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Operator
Good day and thank you for standing by. Welcome to Ascendis Pharma Q2 Earnings and SkyTOFA approval call. At this time, all participants are in a listen-only mode. After the speaker's 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 is being recorded. If you require any further assistance, 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.
Ascendis Pharma Q2 Earnings
Thank you, Operator. Thank you, everyone, for joining our conference call today. I'm Scott Smith, Chief Financial Officer of Ascendus. Joining me on today's call is Yen Mickelson, President and Chief Executive Officer, Jesper Hoyland, Global Chief Commercial Officer, Dr. Dana Pizzuti, Head of Development Operations and Chief Medical Officer, 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 commercialization and continued development of Skytrofa, 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 Skytropha and our pipeline product candidates, and statements regarding our regulatory filings. These statements are based on the 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 most recent annual report on Form 20F. Skytropa was approved by the FDA today for the treatment of pediatric patients one year and older who weigh at least 11.5 kilograms and have growth failure due to inadequate secretion of endogenous growth hormone. Otherwise, please note that our product candidates are investigational product candidates and have not been approved for commercial use. As investigational products, the safety and effectiveness of the product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding Skytropha and our product candidates shall be viewed as promotional. On today's call, we will walk through a presentation available on our website to discuss the FDA approval of Skytropha We'll discuss our second quarter 2021 financial results and provide further business updates. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Yann Mickelson, our President and Chief Executive Officer.
Scott Smith
Yann Mickelson Thanks, Scott, and good afternoon. Sometimes when you wake up in the morning, you some way think about what day will bring. But I have to say, today was one of the days where you someway had an agenda, you adapt to it, like Darwinism says, you need to adapt, this is the best way of survival. And I think we are in a great, great place today. And I have to say, if I can see you, you will see a very, very happy end, that basically are so happy what we have achieved today. But never forget, At Ascentis, the key element in our core values is to make a meaningful improvement in patients' lives. We feel strongly that with our focus on science and data, we can use our innovative Transcon technologies to develop new and potential best-in-class products that address major unmet medical needs. With the approval in the U.S. of Transcon Growth Hormone, or Skytropa, for pediatric growth hormone deficiency today. We are one step near to fulfill our vision three by three to become a leading biopharma company. Before I provide a general business update related to our advancing broad pipeline of now more and more product opportunities, I would like to give a short update related to the approval of Skytrooper. As Scott said, The slides can be found on our website and I would like to refer to this slide. Going to slide number three. GuideProver, our first product developed with the Transcon technology is now approved in the US. The Transcon technology is a technology we have taken basic from the design to preclinical, to clinical, and now the approval in the U.S. At the same time, it's the first approval of the Transcon technology, but it's also the first FDA-approved one-sweet product for pediatric growth hormone deficiency. And we're really proud about it. When we go to the next slide, and I actually think you can see the label different places, You basically will see what we have seen out from the label is basically what we basically could hope for, and it's basically reflecting the science, the clinical data we have received with it. Today, because of time, I will not go through the entire labeling discussion, but I hope you will have the opportunity to look at it, because everything starts with the mode of action, where basic are describing how we releasing and somatopene, the same as daily growth hormone, in going to the right efficacy, it go to the right safety. And we feeling really, really confident with the approval and the labeling we have. We have a strong fundament to build up Skytropa Transcon growth hormone to be the leading brand. But it has not been an easy journey for the patients. If you go to slide five, I often have given you this discussion. It has been possible to develop a long-acting product that basically providing and addressing the unmet medical needs specific you have in a pediatric population about a daily injection. And despite 30 years clinical development, trial development by different kinds of concepts. Currently today in the US, in Europe, in Japan, all patients with growth hormone deficiency is treated with the same entity that actually came into the market in the 80s. There has been advancement in pen devices. There has been advancement that one single product opportunity also could make room simple to a stability. What we see with Skytrover on the approval today, this is the first once weekly opportunity that basic are providing what we call the same entity that we see in daily growth hormone. But we also have built up what we call optimal element for the patient like an auto-injector, which facilitates that you have room temperature induced stability. When I talk about all clinical programs that support the approval on SCARTOFA, it's built on basic, the HIGH trial, the FLIGHT trial, and the ENLIGHTENMENT trial. The HIGH trial, just to sum up is where we really had clinical trials with new patients. We also had a switch trial in the flight trial, and we continue in the enlightenment trial to generate long-term data, how the benefit of our product are really developing on long-term basis, both related to efficacy and safety. That is our commitment really to ensure that we're building up the most comprehensive clinical program as support of this approval. The high trial, as you recall, was a direct comparison to a daily Glutamone at the same dose. And we randomized the patient for two to one. And it's basically the main element in the approval related to efficacy. In slide 8, you can see the result for it. And we saw and better analyzed high velocity at 52 weeks, illustrated from the statistic perspective on the confidence interval. Going to the safety, and when you talk about pediatric treatment, safety is extremely important, as in all other treatment. But when you think about that you have established a safety from a daily growth hormone, it's very hard to believe that you can compromise that. And what we saw in the summary of adverse events and everything what we looked from we basically had a similar profile like Daily Growth Thermal, including hemogenic profile. Now we're coming to the next stage. We don't want to develop Transcontinental Growth Thermal to a product addressing one single geographic region. We want to develop Transcon-Globetamone up from a global commercial strategy. We have already established how we really want to address the two largest commercial markets, the U.S. We are building up our own commercial organization. We do it because we have a pipeline. We have a pipeline of rare disease endocrinology products multiple products in the same therapeutic area. We are in a position that we are ready there and in the next few slides, we basically will have a presentation from Jesper that will go in and go more in detail. But before I start, I would like to give you the perspective of the growth hormone market. We see the growth hormone market in a global setting of around more than 4 billion. The U.S. market is around 1.3 billion, where the pediatric growth hormone estimated is about 700 million. But we've also seen that there's a market that's been highly fragmented with multiple products with basically the same product. And this is where we believe the market is really primed for disruption, primed for innovation that has been lacking for 30 years. And that is what we come with. And this is why we believe we have a possibility not only to improve the treatment, but we also have a possibility to improve and expand the market segment. Jesper, will you go over and talk more dedicated related to the U.S. commercial effort?
Yann Mickelson
Absolutely. This is the moment of truth for me. I have to say that I've been waiting for more than 30 years to this very moment, so it's very emotional. I sold my first growth hormone back in 1988. And even at that point of time, everyone was saying, why can we not have a once-weekly growth hormone for little John, for the patient? Now it's done. With Skytropha, we truly can shape the market and change the market. For me, myself, who have spent my entire career in the endocrine space, I can only say this is truly the first commercial launch that we'll make with Ascendance and with Skytrover, and it will pave the way for the success that we have been waiting for. And you can ask me then, what are your ambitions? And I can only say to drive for market leadership. Market leadership is the absolute term because then you determine what the market should look like. And there are some pillars as a part of that. that is pointed out at the slide that you hopefully see in front of you on slide 12. First, you build credibility. You hire the right people who can do the job. That's done. Then you realize market access. We are in process of working to get the market access that we need for Skytrofa. Then we also need to motivate the caregivers because at the end of the day, you're going to have the world's best drug. If you do not have the patients and the caregivers engaged into it, you will not make any strong stripes. We are working on that and we are in the process of doing that. And then, of course, all the healthcare providers we are working on. One of the first efforts, if you go to slide 13, that we have been working on is building the educational efforts to truly believe what this outgrowth GHD stands for. We launched that back in February, and as we are working on it right now, we have more than 100,000 unique visitors to our site. That would take as a sign of the huge interest that is for Sky Trova and for Lona Pex or Metropin. We strongly believe that we're coming out to the market and we can make the difference. We're also very fortunate in a way because the U.S. market, and now I'm talking or speaking to slide 13, we are addressing the pediatric endocrinology segment, which is relatively small. We're talking about 1,400 prescribers in total. And it's a very concentrated market. About 80% of all prescriptions come from about 20% of the physicians, and we are certainly going to address that market. I am absolutely certain that we are going and doing the right steps going forward for us to be in the right place. So for me, with the team that we have built with my colleagues, we are absolutely ready from this moment on to move forward. We have been waiting for it. And now is the moment of truth, as I said. One of the key components for us is going to be the Center Signature Access Program, ASAP. And it has different elements to it. All the colleagues that I'm working with has a long, long tenure in the area of endocrinology, in the area that we are going to work in, but certainly also in the area of the pharmaceutical industry. So we know what it takes. to build the true access to the market. It takes patient enrollment. We are working on that part. It also takes motivation and access. And all these components were put together in the program of ASAP, of the Ascended Signature Access Program for Skytrofa. And I really, really feel comfortable where we are right now. And I cannot wait. to meet all of you going forward and do the work that has to be done from now on. We have staggered the engagement with the colleagues, so we took on the first and foremost important ones, and now we're going to hire the rest of the team on board, so we have also financially been very student to what we are doing. And I do believe that we are in the absolute spot where we want to be. And with that in mind, Jan, I would like to pass it over back to you for you to expand on all the things we have been doing even outside of the U.S. and with Skytropa and all the preparations that have happened. But thanks a lot for everyone to listen. I cannot wait to see you in the not-too-distant future at actual conferences.
Scott Smith
Thank you, Jesper. A key part of our vision 3x3 is our global clinical read and label expansion. In Europe, we expect a decision from the EMEA Commission on our M&A for transplant growth hormone for the treatment of pediatric growth hormone in the fourth quarter of this year. In Japan, we continue to enroll patients in the 40-subject Phase III right trial for pediatric growth hormone deficient. And in China, Leasing Pharmaceuticals completed enrollment of this phase three clinical trial of trans-con growth hormone in children with growth hormone deficiency in March this year. We also have the global phase three foresight trial underway for adult growth hormone deficiency to support our planned label expansion for trans-con growth hormone. Looking past the foresight trial, we expect additional studies to support our effort to expand the label beyond pediatric and total growth hormone deficiency. Going to the last slide, and it's going back to where I started with our vision about the patient. And this is why I go to work. This is why we're living in Ascendis. It's the stories from the patient, our interaction with patients, not only in the era of growth hormone, also in the area of HP and other diseases we are working with. And we find the change we can do for the patient one of the most important part of our journey as at Ascendis. I will move over to the oil pipeline update. I will start first with Transcon PTH. Transcon PTAs, which has the potential to be the first hormone replacement for the treatment and HP. In the US, Europe, Japan, South Korea, and China, there are around 400,000 patients just in these five regions. And we are dedicated to get Transcon PTAs available to as many of these patients as fast as possible. From our Phase 2 study and now the 58-week open label extension data, we are seeing exactly what we expected and hoped for. All the benefits of physiological PTA levels were realized, including normalization of serum calcium, serum phosphate, urinary calcium, bone turnover, and quality of life. We have achieved this promising result while essentially eliminating standard of care treatment in these patients. The 58-week results demonstrate the durable response and well-tolerated safety profile that we hope for with Transcon PTH in adult HIV patients. What is really exciting is that 58 patients continue to remain in the open-label extension I really believe this shows the positive impact Franscom PCAS is having on these patients' short-term symptoms. We are hearing from patients and providers that patients' lives are improving, that patients can now become active again, can return to their daily activities, including work. With our Phase 2 Path Forward data, We have seen how adult HP patients may benefit independent of background treatment and course. The experience with Transgrown PTA may lead to better understanding of the unmet medical need. Later this year, in the fourth quarter, we expect to have 84 weeks top-line OLE data from path forward. In our phase three trial, 82 adult subjects have been randomized and dosed in North America and Europe. The enrollment includes leading influential clinical sites in both geographics. The demographics are similar to those in our Phase II trial and includes a broad representation of non-surgeon HB subjects, such as primary idiopathic hyperparathyroidism, DDoS syndrome, barocat syndrome, and AES-1. We expect to announce top-line results for the phase 3 trial in the first quarter of 2022. And if successful, I expect to submit an NDA in mid-2022. In Japan, we announced the acceptance of the clinical trial notification and the initiation of the Partway Japan trial, a single-arm Phase III trial of Transcon PTH in a minimum of 12 adult Japanese subjects with HP. In Greater China, Leason has initiated the Phase III Partway China trial of Transcon PTH in patients with HP. The design of the Partway China trial mirrors the design of the partway trial. As you can see, we are taking a global clinical approach with Transcon PTH. We believe the data being generated is driven by the science in establishing Transcon PTH as a replacement therapy with the potential to be first-line therapy for all forms of adult hyperparathyroidism. Turning to Transcon CMP. We are trying to provide an update on our clinical program in the third quarter of this year. As you know, two randomized double-blinded placebo-controlled phase 2 trials in children aged 2 to 10 years old are ongoing. The first, the accomplished trial, is a dose escalation of 12 to 15 subjects in each cohort conducted mainly in North America, Australia, and Europe. The second, won by Vision Pharmaceutical, is the Accomplish China trial, which is a cohort-expensive trial of at least 60 subjects conducted in China. We are planning to keep the data blinded for one year for each cohort. Once completed, we will have robust clinical data from two independent, randomized, double-blinded, placebo-controlled trials. For achondroplasia patients, our top priority is to develop and commercialize a highly differentiated, safe, and effective treatment option that addresses the comorbidities of the disease and not just height. Switching to oncology, we continue to make progress on both programs. Our Transcon TLR78 agonist is designed for intratumoral delivery. allowing for long-term sustained local release for potential superior efficacy with minimal systemic adverse events. Filing the IND last year was a major achievement for the company. It was the first IND delivering the Transcon hydrogel technology for sustained localized delivery. Just a few comments on our hydrogel technology. What we are developing at SENDIT is not just the traditional intratumoral delivery based on injection and normal subcutaneous formulation into the tumor, where the active compound will disappear in a few hours from the injection site. The Transcon intratumoral delivery technology is designed to release an unmodified drug over weeks and once inside the tumor at the site of injection. This highly sustained local concentration within the tumor is intended to kickstart the immune system without systemic toxicity. By activating the immune system locally in the tumor and draining lymph, we aim not only to kill the injected tumor, but to drive a systemic immune response that will also kill non-injected tumors. This is the potential we want to achieve with a true intratumor delivery technology. We have been dosing subjects with Transcon TLR78 agonist in the monotherapy environment, and we recently initiated dose escalation in the combination arm with a checkpoint inhibitor. We expect to have initial results for monotherapy dose escalation for Transcon TLR78 agonist in the fourth board. For our second oncology program, we are planning to submit an IND for Transcon IL-2 beta gamma in the third quarter of this year. Our understanding of the biology has guided us in designing a compound with independently optimized receptor bias potency pharmacokinetics to create a potential best-in-class IL-2 product. By solving the different elements related to efficacy and safety independently, we believe it will be possible to realize the full potential of the IL-2 pathway. To summarize, we have now our first approved product, Skytropa. We are focused on delivering a successful loan for Skytropa, and we remain committed to improving patient life. We are confident in the way we are strategically thinking about all programs, both clinically and commercially, as we address large rare disease market with our product opportunities. We estimate the global daily growth hormone market to be around 4 billion. With up to 200,000 patients in North America, Europe, and Japan, we believe that Transcon PTAs address a market opportunity greater than 5 billion US dollars. We are committed to bring the market leader in each of these endocrinology rare disease market segments. with the approval of Skype Over. We believe that it's a great validation of the Transcon technology and give us hope that we can address major unmet medical needs with high success rate. Our vision has never changed and I will repeat it again and again. We want to establish Ascentis as a fully integrated leading global biopharmaceutical company with a portfolio of multiple independent market-leading products in different therapeutic areas. Now, let me turn the call over to Scott to a financial review before we open for questions.
Ascendis Pharma Q2 Earnings
Thank you, Jan. Turning to our financial results for the quarter ended June 30, 2021. We reported a net loss of 134.4 million euro or 2.5 euro per basic and diluted share compared to a net loss of 94.9 million euro or 1.97 euro per basic and diluted share during the same period in 2020. Let me now run through some key components of these results. Research and development costs for the second quarter were 83.3 million euro compared to 63.6 million euro during the same period in 2020. The increase in R&D costs reflect continued advancement of our pipeline, with the primary drivers including an overall increase in personnel-related costs. For Transcon Growth Hormone, or lanopaxomatropin, costs were higher due to buildup of prelaunch inventories, investments to expand our future manufacturing capacity, as well as increased clinical trial-related activities. As a reminder, we currently expense manufacturing activities of LONAPEG somatropin as R&D costs in advance of approval. At the time of product approval, a portion of these R&D costs may be reversed and capitalized to inventory as raw materials, work-in-progress and finished goods, which will result in a one-time benefit to R&D costs. As of today, this would have been approximately €50 million. For Transcon PTH or Palapeg teraperitide, costs were higher primarily due to increased clinical trial-related manufacturing and device development costs. For Transcon-CNP, costs were higher primarily due to increased manufacturing and clinical trial-related costs. And finally, for our oncology therapeutic area, costs were higher due to increased manufacturing and preclinical costs for Transcon IL-2 Beta Gamma, and for Transcon TLR-7-8 Agonist, higher clinical-related costs were partially offset by lower manufacturing and preclinical costs. Selling general and administrative expenses for the second quarter were 35.3 million euro compared to 20.8 million euro during the same period in 2020. These higher expenses primarily reflect an increase in personnel-related IT and other infrastructure costs as we prepare for the launch of Skytrofa. Financial income and expenses in the second quarter included a foreign exchange rate loss of 11.3 million euro compared to a foreign exchange rate loss of 9.9 million euro in the second quarter of 2020, primarily related to translation of our U.S. dollar holdings of cash and marketable securities to euros. We ended the second quarter with cash, cash equivalents, and marketable securities totaling 641.3 million euro. As of June 30, 2021, the company had 53,900,990 ordinary shares outstanding. Turning to the remainder of 2021, we expect our reported operating expenses for the rest of the year to reflect the first half run rate with some quarter-to-quarter variability, with key drivers including the anticipated launch of Skytropha, advancing our endocrinology rare disease pipeline, expanding our activities in oncology, and investing in the TransCon technology platform, including for lanopaxomotropin, buildup of commercial inventory ahead of launch, execution of commercial launch activities, investment in expanding commercial manufacturing capacity to support anticipated future demand, continued execution of the Foresight Trial, a global phase three randomized controlled clinical trial in adults with GHD, and continued execution of the RITE trial, a Phase III randomized controlled clinical trial in children with GHD in Japan. For palopag-teriparatide, continued execution of the Phase II path-forward trial, which continues to retain 58 subjects in the open-label extension, along with continued execution of the PATHWAY trial, a North American and European Phase III randomized controlled clinical trial in adult hyperparathyroidism. and ongoing manufacturing of PPQ batches. For Transcon CNP, execution of the clinical program, which includes two randomized controlled Phase II clinical trials in achondroplasia, the ongoing ACCOMPLISH trial, and the ACCOMPLISH China trial, which is being conducted through our strategic investment in Beeson Pharmaceuticals. And lastly, in our oncology therapeutic area, execution of the Transcend IT 101 clinical trial for our Transcon TLR78 agonist and advancing the Transcon IL-2 Beta Gamma program into clinical development. We expect other SG&A expenses, including SCITROFA commercial activities, will include PalaPEG prelaunch activities and continued investments in personnel, systems, and infrastructure to support a rapidly progressing portfolio and growing organization. Let me now provide an update on our upcoming clinical milestones. For Lonapeg Somatropin, today we have received FDA approval for Skytropa for the treatment of pediatric GHD in the United States. We continue to anticipate European Commission approval for pediatric GHD in the fourth quarter of this year. For Palipag-Terraparatide, as discussed, we exceeded the target enrollment in the pathway trial and now expect to report top-line results in the first quarter of 2020. For Transcon-CNP, we expect to provide a clinical program update in the fourth quarter this year. For Transcon TLR78 agonist, we have initiated the dose escalation arm in combination with the checkpoint inhibitor, and we plan to report initial monotherapy dose escalation data for Transcend IT 101 in the fourth quarter this year. And finally, for Transcon IL-2 Beta Gamma, we plan to submit an IND later this quarter. Before we open up the call for questions, I want to reiterate a few points about our anticipated commercial activities for Skytropha in 2021. With the FDA approval of Skytropha today, we expect to have product available shortly. Once product is available, we anticipate beginning to provide access to Skytropha for pediatric GHD patients through our dedicated patient support program. Our medical affairs, our U.S. commercial team, and the entire Ascendus organization are currently ready and prepared to execute launch activities. And again, finally, during Q4, we anticipate European Commission marketing approval for pediatric GHD. With that, operator, we are now ready to take questions.
Operator
All right, so as a reminder, to ask a question, you will need to press star 1 on your telephone. To resolve your question, press the pound key. Again, that is star 1 on your telephone. Please stand by while we compile the Q&A roster. First question comes from the line of Jessica Fire from JPMorgan. Your line is now open.
spk05
Hey, guys. Good afternoon. Congrats on the approval, and thanks for taking our questions. A couple from me. First, can you please explain which part of the data investors should look to in the label that reflects the superiority of Skytrophis efficacy over Genotropin? Is it the lower bound of the 95% confidence interval in Table 4 of the clinical study section?
Michel
Exactly.
spk05
Okay. How does this timing of approval impact your payer conversations, if at all? Is it possible you can catch the late summer window for coverage of discussions? And what's the list price per milligram going to be?
Scott Smith
Let me at least start with your first question, Jess. And there's different ways you can describe how you achieve and higher analyzed growth velocity. From my perspective, the best one is to look for the confident interval because it basically describes what is the interval where you are improved with a 95% confidence. So when I see what paragraph or heard what paragraph you are some way are pointing to. I will give you 100% right. This is where I see and where I get my confidence that you achieve a higher analyzed high velocity in the 95% confidence interval. There was one question about the pair system. Are you sure? That is something we start working on, but it's something we have worked for in the last two where we basically have intense discussion with payer, mainly reflecting our discussion on how we basic as Ascenti is providing a pipeline, a product opportunity and building up the long term relationship with the payer system, not only in the US, but also how we want to address the commercialization in the rest of the world. Related to the US, I think Jesper, you potentially have a short comment about it, even if it limits what we can say now and what we can say from a public statement, because that is a discussion that basically can materialize now with the approval.
Yann Mickelson
Yeah, basically, Jan and Jessica, I would say that, of course, things have been, as Jan says, we started out this a long time ago. We have a super good team in place. and we are totally prepared for what we are entering into, and we all know we are in it for the long run. So it's not just about getting access. It's also getting access under the right circumstances, and that's certainly what we are working on as we are speaking, almost at least in the days and weeks to come. So we're truly welcome where we are right now.
Jan
Great. Thank you.
Scott Smith
If I connect a little bit to you, Jess, about it is, you know, we have a commercial strategy. And the commercial strategy is basic to be in a position that we basically are looking on maximizing the long-term value of our best-in-class growth hormones. but also at the same time, as Jesper said, laying the foundation for future product launch in the endocrinology where it leads. So this is why we're building a leading market share based on overall value proposition, but not only for one single element, but both for the patient, caregivers, healthcare provider, And this is why we basically are developing a strategy for that because we want to be a leading biopharma company. And this is why we're building our strategy on maximizing the long-term value and of our best-in-class quote-unquote. So this is our focus and this is one. And you talked about pricing. Yes, we call it premium responsible pricing. And then you say, what is premium responsible pricing? This is because we look on healthcare economic outcome research, because this is where we're coming from, from the European setting, is that this is where we look at it. And we see it. We see that is a basic fundamental good reason, basic to have a premium responsible pricing, and everyone will build. all stakeholders, patient, caregivers, physician, including payers. And this is what we have proven in our pharmacoeconomic data, and that is why we are, some way, are clearly saying we are going from a premium responsible pricing. Just to answer your last part of the question.
Operator
Next one on the queue is Fazeen Ahmad from Bank of America. Your line is now open.
Fazeen Ahmad
Good afternoon and congratulations from me as well on the approval. Lots of years of hard work. Yen, can I just clarify one point as it relates to pricing? Is it the plan to announce pricing before you launch or would we know the price, you know, let's say on the day that the actual product becomes available? Jasper, I'm hoping you can walk me through how a patient will initially be able to get access to the drug before it ends up on formulary. I think there is a process that doctors will have to go through. Have you sorted what that process is, and can you share those steps with us? Thank you.
Scott Smith
The first part I can just shortly say, and it's more or less reflecting in what we call premium responsible pricing. we have a clear view where we want to be in pricing and this is a basic part of our current negotiation and we will come out shortly with a discussion about what the VAC price is. And I think in the slide deck from Jesper, potentially you can refer back to that Jesper, where we basically are going to some of the steps where we basically are talking about our system. I actually think it was what I called, we call it ASAP, Ascended Signature Assess Program, and it's basically in the slide deck number 15. Yes.
Yann Mickelson
I mean, as Jan points out, ASAP is basically our signature program from Ascendis for Skytroker. And what's going to happen in actual terms is, I mean, price is many things, as we all know. It's WAC price and it's net price. And what we will do is basically, if you're going to sell it through the, you could say the traditional without being on formula, route, which is what I heard you asked for, then you will be paying VAT price, and then the physician will have to request a prior auth. A prior auth means that it will go to the health plan, then it will be evaluated, and then often rejected, and then come back, and then the physician will have to re-qualify why this patient is best suitable for once weekly donor pack, Skytropa. And that will happen under certain circumstances. It does not happen very frequently in comparison if you're not on the formula. So that's where we will start out. And then, of course, as we go by, we will negotiate ourselves into the contracting and into the PPMs and get access by doing that. So all in all, we will come to the market with an approach of being price-sensitive, being price-premium, I think we can also say, but we'll also do it in a way where it makes sense for us to make sure that we get optimized profitability, which at the end of the day, that's what the job is all about from our side. So that's what we will be shooting for. Okay.
Fazeen Ahmad
Yeah, thanks. Can I just ask a follow-up? So from the time a doctor writes a script, do you have any sense of how long it will take before the patient could actually receive the treatment. So if you are launching in the fourth quarter, you know, should we really expect to see patients be put on drugs in large numbers because of the dynamics that you just mentioned in the early part of the launch?
Yann Mickelson
It can take some two weeks. to six weeks to eight weeks before patients get put on. But what we will do in the meantime with our Fast Start program is basically our ASAP program, typically nicknamed Fast Start programs when other companies are doing it. Of course, we are calling it the essential signature program. We will provide the drug up front and the auto-injector to the patients. And then as the patients get the approval for the drug, they will be transferred into the health plans and thereby getting access and being paid for. So you will not see any fast uptake, but you certainly will see it as we move forward and as things progress. We do believe that the ASAP program will certainly put us in a very strong position for the time to come to drive our market leadership. Again, remember that we are first in the pediatric segment coming to the market, and that first-mover advantage we will certainly also enjoy in the time to come.
Fazeen Ahmad
Okay. Thank you so much for the call.
Scott Smith
Thanks a lot for the question.
Operator
Next one on the line is Michelle Gilson from Canaccord Gen UT. Your line is now open.
Michelle Gilson
Hi, congratulations. I'm also a very happy Michelle. I noticed the label. It looks very, very similar to daily growth hormone. I guess just with this in mind, do you think physicians will see Skytropa as interchangeable with daily growth hormone? in the way that the labels are in. And do you anticipate there will be any pull-through demand beyond the initial indication into the other growth hormone-approved indications?
Scott Smith
I believe when I look on the labeling, when we talk with physicians, when we discuss the entire concept of scitrophobia, And I think, as you said, Michelle, that is actually illustrated in the labeling where we released a somatopine molecule the same as daily growth hormone. I believe all the respect from what we see from the science reflected into the labeling indicate that we basically have the same active entity as daily growth hormone. and also believe all the clinical data we have generated are supporting the same thing when we look from switching from daily growth hormone patient over to scitropa or we look for starting naive patient in that. And I feel that the confidence we have in our data, we can also communicate to publication, medical affairs, and really illustrate the benefit of the compound. Currently, we have approval in pediatric growth hormone deficiency. We are extensive working on label expansion. As you know, we have initiated an adult growth hormone deficiency trial. We will potentially receive one or two other indications To your knowledge, and when we see the growth hormone market, none of the data growth hormone having basic approval of all the different indication today. So it's an element where we are building up the scientific clinical evidence on the compounds.
Michelle Gilson
If I can also add a follow-up, how do you plan to communicate scitrophos differentiation from other long-acting growth hormones if they are approved in the future? I know you mentioned the immunogenic profile in your prepared remarks.
Scott Smith
What I mentioned was that we had a similar immunogenic readout that you see with data growth hormone, which are really, really a safe treatment. I actually believe in data. And I actually think when people start to compare different phase three trials, then I think the differentiation are really clear. But Michelle, I think it comes back to the mode of action in the beginning because you basically, if you don't have the right molecule you don't have the right distribution to all the tissues, you will never some way can achieve the same thing that you will achieve with a daily somatopine molecule. And I actually think this is why after 30 years, still all patients in Europe, US, Japan, some of the major markets are still being treated with basic, as Jesper said, the old Daily growth hormone that got invented in the 80s.
Michelle Gilson
Okay. Thank you so much for taking my questions, and congratulations again.
Scott Smith
I'll be happy that you're happy, Michel.
Michel
All right.
Operator
Next one on the queue is Josh Schumer from Evercore ISI. Your line is now open.
Josh Schumer
Thanks for taking the questions. So sticking on Skytropha, maybe we can talk about how long you think it'll take to gain widespread formulary adoption. Is that likely to be the key gating step for uptake, or is it likely to be physician hesitancy? And then it looks like consensus for Skytropha for next year is about 110 million in sales. Is that in the general ballpark of what you think is reasonable? Considering some of the launch events, you'll have to push through. Thanks so much.
Scott Smith
Thanks, Jess, for your questions. If I can just start with your last question. We have not provided any kind of guidance to our expected sales for 2022. We feel our... strategy is really to create the long-term value about the product opportunity. And addressing a little bit your first questions, I believe when you think about the view from a physician, the physician can see and know if I have a one-weekly therapy, that basic I in a position, we know that only 20%, less than 20% of the patients today in this market segment, when we look at the U.S., basically are compliance. Meaning is that they take or pick up 80% of the prescription. So out from that perspective, we know and the physicians know that they can get a better outcome with giving a once-weekly product. Go to the patient that is sitting with the caregiver in front and having to take a choice. You can take a daily proclamon, seven injections, or you can potentially go down to five injections a week, which many, many, many do. And then you get poor outcome. Or you can take a once weekly. And likely, the daily need to be in a cool shade all the time. So basic, the patient comfort. What do you want? If the child is traveling, going to the grandparents, they need to be sure there is a cool bag all the time and other things like that. So this, I believe, when all are noticed from the patient and other things, the caregivers, it's such an obvious choice. If you can provide the same efficacy, and we believe that we can do that and have the same safety and tolerability. Going to your question about the reimbursement, I think if you have the efficacy right, the safety right, and the turbidity, then you come back to how fast can we go into the different reimbursement system. And this is where we're building up what I call premium responsible pricing, because we believe we deserve a premium pricing. But we also want to build on what we really call the optimal view from our scientists, building up a company of long-term value of each of these product opportunities. So we are not in a volume game. We are in a value game. And that is how we build up our commercial strategy.
Josh Schumer
Great. Thanks very much.
Yann Mickelson
Yeah, if I can just add, today is day one, and I can tell you we have done a lot of preparedness for this. We have worked for this for the last couple of years to get ready for this moment, and all the things in place for doing a very successful launch and become the company we want to be going forward, not only with Skytrover, but certainly also to build the platform for our future that Jan was also talking about in his introduction.
Scott Smith
Thanks, Jesper.
Operator
Next question comes from the line of Alita Young from Cancer. Your line is now open.
Alita Young
Hey, guys. Thanks for taking my questions, and congrats on the approval. It's been a wonderful road to watch. I guess a couple, and I actually am going to ask one that's not related to Skytropa. But the first one on Skytropa is, can you just talk a little bit about how to think about the Medicare-Medicaid mix, like the government-general mix, if there's any, versus, like, commercial? My second question is, you know, you noted that $2.8 billion, rest of the world. Can you kind of either break that out by patient numbers or how to think about it either on a revenue basis like Europe versus like, you know, Asia? And then my last question is, Just going back to TLR7-8 program, you know, should we expect that you're going to be at doses at the end of the year that might show some efficacy? And then how do we kind of think about what you're kind of expecting for the combination study that probably will have some data hopefully next year? Thanks.
Scott Smith
Thanks a lot. It was actually nice to get a question outside. growth hormone. But let us move back to some of your growth hormone question. Let me take the question when the breakdown reflecting the growth hormone market. And the U.S. is the single largest market. But then we basically have two, you can say, Asian markets that basically are competing on being number two or three. Currently, Japan is the second largest single market China, we expect that it will pass Japan this year, moving up to more than 800 million as a single, but really have major, major advancement every year. Then you have Europe that's just a little bit under this market. Japan is very interesting because it's also built on a little bit of local producers because it's been easy for local producers to enter the market because there has been no innovation for 30 years. And this is where our strategy comes in. We have now U.S. commercial strategy. Yes, we have that. We have our recent pharmaceuticals, Greater China Pharmaceuticals. We're now running the clinical development from Japan, meaning is we basically have a global clinical reach when we have that. Doing that, we also will have a global commercial strategy building on one single thing, pipeline deals, not single product deal, few places where we don't want to do it ourselves. We will go into a place where they basically have the infrastructure to support us to build it up as a leading brand also in this era but we still will be part of what we call the value creation and it will still be run on a global umbrella both related to marketing measures medical affairs because we believe in global market we don't believe in local market more this is a global society and this is how we're building up our global strategy And this is where we have a global aspect for everything what we're doing here. Related to the specific question related to commercial life or commercial patient or not commercial patient, I think we have a clear view where we want to be. Jesper, you can clearly say shortly where our focus will be. And I can move back to the last question.
Yann Mickelson
Absolutely. I mean, key, key focus is, of course, in the commercial space. Again, keep in mind that this is pediatrics. CMS is not really playing that Medicare Medicaid space to any large extent. So our focus is on the 185 million patients that are to be found in the commercial space. So key, key focus there. And just to add on to what Jan is saying, keep in mind that if you hit China in the top seven markets in the world, meaning Japan, U.S., and Europe 5, you're hitting more than 75% of the world pharma market. And that's, of course, where our focus is going to be going forward.
Scott Smith
Related to oncology, what we have said and what we basically are speaking to, at the end of the year, we will give an update. One thing I can say, we're really thrilled with this product opportunity. For the first time, there is what I call a true intertumor delivery technology. and be thrilled with that aspect.
Operator
All right, next one on the queue is David Libovitz from Morgan Stanley.
David Libovitz
Your line is now open. Hi, this is Avatar Jones on for David today. A couple more questions for us on the access side. Firstly, what percent of major payers have already been engaged? Secondly, can you quantify what premium responsible pricing looks like? And finally, how would you see a step therapy requirement through a cheaper alternative impacting adoption? Thank you.
Scott Smith
The first thing I think we and Jesper have really provided so much insight we can provide. And I think it's hard for us to provide more because we are not disclosing our long strategy, how we are moving forward. We are disclosing exactly the overall picture of the long strategy, how we basic our position of the product opportunity, what has been our strategy, what we have done. And I think we have done that in a pretty detailed manner. Premium pricing is what we discussed before, and we call it premium responsible pricing because we believe that our product deserves a premium pricing. And because we believe it provides a pharmacoeconomic benefit for everyone, for the patient, for the physician, for all the stakeholders, including the payer system. So the last question, I do not know, Jesper, if you have a few comments to that.
Yann Mickelson
No, I think, I mean, for pricing, of course, very close to heart. Negotiations is ongoing with the different PBMs and health plans. I really don't have anything much color to add. I think strategy is in place and we're moving forward. And I can only say I look really, really forward to... to make the announcements as they become public information in negotiations. Also, bear in mind that when you're talking PBMs, you're at a very tight spot right now due to the way that the system is set up where basically announcements are coming out in August, very early September for the PBMs for next year. And we are working hard on being there.
Scott Smith
Thanks a lot, Jesper.
Operator
Next question comes from the line of Yanan Zhu from Wells Fargo Securities. Please limit yourself to one question. Your line is now open.
Yanan Zhu
Hi. Thanks for taking my question and congrats on the approval. So I'll just limit myself to one question on the adoption of Skytropha. So it's our understanding that in a real-world setting, physicians often prescribe daily growth hormone above, the labeled 0.24 mcg per week. So for those physicians, I guess first of all, how prevalent is that? And for those physicians, how do you think they interpret the label and then proceed to use Skytropha? And do you need additional studies at a higher dose or including a higher dose in your open label study that's ongoing to convince those physicians for a greater adoption? Thank you.
Scott Smith
So what is in the labeling is a dosing of 0.24 milligrams per kilo per week. And its basic is reflecting what we did in both naive patients and what we did in our SWIT trial where we took patients from different daily growth hormone concentration and all of them got SWIT over initial to 0.24 mg. What we observed in this trial was also that precision, basic, titrated different patients to different levels dependent on clinical outcome and other important parameters that are observed for the patient. So what is important in this case is that you have a compound that can be titrated for a product because that is very important for the physician, that you can titrate it in a manner that is predictable. And that is what we have observed. What we have done previously is to make what we call in a phase two trial, where the basic has a classical dose escalation, we can definitely see a clear effect on the different doses, which indicating that we have a compound that could be titrated up and down. and we achieved the expected response.
Yanan Zhu
Got it. Thank you. Very helpful.
Operator
Next question comes from the line of Joseph Swartz from SVB Learing. The line is now open.
Jan
Hi. I'm jury dialing in for Joe. Thank you for taking our question. I'm actually going to ask you on transcon PTH, the data that we're expecting in 4Q. So ahead of the kidney function data, I was just wondering if you could give us insight into how you're thinking about interpreting the kidney results, considering everyone will be on drug in the study. So, you know, what would be a good result for those patients who have different degrees of calcification over the years? What could be considered a small or big effect? And, you know, how do you interpret the results with everyone on drug? Thank you very much.
Scott Smith
Yeah, I actually think we already got what I, from my perspective, is when we look on 24-hour urinary calcium, which are basically the most validated way to look on reabsorption capacity in the kidney. And what we saw in the 58 weeks was that we basically saw a continuation of what we observed at six months. We saw a durable response. And we hope that we will see the same durable response at 84 weeks. Interesting part is that we did a lot of sub-analysis because we basically have patients that basically had already renal impact. And we wanted, for example, to analyze, do this subgroup with already established renal impact had a poor prognosis of achieving what we call a normalization of 24-hour UNAid calcium. And it was not really the case. We saw the same positive effect independent of what we call the background demographic related to reabsorption establishing again from that perspective. And we saw there was extremely, extremely positive results. We hope we can continue to see the same positive trend when we will have the 84 weeks data here in the end of the year.
Operator
Next question comes from the line of Renee Wooders from Kingpin. Your line is now open.
Renee Wooders
Hi, good evening, and thanks for taking my question. First of all, congratulations also from my end. I wanted to ask how this approval impacts your plans with regards to further label extension, looking beyond adult growth hormone deficiency, so other indications where growth hormone is impacted.
Scott Smith
I actually think it just makes us... I have no belief that we will not I had a strong belief we would get the approval because we had such a strong packet to provide. When we initiated all what we call label expansion activity, we did it actually a long time before the approval, like the adult growth hormone deficiency activities. And we already have been planning additional label expansion to other indication. So what I'm saying with that is that The approval is just the element that we needed to continue these activities, but all these activities were initiated for a long time before.
Renee Wooders
That's super helpful. Thank you very much.
Operator
Next question comes from the line of Trevor Albert from Oppenheimer. Your line is now open.
Trevor Albert
Hey, guys. Thanks for taking the question, and my congrats as well. Just wanted to ask about the upcoming CNP update in 4Q. Have you determined what you're going to be sharing? Will we see any initial annualized growth velocity? Thanks.
Scott Smith
We're currently analyzing what we're going to show at that data set, and we are definitely in a position that we will give you an update related to this program. Our overall perspective is that we want to make this product as fast as possible accessible for the patient. So we are compromising two things to give information and at the same time to keep the trials blinded. And that is a balance where we basically are going back and forward what is the information we can share without jeopardizing the blindness of these clinical trials. And therefore, I cannot concretely say what can we share, what can we not share, because that is a continued development. And I'm quite sure Dana and her team will really be strong to support to find out how we can find the best balance between these two things.
Operator
Next question comes from the line of Anita Duchon from Bernberg Capital Market. Your line is now open.
spk02
Hi, good afternoon. Congratulations on the approval, and thanks for taking my question. So, Jasper, maybe you could help me understand this a little bit. I know you mentioned earlier that, you know, it's going to take some time for the duck to get on the formulary. So, are you kind of providing some kind of support to accelerate the prior authorizations to provide accelerated patient access. And then I just wanted to know regarding your application in the European region, are we still expecting approval in Q4?
Scott Smith
So I think Jesper explained about our ASAP program that is basically providing a drug to the patient in the period between that you initiate the process compared to the basic getting the reimbursement. So Jesper has, that is basic in the slide deck, basic talked about the staffings at this product. Our European strategy is an integrated pipeline strategy and we're working to find out how we basically have what I call and the enrollment out of our pipeline in Europe that is balanced with two different elements between cash conversation, expansion of the market in the most important regions. Europe is still a very, very diverse region. Some countries take up to 80 to 24 months for basically getting reimbursement. Other ones are much faster. This is why you typically have a very But we will keep you updated when we have more clarification about the European strategy.
Operator
There are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.
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