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Operator
Ladies and gentlemen, thank you for standing by, and welcome to the third quarter 2020 Ascendus Pharma earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Scott Smith. Senior Vice President and Chief Financial Officer at Ascendus Pharma. Please go ahead, sir.
Ascendus Pharma
Thank you, operator. Thank you, everyone, for joining our third quarter 2020 financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendus. Joining me on today's call is Jen Mickelson, President and Chief Executive Officer. Dr. Mark Bach, Head of Clinical Development and Medical Affairs for Endocrinology Rare Diseases. Jesper Hoyland, Global Chief Commercial Officer, Dr. Dana Pizzuti, Head of Development Operations, and Dr. Yuha Poonanen, Head of Oncology. 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 progress on our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline, statements regarding the market potential of our pipeline candidates, and statements regarding our regulatory filings. These statements are based on information that is available to us today. Actual results or events could differ materially from those in the forward-looking statements. and we may not achieve our goals, carry out our plans or intentions, or meet the 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 the forward-looking statement section in today's press release and the risk factor section of our prospective supplement filed on July 9, 2020. Please note that our Transcon product candidates are investigational product candidates and are not approved for commercial use. As investigational products, the safety and effectiveness of the Transcon product candidates has not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our TransCon product candidates shall be viewed as promotional. On today's call, we will discuss our third quarter 2020 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Yen Mickelson, our President and Chief Executive Officer.
Scott Smith
Thanks, Scott, and good afternoon, everyone. We are now almost to 2020, which has been, again, a very transformative and successful year for Ascendis. Now, 11 months into 2020, we have met or exceeded all of our corporate goals to date. We have advanced our clinical programs, bringing them closer to addressing major unmet needs for patients. And we have built out our first two product opportunities in Oncology that have the potential to represent a new paradigm shift in treatment patients with cancer. Why are we able to execute in this manner day in and day out? It is because we are a company driven by the following fundamentals. Ascendi's three core values, the patience, science and passion, the power of Transcon technology, a clear vision with long-term strategic mindset on how to build a sustainable leading biopharma company. People ask me, how do you motivate Ascendi's employees to take a meeting with their colleagues at 6 a.m. in the morning or stay up until midnight to speak with a patient group? My answer is that it is not me that motivates our people. It is the core values of Ascentis. We put the patient first to drive our decision making. Everything we do is to develop product opportunities that address unmet medical needs for patients as fast as possible. We are dedicated to using science and biological understanding built by the scientific community over many decades to guide our patient focus and decision. And finally, we are passionate about realizing our shared vision and goals. We trust each other's strengths and when we are facing challenges, we remain optimistic and commit to work together as one team to achieve extraordinary results. What enables Ascendis to develop a continuous flow of diversified, highly differentiated product opportunity with a high probability of success as demonstrated by our clinical results? This is the power of the Transcon technology platform and our dedication to science. We have already demonstrated clinical validation of the Transcon technology in three independent endocrinology rare disease programs. Combining our Transcon technologies, the clinical validated parent dog has allowed us to harness well-known biology and the power of mother nature to deliver highly differentiated product opportunity with a high probability of success. We believe we are just getting started with Transcon and that we have a real opportunity to transform patient lives. Now we are embarking on applying this successful approach and our unique algorithm for product innovation to create potential high-value product candidates in multiple therapeutic areas. And we are now getting ready to enter the clinic in oncology. Transcon is a unique technology approach compared to other technologies, as we at Ascentis can create highly differentiated product opportunities not possible by other technologies and at the same time have expected high clinical development success as we are building on scientifically validated biological pathways and parent stock. Last, the value of having a strong vision and a strategic mindset with a clear direction on how to build a sustainable long-term value company is essential for success. Our pipeline strategy has been a key part of our successful vision. The first fundamental in our pipeline strategy is to focus on large orphaned drug product opportunities with a well-established unmet medical need, where the Transcon technology can make a major difference. The second fundamental is that we must build multiple product candidates in each of our therapeutic areas in order to achieve synergies. Economy of scale. and realized the huge advantage from a therapeutic focus in clinical development, regulatory affairs, medical affairs, and commercialization. We believe that combining these two elements provide the fundament for creating economy of scale, achieving long-term sustainable growth to highly differentiated product, and building a leading biopharma company. Our current vision Vision 3x3 provides clear direction and strategic goals year by year on how we want to build a long-term sustainable leading biopharma company through multiple approaches. I have to say, the results we have delivered to date by pulling all these things together, our values, our Transcon technology, and our Vision 3x3 have exceeded my expectations. Not only do we continue to execute year by year, Quarter by quarter, we have accomplished what many companies have tried and failed to do. We continue to push ourselves to deliver not only in endocrinology rare disease, but also in oncology, where I truly believe we have the opportunity to transform the treatment of cancer. We are planning an investor call later this month to share more with you about our vision and strategy in oncology and latest progress. Let me review some of our important achievements in this quarter. Let me start with Transcon growth hormone or Lonapec somatopoeia. All science tells us that growth hormone needs to remain unmodified to achieve the same mode of action as data growth hormone. The same as industrial growth hormone. And you have heard us say this for years. and FDA reviews of long-acting growth hormone analogs further confirm the science and demonstrate that you cannot cheat nature. If you modify a hormone, you will modify its effect, which comes with consequence. We believe transplant growth hormone may provide a major improvement to daily growth hormone therapy, an alternative that maintains the mode of action of daily growth hormone, addresses overall endocrine health and provides convenient weekly administration. Together, this benefit could potentially lead to better outcomes for patients and an expansion of the growth hormone market. In Europe, we submitted our first M&A filing for Transcon Growth Hormone for the treatment of pediatric growth hormone deficiency ahead of schedule. Our submission followed the agreement of EMEA to our proposed pediatric investigation plan, or PIP, covering children from 6 months to less than 18 years of age. We are pleased by the EMEA decision, because we believe it reflects the unique product feature of Lona PEG somatopoeia, which enables the long-acting release of unmodified somatopoeia. To our knowledge, the approval of our PIP is the first time PECCO, the European Committee responsible for overseeing pediatric drug development programs, has concluded that a development program for a long-acting growth hormone treatment supports the clinical development in children. In the U.S., we received notice that the FDA accepted our BLA filing for transplant growth hormone for the treatment of pediatric growth hormone deficiencies. And we now have a PDUFA date of June 25, 2021. We were pleased to hear that there were no filing issue, and we look forward to continue to engage with FDA during its review. We have also completed and submitted the routine day 120 safety and efficacy update from the Enlightenment trial. We are pleased to report that of the 306 children treated with franscon growth hormone in our phase three program 160 children have completed at least two years of therapy and more than 140 children in the u.s have now been using our novel auto injector for at least 26 weeks successfully with this updated safety assessment the overall safety profile has remained consistent with what was reported with the original BLA file. The observed safety profiles continue to be comparable to that observed for daily growth hormone, and no safety information has been identified that would negatively impact the established benefit-risk profile of Transcon Growth Hormone. Updated efficacy analysis showed that the analyzed height velocity was within the expected range for second-year therapy, indicating long-term efficacy with continued treatment. Building on our objective of creating global clinical ways, we recently announced the filing of a clinical trial notification with the PMDA in Japan ahead of schedule. to initiate our phase 3 RITE trial for the treatment of pediatric growth hormone deficiency. The RITE trial will randomize treatment-naive children with growth hormone deficiency in a one-to-one manner to transplant growth hormone or daily growth hormone. As with our pupil-to-height trial, the primary efficacy endpoint is analyzed height velocity at week 52. A third arm will include treatment-experienced children with growth hormone deficiency. The trials will be conducted entirely in Japan. The target enrollment is 40 subjects in the treatment-naive population and more than 10 subjects in the switch arm. An opportunity to continue in an extension phase will be offered. I'm also pleased to tell you that the global four-site trial of transgrown growth hormone in adult growth hormone deficiency is progressing as planned. In adults, We measure body composition, fat mass, lean muscle mass, etc., and we believe that Transcon growth hormone will perform well compared to daily growth hormone. Finally, the commercial team continues the planned preparation for the expected launch of Transcon growth hormone as quickly as practical after approval. During the coming months, we are looking forward to keeping you updated about the progress of Ascendi's first commercial launch. and our vision of how to develop Transcon Growth Hormone to become the leading growth hormone product in the global growth hormone market. Turning to Transcon P-TAIDS. For transcon-PTH, we submitted ahead of schedule an amendment to our IND with the FDA for the part-weight phase 3 clinical trials, evaluating safety, durability, and efficacy of transcon-PTH in adults with hypoparathyroidism, or HP. We have also submitted regulatory findings to enable imitation of European and Canadian sites for part-weight. Partway Trial is a six-month randomized double-blinded placebo-controlled trial with an open-label extension period similar to our Phase II trial. We plan to enroll about 76 adults with chronic HP who are currently on standard of care, randomized in the 3-to-1 fashion to Transcon P2H versus placebo. At the same time we initiated the PART-WELL phase 3 trial, we announced the preliminary six-month results from the open-label extension portion of the phase 2 PART-FORWARD trial. PART-FORWARD is a global phase 2 trial evaluating the safety, tolerability, and efficacy of transcon PTH in adult subjects with HP. These results were better than we could have possibly hoped for. These data indicate that the Transcon PTA can eliminate standard of care treatment for HP, since 100% of patients were able to remove active vitamin D, and 91% of patients were able to stop both active vitamin D and therapeutic calcium supplement. In addition, and very important for the patient, our results demonstrate continued improvement in measure of quality of life in Transcon PTA treated subjects using SF-36. For those subjects we initiated part forward on the placebo arm. When they switched to Transcon PTA, they were also able to normalize all domains and subdomains on their SF-36 scores. Turning to Transcon CMP. The ACOMTIS trial is proceeding as planned, and today we are announcing the filing in collaboration with Wiesen of an IND to initiate the Phase 2 ACOMTIS China trial of Transcon-CMP. The ACOMTIS China trial is a Phase 2 randomized double-blinded placebo-controlled trial evaluating the safety, efficacy, and pharmacokinetics of multiple subcontainer doses of Transcon-CMP administrated once weekly. The primary objectives of the clinical trial are to determine the safety and growth velocity of Transcon-CMP in infants and children of age less than 11 years with acondoplasia and include cohort expansion of optimal doses. All subjects who completed the trial will have the opportunity to receive Transcon-CMP in long-term extension trials. Moving to our second therapeutic area, Oncology, we remain on track to achieve our final corporate goal of the year, to file an IND or similar for Transcon TLR 7.8 Agonist in December. On November 20, we are looking forward to have a virtual Oncology Research and Development Day, where we will provide an update on our vision in oncology and an update on our two most advanced pipeline candidates. Transcon TLR78 Agonist and Transcon ELB IL-2 Beta Gamma. We will share our vision to create potential best-in-class oncology therapeutics by applying our systemic and intratumoral Transcon technologies to clinically validated parent drugs and biological pathways. As we continue to execute our clinical programs, we continue to build out our global clinical development and medical affairs capability with the hiring of Dr. Mark Buck. Mark joins us as Senior VP of Clinical Development and Medical Affairs for Endocrinology Rare Diseases and will report to me. Mark is a pediatric endocrinologist with 30 years of experience building and leaning clinical teams that has successfully launched innovative pharmaceutical products into global markets, including Janssen and Merck. Mark's experience managing global clinical programs across Europe, Asia, and North America aligns well with our vision, three by three, of establishing global clinical ways to bring our endocrinology rare diseases product candidate to market as fast and safe as possible. Each of the milestones we have achieved this quarter and throughout the year represent significant elements of the company's vision 3x3, our vision to create long-term sustainable growth. Our mission is to develop a pipeline of multiple innovative therapeutics, not just a single product opportunity. We have a powerful technology platform. that we can apply to create multiple product opportunities in multiple therapeutic areas. What all these product opportunities have in common is that they can truly address unmet medical needs. That is what motivates us and drives us, seeing our therapeutic providing benefit to patients, improving clinical outcomes, and fighting to bring them to the patient as fast as possible. This is my measure of success, and I think we can truly consider ourselves successful in achieving our goals to date. We look forward to sharing more with you as we move ahead in 2021 to advance our endocrinology rare disease product candidate to patient and bring our oncology pipeline into clinic. Now, let me turn the call over to Scott for a financial review before we open for questions. Thank you, Jan.
Ascendus Pharma
Turning to our financial results for the quarter ended September 30, 2020, we reported a net loss of 121.7 million euro or 2.31 euro per basic and diluted share compared to a net loss of 25.1 million euro or 0.53 euro per basic and diluted share during the same period in 2019. Now let me run through some of the key components of these results. Research and development costs for the third quarter were 64.1 million Euro, compared to 46.3 million Euro during the same period in 2019. The increase in R&D costs reflect continued advancement of our pipeline, with the primary drivers including an overall increase in personnel and R&D infrastructure costs. And for Transcon HGH or Lonnopeg Somatropin, costs were higher due to manufacturing of product supply, as well as increased clinical trial activities. As a reminder, we currently expense manufacturing costs of lanapeg somatropin as R&D in advance of our anticipated product launch. At the time of product approval, a portion of these R&D costs may be reversed and capitalized as inventory, which will result in a one-time benefit to R&D costs. For both Transcon PTH and Transcon CNP, costs were higher primarily due to increased manufacturing, device development, and clinical trial costs. And finally, costs were higher due to the continued build-out of our oncology therapeutic area. Selling, general, and administrative expenses for the third quarter were 17.5 million Euro, compared to 10.0 million Euro during the same period in 2019. These higher costs primarily reflect an increase in personnel-related IT and other infrastructure costs, as well as expenses associated with the continued build-out of our commercial capabilities. Financial income and expenses include an unrealized loss of 39.6 million euro compared to an unrealized gain of 27.4 million euro during the same period in 2019 due to foreign currency exchange rate fluctuations primarily on our U.S. dollar holdings of cash and marketable securities. We ended the third quarter with cash, cash equivalents, and marketable securities totaling 957.5 million euro. As Yen detailed out, we continue to execute on our goal of building a leading biopharma company with a diverse pipeline of potential high-value product candidates in multiple therapeutic areas. The combination of our values, our validated TransCon technologies, and our strategic Vision 3x3 has allowed us to deliver unique product candidates and clinical results with an expected high probability of success that you have seen first in endocrinology rare diseases, and we look forward to sharing more with you about oncology therapeutic area. We remain on track to achieve our final corporate milestone for 2020 of submitting our first oncology IND or similar filing in December for our TRANSCON TLR78 agonist and look forward to sharing progress on the rest of our pipeline over the near term, including for LONAPEG somatropin, continued execution of the ENLIGHTEN trial, our ongoing long-term phase three extension trial of subjects who completed the height and flight trials, Continued execution of the Foresight Trial, a global Phase III randomized controlled clinical trial in adult GHD, and execution of the Right Trial, a Phase III randomized controlled clinical trial in pediatric GHD in Japan. For Transcon PTH, continued execution of the Phase II Path Forward Trial, which continues to retain 58 subjects in the Open Label Extension. execution of the PATHWAY trial, a North American and European Phase III randomized controlled clinical trial in adult hyperparathyroidism, and further global clinical reach and label expansion for Transcon PTH in 2021. For Transcon C&P, execution of two randomized controlled Phase II clinical trials in achondroplasia, the ongoing ACCOMPLISH trial, and the Accomplished China Trial, which is being conducted through our strategic investment in Visa and Pharmaceuticals, for which we recently filed an IND. And lastly, in our oncology therapeutic area, as mentioned, we plan to submit our first oncology IND or similar filing in December of this year for our Transcon TLR78 agonist, followed by an IND or similar filing for Transcon IL-2 Beta Gamma in 2021. With our extensive clinical development programs, The recent addition of Dr. Mark Bach to our team has strengthened our ability to achieve global market leadership with the advancing of our endocrinology rare disease portfolio and the future potential launch of our product candidates, if approved. We look forward to seeing you all virtually at our upcoming Oncology Research Day on Friday, November 20th at 12 noon Eastern Time. Operator, we are now ready to take questions.
Operator
Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Jessica Fye with JPMorgan. You may proceed with your question.
Jessica Fye
Hey, guys. Good afternoon. Thanks for taking my question. As we approach the launch for TransCon Growth Hormone, Can you share a little more about how you're thinking about the commercial strategy? Do you anticipate being able to launch immediately post-approval or should we think about any lag for whatever reason? And how should we think about the timeframe within which you'll be able to get on commercial plans?
Scott Smith
Thanks, Jess. It's always great to hear you. And first of all, I'm really pleased to have Jesper here in the room so he can take over some of the questions. But I think what we have said currently, and this is what we are executing on now, and this is what we have shared with you, is our plan for the U.S. So when Jesper talks, he will mainly be focused on the U.S., and we will, in later states, come out with how we really are going to execute also in the upcoming hopeful, expected European approval, which we actually are, in some way, seeing also coming near now. So Jesper, will you tell about the overall strategic plan related to the U.S. market?
Jess
Absolutely. Thanks for the question, Jessica. I have spent more than 30 years in the area of endocrinology and growth hormone, and I can only say I'm super excited about the Lonapeg Sonotropin opportunity that we're having in the U.S. I certainly think it can be transformational, going from once daily to once weekly. is what all patients and parents and caretakers will look forward to. We are in process of hiring in the people to be ready to launch shortly after the PDUVA date, which is the 25th of June next year, as you know. So shortly thereafter, we will hopefully be up and running with the entire team. The level of management under me is in place, and we are recruiting in according to the plan. and we will certainly be completely ready and full of energy when we come onto the market. You know about the commercial strategy. Commercial is the commercial market. That's what it's all about in this segment, and that's where we will be focusing. And of course, pricing, which I also guess that someone will talk to, is that we will make that decision at the point of time of having the approval of the product before the launch.
Scott Smith
Adding one comment to Jesper is from the manufacturing perspective, yes, we are ready to launch exactly after we're getting our approval. We have the capacity. We are producing the drug. We are there. So we are not having a lag period where we need to go out and start manufacturing for it is already established.
Jesper
Great. Thank you.
Operator
Thank you. Our next question comes from Michelle Gilson with Canaccord Genuity. You may proceed with your question.
Michelle Gilson
Hi. Thanks for taking my question. Could you maybe talk a little bit about the CMP trial and the overall program? The current accomplished trial is enrolling patients 2 to 10 years old. You know, do you have plans to go to bring TransConCMP into younger patients? And I guess how young would you anticipate needing to go to address some of the more debilitating comorbidities associated with achondroplasia? And then could you remind us why CMP is the right approach in achondroplasia versus FGFR inhibition?
Scott Smith
Thanks. Let me basically start from your last question. CMP has been known for 20 years or more. There has been extensive research on CMP. There have been extensive knowledge about how CMP basic in a very, very cell-specific manner can make an inhibition of the hyperactivation signaling you have in the FDR3 receptor in acondoplation. It has proven that if you have extensive concentration of CNP, because there is, in the world, patients that got bored either with a continuous activation of the NRB receptor or having a high concentration of CNP. Just looking on all the knowledge we have from the scientific literature and what we have seen in our preclinical findings, basically the CMP molecule is an extremely safe molecule and the main effect on CMP is basically to provide in growth disorder, a possibility to over call the hyper signaling pathway of the FDR3 pathway in a safe, safe manner. You can basically say also from cardiovascular perspective, everyone knows that CMP is basically also preventing and protecting cardiovascular diseases. So it's basically a multiple hormone that have a lot of benefit. Then you can say, why if tyrosine 3 kinase inhibitor have not even been successful? Why have they not even been successful in oncology? It's because it's impossible to make them specific enough. So out from that perspective is that it's really hard for me to imagine a compound and developing a tyrosine kinase which have been broadly tried in oncology and have already and always shown high levels of toxicity compared to the benefit-risk, how will it be possible to apply that basic into a setting of acondoplasia, where you don't want to have a general inhibition of FDR1, FDR2, and FDR3, because that is what you get the tyrosine kinases inhibitor. Even you call it tyrosine 3 kinases, basically it has the same inhibition of all 3 kinases. And we know how essential the different kinases, tyrosine kinases, are in the basic, in the development of a child and also in an adult setting. So this is basic when we analyzed for about 5-6 years ago, we only saw one safe possibility And it also has been proven to be very safe. Everything what we have seen with CMP is that it's a safe manner to control the hyperactive pathway of FDR3. Going back to our overall program, as I have said before, you can conduct phase two trials in completely different ways. You can have a single arm trial and then compare it to historical data. And then you basically mitigate the risk from a Phase II into a Phase III setting. What we did in this case here, we basically not only have one Phase II trial, we basically have two Phase II trials. Both of them are placebo-controlled, double-blinded. Meaning is that having two independent Phase II trials, we basically will be in a position that we can analyze not only for efficacy, where we really believe because of our continuous exposure of CNP, we can have a continuous inhibition of the FDR3 pathway that we will see major outcome improvement, not only to height, which we believe is a parameter that is easy to measure, but we really want to address the comorbidities of this disease. This is why we're developing Transcon-CNP. And this is what we have now in two Interrepresented Phase II trials, where one, what we call Accomplished China, basic is what we call cohort expansion, where you have an optimal dose and you will select a cohort in many more patients when you have the optimal dose. The other part, will we go back down to newborn? Yes. This is also what we basically are fighting on now, is to have the opportunity to treat children from newborn. If we need to address element of spinal stenosis, we need to initiate the treatment basic as early as possible. This is the only way you can avoid before you basically are closing up the bone fusion. And that is happening basically in the first two years of life. And this is why we need to go down to be newborn to really have the optimal way to address comorbidities.
Michelle Gilson
So have you, since you are initiating the phase two trial in China, have you chosen the doses that you're planning to expand?
Scott Smith
We're still doing dose escalation, and we're learning, and we want to be quite sure we do it right. And that is basically what we're doing now. We basically want to ensure that we see the right growth velocity, we see the right safety before we really go out to what are called broadly and cohort expansion. So we are in a position that we're following this trial, basic, month by month to be sure, and also potentially we will still enroll more cohort to ensuring that we basically have the optimal dose for treating this patient group.
Michelle Gilson
Okay. Thank you so much for taking my question.
Scott Smith
Thanks, Michel.
Operator
Thank you. Our next question comes from Joseph Schwartz with SBB Lyric. You may proceed with your question.
Joseph Schwartz
Hi, I'm Julie, dialing in for Joe. Thanks for taking our question. My first one's on CNP, TransCon CNP. I was wondering what your thoughts are on the FDA possibly wanting two-year data in different age groups for achondroplasia based on a competitor's filing. And assuming the FDA wants two-year data, I was just wondering, you know, does this impact your strategy for TransCon CNP?
Scott Smith
This is a great question. But I believe also in the data. And the data saying is if you have a small marginal effect where you have one centimeter, potential, it's some way hard to see and believe that UBASIC will like that continue two years. Because UBASIC had a product that could do the same thing, which are approved in Japan. You can use growth hormone. And your basic will get one centimeter more in growth velocity in basic in an acondiplasia patient group. But it has been very, very hard to prove that continues over time. And I think this is one of the reasons why you potentially will have a kind of scientific question, because there already had been established clinical trials and applying growth hormone into achondroplasia. Compared to our situation, Dana, you can comment about how you see that and how it could potentially impact us.
Dana
Sure. I think that the FDA guidance and reviewing the output of that advisory committee was a recommendation that two years is a good interval. you know, to assess safety as well as the continuation of efficacy. I think that the way that you come up with the two years, you know, may be somewhat flexible. I believe that, you know, they don't articulate for specific two years of placebo controlled trials because there was concerns in that advisory committee that were expressed about keeping these kids on placebo or, you know, that long of a time. So, but I think that, you know, there'll be a way, you know, within the context of our current program for us to be able to accumulate, you know, a certain number of patients at two years so that it wouldn't really impact our, you know, potential plan for filing. Does that answer your question?
Joseph Schwartz
Yeah, that's very helpful. Thank you. And then for Transcon HGH, based on your market research, for your launch, assuming approval, how do you anticipate patrons switching to TransCon HGH from Daily Growth Hormone? Are you expecting a gradual ramp for when patients switch over, or are you detecting a lot of demand from patients ready to switch and it could be more aggressive?
Scott Smith
I think to step one, step back before Jesper goes in. That was a good reason. why we made two phase III trials. One phase III trial that was named patient. The high trial was the basic what we call a major part of our regulatory filing related to efficacy and also safety. But we also made a switch trial with the same number of patients because we wanted to prove that we basically have a safe algorithm for also switching patients that is coming from established daily growth mode. And we did that because we saw there was an investment to ensuring that the physician would have the sufficient knowledge, sufficient understanding, and see the benefit of what they could achieve by both taking the new patient and also switching patients. But you also need to remember that a typical patient The vast majority have idiopathic growth hormone deficiency, and they're currently only in a treatment about three to four years before the basic are out of treatment, and then you basically recycle the entire patient population in less than three to four years. But Jesper, you can comment about how much we expect to focus also on respiratory patients.
Jess
Absolutely. First and foremost, it will be a push and pull strategy from our side. Patients that are newly diagnosed is, of course, the first ones that we will hope to be putting on Lonapeg somatopine. And then, of course, we will also see switches. Switches very much also have to do with a very, very important point of market access. And we anticipate to get a gradual market access as we come into the market on the basis of the negotiations that we'll have with the PPMs and health plans. but we certainly believe that for new patients it's really a great start. For patients that are currently well-established on growth hormone, less likely unless we really get that sort of market access that we are aiming for and believe that we will get with a new, really innovative way of treating patients going forward. As said, I spent more than 30 years in this area, and the colleagues that we have attracted also have a very, very strong background in not only in growth hormone, but also in endocrinology. From market access to sales and marketing, everyone is in place, operations. So we'll be up and running in a not too distant future, and I cannot wait to present end of next year.
Operator
Thank you. Our next question goes from Tadeen Ahmad with the Bank of America. You may proceed with your question.
Jesper
Hi, thanks so much for taking my questions. Good afternoon, guys. I wanted to get your thoughts on how you're thinking in general about receptivity to pricing. So for growth hormone, you've obviously demonstrated with clinical data that you are superior to daily treatment. And with that in mind, I guess I would ask, why wouldn't you want to price at a premium to daily growth hormone? And then I have a follow-up.
Scott Smith
I think that question is so clear that Jesper will take it.
Jess
I mean, of course, pricing is what it boils down to, but it's not the WAC price, meaning the list price that we're going to aim for. It's the net price that is of true interest here, and that, of course, boils down to the negotiations that we're going to have with the PBMs and health plans. But as you're pointing out, we're having a superior product, and of course, I dare you will anticipate to demand a superior price. I mean, I have never seen Apple introducing a new phone that was cheaper than the previous phone that they put on the market.
Jesper
Okay, so with that in mind, how long do you think it'll take for the switch patients to convert to your product? I would assume that for new patients, doctors would prescribe Transcon right away. But for the current market, can you talk to us about what you think the potential dynamics would be for anybody who might be comfortable with daily treatments, whether it be the parents or the referring physicians? How should we be thinking about that?
Scott Smith
Thanks. First of all, Christine, the patient dynamic is that you switch basic old patient to a cycle in three to four years. So if you talk about switch and the impact on switching pacing, it's basic for all the modeling Jesper have done, everything what I've seen for Jesper's organization, basically have only an impact on the first two, two and a half years. Because this is where you basically can switch some patients over. Because after three, four years, it's basically NTX you're talking about. And this is where you also need to see that from the modeling perspective is that switch patient is something that impact the first one to two years, but after three, four, it's only N-T-X.
Jess
I would also like to add, one has to just take the parent perspective and child perspective. For many of these patients, it's a daily challenge to inject their growth hormone. And therefore, to be given the opportunity to get it once weekly is really what the market has been craving for for a very, very long time. As long as I have been in this industry, which is over 30 years in endocrinology since I sold my first growth hormone, I firmly believe that a once weekly is what you truly, truly want. I used to refer to the patient as little John, and little John will certainly appreciate only to go through that hassle once a week. If you think about it, when I started in growth hormone in the 80s, we always said you treat with six times and then you take Sunday off. And that was truly because of that sort of relaxation. Often in those days, it was intramuscular injections that you ended up getting and so on and so forth. And in this instance, little John would really appreciate getting it once weekly. Also because when the Children get to an age where they used to stay over with friends when they are going to grandmothers, grandfathers, what have you. They will appreciate not having to go through that sort of injection. So from my point of view, we have best-in-class product, and we will be first to market in the pediatric segment. So I cannot see ourselves not doing a real good job. It boils down to market access. There will be some NDC blocks from certain plants. But that will also overcome, again, that's the push-pull strategy that I'm thinking of in this respect.
Operator
Thank you. Our next question comes from David Liebowitz with Morgan Stanley. You may proceed with your question.
David Liebowitz
Thank you very much for taking my question. Given that there are other long-reactings out there for growth hormone, they did not achieve superiority. but how is the communications ongoing right now with the community on those products? I guess how viable are they as a competitor in your mind? And also with respect to the growth hormone, clearly the adult data is coming up at a subsequent point, but is there some level of inquiry on that and potential for off-label use? in that population ahead of data in adults?
Scott Smith
I think you need to separate the two different indications, pediatric growth hormone deficiency, adult growth hormone deficiency. First of all, the doses you are using is complete difference, four to five difference higher in the pediatric indication. the demographic and the cause of the disease is quite different. Where the empiric growth hormone deficiency, the vast majority is idiopathic growth hormone deficiencies and idiopathic as we always call it. If we don't know exactly the cause, we call it idiopathic because it sounds better for the patient. If you go over to the adult, they're coming in a completely different way. Typical, it could be coming from trauma, it could be coming from the oncology setting and other things like that. In the pediatric, there is a completely different kind of doses. There's a different way that you need to have safety aspect. So having one product approved in the adult, which are the small, small segment of this here. This is under 10% today. Under 10% is the adult market today in the growth hormone market. It will be highly, highly unlikely that anyone can prescribe that into the pediatrics segment. So let me then go to the competitive landscape. So Jesper said it in the right, good manner. We're not only first to market. We also, what we know, have seen best in class in the pediatrics segment. And that is the pediatric market is 90% of the entire market. So if you look on our product to only one other product that is coming behind us, the one that's coming behind us nearest is the Opco Pfizer. And we have to date, at least I am not seeing any filing of the BLA yet. I expect it's coming because people are saying it will be filed, but at least we have not seen the filing yet. The other point that I want to raise up is that this product is a product that has basically proven to fail in another phase 3 trial, in adult growth hormone deficiency, where it basically proved that you could not get the tissue distribution, could not get the effect on truncal fat that you basically could have significant compared to placebo, which none of other growth hormone products ever have failed. So it basically has proven that you're not providing the same endocrine benefit that you see with daily growth hormone. This is the product we are talking about, where we have shown, we have seen the integrated benefit of all endocrine benefit with our Transcon growth hormone product. At the same time, waiting for a filing the only information we basically have seen of this product it's nothing to what really at least from my perspective can make any kind of judgment is this is really a product that have the benefit you want to see because nothing has been disclosed which make me always wonder why going back to nova which come on they have not public said that the BASIC have enrolled the patient to the Phase III trial. So you can see how from that perspective there are at least multiple years behind us now. For the adult segment where NOVA got approved, there is also proof there that BASIC only got half the effect on the primary endpoint. compared to daily growth tomorrow. And you can read that very, very easily out from the FDA document. It's even said in the label, you can look at it in the label, that it's only getting half of the effect compared to daily growth tomorrow. Because the real competitor, the real benchmark, is not placebo. It's daily growth tomorrow. You are in an established treatment with daily growth tomorrow. Would you go out and then only get half the effect? This is my question.
Jess
If I may add in this context, so far we haven't seen any long-acting growth hormones on the market. We're still waiting for that. And if I may just push the way I've always seen, I never talk about competition. I talk about our own product. And if you want to look at the success in this industry, the first and foremost is you hire people with the right background because it's all about the employees and the people that you engage in. that has the true vision of what you want to come through with. Second, it's the company. It's the reputation of the company. And they are essentially in a very strong position having free products in the pipeline for endocrinology. So the endocrinologists and people that are treating growth hormone patients, PTH patients, and as a general, they will see we are not in for the short. We are in for the long and really becoming the partner of choice in the area of endocrinology. And first, thirdly, comes the product. And again, don't talk about the other company's product. Talk about what it is that we are offering. And we are offering asomatopine at 191 amino acids that are truly standing out in a once-weekly setting. So as far as I'm concerned, from a commercial point of view, we are at the best possible place we can be when coming up with our growth hormone after the 25th of June next year.
Operator
Thank you. Our next question comes from Jim Birkenhoff with Wells Fargo. You may proceed with your question. Yeah.
Jim Birkenhoff
Hi, guys. Congrats on all the progress. I guess a couple from me or maybe a two-part. Just on manufacturing, could you maybe just give us some comfort on, you know, your level of confidence in the manufacturing? We've seen in other areas manufacturing be something that comes up late in the review cycle. And so, you know, what can you – share with investors to give confidence that that's not going to be an issue here. And then just on the commercial launch, what's the frequency that patients typically see their physicians? And do you have some benchmark for expected switch rates? Are there other products that have had similar differentiation that you could benchmark off to say, you know, we expect 50% switch like enhanced products in Europe or 90% switch like Darzalex SubQ? What's the benchmark for you guys? That would be the second part.
Scott Smith
Jim, you're right. When you see the stream of CMNC problem you often see in the end of the filing, we actually took some of the precautions. And I think the most important precaution you ever, ever can do when you talk about a biological compound is that you are applying the same manufacturing site, the same process, the same scale between phase 3 and launch. By doing that, you can basically prove that the patient got exposed to exactly the same compound that you will basically have in your lungs. So there are no changes between the phase 3 material and the lungs. By doing that, you basically avoid all, I would say, 90% of the discussion you have and you're getting issue with later on. The last 10% is reflecting is the plan that we're producing is basically living up to the manufacturing capabilities, systems, quality system, everything that you basically would expect for a product that is biological. to our best knowledge and what we know is a place that has been already FDA pre-approval inspected and other elements like that. So we believe that the way we basically built the case by not having the risk of any kind of manufacturing change between phase three and the launch was basically to minimize any risk that we could have by running into a CMC manufacturing issue during the regulatory approval. Going back to the switch thing, I think as we discussed before, it's basically something that will have an impact on the first three, four years revenue because the entire patient population in the US will be switched from new initiation in the treatment in less than three to four years. And I believe that, Jesper, you can comment about how we see the switch, but we see that we have conducted a trial and we believe there will be a need for having basic patient can see the benefit also for switch patient. Will it start with the patient that potentially where you don't see the right outcome because you don't know either it's because they are not compliant or it's a difficult to treat patient? It could be that you potentially will see a kind of the vast majority of the patient that's switching is patient group that don't see the right outcome with daily growth hormone.
Jess
If I should just add, I mean, the segment that I was thinking of when you asked the question was the GLP-1 segment where you saw once daily and once weekly. So use that as an analogy. But I think that there are three factors that you really have to think about in this context. The first and foremost is we are going to come up with an autoinjector, which will differentiate us highly not only on the compound or the growth hormone, but also on how you're going to receive the growth hormone. The second point, which I think might be even more interesting, is there has currently been seven players in the daily segment. And what we have seen when we are looking at the competitive landscape is one by one, they're basically withdrawing from the growth hormone market, not physically going out withdrawing the products, but reducing their presence in the marketplace. They do no longer have sales forces in place. they start to not provide hops, samples, and so on and so forth. So you're seeing a changing environment in the data segment already by now. And that's lastly where I see us again coming in, having people with the right sort of entry understanding of the market with the people that we have hired in so far that has years and years of growth hormone background that will really put us in the right place. So with those three sort of factors to look at, I think we are in a strong position to do very well. Again, the last thing that is not talked so much about, I think, is the market access. It all boils down to what are you willing to do in this context in terms of pricing. And I think it's not the fast penetration you just should look at, it's what I call the area under the curve, i.e., what is the long-term valuation that you're creating by coming up with something as new and innovative as an auto-injector, as a product that is once weekly instead of once daily.
Operator
Thank you. Our next question comes from Amitia Young with Kantor. You may proceed with your question.
spk06
Hey, guys. Thanks for taking my question. I just wanted to talk a little bit about the PTH kind of feedback that you've been hearing from, you know, experts and KOLs as you kind of have the information disseminates. And then what do you think are some of the challenges from an educational basis in kind of educating the population?
Scott Smith
I think that the feedback we're getting is basic first time in their life where I feel this kind of enthusiasm for really helping patients. Patients where we believed that they had and situation where even really because of the symptoms, short-term symptoms, where the quality of life was extremely low. I'm not talking on long-term risk. I'm not talking about other things like that. Where patients basically coming back and the physician telling us, this is one of the most positive trials I've ever been part of because the physician basically are getting their life back. And this is what we got indicated in a statistically meaningful manner through our SF36, where you basically can see just where they start. They start in a way where you basically see the quality of life is down in a level of what you see in chronic heart diseases or other things like that that it perhaps is more well known. But it's mean and indicate why 40% of the patient cannot work, 40% are basic on part-time. And you're seeing them getting a normal life back again. The explanation of that is that only because we stabilize the calcium, Or it's the combination of the direct CNS effect we believe potentially is a combination of both of them that basically give them lack. And then you can say on top of them, the basic will be in a position that the long-term complication, everything for cardiovascular because of the calcification of soft tissue and other places, cataract and other things, ganglia, and also the kidney and other things like that is providing them a life where your basic are providing a hormone replacement that is restoring the normal physiological level of PTH. I believe it's so game-changing as when we basically got what are called basal insulin that basically provided to patients with diabetes in a situation, type 1 diabetes, at basal insulin level during nearly 24 hours a day.
spk06
That's definitely... And for the IND amendment with the FDA for the Pathway Phase III clinical trial, have you guys talked about kind of what the details are around the amendment?
Dana
Well, we actually submitted it to FDA, and we're waiting for them to give us their feedback, even though it was based upon the communications we'd had with them. But I think there's still a few details that they just, you know, need to get back to us on. But... I don't think that there's anything, you know, substantial in terms of, you know, what we've committed.
spk06
Okay, great. Thanks.
Operator
Thank you. Our next question comes from Leland Kershaw with Oppenheimer. You may proceed with your question.
Leland Kershaw
Hey, thanks for taking my question. I wanted to ask with the IND filing in achondroplasia in children, in China, I wanted to ask what the accessible market opportunity you see is for perhaps for the Chinese market for the CNP? Thanks.
Scott Smith
Yeah. I actually believe that is a dual reason for what we're doing. And I'm sure the primary reason is that we also want to ensuring the benefit of the patient population in China with air contraplasia, hypo contraplasia that can get access to treatment. But the other point for also us is that it's a way where we basically can accelerate the program because we have access to a large centralized patient population where we basically can extremely fast recruit a lot of patients into our second phase two trial on an optimal dose. So from that perspective, you can see this is why we took this strategic decision to be part of Reason Pharmaceutical, not only to give us a reason to basically commercialize all our endocrinology product opportunities, Goptamone, PTH, CMP in Greater China, the second largest pharmaceutical market in the world, but it also gives us unique opportunity as a company specific in the rare disease setting to conduct clinical trials in a speed and quality manner. because we are really integrated into reaching everything from quality to databases and other things like that, we basically can conduct clinical trials, which are very difficult for any other company that they don't have this kind of setup to conduct in greater China.
Leland Kershaw
Thank you, and that's helpful. And another China question. With the phase three on the growth hormone side up there running,
Scott Smith
running there for the better part of a year at this point just want to know if you could provide us on any updates on the progress of that phase three in the growth hormone deficiency this is going exactly as a plant and you know it was a basic a copy of our hydride with a 150 patient in the same randomization same endpoint basic it's a total copy of what we did in our hydride and And currently, there are recruiting, and I believe, to my best knowledge, there's more than half of the patients of the entire trial have now been recruited.
Leland Kershaw
All right, great. Thank you very much for taking the questions, and congrats on the great progress. Thanks.
Operator
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
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