Ascendis Pharma A/S Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jessica Fye - JPMorgan Chase & Co. - Analyst : I want to better understand how you project getting SKYTROFA to a blockbuster in the US alone based on the kind of reset of net price and what you said about where you are in terms of penetration in GHD and the broader treated growth hormone market. Can you walk through that a little bit? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2024 / 8:30PM, ASND.OQ - Q2 2024 Ascendis Pharma A/S Earnings Call Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board Thanks, Jess. I will start, and I have my two commercial colleagues with me here today. So that can also some -- give you more details if that is desired. Currently, we see the market is about USD1.4 billion, the entire growth hormone market in the US. And as I stated in my prepared remarks, when we look on net value per patient, the basic with SKYTROFA have about 3 times the net value on a yearly treatment. When we see our effort, when we look at our -- when we are developing the long-acting segment, we see SKYTROFA as really the preferred brand. Even in places where we just are in the same level of market assess, clearly, clearly, clearly, SKYTROFA is the preferred product. Even in places where we don't have market assets, we really see SKYTROFA coming in because it's really avoiding a unique improvement compared to the other products' potential. So when we see our label expansion effort, we basic -- in the coming year, will be possible for us not only to address the pediatric growth hormone deficiency market. We -- in this next weeks, we are filing for Adult Growth Hormone Deficiency. We have Turner data coming in for Phase 2 later this year, we will initiate trials very fast, and we can do it in a basket manner. So we basically can get to the full cohort for all the different growth hormone indications. That give you the high level how we see we can develop SKYTROFA to a blockbuster in the US. And with the reset of the -- what we call the market assets, we will -- can keep that value as we have today and expand from there. I do not know Joe or Camilla, you have further comments or yeah, you have and want to get more in-depth knowledge about specific comments from my side. Thanks.

Question: Tazeen Ahmad - Bank of America Securities - Analyst : With regards to this new net price that you have for SKYTROFA, can you talk to us about the competitive dynamics? Namely, are the daily injector manufacturers offering deeper discounts? And can you also talk about the level of impact that you're seeing from the recent -- relatively recent launch of Novo competing product? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board Thanks for the question. I think it's in the line with some of the same question that got asked us, the first question. Yeah, today, there is two other long-acting products in the US market. We basically see one of them in general because of the obvious effect everyone can observe just going to the databases that describe tolerability and other things like that. We see we are always doing extremely well to -- in general, we see the same thing with Sogroya. Sogroya have a preferred position on some of the big PPM, and we have other places. But what I'm generally seeing is there is no doubt, we always said that SKYTROFA had a best-in-class potential

Question: Derek Archila - Wells Fargo - Analyst : Just wanted to know what payer feedback you might have received thus far on the proposed YORVIPATH pricing in the US? And then I have a follow-up. Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board We are coming out with a responsible pricing. We're coming with a pricing where we basically can support the statement we want to go. Every patient that have hypoparathyroidism, we aim to support that they can be treated. In that entire mathematic algorithm how to achieve that, we came to this responsible pricing on back. And we have not got any feedback against that, that is not total acceptable.

Question: Li Watsek - Cantor Fitzgerald - Analyst : Maybe just a follow-up on SKYTROFA. Maybe help us understand what went into the assumptions for the lower guidance for SKYTROFA for this year. Just looking for more details on what's driving that EUR100 million reduction. Maybe talk a little bit about the dynamics between broader market access and pricing? And I have a follow-up. Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board I can come with some overall statement first related to how we did the forecasting because what we basically did that we saw a growth in volume between Q1 and Q2. And as we utilize that growth basically to predict rest of the year and it's basically giving the lower value. And after we now have visit our market assess portfolio, we are in a position that we expect that the [DTN] will be keeping constantly throughout the year. What we have observed like last year, we saw a last seasonal effect between the first half compared to the second half. We still see that as an upside, it would potentially materialize, but we also note that it could not materialize. So this is how we have basically taken the guidance forward in that. And that is not anything believing in that we potentially can accelerate growth. We see the potential; we see the best-in-class potential on it. Joe, that is responsible for our US, you can give a short summary about all the effect that's getting implemented now that first will provide effect in the second half of this year.

Question: Li Watsek - Cantor Fitzgerald - Analyst : Okay. And I also wonder if you can talk a little bit about where you can further reduce from the cost perspective and is there any chance that you can still break even this year, given the lower SKYTROFA guidance? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board You know, Scott is really good at the numbers. So I will some way give you an overall perspective and then Scott can go more back to some of the way we are looking at it today. One of the things we are proud about is that we really keep our operating expenses in control, and we really see that we really have a good internal system to keep Ascendis Pharma to be a highly effective organization. We also see that it's revenue specific YORVIPATH different regions, really starting to ticking now. So potentially, we have a YORVIPATH outside US. We're still in a situation where we are still discussing with FDA related to how we can really help the patient that is in shortage of a treatment here in the US. We hope we can help them. We will do everything to help them. It meaning that we will have a much faster launch than we actually are taking into our clients. We hear the voice from the patients. We hear the voice for the physicians. We will do everything so we can have an earlier launch. And as soon as we get clarity about that, we will come back to you. So we have a lot of potential upside. We have a lot of different ways where we're looking about how we can strengthen our revenue, how we basically still keeping our expenses in control, and this is how we are operating. Scott, comments?

Question: Gavin Clark-Gartner - Evercore ISI - Analyst : First, I just wanted to ask, for SKYTROFA, when did these policies with more favorable access go into place? And when should we expect a pickup in prescriptions? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2024 / 8:30PM, ASND.OQ - Q2 2024 Ascendis Pharma A/S Earnings Call Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board I think it was gradual during the first half year. So some of them are first taking in here in Q2. The complexity of these agreements are very complex in this way that potential rebate compared to volume increase are some way not really aligned and there was some of the issue we ranked into that the rebate basically got established much faster than really we can start to grow the volume. So from a modeling perspective, we see a double-digit number in increase in volume between Q1 and Q2, but we really would expect first all the effect that we now have installed, as Joe told before, is first ticking in the second half, okay? So I will first see the expected growth coming in in the second half.

Question: Vikram Purohit - Morgan Stanley - Analyst : I guess switching to TransCon CNP, we were just curious for the upcoming ApproaCH readout and then also for the COACH readout in 2Q '25, just which parameters of data you expect to report out and how you would currently guide people to compare and contrast the data sets versus a competitor CNP data sets available in this space? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board I think the most easiest way to compare anything is to go through vosoritide because this is to, you can say, mode of action that is very most aligned between them even if there is a different in healthy function because we have a continuous exposure of CNP molecule where from the vosoritide it basically is only have an active cover for two or three hours in every 24 hours dosing cycle. So when we look on our aim, as we have said in the last eight years, we want both to provide linear growth but also provide and address the co-morbidity of the disease. And what we have seen until now and now I'm referring into Phase 2 because this is the data I can talk about today, is that we have seen and analyzed high velocity exactly at the same level of vosoritide with a once-weekly dosing profile. But we have seen the improvement in many of the ways that the children, the physician, the caregivers talk about that benefit to the patient. And out from that perspective, we also can show when we compare our Phase 2 data directly to placebo, an improvement in quality of life related to physical function. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2024 / 8:30PM, ASND.OQ - Q2 2024 Ascendis Pharma A/S Earnings Call And this is why we basically are taking into our trial, different measuring on key secondary endpoint that basically hope for us that it can give an effect that really shows how we address the co-morbidity, which have never, never been shown by any other product. And when they go to the biochemical process, the science behind it, which we always love, then we basically can come with great explanation why you need to have a continuous exposure of CNP basically to address some of the co-morbidities. So it gives you where we started from. I need to see the data that are coming in the next week. So it's pretty, pretty, pretty near. So the database has been locked. People are running the stat now. So as soon they're finished, I will be taken into a room and see the data.

Question: Kelly Shi - Jefferies Financial Group Inc - Analyst : Maybe for PTH, could you please elaborate more on your ongoing interactions with regulators regarding the commercialization of existing batches for the US launch, which is likely of 4Q or first quarter of next year at the moment? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board We have an extremely constructive dialogue with FDA related to how potentially to address the shortest of PTH drops in the US. It's been driven by patients that basically are seeing the huge unmet medical need. The situation where patients have been missing net par for a long time and extremely serious consequence of patients that now today are under par and certainly need to be disrupted of the treatment because net par will not be available longer. Out from that both patient organization, physician and us and FDA recognized this issue. And I think everyone is working together in an extremely constant manner to find out how we can help the patient to avoid such a crisis that potentially will be.

Question: David Lebowitz - Citigroup, Inc. - Analyst : I got two here. First, on the SKYTROFA adjustments, just to make sure I got this right, you came to an agreement on new net pricing with payers. And as part of it, you had to true up prior sales in the last couple of quarters? And then I'll have one more after that. Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board I think you have understood it correct. This is a true up that is basically reflecting net revenue from -- mainly net revenue for Q1 but about [EUR7.6 million] also from '23. That is the true up that is being taken away from Q2 revenue. So basically, if you want to calculate real sales in Q2, you need to add all this true up to the net revenue from Q2 that is reported. Scott, any comments? Or did I get it right?

Question: David Lebowitz - Citigroup, Inc. - Analyst : Got it. And on CNP, what has occurred to actually essentially accelerate the pivotal data time line from prior updates? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board I have to say, how fast physicians, the setup of our clinical operation has been function, in this case, have brought the data to come in much, much faster than we ever thought. I believe there is such a dedication that I only can compare to what we have seen for both PTH and SKYTROFA to get this product out as fast as possible. We're also seeing the same kind of extremely, extremely high retention in this year too. So I think always when I see this data, when I see this positive thing coming in, I think people have one dedication, to get it out to the patients as fast as possible.

Question: Alex Thompson - Stifel Financial Corp. - Analyst : I guess, again on sort of the YORVIPATH potential in the US, could you talk specifically about the data that FDA needs to or wants to see in order to understand whether the material you have currently would be suitable for a US launch in the fourth quarter? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board I actually think that they have all the data to take this decision, and I don't believe any data need to be brought to them, at least the [request] we have one is not really on anything of the data. It's mainly how fast can we supply, how vast material do we have and other things like that. So we can ensure that when we start, we basically are in a position we really can manage this entire demand that we expect to come.

Question: Paul Choi - The Goldman Sachs Group, Inc. - Analyst : To revisit SKYTROFA, can you maybe comment on what percentage of your payer contracts were affected by this -- by the true-up and whether the duration of this -- these changes are multiyear? Basically, it would be helpful to understand if this is an issue we'll have to potentially revisit next year. So any comments there would be helpful. And second, just in terms of the Royalty Pharma agreement that was announced this year. I just want to confirm that from your perspective, is this potentially the last source of external capital that you think you'll need prior to achieving operating cash flow breakeven either this year or next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2024 / 8:30PM, ASND.OQ - Q2 2024 Ascendis Pharma A/S Earnings Call Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board The question that you are asking for -- related to the implementation of the new contracts, the implementation of the new contract was a continued process to Q1 and Q2. We are now in a position that we have resetted. This is why Scott used the great word, reset. We have reset our coverage in the US. And out from that perspective, that GTN, we expect to see in the second half will be aligned to what we saw in the first half. And we expect the same GTN in '25, '26, '27, '28, '29 and '30. I can only come with five years' guidance.

Question: Yaron Werber - TD Cowen - Analyst : Great. Hope you can hear me. My question is two parts, just relating to the -- as you think about the guidance for the year, the EUR220 million to EUR240 million, does that entail the EUR71.5 million that you sort of did in the first half for SKYTROFA on a net basis? Or is that including the EUR91 million, assuming you did EUR65 million in Q1? And then secondly, Jan, you said you did EUR53 million in Q2, is that a good run rate to then start into Q3? And four, should we really think of the EUR26 million this quarter is a good run rate into the second half? Jan Moller Mikkelsen - Ascendis Pharma A/S - President, Chief Executive Officer, Executive Director, Member of the Executive Board Yeah. There was a lot of question in what you basically gave to Scott and me and Joe and the commercial team into it. I think when you start on the last question about basically the reported number to day here in our numbers, and I see that the real number is basically the reported net sales plus the true up that we basically provided to you. So you take the number that we had in our Q2 sales and then basic -- everything what we took in true up, both from '23 and what we did in Q1, there you will get a basic and net sales of what we had in the second quarter of '24. So I think that is the real number. And when you look at that, it's around EUR53 million, if I calculate it right. That I think is a real number for Q2. If I do my calculation, it's EUR53.4 million or something like that, to be concrete. So we see, without doubt, a really good pickup in -- from Q1 to Q2. And when you go back and look on the seasonal variance that pertains to the [gap], we will see an improved pickup in Q3 and Q4. And when we did the forecasting, we basiccally took a conservative approach and saying, we use the number between Q1 and Q2 and use that as a forthcoming number for every quarter rest of the year. Meaning is that we have not calculated any seasonal effect in the numbers we have given you today. I think it answered most questions related to your mathematic algorithm related to the numbers. Scott, do you have anything to add?