Ascendis Pharma A/S

Good day and thank you for standing by. Welcome to the Q3 2021 Ascendus Pharma Earnings Conference Call. At this time, all participants are in the 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, please press star 0. I would now like to hand the conference over to your speaker for today, Mr. Scott Smith, Senior Vice President and Chief Financial Officer of Ascendus Pharma. Please go ahead, sir.

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, Esper Hoyland, Global Chief Commercial Officer, Dr. Dana Pizzuti, Head of Development Operations and Chief Medical Officer, and Dr. Yuha Punanen, 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 U.S. commercialization and continued development of Skytropha for the U.S. market, 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 U.S. market potential of Skytropha and our pipeline product 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, 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 in August 2021 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 not 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 our product candidates shall be viewed as promotional. On today's call, we will discuss third 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 Jan Mikkelsen, our President and Chief Executive Officer.

Jan? Thanks, Scott, and good afternoon. Every quarter, I reflect on how the incentives team work together with patient and physician to satisfy major unmet medical needs. I also reflect upon the significant progress we have made toward our key development milestone to bring safe, highly differentiated product to patients as fast as possible. This quarter was special for Ascentis. It marks a defining moment for the company on our vision tree by tree part to achieving sustainable growth as a fully integrated eating global biopharma company. For years, we have worked to understand the biology behind growth hormone deficiency. We studied the science. We learned from previous successes and failures in trying to develop long-acting growth hormone therapies. And we were diligent in understanding the clinical data in pediatric and adult growth hormone deficiency. There have been very limited innovations since daily injection of recombinant human growth hormone were introduced over 30 years ago. And now, Ascendis has the first FDA-approved once-weekly product that offers pediatric growth hormone deficient patients caregivers and physicians what they have been seeking for decades. The approval of Transcon growth hormone in the U.S. is the culmination of determined efforts by the SENDIS team over many years to bring the first Transcon technology product all the way from the concept stage through non-clinical and clinical development. manufacturing and device development, and regulatory reviews so it can finally go out to the patients. With the approval of Skytrover in the U.S., we believe we have just begun to unlock the potential of what we are seeking to accomplish with the Transcon technology platform and algorithm for product innovation. To develop highly differentiated products addressing major unmet medical needs with expected high development success, a real paradigm shift. The same excitement we have for Transcon Growth Tomorrow exists across our entire portfolio of our five independent clinical product candidates. Why am I so optimistic? Because we believe the first FDA-approved product is a strong endorsement for the Transcon technology platform, our algorithm for product innovation, and Ascendi's infrastructure and expertise in product and device development. This is the reason why we are so enthusiastic about the prospect for our pipeline programs. Transcon PTAs and Transcon CMPs in endocrinology rare diseases, as well as our oncology programs, Transcon TLR78, Acronyst, and Transcon IL-2 Beta Gamma. We believe we have built a sustainable, robust pipeline and do not have the common challenge that many biopharma companies face in finding a second act to follow their first product as we, from the beginning, set out to build a sustainable pipeline in multi-therapeutic areas. Approval in the U.S. is a major success for Ascensis, but we will, of course, not stop there. We expect to receive European Commission approval of Transcon-Glutamone for Pediatric Glutamine Hormone Deficiency later this year or early next year. to report Phase III data for transcontinous PTH in adult hyperparathyroidism in Q1 2022, followed by a planned U.S. NDA filing in mid-2022. Our research and development engine continues to produce promising new product candidates, and we expect to continue the clinical development with additional regulatory submission. in rare disease, endocrinology, oncology, and also in our third therapeutic era. After we launched Skytrover in the US in mid-October, we quickly received our first commercial order and first commercial patient on therapy. The Ascendi's commercial team is executing on the long strategy, which is designed to the long-term value of our growth hormone product and laying the fundament for future product launches into the endocrinology rare disease area. We intend to create a global market-leading brand based on demonstrating clinical benefit and strong value proposition for patient, caregivers, healthcare providers, and payers. With Transcon Growth Hormone, we believe we can expand the global growth hormone market, while at the same time reducing the cost to society that results from suboptimal or lack of treatment. I'm often being asked about our pricing strategy and what do we mean by premium responsible pricing. Our health care economic outcome research demonstrates that with a premium responsible pricing, transplant growth hormone may deliver meaningful savings to the payer by potentially improving patient outcome compared to daily growth hormone. Our payer research covering 21,000 pediatric growth hormone deficient patients in the U.S. indicates only 20 to 30% of patients are adhering to daily injection therapy and therefore may experience suboptimal outcomes. With this in mind, We have established a VAC price for Skytropha in the U.S. that takes into account expected milligram per kilo dose difference for Skytropha compared to daily growth hormone in real-world practice. Also, on an annual basis, the VAC price is mid to high single percent higher compared to the leading daily growth hormone product. This is what we mean by premium responsible pricing and can be considered a win-win for patient, the caregivers, physician, including the society. We also understand the importance of U.S. market assets for patients and families, and we continue to work with payers to make Skytover as widely available as possible. Our priority is contracting based on the value of Skytover, rather than focusing just on volume. We are committed to building a long-term relationship with U.S. payers and health systems in the rest of the world as we are working to bring a portfolio of products to the market in the future. As we have highlighted before, Accenture's commercial leadership team is very experienced in endocrinology. especially in the growth hormone and PTH segment. They understand what it takes to create market leading brands. Our U.S. commercial organization is in place and we tend to cover around the 1,400 growth hormone prescribers. The pediatric growth hormone market in the U.S. is concentrated with about 80% of all prescription coming from about 20% of the prescribers. In parallel, Our experienced U.S. medical affairs team has been out in the field creating awareness with key opinion leaders and pediatric endocrinologists. A key component in the Skytrover launch in the U.S. has been the successful introduction of a SENTIS signature SS program. It has several different elements to it, but it is basically a personalized, Patient Support Program, with each patient assigning a nurse dedicated to working with them and their families, caregivers, and physicians from decision to treat to long-term therapy adherence. The program offers a suite of services including, but not limited to, prior authorization support, out-of-pocket assistance, and training on the Skytrover outrejector. As you know, at Ascendis, we always think globally. And so, let us turn now to our clinical development programs for growth hormone in other parts of the world. This week, the European Medicine Agency Committee for Medical Products for Human Use, or CHMP, has Transcon Growth Hormone on the agenda. We believe we are on track to obtain a positive CHMP opinion followed by an expected European Commission approval for transplant growth hormone by the end of the year or early next year. In Japan, we continue to screen and enroll patients in the 40-subject Phase III right trial for pediatric growth hormone deficiency, and in China, recent pharmaceuticals completed enrollment of its Phase III clinical trial of transplant growth hormone in children with growth hormone deficiency in March of this year. turning to potential label expansion for Transcon growth hormone. We also have the Global Phase III foresight trial underway for adult growth hormone deficiency. Looking ahead, we expect to conduct additional trials to support an application for labeling expansion beyond pediatric and adult growth hormone deficiency. Moving to Transcon PTAs. Our excitement continues around the clinical progress and prospect. Physician and patient story we have heard has so far indicated that Transcon PTAs has the potential ability to transform patients' lives. Given that 400,000 patients globally suffer from this and the lack of other treatment options, we believe Transcon PTAs, if approved, has the potential to be our largest endocrinology rare disease product opportunity. We think it could represent a market opportunity greater than 5 billion U.S. dollars. In September, we announced the 58-week bone mineral density data from the central lab reading in the Part 4 trial, the global phase 2 trial of transcon PTH in adult subjects These BMD data complement previous announced bone turnover data and demonstrated, as expected, continued normalization and stabilization of the BMD set score between 26 and 58 weeks. The BMD set scores parallel markers of bone turnover. which we believe is an indicator that the calcium metabolism subject in our Phase II trial are normalizing over time, as expected when PTH concentration is restored to physiological levels. We continue to have extremely high patient retention in the Open Label Extension Study, with 58 patients continuing in the trial as of November 7, 2021. I'm always so pleased when I hear about how many patients are remaining in the open-label extension study. This is the first time in my career that I have seen such strong patient commitment to taking a one-state injection and staying on therapy in an open-label study. We believe this is a potential indication of how transplant PTAs may be having a positive impact on short-term symptoms as to their quality of life. We believe that as BCH concentration is restored to physiological levels, it can improve short-term symptoms that could also translate into positive impact on long-term complications. We remain on track to report the 84-week Phase II data this quarter and would expect to see similar trends as we saw with the 58-week data. Globally, all three Phase III HB trials that are underway are progressing. Partway Japan, the Japanese Phase III trial, is designed to enroll a minimum of 12 HB subjects. Partway China, the Phase III trial in Greater China, has been initiated by decent pharmaceuticals. We are looking forward to reporting the top line phase two results from the North American and European trials in adult HP patients in Q1 2022. If positive, our plan is to file an NDA in the United States for Transcon PTH in mid 2022 for adult HP. The strong data we have generated so far reinforce our confidence in Transcon PTH as a potential first replacement hormone therapy in adult HP. Now turning to Transcon-CMP. We continue to move forward with two Phase II double-blinded placebo-controlled studies in children with achondroplasia. The first Phase II trial, the accomplished trial, is a dose escalation trial of 12 to 15 subjects in each cohort conducted mainly in North America, Australia, and Europe. The second one is the Accomplished China Trial, which is a cohort expansion trial of at least 66 subjects conducted in China. Completing two independent randomized placebo-controlled trials will give us 52-week clinical data on over 120 subjects with aconthoplasia treated with Transcon-CMP and over 25 subjects with placebo treatment. We believe these two blinded trials will be a strong indication of the potential safety and efficacy of Transcon-CMP. Later this quarter, we will provide a program update on Transcon-CMP, which will include a review of the biology and why we believe Transcon-CMP has a unique product profile that is highly differentiated from other treatments in development. We will provide an overview of the program involving the status of the dose escalation cohort, cohort expansion, and a safety update on the blinded data. We also plan to discuss target engagement to illustrate that Transcon CRP is doing what we expect it to do. And we will give an update on expected timelines for data next year. Now, moving to Oncology. We want to transform cancer therapy by improving a patient's endotumor outcomes by using Transcon systemic and endotumor technology. designed to provide sustained modulation of the tumor microenvironment and activating cytotoxic immunocells. We all know that developing effective and safe products has been a challenge within the oncology field. We believe by using the Transcon technologies and our algorithmic product innovation to turn on the body's anti-tumor immune system, we expect to improve patient outcomes. This is how we are looking forward to making a real difference in the way cancer is treated. Our oncology programs have made major advancement this year. For our Transcon TLR7 agonist program, we believe we have identified a product candidate that is highly differentiated compared to other product candidates by dramatically extending the duration of release of an active immunotherapy compound inside the tumor. With the Transcon technology, we are aiming to provide therapeutic efficacy inside the tumor for weeks and at the same time reducing systemic toxicity compared to what has been seen with direct injection of a parent drug alone into the tumor. We believe the prolonged activation of the immune system inside the tumor for weeks will also generate an ascorbic effect. killing similar tumor in other part of the body. Our Transcon IT 101 trial for Transcon TLR78 agonist in advanced cancer patient is ongoing. We have been dose escalating subject with Transcon TLR78 agonist in the monotherapy arm, and we have initiated dose escalation with checkpoint inhibitor in the combination arm during the third quarter. We expect to have initial results from the monotherapy dose escalation for Transcon TLR78 agonists by year end. We are presenting additional preclinical data for Transcon TLR78 agonists at the Society for Immunotherapy at our Chancellor's 36th Annual Meeting taking place in Washington, D.C. this week. Also in the third quarter, we submitted an ID to the U.S. FDA to initiate the Transcon IL-2 Beta Gamma clinical program. This is a Phase I-II clinical trial to evaluate Transcon IL-2 Beta Gamma in patients with advanced cancer. Transcon IL-2 Beta Gamma is a long-acting protocol using the same systemic Transcon technology as Transcon Gotamo. and is designed to improve cancer immunotherapy by providing long-acting exposure without a high Cmax of a highly potent IL-2 variant selected for the beta-gamma receptor. The second Oncology Clinical Stage product candidate is another sign of our commitment to solving unmet medical needs for patients by focusing on the science. IL-2 is a highly validated cytokine in the treatment of cancer. We have reviewed the data generated by others from the long list of IL-2 compounds, and we believe Transcontinental IL-2 Beta Gamma has the potential to be best in class and the first to fully solve the shortcomings of IL-2. Looking ahead to the rest of 2021, the fourth quarter is shaping up to be very difficult, with the potential to obtain a positive CHMP opinion, the program update for Transcon CMP, first patient data on Transcon TLR78 agonist, and our 84-week data on Transcon PTAs. We plan to announce the update for these R&D programs on a virtual research and development program update call in mid-December. We will provide additional details in the coming weeks. It was a great moment at Ascendis achieving our first product approval in the U.S. It is very rewarding that pediatric growth hormone patients in the U.S. now have a new once-weekly treatment option. What makes me even more happy is that I know we have the potential to help many more patients facing significant unmet medical needs. And as I said before, our goal at Ascendance has not just to get product approved, but to get products approved that can make a meaningful difference to patients, and not just once, but multiple times in multiple therapeutic areas. Now, let me turn the call over to Scott for a financial review before we open up for questions.