Ascendis Pharma A/S (ASND) Earnings Call Transcript

All right. Let's get started here. Well, welcome, everyone, to the 2025 Wells Fargo Healthcare Conference. My name is Derek Archila. We're going to be kicking off today with Ascendis. From the company, we have Jan Mikkelsen, the CEO; as well as Scott Smith, the Chief Financial Officer.

The company has been executing and firing all cylinders on the YORVIPATH launch. So a lot to talk about. But, Jan, maybe just to start us off, kind of give us the state of the union here. Where are you? How are you thinking about things? And then we can start digging into the Q&A.

Thanks a lot. First of all, thanks a lot for inviting us. It's always a pleasure to be here. And where are we in a pretty good place. We have now from our TransCon technology. This is the platform we are using to develop all our internal product opportunity, but also the external product opportunity, we, for example, have in our collaboration with Novo Nordisk in metabolic diseases and obesity. And we have now branded what I call the first pipeline, and that was starting with SKYTROFA. Now YORVIPATH is approved. And now we have the third arm. This is TransCon CNP, where we have the priority review here end of November. So the first pipeline has given us the opportunity to really to develop what we call a leading biopharma in rare diseases. Our aspiration is really, really simple, three independent product opportunity, all of three addressing a major unmet medical need. And we are now taking the next three or four years in really developing label expansion developed for each of the new chemical entity in pipeline itself. And then at the same time, we are developing what we call the next generation of new compound that really addressing as the same as the three first major unmet medical need built on the TransCon technology, both inside rare disease endocrinology, but also outside. So when I look on the perspective of Ascendis Pharma, we are, for the first time, come to this stage where we have revenue generation, which are increasing quarter-by-quarter really as we have expected, as we have planned, and we're coming to this extremely what I call pleasant situation to be independent on the financial market and can generate a positive cash contribution quarter-by-quarter.

Got it. Well, maybe let's start off with the YORVIPATH launch. It's very topical and going well. Maybe just talk about how you think -- you've talked about this $5 billion potential peak number for YORVIPATH in hypoparathyroidism. What gets you there? And what sort of moats or kind of competitive dynamics do you expect in that market over time?

So when I look at YORVIPATH, this is our product that is in the medical era of hypopara, meaning patients that really have a severe disease where they don't have enough endogenous PTH produced. And what we are providing and replacement therapy, where we're basically providing the right mode of action, the same as the endogenous PTH in the same physiological level, 24 hours, 7 days a week. So when we look at a product opportunity, you have a lot of different strategies to think how to launch it. And when I look at YORVIPATH, it's pretty clear we have extremely strong IP protection up to -- I think now it's up to 42. At the same time, it's a combination product, meaning is that you don't have the same fear of a clip when we come to end of 42, it will have a long durability. So what we are doing is we take the arrow under the curve, the strategy, how we really can, for the next 20, 30 years, build most value of this product opportunity, both inside U.S. and ex U.S. And let me first start with the U.S. In U.S., there's about 80,000, 90,000, perhaps 100,000 patients that already are diagnosed with having hypopara. And if any one of you have any doubt about this unmet medical need, try to listen to the YouTube of the FDA arranged hypopara session. It takes about three hours, but I think it's really an eye opening if you not really have talked with the patient about this unmet medical need. And when you hear the story for the few patients that also are on YORVIPATH, then you can understand how it's changing their life, not only taking account of the long-term risk, but also the short-term symptoms like feeling better, can do normal work, live like a normal person. Don't forget 70%, 80% of these people had a normal life until basically they came to a situation where the endogenous PTH because often a head and neck operation came to a situation where they didn't have enough of that. So we are taking the concept that we have a product that will have extremely many years. When we look at the competitive landscape, it's clearing out. We don't see any other product opportunities in clinical development that can provide the same benefit as YORVIPATH. And this is why we focus on really the long-term effect. And we see a steady, steady growth. Yes, you can say there was a bolus in the first quarter, a bolus from about 220 patients that came from our EAP program. When we take the 220 patients off of Q1 with, I will call a bolus because they already were on treatment and then look on what we saw in both Q1 and Q2, and that was what we came out with our Q2, we see extremely stable growth. And that is really how we have designed our commercial effort. And what we also said at that time, we expect that to continue rest of the year. So this is what we see. But don't forget ex U.S. Ex U.S., we have a more diversified strategy. It's built on mainly three pillars. One is what we call the direct market. It's about 13, 14 countries direct. The three countries where we already is full commercial in the direct market is Germany, Austria and Spain, and we hope in '25 to get two, three more countries on it. And then the majority of the 14, 15 countries, we will get them on board in '26. Then we have our sales and distribution agreements. Today, it's mainly being built up on named patient programs where we have revenue generation for about 30 countries. So our entire distribution agreement and direct market is around plus 50 countries today and expanding and expanding. Then we have the last pillar is our partnerships and our partnership. You can see that our Japanese partner, Teijin, just got marketing approval for YORVIPATH now in Japan. So that will start to go commercial later this year. So because of the, you can say, diversity in how and commercial time schedule is developed ex U.S., you will see during the next five, six, seven years, how we really are going building up the commercial effort, the revenue generation for all the ex U.S. But the key element, we will be where there is patients. And that is what we have done in our global commercialization effort of YORVIPATH.

How do you think about the breakdown geography about the peak sales opportunity? And you said, again, $5 billion, but how is that split between U.S. and kind of the rest of the world?

It is dependent on the time horizon. If I take the first up to perhaps four, five years, the majority will come from the U.S. and after four, five years, I actually think it's switching over because then you see the ex U.S. global effort is really starting going up running on much, much larger speed. So this is why we believe that the revenue generation will continue, continue for many, many years.

In the U.S. in the launch, like what are you seeing that's kind of driving the most uptake? Is it just awareness of a new therapy? Or is it just kind of, again, physicians using the drug seeing great results? Like what's kind of been the near-term driver kind of quarter-over-quarter in terms of like physician uptake and more patient penetration?

There's a lot of different elements in the launch. When you think a person having a disease, they're already diagnosed. We know that. So they have in their head, I have this disease, I need a treatment and until they go on treatment. And I think this is a heterogeneous journey for so many different patient stories. But what I see today really a steady, steady flow of new prescriber and new prescription being written and basically the flow to the system. We expect in the end of the year because we're getting up in the fourth quarter of the launch that a lot of infrastructure from physician office to everywhere in the system, how to make a fast transfer from the patient from the prescription up to be on drug will improve in this way. And what I see today, which we also see in many countries is that basically, the bottleneck is basically to go into an endo and get a prescription. And this is why we basically have this constant flow of patients month by month, quarter-by-quarter because the number of endos is not changing a lot that basically are the main prescriber of the product. We can improve that, which we also start to improve that we can go outside the endo as target physician, nephro and other one will also see a lot of, you can say, hypoparathyroidism. So that's the way when we come to the second wave, third wave of this year, where you will see we can improve the number of prescriptions.

Got you. So basically, it's just that time from script to getting on drug, that's what needs to improve over time, which typically improves while the launch progresses. Is that fair to say?

That is fair to say, and that is what we have observed in basically nearly every launch.

Got you. A question we often get is just around, obviously, competition. I know you kind of said that's starting to clear up. But one of the questions is really centered around like is there really a need for a longer-acting, again, like a weekly formulation versus daily. You have the TransCon technology. You've done a lot of daily to weekly kind of transformation. So what's your view there?

Yes. You can say the first obvious question you can ask us is that you made a once-weekly growth hormone SKYTROFA. You made a once-weekly CNP product. Why did you not make a once-weekly PTH product? And we did it after a lot of considerations. And it comes back to potential my background and a lot of other people's background from the large pharma company that worked a lot with diabetes, insulin treatment, type 1 diabetes. We are working with an extremely powerful hormone. And no one will ever consider why did not just make a once-weekly insulin from the beginning, even if you can do it. And we wanted to be sure that we can stabilize a patient first on the right doses. And then we wanted to consider are there sufficient enough stable patients that not titrate up and down because there's a lot of influence on your work capacity, how hard you work, how much you exercise, if you have diseases, what is really your need for PTH? Also what is your intake of dietary calcium and other things like that. And what we said also we are in a situation where there's not an antidote to PTH. It's not like insulin, you have rescue therapy with glucagon. What do you do with a patient that get too much PTH because suddenly, it don't need it too much. There's not anything else to do, stop taking the medication and then hope it go down. And that was why we never felt secure to have a once-weekly starting product in this way. So that was why we had the overall strategy, start with a daily product, really optimize it. And when we are in a position that we're feeling that there is sufficient enough stable patient and there is a large unmet medical need for that. My question is still what is the last unmet medical need because we see excellent adherence, no one is dropping out of therapy. Everyone basically continue when they're getting started. And I think the barrier for treatment is very low. We have one of the best pen devices. It's prefilled. It's a room temperature. You just take the pen, take two minutes to make the injection and then you have done it. It's not like taking something out from the fight, get it up to room temperature. So you can say the treatment barrier is pretty low for that. Will we one day make a once-weekly product? Yes, if we convince that there is sufficient enough stable patients and how do we define a stable patient is that you're not going up and down a lot in less than three months. So you need basically to be in three months stable on one doses. And we see about perhaps 30%, 40% of the patients in that. But we do not know if that continued during the year. And that is all the data we collected to that. We are ready for a once-weekly product, but we see a once-weekly product is in combination with a daily product. So you potentially will have a basal level of PTH and then you can add in by a daily injection. But it does mean that you always can be sure you're covered with a basal PTH level. There was our thinking behind when we make YORVIPATH as a daily product and not started with that a weekly product. Just think about how to titrate a compound when you need to go out on what we call calcium supplement, active vitamin D, you need to titrate a lot the first two, three, four, five, six weeks. It really, really will be tough with a once-weekly product.

And just remind us, I mean, obviously, within the context of that titration scheme, you're really trying to, I guess, mitigate any sort of safety issues, right? So maybe just talk about some of those issues that could arise with a weekly in that setting.

So if we -- we had cases of hypocalcemic episode where they came up to a level where it was out of the range. And what happened then we actually could control them just by getting what we call lack not take you medication for the next two to three days, and we saw it coming down slowly. So we basically avoid any emergency part of having hypocalcemic episode.

Got you. Got you. Maybe shifting gears to TransCon CNP. So another exciting thing, as you highlighted before, PDUFA date coming up towards the end of the year. Again, how do you think about the differentiation versus BioMarin's VOXZOGO, and ultimately, your preparations to launch? What should we expect after the PDUFA?

Yes. First of all, both products are being built on CNP as a mode of action, but a lot of difference between that. BioMarin is a variant of CNP with mutation in it. We have wild-type CNP, the natural form of CNP. We are in a position that we developed it to be highly differentiated to the established vosoritide. And we did it by doing a continuous exposure 24 hours, 7 days a week. It looked like people now also coming back from all other aspects saying this is the optimal profile to develop that, at least that is what we're hearing from BioMarin that want to develop a product like us, which I think are a little bit proud about. It's a little bit sad, it took eight, nine years to realize that. But from my perspective is what is the differentiation you get with the continuous exposure. And I can start with a lot of different things. The B drug technology provides that you don't get injection site reaction. This is one thing. This is something that patients and caregivers really think about a lot. If you have 2x to 3x a week on average, major injection site reaction in a child instead you have every second year. This is because of the product technology. The sustained release of our product technology gives that we always have a constant without a peak, meaning there is no risk of hypertension. That is a major differentiation compared to anything like that. Then we go to efficacy. What we have shown as the only company in our pivotal trial compared to placebo, we have meaningful clinical effect beyond linear growth. And what I'm really addressing here is the positive effect we have seen both related to elements like leg bowing, when we see patients subject with achondroplasia really are in a position that they need to go on severe operation for up to one year just to correct leg bowing because of the pains and other things that's associated with that. And we saw a correction of that first time ever seen. We saw improvement in elements like muscle strength, which we actually address to the continuous exposure always of it. We saw change in how the spinal cord are going to date of birth expanding and everything like that. We could address this benefit we saw from, for example, X-ray radiology really to quality of life improvement. We can address the one that basically have most improvement, also have the most improvement in quality of life, meaning is that it's really a meaningful differentiation you see in this way. When I come over to the product itself, I feel it's really providing what I would call a transformative treatment to it. And I think that is why we also have achieved priority review by FDA and pursuing some of the same thing in the EAP way. So I think this is not only us that recognizes, it's recognized by physician, but at least and more important, it's recognized by patients.

In terms of the launch strategy, is it more of a switch strategy from VOXZOGO initially? Like how do you guys want to -- I mean, obviously, you've got great differentiation, but how is kind of the positioning upon launch?

I think this will be like NATPAR to YORVIPATH, complete different compound to think about. People thought when we launched YORVIPATH, there will be somebody just the same kind of NATPAR, completely different. It's only 15%, 20% of physicians that ever have made NATPAR prescription. Everyone is seeing this product as a complete new treatment thing. I think both patient parents, physicians see the same thing with our TransCon CNP because it provides clinical benefit beyond linear growth. So we don't see being short as a disease. We see the comorbidities as the severity of having achondroplasia. And if we can help people with achondroplasia to really address this comorbidity, we believe we have a major way to work together with them and really establish as a standard treatment in it. So we are not just looking on naive patients. We are not just looking on switch patients. We are looking at every patient that want to have a treatment.

Is your view that some of the comments in terms of the differentiation, we'll make it on the label? Or do you think it will just be similar to what we've seen with kind of the VOXZOGO label?

For me, it's not really so much the discussion on what is going on the label because that's something we do in the end with FDA. So I cannot really comment on that. But what I can comment on that we have all the clinical data that would come out in peer reviews, manuscript and everything like that, that's really proving the data. But it's not only proving it by making publications. This is also the patient story that give me the confidence that we're making a major differentiation compared to any other treatment.

What do you think in terms of -- you've kind of set some guideposts around peak sales for YORVIPATH. What do you think about CNP maybe as a kind of a class, but maybe TransCon CNP specifically, where do you think that nets out in terms of peak?

Yes. TransCon CNP is one of the cornerstone in our growth disorder strategy as SKYTROFA is. So you will see part of SKYTROFA where we do label expansion in all the established growth hormone indication in a new basket trial. So we're really building up SKYTROFA to a blockbuster status. We're doing that also in combination with TransCon CNP in our COACH trial later or beginning next year, you will see the one-year data of the COACH trial. And I will say this is one of my proudest moment in being part of developing drugs because when I saw the clinical after six months, I've never thought that would be possible that it would be buying combination treatment, taking an achondroplasia child and basically provide growth that is much larger than what you will see on a normal child in a growth birth. This is what we see. This is unbelievable from my perspective, that is really -- but it makes sense from a biological system. When you role a brake and press the speeder, yes, you go faster. If you just remove a brake, there's very limit the speed you can get depending on the health. But if you really remove a brake, press the speeder, then you have really a complete new treatment regime. And we believe that when we look on this pillar, when we go to hypochondroplasia, combination therapy because some patients will benefit most for growth hormone, someone will benefit most from CNP and some of them will benefit both from the combination. And I think this is where we have the fundamental really, really to be the leader in growth disorder because we are the only company that really can provide the clinical benefit of the two products in once-weekly dosing profile and all the other benefit both products have in this way.