highly differentiated sale, plus 25 indication. And you can see the fundamentals there. There is some of the new product opportunity that are coming up. And you can also see there will be in larger indication being split into partnerships. Going to TransCon PTH, our leading product in hypopara. This is just giving illustration about the, you can say, the size of this market here. In U.S., 70,000 to 90,000, which are what we call the lowest number. Some people actually believe this is 100% higher. Europe Direct 150,000 to 200,000 and international market, a huge market. And this is where we're building up a global commercialization. So currently, we see the big driver of the revenue increase is mainly been from the U.S. side. But what we see by long-term basic that ex U.S. will take over more and more because it's much more fragmented, it takes a longer time to penetrate, but you will really see the high value because of the large patient population. So this is what we call the global commercial update. So if you start on U.S. we have 5,300 a unique prescription. We have nearly 2,400 prescribers. So you can see we have a constant flow every quarter up nearly the same amount of prescriptions and we see the broaden above the prescription basis. Still a unique opportunity with less than 5% basis on drug today. Your direct, we only launched in countries now Germany, Austria and Spain. And Spain only started in Q3. Here in '26, we expect to have up to plus 10 countries coming in. So this is where we see that big span of country coming in Europe direct. This is where we have direct commercialization. International market, we only covered to named patient program and but we have distribution agreement 75+ country. And we're also seeing our partner, Teijin, got the approval, had been launched in Japan, which we're really looking forward to see also how we penetrate this market segment. Going to the right, you can see the increase in global revenue. And it's pretty clear we're really increasing and accelerating the revenue EUR 40 million to EUR 50 million every quarter. Why I call it to building a big house. This is like the YORVIPATH skyscraper in Manhattan because you're basically building one or two floor every quarter and it's getting to all because patients stay on treatment. They stay on treatment, this is why we see this acceleration in revenue, which we hope we will see the same thing in '26. And then we will see the biggest, biggest tower ever being built in the Manhattan. So there's been a lot of discussion about how we look at once weekly product. And we had a once-weekly product. And we had also a clear way how we see the utilization of the [ once-weekly ] product. We cannot see any other reason that every patient needs to be [ titrated ] with a daily product. Out from the that you are taking a lot of convention therapy at the same time, you're adjusting the dose to be right for the patient, doing that with a weekly product, make no sense. So when we see the utilization of a on-site product will basically when we have stable patients. We believe about 35% to 40% will be stable when they have been trade to a stable level of YORVIPATH. For them, we really believe it could be a benefit for them to move over on a once-weekly product. If they then feel that we are in a position that change for them. They need to change their life. They need to have more exercise. Sure, they can go back to the once-weekly product or add in one daily product. So we develop one product, but we also No, we made a benchmark with YORVIPATH. And if you go to some of the FDA regulatory documents, it's quite sure when there is a benchmark on a daily product, you cannot compromise safety and efficacy. So what we did, we needed to develop a complete new product when we saw that and got that interaction. And we said, we need basically to be bioequivalent every day in the week with what we call a weekly product. And that is what we develop here. If you see our -- to the left, this is in monkeys. And when we do the human prediction, which we always have been 110% spun on. We never had anyone to have been different. You see the profile over once weekly, and then you compare to your kind over 1 day. Clearly, all the interval or this is basic is a bioequivalent. It's the same product, the same active ingredients, the same element, the only thing we're changing is building. So there's a really believe there can be fast condensed program and helping the patient that really want to move over to that. So when I look on our TransCon PTH is now indicated in adults. We had Q4 revenue of nearly EUR 190 million. And we saw a full year revenue on EUR 40 million to EUR 70 million, EUR 480 million. When I see U.S. expect to see a estate increase in the U.S. If I go to ex U.S., we will see in '26, likely an increase we're getting more and more country on board. We're getting more and more full commercial, we move away from name patient program. So when I see the ex U.S. for the next 3, 4, 5 years, you will see much more growth there in what I call ratio. Clinical program to expand the labeling in the U.S., we have our PaTHway60, where we have a program to move up to 60 micrograms per day. And we have pathway going on to younger children. Now we are in the state for 12 to 18. When we have gone through that, we will likely go down to the lower children. The once weekly, we have it, we believe in this. This is exactly built on technology, where we never, never have failed on a preclinical candidate. We go into our global commercialization, and we expect launches in 10 additional countries here in '26. And this is a doable product. When I look at the competition, I see no competition. If I look on the lifespan of this product, that is a combination product. There will be there probably next 10, 20 years. And this is why I don't see any way where we know going for what we call value optimization in each country. We are not going for sprinting into the market. We are going for the value optimization. Going to SKYTROFA, I really love this product. It's approved in U.S. and other countries in a single indication, pediatric growth hormone deficiency. In this year, we expanded into adult growth hormone deficiency in the U.S. It was our first label expansion. We now have a basket trial for basic additional indication that we are running now. So we can basically explain to all the established growth hormone indication. We are also going to a new era, combine it with, for example, TransCon CNP in achondroplasia and hypochondroplasia. And what we want really to do really make this to a growing, growing product. How do we do it? Growing the basic business. And we have a strong belief that were happening, we see the consolidation of the daily growth hormone. We see also how SKYTROFA in a best-in-class properties really increasing the brand share. We expand the traditional growth hormone indication. We add no new novel growth hormone dedication, and we broaden the geographic reach. This is how we're building this up to a blockbuster product. Going to TransCon CNP, we decided TransCon CNP to provide a sustainable exposure of CNP of wild-type CNP in the product technology to avoid any kind of injection site reaction. And this is what we saw in the peer-reviewed validation of it. Yes, the enhanced linear growth as much as ever, you can get out of the inhibition of the tyrosine kinase. We give for first time, benefit beyond linear growth compared to placebo in a controlled trial. There was no evidence of hypertension, low hemogenic signal. And because we use the product technology, no injection site reaction and once weekly administration, so where are we? Yes, we achieved really the target product profile. We have now durable response for up to 3 years in our open-label extension, we have our PDUFA date here in end of February, and we have our EMEA submission where we expect a decision in Q4. I have no doubt that TransCon CNP really are providing the benefit that is needed to this patient group really showing benefit beyond linear growth because that is the key element. But we also want to improve can we boost the response if you have a child that has not been treated just for being newborn. And that is what we have done in our combination therapy, which I will come to next one, so the idea is this basically is when you do have achondroplasia, you have a [ hyperactive ] tyrosine kinase. This is basically putting a brake on the system. This is taking car sitting up on a hill here in San Francisco, and then you take a brake on. It stand there. And this is what you basically see in this situation. When you increased, let the brake go, start rolling and independent, how you let the brake go, if you take it on electronic, you take it by hand or other thing. They're basically moving up to the same growth velocity, about 5.5 to 6.0 in annualized growth. Depending on gender, you can see it much easier in set score about 0.3. This is what you get when you remove the break. But the idea is that when you move the break you basically have a new opportunity to take a growth stimulation, and this is where growth hormone comes in. Because you can nearly see for this scheme, if you take the green one and basically move the break, then you really can get full potential of both hormone. So when people say, growth hormone is not functional achondroplasia. Yes, it's not functional when you don't have the brake off. If you have a brake off, you'll get perhaps 1 centimeter in 1 year. I heard some people coming and explain to me, we're getting 8 centimeter. Then I said, if we're really getting 8 centimeter, then quite sure growth hormone will be utilized everywhere in the world and not only in Japan. It's pretty obvious, no one gets 8 centimeters. This makes no sense. So you get about 1 centimeter when you really give it and it's not really durable or 3, 4, 5, you still get some benefit. And there was a, why you can see addressing is tyrosine kinase come in. That is already by what we are doing. So when we see here the safety because that is basic #1 in any pediatric indication safety, safety, safety. The risk of exposing a tie to something that can harm it can give late-stage complication or anything like that. So when we look at this one of the best safety I've ever seen in this indication. So this is really the key. If any one of you look at this year, it basically of this year and is focused on growth velocity. So if you take the gray, that is new patients. And you look on the gray curve or the gray scattering, what we you achondroplasia growth chart, you have 50%, which are a normal growth pattern of a child with achondroplasia. Then you have the 50% and 95%. This is how you can take it. average state child is what a normal child will go off. And this is the blue one. And there, you can see we have the 3% and the 97%. So when we take naive patient into our combination trial, they are growing at 4.92 centimeter per year. And when you go up and look, oh, they're the 50% factor. Oh, they're growing exactly as you expect of a achondroplasia child? And will they come into the combination, they're actually growing more than you see in a normal child in across growth bus. I have no belief that could happen. Let me say what is then from the children that is already happening in CNP treatment for about more than 2 years. Okay, look at them. They are starting not under 50%. We're starting much more up on the 95% fracture, because they've got CNP therapy for 2 years, and therefore, we have a benefit on it. But when we give them growth hormone, the are moving. So independent, if you have been on CNP or not on CNP, you basically can see that you basically move the children up to a growth spurt more than you see in a normal child. If anyone have seen that more than one [ phase ], I've never seen it. And I don't didn't believe the basic possible to do. So what is really happening with the growth of the child? Are everything being built in a normalization of the child, [indiscernible] and body proportionality, never seen an improvement in body proportionality to that level before. And then something completely new. We have never seen that to a level on monotherapy in any way, increasing the life arm span. And that is a key element for the commodity that really limits them a lot of physical activity, the short arm. And when you see that, you see the same pattern, the no patient moving up but also the patient that has been on CNP moving up over the 94% factor, never seen before. First time I ever seen an improvement in an important comorbidity as arm span. So there has been a lot of talk about really winding off the signal. It's getting weaker and weaker. And there haven't been discussion on that, oh, there is negative growth in I do not know so much I hear some time. But when I look at this curve here and then look at just too well right, TransCon CNP monotherapy. And look on the 26 week and 52 weeks. And you see a small decrease 3%, 4%. When you go and see on the COACH trial, the same decrease 3% to 4%. So what is really happening is you unblind a complete new biology where the binding effect of growth hormone that has been seen in achondroplasia is not existing. And if people don't believe it then look at the data, that is the same limited small decline that you see with CNP monotherapy. Really, really unique data. I've never seen any time before. So when I look on this program here is why we really are going to be the leader in growth to because we exceed every historical benchmark for growth without compromising safety and tolerability. This is a new benchmark. Go out and ask anyone else get this same effect and see if you can get it. And the safety is really that's what you hope for. CNP has proven to be one of the most safe therapies for years and years in patients. Growth hormone has been the same thing. So combining two safe, well-known things in a pediatric indication, yes, 100% of the children completed, still on treatment. The burden of two injections a week is far out for what the element of the benefit we see. And the bone age remain consistent with chronological age. We had end of phase II meeting with FDA. We went in and started now the Phase III trial. We have signed the protocol and start enrolling patients in Q1. We will also come up with the week 78 COACH data here in Q2. They continue now in 2 years, it's an open-label extension for 1 year more, and we initiate new trials where we're also using company. This is the most powerful combination in the 20-plus growth disorder that exists today. Collaboration partnership. Novo Nordisk, yes, we developed the first once-monthly product with the best profile ever seen. There was why Novo Nordisk signed agreement was and not other companies. And it's on track. You will see the benefit of that. It's a unique product. Before Eyconis, where we took all our ophthalmology product in really moving forward. Also they're going in clinic this year. Teijin, they have our right in Japan, and they're excusing excellent, get the first product into the market now. And VISEN is doing the same in China. Financial update. This is typical a slide that is dedicated to Scott, but Scott gave to me to take to go to it. And when I look on our product revenue, EUR 683 million, yes. We really were we moving up. When you just look at the number for [ EUR 200 million ] for '24, huge [indiscernible] [ statements ] and it continues. YORVIPATH is the main driver of the acceleration EUR 477 million, SKYTROFA EUR 206 million, totaled full year, EUR 720 million. And what we always said, we invested in highly profit product. You don't pay bills with revenue, you pay bill with profit. And that is what we're also doing in SKYTROFA. We only taking really the revenue when it's highly profitable. So we even in '25 increase our profit range there. Total full year operating expenses, EUR 762 million, really control it, really take it in the way we want to do it. Cash balance, [ EUR 616 million ], increasing quarter by quarter now. And we expect to have an operating cash flow of at least EUR 500 million. This is the dedication and how fundamentals are, how we can accelerate revenue. At the same time, we can control expenses, but not compromising our investment in globalization, not compromising our investment in life cycle market not compromise any of our investment that's coming in further. We also plan to buy at least $120 million shares back this year because the board said to me, yes, you're not a bank, you basically need to do something with your cash. So this is the R&D milestone for '26. And you can see, we expect the CNP approval here in the Q1. We will come up with a 78 weeks data here in Q2 from our combination trial. And as a little good, we will come out with our overall survival in platinum-resistant ovarian cancer, this is over cancer, where we enrolled 7 patients. We expected it to here in Q1, but it's actually really positive when you delay OS for 1 quarter in my view because it does meaning is that we're only in the 30s. So we still have a long to go before we can go up to the OS. TransCon [indiscernible], complete enrollment of the achondroplasia infant trial. We then have Q4 pediatric EMA decision of CNP, initiate proof-of-concept study in adult. This is also where we move in. There is a lot of comorbidity in adults, and we really have a product that really can show this benefit. We will give you the 2 years update from our combination trial. We will complete recruitment in our basket trial, and we also will have complete enrollment in PaTHway60 trial. So thank you a lot for listening to us today. The Ascendis team is really proud. We feel we are on the edge of really being a leading biopharma company, we had all the fundamentals before the TransCon Technology, our R&D engine, our commercialization. We really built it up in the last 2 years to be a global commercial organization, and now we see the revenue coming in. And this is where I said Ascendis Pharma edge to be a biopharma company. Thanks so much.

So we're going to go into Q&A here. And if you're in the room, feel free to raise your hand or can send me questions on the iPad up here through the portal. So YORVIPATH been off to a very rapid start. How should we think about the growth drivers in the U.S. and Europe in '26? And are there any like underappreciated factors that could meaningfully influence the ramp this year?

That's divided in U.S. and ex U.S. And I think, Jay, you would take U.S., how you really are ramping up and doing all different kind of effort to really expand in extra rates.

Sure. So I would say in the U.S., we probably have three primary focuses. One, as you saw earlier, the penetration in the U.S. is still quite low, right? So there's a lot of opportunity remaining particularly in a rare disease condition where there's still an evolving understanding of the condition itself. So the three things specifically, I would say. One is we're still engaging heavily in increasing that provider education and base right? So there's still ample room for us to increase not only the number of prescribers that may be prescribing something for the first time beyond conventional therapy as well as expanding their perception of the eligible patient for hypoparathyroidism given that some of these patients historically have just primarily been treated with conventional therapy. The second area I would say is patient activation is a big piece, right? So whenever you're looking at any kind of underpenetrated larger group of patients really thinking about how you reach a diffuse group of patients that may not have established care, thinking about how to reach them through digital channels. that's going to be a big focus for us in 2026 as well. And then lastly, I would say the third is we're constantly investing in just how we approach access and patient support, recognizing that experience, particularly, again, in these rare conditions is incredibly important, not only because it's the right thing to do for the community, but also because it materially impacts that patient experience while being treated with YORVIPATH.

Ex U.S., we're using some of the same strategic element for discussion in Germany, for example, the most mature country from our European launch. In the other countries, you can say it's really, really simple. Get full commercial launch, and this is where we expect to add at least 10 more countries.

In the U.S., there last year, there was a lot of focus on kind of the time from a patient getting their prescription to when it was reimbursed. How do you see that evolving as the launch goes on?

Jay?

So I would say that a lot of the evolution in itself is time, right? So when you think about Evolution, there's a difference between like are you doing anything materially different from an activity standpoint. And I would say the team is doing the things that you would expect to do. Because the clinical value proposition is so strong for YORVIPATH, it's important for us to be able to continue to tell that story. But the time lag that you see for a lot of these rolling staggered reviews for a lot of the fragmented payer in the system in the U.S. simply requires that time, patience, discipline, continued engagement and education, so I don't think the strategy in and of itself will change because the value proposition is strong. But I do anticipate that the needle will continue to move upwards that you would expect with any launch trajectory. But we actually feel really good about where we are today. And I think the percent coverage and approval rates that you're seeing so quickly out of the gates is a testament to the strong clinical value proposition that we have.

Great. Getting audience questions in here. So for TransCon PTH over path, given the low level of penetration in the U.S., can we expect quarterly new patient adds stabilize at the level you saw in the fourth quarter?

I think what seeing now is steady additions of new patients. And I think next year, again, were the three areas that we talked about. We do anticipate continued growth throughout 2026. So we're optimistic that we'll see that continued growth.

I think yes, we also need to look on the penetration we down on perhaps 3%, 4% of the patient population. And when we look on the clinical benefit we have provided to our clinical trial there was no one single patient group or patient that didn't benefit on being on treatment. So in a theoretical optimized positive world, 100% of the patients should be on. Think about having type 1 diabetes without insulin, having hypopara without PTH for me, it's the same thing.

And some other questions coming in on the weekly PTH product. Can you elaborate on what the differences are between this weekly PTH and the MBX product? And can you talk about the registrational path for the weekly? What could that look like? Could it just be of PK/PD bridging, do you need a separate Phase III efficacy trial?

Yes. I will start with one and Kennett will take over. I think the key element, how we designed our once-weekly product is to build on your part, the same mode of action, the same active ingredients, the same way to designing, just changing the linker. So we basically are taking the same benefit you have seen with YORVIPATH. We expect also to tie with our once-weekly trying to cope. About MBX there's nothing to do with basic the benefit we see with YORVIPATH or anything like that. And Kennett, you can explain the mode of action because it's completely different design of this molecule.

So what we wanted to do is build on the success that we have with YORVIPATH and having the release of unmodified PTH second reach receptors in all of the target tissues. So when we wanted to design the once weekly, we wanted to be able to do exactly that. As Jan was mentioning in the presentation, we actually made a first generation once weekly PTH. This molecule actually had a peak to trough of 1.7, and by the modeling that we also showed that we are doing for this compound, we could see that would probably be too much over the course of a week. So you would have periods where patients could hypercalcemic and times where they would be hypocalcemic over the course of a week because we have set that benchmark with YORVIPATH, where we have a peak to trough of 1.3. So we knew what the outer bounds for peak to trough could be. So we actually had to come up with new technology or new TransCon linkers that would address that particular point. And this is what our scientists have been able to do. And this is why you can now see over the course of a week, we had exactly the same variation in plasma exposure as you're seeing with YORVIPATH. And this is why we're quite comfortable, I'm not comfortable, confidence. If I have been Jan, I would just continue talking nobody would have understood confident that we actually have the right PK profile to address the needs for patients over the course of a week.

Just to sum up, Jes. YORVIPATH, TransCon once-weekly TransCon PNT . It's extremely durable product. If I look on the competitive landscape, there's nothing, nothing that's living up to the benefit we see with YORVIPATH. So this is why when I look in the next 15, 20 years, I cannot see anything that can come in and basically in a position to substitute or just living up to the standard of benefit we're giving with YORVIPATH. MBX, a complete mode of action, not giving anything what I call in replacement therapy, totally different mode of and the lack of data, I think, also illustrate it.

All right. Last 30 seconds. Can you remind me what your peak sales expectations are for YORVIPATH?

In the U.S. or global basis? I think it will be at least EUR 5 billion to EUR 8 billion just for that problem.

Worldwide?

Yes. But I'm typical, I'm wrong because I'm very conservative from the country side. So likely it will be higher.

Great. Thank you.

Thanks very a lot.