Ascendis Pharma A/S (NASDAQ:ASND) Q4 2022 Earnings Call Transcript

Ascendis Pharma A/S (NASDAQ:ASND) Q4 2022 Earnings Call Transcript February 16, 2023

Operator: Good day, and thank you for standing by. Welcome to the Ascendis Pharma Full Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session . Please be advised that, today’s conference is being recorded. I would now like to turn the call over to now your speaker for today, Tim Lee, Senior Director of Investor Relations. Please go ahead, the floor is yours.

Tim Lee: Thank you, operator, and thank you everyone for joining our full year 2022 financial results conference call. I’m Tim Lee, Senior Director of Investor Relations at Ascendis Pharma. Joining me on the call today is Jan Mikkelsen, President and Chief Executive Officer; Scott Smith, Executive Vice President and Chief Financial Officer; Dr. Stina Singel, Executive Vice President, Head of Clinical Development Oncology; and Joe Kelly, Senior Vice President, Head of U.S. Commercial Endocrinology. 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, our US commercialization and continued development of SKYTROFA for the US market, the commercialization of TransCon hGH for the EU market, statements regarding the expected timing of approval and launch of TransCon PTH in the US market next year, statements regarding expected timing of approval of TransCon PTH in Europe, statements regarding the potential the market size of TransCon PTH, our progress and our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline, including the timing of clinical results, statements regarding our pipeline product candidates, statements regarding planned regulatory filings, our expansion into new therapeutic areas and statements regarding the ability to create a sustainable leading global biopharma company.

These statements are based on information that is available to us today. Actual results and events could differ materially from those in the forward-looking statements. And we may not be able to achieve our goals, carry out our plans, our intentions, our expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. 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 factor sections of our most annual report on form 20-F, which is being filed today, February 16, 2023.

TransCon Human Growth Hormone or TransCon hGH is approved by the FDA in the US under the brand name SKYTROFA for the treatment of pediatric patients one year older weighing at least 11.5 kilograms and have growth failure due to inadequate secretion of endogenous growth hormone. In addition, the European Commission has granted a marketing authorization for SKYTROFA to Ascendis Pharma developed under the name TransCon hGH is a onceweekly subcutaneous injection for the treatment of children and adolescents aged three to 18 years with growth failure due to insufficient secretion of endogenous growth hormone. In general, we refer to this product as TransCon growth hormone, and unless we are referring to the product in the context of a particular jurisdictions such as the United States or the European Union.

Otherwise, please note that our product candidates are investigational and are not approved commercial use. As investigational products, the safety and effectiveness of the product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our product candidates shall be viewed as promotional. On the call today, we’ll discuss our full year 2022 financial results and we’ll provide further business updates. Following some prepared remarks, we will then open up the call for questions. I’ll now turn the call over to Jan Mikkelsen, President and Chief Executive Officer. Jan?

Jan Mikkelsen: Thank you so much. Ascendis is built on the unique TransCon technology platform, which enables development of highly differentiated product candidates across multiple therapeutic areas. Combining the TransCon technology with our product innovation has enabled us to create and develop product candidates with a higher likelihood of success than seen with conventional drug development. One of our key product selection criteria is to fulfill best-in-class potential on each of the four key pillars of drug development. Safety, efficacy, tolerability and convenience. In addition, each product candidate must have the potential to achieve $1 billion or greater revenue in a single therapeutic indication. With this approach and by our values of patients, science and passion, we have demonstrated our ability to continuously build out a robust pipeline, while taking product candidates from concept through approval and launch.

With expected regulatory approvals of a new product or additional indication every one to two years, we are fulfilling our Vision 3×3 goal of building a sustainable, profitable, leading biopharma company and creating long term value for all stakeholders. This past year, we have advanced our pipelines as planned entering 2023 with an April 30th PDUFA date and expected US launch of TransCon PTH for adult patient with hyperparathyroidism by the end of Q2, along with an expected European Commission decision during Q4 as well. TransCon PTH is our second endocrinology rare disease product opportunity, representing a potential global opportunity greater than $5 billion. Turning to TransCon CNP. Last November, we reported 12 months data from our first — from the first ever randomized, double blind, placebo controlled Phase 2 trial in children diagnosed with achondroplasia.

These results give me confidence that this third endocrinology rare disease product candidate may have its first approval by 2025 as target in our Vision 3×3. Another covenant of Vision 3×3 its label and geographic expansion. We continue to build the value of our existing programs through additional clinical studies for label expansion and global commercial reads. Starting with our newly expanded European organization, which is preparing for launch of SKYTROFA in Germany this year and if approved TransCon PTH next year. With this great momentum across our pipeline, I would like to review additional details from our major programs. Turning to growth hormone. During the fourth quarter of this year, we plan to report the top line results from our global Phase 3 foresiGHt trial in adult growth hormone deficiency, our potential second indication for TransCon growth hormone.

Adult growth hormone deficiency is a serious endocrine rare disease characteristic by abnormal body composition, dyslipidemia, insulin resistance and impaired quality of life. Analysis has shown dis consequence of adult growth hormone deficiency result in mean analyzed healthcare cost more than 4 times that of a non-growth hormone deficient population. Because TransCon growth hormone is the only once weekly growth hormone product releasing unmodified somatropin, we expect it to be the first adult growth hormone treatment to meet or exceed the safety, efficacy and tolerability of daily growth hormone. Meanwhile, in the US, SKYTROFA is experienced the commercial success it deserved, because of its unique product strengths. As we pre-announced during JPMorgan, fourth quarter 2022 US SKYTROFA revenue growth to €17.1 million, providing a strong fundament for growth in 2023 and after.

With our progress towards label expansion and planned commercial launch in markets outside the US, we believe we can track — be on track to build SKYTROFA into the leading growth hormone product in value by increasing the total market site. As we have predicted, we are seeing the consolidation of the daily growth hormone market as other manufacturers begin to exit the US market. Turning to TransCon PTH. Excitement continues to build among stakeholders around this potential treatment for adult patient with hypopara ahead of the upcoming PDUFA date of April 13th. Our expanded teams are hired, trained and working to deepen physician and payor awareness of this serious health and quality of life issue that hypopara causes. We have already made more than 2,000 call to physician related to disease awareness and we are encouraged by their interest in learning more about the multi-organ impact of this disease and its negative effect on patients quality of life.

Our commercial team, medical affairs, premium reimbursement and our manufacturing teams are ready to launch TransCon PTH in the US market as soon as possible after approval. Importantly, we are launching TransCon PTH, our second endocrinology rare disease product with the same commercial infrastructure that has proven its success with SKYTROFA. Coming back to CMP. As we did with TransCon Growth Hormone and TransCon PTH, we ran a robust Phase 2 trial to confirm TransCon CNP’s target profile or all four key pillars, safety, efficacy, tolerability and convenience, and derisk it as the Phase 2 level. This can only be done with a robust randomized placebo controlled trial that does mimic the pivotal trial. We saw clear success in ACcomplisH trial with TransCon CNP, demonstrating superiority over placebo at the 12 months primary endpoint in children aged two to 10.

In addition, we saw clear dose response. All 57 patients who started this trial remain in the open label extension today. To extend and confirm these results, including positive treatment effect observed on achondroplasia related comorbidities, we are running our Phase 2b ApproaCH trial. As investigator I’m aware of the Phase 2 results where I experienced very high interest in our ApproaCH trial, and we expect to complete target enrollment of around 80 patients in the next quarter. During our upcoming end of Phase 2 meeting with FDA, we expect to collaborate on how to best achieve a broad treatment labeling rather than a linear labeling alone. Shifting to oncology. We are progressing with the development of our two novel immuno oncology programs, TransCon TLR7/8 agonist and TransCon IL-2 β/γ.

With these two clinical programs, we are positioned this year to start iteration of clinical efficacy in seven specific tumor types, nine different indications with four different combination therapies, including by combining our two TransCon oncology product candidates with each other. Clinical proof of concept Phase 2 top line results are expected starting in 2024. In addition, this year we would initiate the randomized Phase 2 trial βelieγe 201 using TransCon IL-2 β/γ and TLR7 agonist combination therapy in head and neck cancer. As we successfully demonstrated with our endocrinology programs, we are building a solid Phase 2 clinical proof of concept for our oncology products in multiple tumor types in the next one or two years.

As you can see, we have and will always focus on best-in-class product profile to benefit patients on the four key pillars of safety, efficacy, tolerability and convenience, areas in which we will not compromise. This development approach, including extremely robust clinical trial design, has positioned Ascendis to potentially launch a new product or indication every one to two years, building sustainability, long term value for all stakeholders. This successful clinical trial further confirms the power of the technology platform and our product innovation and increase our confidence and likelihood of successful future product candidates. To build on expanded pipeline and commercial successes, Ascendis remains on track to meet or exceed our goals outlined in our Vision 3×3.

I will now turn the call over to Scott for a financial review before we open up for questions.

Scott Smith: To follow on Jan’s comments, we are excited to see the realization of Vision 3×3 with a continued flow of new products and additional indications every one to two years. For example, as Jan noted, we expect to launch TransCon PTH in the US and SKYTROFA in Germany this year, followed by the first European country launch of TransCon PTH in early 2024. With results for SKYTROFA in adult growth hormone deficiency and TransCon CNP in achondroplasia on the horizon, we expect this cadence of approvals and launches to continue beyond 2024. In this way, we are creating sustainable long term value for Ascendis and our stakeholders through our proven R&D development capabilities. I will quickly touch on a few points. For further details on our full year 2022 financial results, please refer to our Form 20-F, which is being filed today.

As we previously announced in early January, SKYTROFA US revenue for the fourth quarter of 2022 grew to €17.1 million. These results exceeded the algorithme that Jan laid out last May, which projected €16 million. For the full year 2022, total revenue was €51.2 million, including SKYTROFA revenue of €35.7 million as well as licensed clinical supply and services provided to third parties primarily VISEN Pharmaceuticals. With profitable growth of SKYTROFA, our overall operating loss grew about 2% sequentially to €147.4 million for the fourth quarter from €144.5 million in the third quarter of 2022. Finally, we ended 2022 with cash, cash equivalents and marketable securities totaling €743 million. Looking forward, as Jan described at the JPMorgan conference, annualizing fourth quarter SKYTROFA revenue of €17.1 million provides a foundation for 2023.

In addition, we expect to add at least as many reimbursed patients this year as we did in 2022, which would provide even greater growth. As a result, at this time, we believe we are on track to exceed the current Ascendis compiled consensus estimate for 2023 SKYTROFA revenue of €96 million. Switching to TransCon PTH. Our PDUFA date is April 30th this year. If approved, we expect to begin shipping product by the end of the second quarter. A quick reminder on selected key 2023 corporate milestones. For TransCon Growth Hormone, as mentioned, we plan to launch SKYTROFA in Europe, starting with Germany in Q3. And we also expect to report top line data from the global Phase 3 foresiGHt trial in adult growth hormone deficiency, our second indication in Q4.

TransCon PTH, we are planning for FDA approval by the PDUFA date of April 30 and launch in the US by the end of Q2, and we expect the European commission decision in Q4. For TransCon CNP, we are on track to complete enrollment of the Phase 2b ApproaCH trial in achondroplasia in Q2. Within our oncology therapeutic area, we expect to report top line results and declare the recommended Phase 2 dose for monotherapy dose escalation cohorts for TransCon IL- 2 β/γ later this quarter, and to declare the recommended Phase 2 dose from TransCon IL- 2 β/γ combo therapy with checkpoint inhibitor in Q3. Finally, as you see with our reporting to date, continued optimization of finance systems and processes have enabled us to accelerate our year end reporting.

With that, operator, we are now ready to take questions.

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Q&A Session

Operator: Thank you. Our first question for today will be coming from Fye of JPMorgan.

Jessica Fye: Thanks for the comments on how to think about SKYTROFA sales this year. Can you comment on your comfort level with consensus estimates for TransCon PTH this year? And actually while we’re at it, where is that consensus figure based on your latest compilation of the analyst numbers?

Jan Mikkelsen: Jess, are you reflecting into SKYTROFA or TransCon PTH?

Jess Fye: For PTH.

Jan Mikkelsen: I actually have not looked at the consensus number for PTH. I don’t think we have collected that information. So I don’t think we can really address that. We can mainly address the places where we feel confident to give an algorithme that can reflect our expectation as we have done from SKYTROFA.

Jessica Fye: Okay, I’m going to ask something else then. Can you tell us how many cumulative new patient prescriptions there were for SKYTROFA as of your end? I think you were previously giving that quarter by quarter. And can you also tell us when we should look for the next update from the Phase 2 extension for TransCon CNP?

Jan Mikkelsen: Let’s just go back to how we basically are looking on the forecasting related to the revenue of SKYTROFA in the US in 2023. What we have seen in here in ’22 that month by month, we have increased the number of new patients that got reimbursed, and we have continued to see this trend also in 2022. This is why it was important to look on the fourth quarter, because we also seen at the same time, we’re seeing and really very strong retention. When you start on SKYTROFA, you stay on SKYTROFA. When we take the €17.5 million and multiply that with 4, Scott is calculating, it’s about €70 million. And we basically will expect an acceleration of the number of new patients, because of a lot of good reason. And I can come back to that, Jesse, if you want that.

So we actually expect to see more patients per month of new reimbursed patients that we actually saw in ’22. We’re feeling really, really, really confident that we will exceed the consensus number that is out on the street today related to SKYTROFA. The element that basic — providing our increase in number of monthly new reimbursed patients is that the physician is starting really to get the knowledge about the product strength of SKYTROFA. It’s not something you experience in one month, you need to see six months, 12 months of data. And this is what we’re starting to see, so we’re really seeing how we really have a highly differentiated product compared to daily growth hormone. The other point is that we see the consolidation of the daily growth hormone market that started for about three years ago where we saw after our Phase 2 data that the consolidation of the daily growth hormone market is really kicking in now.

So that is a major, major switch away from some of the six daily growth hormone players, which all have the same product. So this is why we feel that confident about how we really would grow SKYTROFA into the most valued product in the growth hormone market in the near future. Related to CNP, you had a question related to CNP. Jess, you can specify exactly what you wanted to know, though.

Jessica Fye: Well, I think in the past, you talked about the high velocity for a proportion of patients that had been on up to a certain time point, and I think we’re going to maybe update that one all the patients got out to that time point. Is there kind of plan to update that data and when should we expect that?