Ascendis Pharma A/S Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
September 3, 2024

There are 11 speakers on the call.

Operator

Ladies and gentlemen, this is your operator. Again, thank you for your patience and we do apologize for the delay. We're having a bit of technical difficulties. We will start the conference shortly. Again, thank you for your patience everyone.

Operator

Ladies and gentlemen, please stand by. Your conference call will begin in 2 minutes. Hello. Thank you for standing by. Welcome to Ascendis Pharma's Second Quarter 20 24 Earnings Conference Call.

Operator

At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Would now like to turn the call over to Tim Lee, Senior Director of Investor Relations at Ascendis Pharma. Sir, you may begin.

Speaker 1

Thank you, operator, and thank you, everyone, for joining our Q2 2024 financial results conference call. We apologize for the delay due to some technical issues that we had here. I'm Tim Lee, Senior Director, Investor Relations at Ascendis Pharma. Joining me on the call today are Jan Mickelson, President and Chief Executive Officer Scott Smith, Executive Vice President and Chief Financial Officer Doctor. Sina Single, Executive Vice President and Head of Clinical Development Oncology Camilla Hartwig, Executive Vice President and Global Chief Commercial Officer and Joe Kelly, U.

Speaker 1

S. General Manager. Before we begin, I'd like to remind you that this conference call will contain forward looking statements that are intended to be covered in the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to statements regarding our commercialization and continued development of Skytrophy and Europath, the U. S.

Speaker 1

And European markets, as well as certain financial expectations, our pipeline candidates and our expectations with respect to their continued progress and potential commercialization, our strategic plans, our goals regarding our clinical pipeline, including the timing of clinical results our ongoing and planned regulatory filings for expectations regarding the timing and the results of regulatory decisions and our exploration of market opportunities in therapeutic areas outside of endocrinology rare disease. These statements are based on information that is available to us as of today. Actual results may differ and could differ materially from those in our forward looking statements and 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 can cause actual results to differ materially, please see our forward looking statements section in today's press release and the Risk Factors section of our most recent Annual Report on Form 20 F filed with the SEC on February 7, 2024.

Speaker 1

TransCon Growth Hormone or TransCon HGH is approved in the U. S. By FDA and the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency. TransCon PTH is approved in the U. S.

Speaker 1

By the FDA for the treatment of hypoparathyroidism in adults and the European Commission and the United Kingdom's Medicines and Healthcare Products Regulatory Agency have granted marketing authorization for TransCon PTH as a replacement therapy indicated for the treatment of adults with chronic hyperparathyroidism. Otherwise, please note that our product candidates are investigational and not approved for commercial use. As investigational products, the safety and effectiveness of product candidates have not been reviewed or approved by any regulatory agency. None of the statements during this conference call regarding our product candidates shall be viewed as promotional. On the call today, we'll discuss our Q2 2024 financial results and we'll provide further business updates.

Speaker 1

Following some prepared remarks, we will then open up the call for questions. With that, let me turn it over to Jan.

Speaker 2

Thanks, Tim. Good afternoon, everyone. With the recent U. S. Approval of EUROPET as the first and the only FDA approved treatment of hypotherarrhythmia in adults, Ascendis has successfully obtained approval for 2 out of 3 endocrinology rare disease product candidates in 2 major market, the U.

Speaker 2

S. And EU. And with pivotal data from our 3rd product candidate TransCon CNP in air condor, Asia expected in the coming weeks, we are nearing our vision to achieve approval of all three product candidates by the end of 2025. Our algorithm for product innovation combined with our TransCon technology have enabled us to bring new highly differentiated product candidates through the clinical development of this faster and with a higher success rate compared to traditional drug development. We attempt to continue to develop new product candidates in endocrine disease.

Speaker 2

And last therapeutic area such as oncology, obesity, metabolic disease and cardiovascular with best in class potential to make a meaningful difference for patients across the globe based on our strong scientific focus. Let us begin with Europads. In the U. S. Alone, an estimated 70,000 to 90,000 patients are living with hypoparatyarrhythmia.

Speaker 2

For those who haven't seen it, please take time to watch the patient arranged FDA hearing on the hypoparatyarrhythmia associated website. Providing an in-depth understanding of the serious consequence of having this disease. With the FDA approval of UroPAD, physician and adult patient in United States can now look forward to having a treatment option for treatment of hypopadrenaline. We are preparing for UroPath's launch in the U. S, levering our established commercial infrastructure and expertise.

Speaker 2

We are expanding our dedicated team of sales reps and field medical personnel, who will engage with around 6,000 physician who treat 80,000 80 percent of patients with hypopara in the U. S. Other key launch initiatives are underway, including the rollout of our patient support programs designed to support access to uropads. For example, eligible patient on commercial insurance will pay as little as $5 a month for the uropad prescription. In addition, following our goal to take care of all patients with this disease, we will also introduce a patient assisted program.

Speaker 2

We have also started engaging U. S. Payers and PBMs. We expect product availability in the U. S.

Speaker 2

In the Q1 of 2025 or sooner if it's possible. Consisting with premium responsible pricing, we will launch with a VAT price corresponding to 285,000 annual per patient, reflecting the value of UroPED to the U. S. Healthcare system. In the U.

Speaker 2

S, there are around 140 patients currently active in the expanded SS program and about 50 more patients in the open label extension of our clinical studies. Physician will begin transplant these patients over to commercial product as soon as it's available. In Europe, the number of patient and prescribing physician, imitating EUROPAD continues to increase, and we see a good mix of PTH experienced and new patient. This was the 1st full quarter of commercial launch in Germany and Austria, where sales momentum continues to build. We now have more than 250 patients on treatment and an estimated 125 prescribers in these two markets.

Speaker 2

EURPAS patient retention rate is extremely strong and currently around 98 percent. As physician gain more experience at UroPath, we expect them to bring more patient on therapy, including those finishing remaining supplies of NATPAR. The interest for serving patients under named patient programs prior to full commercial launch is increasing. We now have patient in these programs in more than 10 countries and expect more by the end of the year. Moving to SKYTropa.

Speaker 2

We are proud to have more than 11,000 patients for SKYT's KEYTROPPA in the 1st 3 years symptoms and to have achieved market value leadership while expanding the overall growth hormone market. Key component of our strategy to make SKYTRAFA a blockbuster product in the U. S. Include simplifying, broaden market assess for both treatment naive or switch patient as well as expanding our label. In the first half of the year, the reset to broader market assess for SKYTRAFA was largely complete.

Speaker 2

While this broader access to SKYTRAFA will support long term demand in the short term, it negatively impacted our first half net revenue. Scott will share more details. With our market assess transition largely completed, SKYTROFA is now positioned as a premium product with a net value per patient of around 3 times compared to daily growth hormone. Finally, to build on our market leadership position, we plan to submit and supplement BLA in adult protomone deficiency to the FDA in the Q3 of this year, our first SKAGROVA label expansion. We also expect top line data from our Phase II trial in Turner syndrome in the Q4 of 2024.

Speaker 2

Switching to TransCon CNP. I have always been extremely excited about our program in air conduction and much more now as we are approaching the result from our pivotal trial in the coming weeks. We have consistently in our messaging over the past 8 years SYMBIA announced our product candidate that our aim is to develop a treatment that address both linear growth and the comorbidities that affect health and quality of life for people living with achondroplasia. Earlier this year, you saw a comprehensive result for our Phase 2 ACONCIS trial, demonstrating that our once weekly TransCon CFT increased annualized growth velocity similar to vosoritide about 5.6 centimeter after 12 months of treatment. In addition, for first time AR4 product in the setting of a condylasia, we also demonstrated that compared to placebo TransCon CNP improved quality of life associated with the physical function of well-being in children with air condition with a favorable side effect and tolerability profile.

Speaker 2

Now we hope that we can replicate these results with more patients in our pivotal approach trial, and we are expecting top line data in the next few weeks, 1 quarter earlier than guided. This trial enrolled 84 children aged 2 to 11 with achondroplasia. The mean age was 5.7 years, similar to our Phase 2 trial. We also continue to enroll in cohorts, a Phase 2 trial of TransCon CNP in combination with TransCon Growth Hormone, SKYTOFE, designed to show that adding SKYTOFE to TransCon CNP could provide cash up growth for patients who start CNP treatment late. We expect to complete enrollment in this combination trial during the Q4 of 2024 with top line 26 data expected in the Q2 of 2025.

Speaker 2

Turning now to oncology. We continue advancing 3 Phase II trials with multiple indication specific cohort to study the best in class potential of our 2 product candidates, TransCon IL-two beta gamma and TransCon TLR-seventy eight agonist in different combination scenarios. We plan to present initial results from our TransCon IL-two beta gamma in combination with chemotherapy in plasma resistant of war ovarian cancer from the IL BELIEVE trial later this month at the ESMO conference in Barcelona. I'm pleased how these programs are progressing. In closing, for Ascendis, it's all about the patients.

Speaker 2

Patient tell us the U. S. Approval of UroPAD is transformative for them. We hear from parents that SKYTROFA has changed the life of children and parents both. With data expected in the next week for TransCon CMV, it is our goal that we are able to show that we also can transform the life of people living with achondroplasia.

Speaker 2

With our ongoing progress in our oncology program and exploration of oil areas of innovation in last market opportunity such as obesity, we continue to position Ascendis for sustainable growth with an expanded pipeline and transformative transcon product candidate. I'll now turn it over to Scott for a financial update.

Speaker 3

Thanks, Jens. Skytropha volume more than doubled in the Q2 of 2024 compared to the Q2 last year, while reported revenue was €26,200,000 compared to €35,900,000 reported in the Q2 of 2023, a decrease of 27 percent year over year. An increase in Skytropha volume was offset by higher sales deductions for Q2 and an adjustment to Q1, 2024 sales deduction accruals as well as for periods in 2023. These adjustments reflect the reset of broader market access to support continued growth of Skytropha as the market value leader and a potential blockbuster in the U. S.

Speaker 3

Alone. In total, Q2, 2024 reported revenue was reduced by a true up of €27,100,000 of which €19,500,000 was attributable to the Q1 2024 sales and €7,600,000 to sales prior to January 1, 2024. Skytropha revenue for the first half of twenty twenty four totaled €91,200,000 a 35% year over year increase compared to €67,400,000 during the same period in 2023. First half twenty twenty four Skytropha volume more than doubled, but was partially offset by an accrual true up of €7,600,000 which was attributable to periods prior to January 1, 2024. With the advent of broader market access, we believe the overall growth hormone market will continue to grow the number of patients treated.

Speaker 3

We estimate that by the end of Q2, 2024, SKYTROFA penetration in the U. S. Pediatric growth hormone deficiency treated patient population was 18% or a little under 10% of the overall treated growth hormone market, still with our single indication for pediatric GHD, leaving lots of room for further growth and market expansion. Based on year to date results and current trends, we now expect full year 2024 Skytropha revenue to be in the range of €220,000,000 to €240,000,000 Shifting to TransCon PTH, 2nd quarter YorvaPath revenue of €5,200,000 reflected the first full quarter of commercial revenue in Germany and Austria as well as initial revenue in other markets, with YorvaPath revenue continuing to increase from the €1,500,000 in Q1 driven by growing patient and physician demand. Closing out the top line, total revenue for the Q2 was €36,000,000 including €4,600,000 tied to rendering of services and license revenue.

Speaker 3

Turning to expenses. R and D costs in the Q2 of 2024 totaled €38,500,000 compared to €105,000,000 during the Q2 of 2023. The 21% decline was largely tied to lower external development costs for TransCon TLR-seventy eight agonist and lower costs for TransCon PTH as well as the Iconis spin off. SG and A expenses in the quarter totaled €74,300,000 compared to €70,300,000 during the Q2 of 2023. The increase was primarily due to higher employee costs, including the impact from global commercial expansion.

Speaker 3

Total operating expenses were €157,800,000 for the 2nd quarter, a 10% decrease compared to the €175,300,000 during the Q2 of 2023. Total operating expenses for the first half of twenty twenty four were €295,000,000 Net finance income in the quarter was €29,400,000 compared to €26,400,000 in the Q2 of last year. As a reminder, the net finance line can fluctuate quarter to quarter driven in part by non cash items related to our outstanding convertible notes. We ended the 2nd quarter with cash, cash equivalents and marketable securities totaling €259,000,000 compared to €399,000,000 as of December 31, 2023. Finally, earlier today and subsequent to June 30, 2024, therefore not included in the reported cash balance, we announced that we have entered into a new capped synthetic royalty funding agreement with Royalty Pharma for US150 $1,000,000 in exchange for a exchange for a 3% royalty on net sales of YorbaPath within the United States.

Speaker 3

The royalty payments are capped at 1.65 times the purchase price if fully paid prior to December 31, 2029 or two times thereafter. Further details are disclosed in a separate 6 ks also filed today. Looking ahead for the full year 2024, based on current plans, we expect Skytrophy revenue to be in the range of EUR 220,000,000 to EUR 240,000,000 Total operating expenses, which include SG and A and R and D to be approximately EUR 600,000,000 including YORVA Path related launch activities in the U. S. And pending launch timing of YORVA Path in the U.

Speaker 3

S, we currently expect to achieve operating cash flow breakeven on a quarterly basis in 2024 or 2025. Before we turn it over to the operator for Q and A, I want to reiterate with database lock and the top line results for our pivotal approach trial expected in the coming weeks, we plan to institute a quiet period starting Thursday. And unfortunately we will not be able to participate in upcoming investor conferences. With that, operator, we are now ready to take questions.

Operator

Thank you. Our Our first question comes from the line of Jessica Fye with JPMorgan. Your line is open. Hey, guys. Good afternoon.

Operator

Thanks for taking my question. I want to better understand how you project getting SKYTROFA to a blockbuster in the U. S. 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?

Operator

Thank you.

Speaker 2

Thanks, Jess. I will start and I have my 2 commercial colleagues with me here today. So that can also some way give you more details if that is desired. Currently, we see the market is about US1.4 billion dollars the entire growth market in the U. S.

Speaker 2

And as I stated in my prepared remarks, when we look on a net value per patient, the basic with SKYTRAFA have about 3 times the net value on a yearly treatment. When we see our effort, when we look about when we are developing the long acting segment, we see Skytrophy as really the preferred brand. Even in places where we just are in the same level of market access, clearly, clearly, clearly Skytrophy is the preferred product. Even in places where we don't have market access, we really see Skytrophy coming in because it's really up 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.

Speaker 2

We in this next weeks, we are filing for adult growth hormone deficiency. We have Turner, please are 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 gives you the high level how we see we can develop SKYTROFR2 blockbuster in the U.

Speaker 2

S. And with the reset of the what we call the market asset, 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 Jes, you have and want to get more in-depth knowledge about specific comments from my side. Thanks.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Tazeen Ahmad with Bank of America Securities. Your line is open. Hi guys.

Operator

Good afternoon. Thanks for taking my question. With regards to this new net price that you have for SKYTOFA, 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 the Novo competing product?

Operator

Thanks.

Speaker 2

Thanks for the question. I think it's in their line with some of the same question that got asked as the first question. Yes, today there is 2 other long acting product in the U. S. Market.

Speaker 2

We basically see one of them in Engensa 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 Sequoia. Sequoia have a preferred position on some of the big PPM and we have other places. But what I'm generally seeing is there's no doubt. We always said that scratch over had a best in class potential.

Speaker 2

But what we also see in the market that is really realizing as the best in class product opportunity. And that is the strengths we want to continue to build on, not only in pediatric growth hormone deficiency, but also in all the different label expansion when we coming into first generation when we also get them. For example, you should also look on what happening with, for example, the largest volume supplier of growth hormone in the Q2 that basic have a revenue down on 73%. So clearly, there was a reset of the entire market that potentially come a little bit more unexpected to many of us that it was so fast adapted into the system.

Operator

Thank you. Please standby for our next question. Our next question comes from the line of Derek Archila with Wells Fargo. Your line is open.

Speaker 4

Hi there. Thanks for taking the questions. Just want to know what payer feedback you might have received thus far on the proposed URBPath pricing in the U. S? And then I have a follow-up.

Speaker 2

We are coming up with a responsible pricing. We are coming with a pricing where we basic can support the statement we want to go. Every patient that have hypoparatyarisme, we aim to support that where it 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.

Speaker 4

Got it. Very helpful. And then second question, just in terms of the patients that you talked about on your V path in Germany and Austria, I think you commented about 250 patients on the approval call for the U. S. I guess how do you think about that penetration relative to the overall market size in Germany?

Speaker 4

And how do you believe you're tracking thus far in the launch? Is it ahead of where you expected or less than you expected? Thanks.

Speaker 2

I can come with some initial comments, and you can get some further comments from Camilla. Our initial aim and how we look at how we expected the penetration profile would be that we will see typical 1 to 2 patient per physician in the beginning. There was what we expected to see. Before each single physician really see the benefit of really what uroPAD can give to the patients, When they observe that, we expect later in this year that each patient or each physician will start to prescribe more and more patient from the number of patient each of them. So when we look on the number of physicians that already have prescribed in Germany and Austria around 125 prescriber have really prescribed it.

Speaker 2

We are extremely proud about this penetration to physicians. But I think what does really are the most impressive thing for me in this launch is basic retention. When you think about rehab retention, when you start to take patient in and really test them, are they really providing a benefit for the patient and then they have a retention of 98%. I have never seen that for any product before. That is really, really unique.

Speaker 2

But it's really described the benefit that is really giving to the patient and the stay on the treatment exactly as we have observed in our clinical trials. I do not know Camilla, you have further comments to the launch in specific in Germany and Austria?

Speaker 5

Jan, I think you said it very, very well. We are very pleased with the uptake of the JorbiPath in Germany. We are benchmarking other rare disease launches, and we are doing very well compared to them. So the team is working hard on both breadth and depth, and that's working well. And also creating the mix between the PTH patients and the ones that have been on natPAR.

Speaker 5

And the switch that we are making from natPAR to yorvipan is going very, very fast. So all in all, we are very pleased with how it's going and where we go in the future.

Speaker 2

Yes. What we have seen in different European countries that the net part basic because of its stop of manufacturing, there is a tendency to keep the patient on that part until all the, you can say, accumulated drug are being utilized in the specific regions. And we also see now that is starting to change a lot where we see much, much more pressure taken out from the NEPAR patient coming in now. But one thing, we have now been launched in Germany and Austria. In our Europe direct strategy, we go to France and then here, hopefully in this year.

Speaker 2

And then in 2025, we will have the next 6, 7, 8 European countries being added in, really are rolling out in the way we generate revenue from this region in a much faster speed.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Lee Watsik with Cantor. Your line is open.

Speaker 6

Hey guys, thanks for taking my questions. Maybe just a follow-up on Sky Trofa. Maybe help us understand what went into the assumptions for the lower guidance for Sky Trofa this year. Just looking for more details on what's driving that 100,000,000 euro reduction. Reduction?

Speaker 6

Maybe talk a little bit about the dynamics between broader market access and pricing? And I have a follow-up.

Speaker 2

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 if we utilize that growth basically to predict rest of the year and it basically giving the lower value. And after we now have reset our market assessed portfolio, we are in a position that we expect that the DJN will be keeping constantly throughout the year. What we have observed like last year, we saw a large seasonal effect between the first half compared to the second half. We still see that as an upside, which potentially will materialize, but we also know that it could not materialize.

Speaker 2

So this is how we have basically taking 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 U. S, you can also 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.

Speaker 7

So the healthcare providers right now have extreme clarity about where they can provide SKYTROFA to patients with a high chance of reimbursement. But also where SKYTROFA is not on formulary, healthcare providers are documenting intolerance, growth below the average parenteral height, while on other growth hormones, therefore allowing a resubmission, so that pediatric growth hormone deficient patients can have access to SKYTROFR. So there's time left in this year. Obviously, things will stabilize in 2025. So we know now where we can continue to add patients and grow our net revenue and expand and grow the value of the entire growth hormone marketplace.

Speaker 6

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 you can still breakeven this year given the lower schedule for guidance?

Speaker 2

Scott is really good at numbers. So I will someway give you an all 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 there is revenue specific Europe has different regions are really starting to take in now. So potentially, we have a Europe path outside U.

Speaker 2

S. 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 U. S. We hope we can help them. We would do everything to help them.

Speaker 2

It meaning that we will have a much faster launch than we actually are taking into our plans. We hear the voice from the patients. We hear the voice from 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.

Speaker 2

So we have a lot of potential upsides. We have a lot of different ways where we're looking about how we can strengthen our revenue, how we basic still keeping our expenses in control and this is how we're operating. Scott, comments?

Speaker 3

I think you said it well, Yen. Lee, as you know, we always look to be cost effective in what we do as a company. And we evaluate expenses that aren't tied to getting the product to patient as soon as possible. But at the same time, of course, we don't want to sacrifice doing that and getting the product. So that's part of the reason we announced the new financing today after the close for the additional US150 $1,000,000 But we continue to have great scrutiny on costs, particularly where they're not leading to getting our products to patients.

Speaker 6

Thank you.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Gavin Clark Gartner with Evercore ISI. Your line is open.

Speaker 8

Hey guys, thanks for taking the questions. First, I just wanted to ask for Skytropha, when did these policies with more favorable access go into place and when should we expect a pickup in prescriptions?

Speaker 2

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 ran 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.

Speaker 2

But we really would expect first all the effort that we now have installed, as Joe said before, is first ticking in, in the second half, okay? So I will first see the expected growth coming in, in the second half. Okay.

Speaker 8

That makes sense. And just wanted to ask on IQVIA data overall. Have you guys noticed any changes in capture rate trends over time?

Speaker 2

I think the issue I personally have the data is that it's a sampling of few places. And if you some way keep everything stable, you can use it as an overall trend. If there is a shift between different PPMs, between different market assets, you often will see some difference in volume that really are totally unpredictable out from the perspective at the sampling between the different PPMs are different. So out from that, I think you should pay it. If you give them all the money, but the utilization of these days, at least I'm not paying for it.

Speaker 2

I get it for free because I showed so many times they were totally not useful to have. But still buy it if you want. Okay, thanks.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Vikram Parikh Rohit with Morgan Stanley. Your line is open.

Speaker 9

Hi, good afternoon. Thank you for taking our questions. I guess switching to TransCon CNP, we were just curious for the upcoming approach readout and then also for the coach readout in 2Q 2025, 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 competitor CNP data sets available in the space? Thank you.

Speaker 2

I think the most easiest way to compare anything is to go to rosuartite because this is true, you can say, mode of action that is there must align between them, even if there is a difference in how we function because we have a continuous exposure of CMP molecule, where from the vosoritide, basic is only have an active covers for 2 or 3 hours in every 24 hours dosing cycle. So when we look on our aim, as we have said in the last 8 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 II 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 rosuartide with a once weekly dosing profile. But we have seen the improvement in many of the way that this children, their physician, their caregivers talk about the benefit to the patient. And out from that perspective, we also can show when we compare our Phase 2 data directly to placebo and improvement in quality of life related to physical function.

Speaker 2

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 comorbidity, which have never, never been shown by any other product. And when we 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 basic to address some of the comorbidities. So to give you where we started from, I need to see the data. They're coming in the next weeks. So it's pretty, pretty, pretty near.

Speaker 2

So the database has been locked. People are running the stat now. So as soon as they're finished, I will be taken into a room and see the data.

Speaker 9

Got it. Thank you.

Operator

Thank you. Our next question comes from the line of Kelly Shaw with Jefferies. Your line is open.

Speaker 6

Thank you for taking my questions. Maybe for PTH, could you please elaborate more on your ongoing interactions with regulators regarding commercialization of existing batches for the U. S. Launch, which is likely of 4Q or Q1 of next year at the moment?

Speaker 2

We have an extremely constructive dialogue with FDA related to how potential to address the shortage of PTH drops in the U. S. It's been driven by patients that basic are seeing the huge unmet medical need, the situation where patients have been missing that power for a long time and extremely serious consequence of patients that now today are on that power and suddenly need to be disrupted of the treatment because net part will not be available longer. Out from that, both patient organization, physician and us and FDA recognize this issue. And I think everyone is working together in extremely constructive manner to find out how we can help the patient to avoid such a crisis that potentially it will be.

Operator

Thanks. Thank you. Please stand by for our next question. Our next question comes from the line of David Lebowitz with Citi. Your line is open.

Speaker 8

Thank you for taking my question. I got 2 here. First on the Sky Trofa adjustments, just to make sure I got this right, that you came to an agreement on new net pricing with the 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.

Speaker 2

I think you have understood it correct. This is a true up that is basic up reflecting net revenue from mainly net revenue for Q1, but about EUR 7,600,000 also from EUR 23,000,000. 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 act all this true up to the net revenue from Q2. That is reported here.

Speaker 2

Scott, any comments? Or did I get it right?

Speaker 3

You got it right, Jan. Good.

Speaker 8

Got it. And on CNP, what has occurred to actually essentially accelerate the pivotal data timeline from prior updates?

Speaker 2

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 PJs 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. Got it.

Speaker 2

Thank you.

Operator

Thank you. Please standby for our next question. Our next question comes from the line of Alex Thompson with Stifel. Your line is open.

Speaker 3

Hey, great. Thanks for taking my question. I guess, again, on sort of the YARVIPATH potential in the U. S, 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 U. S.

Speaker 3

Launch in the Q4? Thanks.

Speaker 2

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 on. It's not really on anything of the data. It's mainly how fast can we supply, how much material do we have and other things like that. So we can ensure that when we start, we basically are in a position.

Speaker 2

We really can manage this entire demand that we expect to come.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Speaker 9

Hi, thank you. Good afternoon and thank you for taking our question. On 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 these changes are multi year. Basically, it'd be helpful to understand if this is an issue we'll have to potentially revisit next year. So any comments there would be helpful.

Speaker 9

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? Thank you very much.

Speaker 2

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 reset it. This is why Scott used the great word reset. We have reset our coverage in the U.

Speaker 2

S. And out from that perspective, the GGN, we expect to see in the second half would be aligned to what we saw in the first half, and we expect the same GTN in 2025, 2020 6, 2017, 2020 8, 2019, 2020. I can only come with 5 years guidance.

Operator

Thank you. Our last question will come from the line of Yaron Werber from TD Cowen. Your line is open.

Speaker 10

Great. Thanks for taking my question. Hope you can hear me. My question is 2 parts, just relating to the as you think about the guidance for the year, the $220,000,000 to $240,000,000 does that entail the $71,500,000 that you sort of did in the first half for Skytropha on a net basis? Or is that including the $91,000,000 assuming you did $65,000,000 in Q1?

Speaker 10

And then secondly, Jan, you said you did $53,000,000 in Q2. Is that a good run rate to then start into Q3? And 4, should we really think of the $26,000,000 this quarter as a good run rate into the second half? Thank you.

Speaker 2

Yes. 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 basic the reported number to date here in our numbers, and I see that the real number is basic, the reported net sales plus the true out that we basic provided to you. So you take the number that we had in our Q2 sales and then basic and everything what we took in throughout both from 23% and what we did in Q1. There you will get a basic and net sales of what we had in the Q2 of 2024.

Speaker 2

So I think that is the real number. And when you look at that, it is around €53,000,000 If I calculate it right, that I think is the real number for Q2. If I do my calculation, it's $53,400,000 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 COP, we will see an improved pickup in Q3 and Q4.

Speaker 2

And when we did the forecasting, we basic 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, you have anything to add?

Speaker 3

Yes. Just one thing, Yaron. For the first half, we reported €91,200,000 without any those were the actual reported numbers. And as we said in the prepared remarks in the press release, that number was reduced had been reduced by €7,600,000 of true up for periods prior to January 1. So in other words, it would have been 7.2 higher or about €100,000,000 for the first half.

Operator

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. This concludes today's conference call. Thank you for your participation. You may now disconnect.

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Earnings Conference Call
Ascendis Pharma A/S Q2 2024
00:00 / 00:00