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spk10: Good day, and thank you for standing by. Welcome to the Q4 2021 Ascended Pharma Earnings Conference 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 that session, you will need to press star 1 on your telephone. Please be advised that today's conference is recorded, and if you require any assistance during the call, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Tim Lee, Senior Director of Investor Relations. Tim Lee, the floor is yours.
spk04: Thank you, Operator. Thank you, everyone, for joining our full year 2021 Financial Results Conference call today. I'm Tim Lee, Senior Director, Investor Relations of Ascendus Pharma. Joining me on today's call is Jen Mickelson, President and Chief Executive Officer, Scott Smith, Senior Vice President and Chief Financial Officer, Jesper Hoyland, Global Chief Commercial Officer, Dr. Dana Pizzutti, Head of Development Operations and Chief Medical Officer, Dr. Juha Purnanen, Head of Oncology, and Dr. Steena Singhal, Head of Clinical Development 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 statement may include but are not limited to our U.S. commercialization and continued development of SCICROFA 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 for 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 and 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 our forward-looking statements section in today's press release and the risk factor section of our most recent annual report on Form 20F. Krantz-Kahn Human Growth Hormone, or Krantz-Kahn HGH, is approved by the FDA in the U.S. under the brand name Skytropa for the treatment of pediatric patients one year or older who weigh at least 11.5 kilograms and have growth failure due to inadequate secretion of endogenous growth hormone. In addition, the European Commission has granted a marketing authorization for Lonepeck Somatropin Ascendus Pharma, developed under the name Transcon HGH as a once-weekly subcutaneous injection for the treatment of children and adolescents ages 3 to 18 years with growth failure due to insufficient secretion of endogenous growth hormone. In general, we refer to this product as Transcon HGH unless we are referring to the product in the context of a particular jurisdiction such as the United States or the European Union. Skycopa was approved by the FDA in August 2021 for the treatment of pediatric patients one year 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'll discuss our full year 2021 financial results and provide further business updates. Following some prepared remarks, we'll then open up the call for questions. I will now turn the call over to Yen Mickelson, President and Chief Executive Officer.
spk05: Thanks, Tim, and good afternoon. 2021 was an extraordinary year for Ascentis. The regulatory approvals of Transcon growth hormone in the U.S. and Europe were a key milestone in achieving our vision 3x3. The approvals of Transcon growth hormone in the U.S. and Europe were a validation of the Transcon technology platform, validation of our algorithm for product innovation, and validation of our infrastructure and capabilities to achieve approvals in the US and Europe of a combination product, including biological manufacturing. We believe these successes confirm that we have the right strategy. and the people and capabilities in place to achieve our vision three by three and to build a sustainable, profitable, leading global biopharma company. But we didn't stop here. In 2021, we also realized significant advances in other areas essential to our vision three by three. These include embedding important studies for TransCon PTAs program in adult hypoparathyroidism and progressing our TransCon CMP program in acondyloplasia. Both of the programs are essential to our goal of achieving regulatory approvals for three independent endocrinology rare disease products. To achieve our goal of global market leadership for each of our products, we continue expanding our global clinical groups and label expansion in the endocrinology rare disease space this year. In our second therapeutic era, oncology, we have two highly differentiated cancer immunotherapy programs being advanced through clinical development. We believe we can transform the treatment in immuno-oncology with our products. Lastly, for our third independent therapeutic area, we are conducting research using our Transcon technologies. and the essential algorithm for product innovation to create a pipeline of independent product candidates addressing major unmet medical needs. As for all our established product candidates, we have the same high expectation for each of the product candidates in our third therapeutic era to achieve global leadership, and create a multi-billion dollar product opportunity. A key element in our vision 3x3 is sustainable growth. We intend to continue developing new product candidates using the Transcon technologies and the Ascenius algorithm for product innovation. We plan to continue to build our organization capability with the aim to bring safe, highly differentiated products to patients as quickly as possible across multiple therapeutic areas, indication, and geographies. I expect that 2022 will be another unforgettable year. You can expect us to share data and regulatory milestones across our five independent clinical programs throughout the year that demonstrate solid progress towards long-term growth. Equally important, we plan to provide you with updates related to the commercial launch of SCARTOFA in the U.S. and the planned launch for commercialization in Europe. as we expand access to this important treatment option for pediatric growth hormone deficiency. In the era of growth hormone, we are here to build a leading global brand. Today, Skytropha is the only approved one-sweep growth hormone on the U.S. market. In the four short months since its launch, our commercial teams have leveraged their decades of endocrinology experience and relationship to meet the target prescribers, maximize awareness of sclerotopia through multiple channels and events, and provide patient treatment and support through our Ascendi Signature Access Program. Because of their industry knowledge, and efforts. Physician interest and adoption of Skytrover continues to grow. As of February 28th, 704 Skytrover prescriptions have been written by 259 prescribers. 44% of prescribing physicians have written prescriptions for more than one of their patients. In November 2021, in Europe, we received a positive CHMP opinion for transcon growth hormone, for pediatric growth hormone deficiency, followed quickly by the European Commission approval in mid-January 2022. As a day's company, Europe is an important market to us, and the unmet medical need for pediatric growth hormone deficient patients is just as great. But because the market opportunity for growth hormone and timelines to secure reimbursement varies from country to country, we plan to advance to establish direct sales capabilities in some European countries and establish distribution partnership in others. In this way, we look forward over time to maximize value and intend to bring a broad portfolio of Transcon-based products to European physicians and patients. Moving to the adult growth hormone deficiency indication. We expect Transcon growth hormone to make a meaningful difference for adults suffering from adult growth hormone deficiencies. We expect by releasing unmodified somatopoeia, Transcon Gotamo may be able to address the many different aspects of the disease and restore overall endocrine health. In addition, during the second quarter of 2022, we plan to submit a protocol to the FDA internal syndromes. and comorbid disorder affecting development in females. We are pursuing this label expansion to help more patients and create a market-leading brand in growth hormone therapy. Turning now to transcomptate. We believe 2022 will be a very important year for patients living with hyperparathyroidism. who face significant challenges in both health and quality of life. Today, HP remains the last large classical hormone deficiency for which a hormone replacement therapy is not yet available. Conventional therapy with calcium supplement and activated vitamin D is aiming at maintaining serum calcium in the normal range with the hope of reducing short-term symptoms and is not able to address the underlying disease. In addition, these conventional therapies can lead to long-term complications. that include severe diseases such as chronic kidney diseases, renal and basal ganglia classification, cardiovascular complications, and bone damage. Numerous publications have reported that despite being unconventional therapies, patients continue to experience short-term symptoms, often resulting in hospital stays and emergency department visits. Finally, patients with HP report below normal quality of life at the same or worse level than many other chronic diseases, with significant impact on daily activities. With this in mind, we designed TransconPetate to restore physiological levels of parathyroid hormone, PTX. Later this month, we look forward to sharing top-line results from our Phase III pathway trial. As a reminder, this is a six-month randomized double-blind, placebo-controlled clinical trial in North America and Europe, investigating the safety, solubility of N-efficacy and transcom PTH in adults with HP. We believe that all chronic HP patients could benefit from a restoration of physiological levels of PTH. And we believe that Transcon PTH, if approved, could become an important treatment option for these patients. We are often asked, how does Transcon PTH differ from other PTH therapies that have been on the market? First, Transcon PTH allows the release of predictable levels of PTH in the physiological range across a 24-hour period. Second, we designed Transcon PTH to be a first-line hormone replacement therapy, potentially eliminating the requirement from conventional therapies by restoring calcium, hemostasis, and quality of life. Let me recap the Phase II data that gave us the initial insight in the potential for this important product candidate. In the open-label extension approach of the study, at month 6, 86% of the subjects had normal serum calcium, were off conventional therapy of activated vitamin D, and taking less than 600 milligrams per day of calcium. These are the same parameters being used as our primary endpoint in the Phase III trial. In addition, subjects reported normalized quality of life scores on all summary and subdomains. Importantly, subjects randomized to TransCon PTAs demonstrated a statistic improvement compared to placebo after four weeks in the blinded portion of the trial and continued normalization from week six to month six. We believe that these improvements in quality of life could be one of the main reasons why 57% out of 59 patients, continue to be part of the open-label extension study, even now, after two years. As you know, we remain excited by the data we have seen so far. And we think Transcon PTA could introduce a paradigm shift in how HP is treated. Among the phase three Assuming the Phase III results are positive, we plan to submit an NDA for Transcon PTAs to the FDA in the third quarter of 2022, followed by M&A submission to EMEA in the fourth quarter. In Japan, where the pathway to Japanese Phase III study of Transcon PTAs is underway, we expect top-line results in the third quarter. Because hypothyroidism can affect all ages, we also plan to initiate a study of transcompete AIDS in children with HHP during the fourth quarter of 2022. With an estimated more than 200,000 patients suffering from HHP in the US, Europe, and Japan alone, and the lack of option to treat the underlying disease. We believe Transcon PTA, if approved, could become our largest endocrine rare disease product. We think and believe Transcon PTA could potentially be the only product to fully address this plus 5 billion market opportunity. I would like to update you on Transcon CMP for a contemplation. Continuous exposure of CMP has shown to counteract the growth inhibition effect of FDR3 mutation associated with echocardioplasia and to stimulate growth. We are investigating Transcon-CMP's ability to provide prolonged exposure on CMP, allowing for penetration into the target growth plates. at predictable levels over time to rebalance the pathway that regulate growth. In the fourth quarter of 2022, we expect to share top-line data from the accomplished trial. Our Phase II randomized, double-blinded, placebo-controlled clinical trial of Transcon-CMP in North America, Europe, few other countries in New Zealand and Australia, aged from 2 to 10 with children with acondoplasia. In the accomplished trial, 42% of the shopping are in the age group from 2 to 5 years. We are really thrilled by the blinded safety data reported last December at our R&D update. And we are looking forward to share the top-line results in the fourth quarter of this year. Given the serious and irreversible early impact of this disease, we also plan during the second quarter of this year to file an IMD application or similar for accomplished infant trials in the patient age 0 to 2 years old. Stretching now to oncology, we believe our product candidates have the potential to transform cancer immunotherapy. Initial data from the Transcon TLR78 agonist first in human dose escalation trial has been promising, and we expect to see further validation of our technology and approaches in oncology later this year. For Transcon TLR78 agonist, Enrollment continues in Transcend IT101, a Phase 1-2 study of Transcon TLR78 agonists with or without checkpoint inhibitors in patients with advanced and metastatic solid tumors. We expect top-line dose escalation data for Transcon TLR78 agonist monotherapy and in combination therapy with checkpoint inhibitor in the third quarter of 2022. For Transcon IL-2 Beta Gamma, we expect top-line monotherapy data from the Phase I to, I believe, try in the fourth quarter of 2022. During the fourth quarter of 2022, we plan to submit an IND or similar for Phase II cohort expansion to investigate Transcom TLR78 agonist and Transcom IL-2 beta-garmin as a combination therapy. We took major steps in 2021 by progressing towards our vision 3x3. We believe we are moving towards becoming a viable, sustainable, and profitable biopharmaceutical company. We estimate that our first therapeutic area of endocrinology rare disease alone represents and combines 10 billion US global market opportunities. We also have a highly differentiated oncology pipeline and we plan to add a third therapeutic area. I look forward to updating you further as the year progresses. I will now turn the call over to Scott for a financial review before we open up for questions.
spk14: Thank you, Ian. Turning to our financial results for the full year ended December 31, 2021, we reported a net loss of 383.6 million euro or 7 euro per basic and diluted share compared to a net loss of 419 million euro or 8.28 euro per basic and diluted share during 2020. Let me now run through some components of these results. Total revenues for 2021 were €7.8 million, compared to €7 million during 2020. Revenues include U.S. Skytropa sales, as well as license, clinical supply, and services provided to third parties, primarily these in pharmaceuticals. Reported U.S. Skytropa sales for 2021, reflecting the launch in October, were 0.9 million euro. This was reduced by provisions we made to cover estimated sales deductions and product returns determined at initial launch. The majority of Skytropa sales in 2021 were related to initial inventory stockings. As a reminder, we recognize revenue upon receipt by our specialty pharmacy and specialty distributor customers, and not upon dispense of the product to the patient. Now turning to operating expenses. Research and development costs for 2021 were €295.9 million compared to €260.9 million during 2020. R&D costs in 2021 reflect continued advancement of our pipeline, with the primary drivers of the increase including an overall increase in personnel-related And then for Transcon HGH, R&D costs were lower primarily due to a one-time benefit related to capitalization of inventory as a result of the FDA approval in the third quarter of Transcon HGH, known by its U.S. trade name of Skytrophin. This was partially offset by investments to expand our future manufacturing capacity as well as increased clinical trial-related activities to support increased global clinical reach and label expansion. For Transcon PTH, R&D costs were higher primarily due to increased clinical trial-related spend, device development costs, and manufacturing costs, including the successful completion of drug substance PPQ batches, as well as initial costs of building commercial inventory. For Transcon C&P, costs were higher primarily due to increased manufacturing and clinical trial-related costs. And finally, for our oncology therapeutic area, R&D costs were higher due to increased manufacturing and clinical trial costs for Transcon TLR78 agonist and also due to increased manufacturing, preclinical, and clinical trial costs for Transcon IL-2 beta gamma. Selling general and administrative expenses for 2021 were €160.2 million compared to €76.7 million during 2020. These higher expenses primarily reflect an increase in personnel-related and commercial expenses, as well as IT systems and other infrastructure costs as we prepared for and launched Skytropha in the U.S. Finance income and expenses in 2021 included a net foreign exchange rate gain of €59 million compared to a net loss of €78.9 million in 2020. primarily related to unrealized gains on translation of our U.S. dollar holdings of cash and marketable securities to euro. We ended 2021 with cash, cash equivalents, and marketable securities totaling 789.6 million euro. Turning to an update on our U.S. launch of Skytropa for Pediatric JHD. Overall, demand for Skytropa has continued to grow since launch in October 2021. Through February 28th, 708 Skytropa prescriptions have been written by 263 prescribers. Each prescription is usually written for one year. Of those 263 prescribers, 44% have prescribed Skytropa to more than one patient. And as of the end of February, 36% of lives were covered per MMIT. From a market access perspective, we continue to see more healthcare plans making Skytropha available to their members over time, with an increasing percentage of prescriptions approved for reimbursement through the prior authorization or medical exception processes where needed. And we are also in active dialogue with major PBMs and other payers to broaden patient access to Skytropha. In summary, we continue to be excited by the strong physician and patient interest in Skytropha And we look forward to updating you on our progress in the coming quarters. Turning to 2022, we expect our expenses to increase as we continue to build our commercial capabilities and organization in preparation for additional anticipated product launches in 2023. And as we advance our endocrinology rare disease pipeline, expand our activities in oncology, and continue to invest in the TransCon technology platform. including for Transcon Growth Hormone, continued investment in expanding commercial manufacturing capacity to support anticipated future demand, geographic expansion for pediatric GHD in the European Union following MAA approval in January 2022, and continued execution of label and geographic expansion in our ongoing clinical trials. For Transcon PTH, key activities will include continued execution of the adult hypopara program, including the Phase II Path Forward trial and the Phase III clinical program, including the Pathway trial and the Pathway Japan trial, preparation for the initiation of a Phase III pediatric hypopara trial, and ongoing manufacturing of PPQ batches and activities to build commercial inventory. For Transcon C&P, key activities include continued execution of our Phase II clinical program, which includes two randomized, double-blind, placebo-controlled clinical trials in achondroplasia, the ongoing ACCOMPLISH trial, and the ACCOMPLISH China trial, which is being coordinated through Visa and pharmaceuticals. And lastly, in our oncology therapeutic area, key activities include continued execution of the TRANSCEND IT-101 clinical trial, for our Transcon TLR78 agonist, and the IL-Believe trial for Transcon IL-2 Beta Gamma. In addition to Skytropa commercial launch activities in the U.S., we expect other SG&A activities will include Transcon PTH pre-launch activities and continued investments in personnel, systems, and infrastructure to support our rapidly progressing portfolio and growing organizations. As Yen noted, we have a lot happening at Ascendus, so let me now provide also an update on our remaining corporate milestones and other key events. For TransCon Growth Hormone, we plan to submit a protocol to FDA to initiate a trial in Turner Syndrome in Q2 2022. Related to the Foresight Trial, our Phase III trial in adult growth hormone deficiency the invasion of Ukraine has impacted our ability to continue clinical trial activities in Ukraine, Russia, and Belarus. While this may affect our timelines, there is currently no material impact to our business from this situation. For Transcon PTH, we expect to record top-line results from our Phase III pathway trial in North America and Europe this month, followed by an expected NDA submission to FDA in Q3 2022. and an expected MAA submission to EMA in Q4 2022. Pathway Japan top-line results are expected in Q3 this year. And finally, we plan to submit an IND or equivalent for pediatric hypoparathyroidism in Q4 2022. For Transcon C&P, top-line data from the Phase II ACCOMPLISH trial are expected in Q4 2022. this year, and we plan to file an IND or equivalent for the ACCOMPLISH infants trial in Q2 2022. Within our oncology therapeutic area, for TRANSCON IL-2 beta gamma, monotherapy top-line results are expected in Q4 this year. For TRANSCON TLR7-8 agonist, Top-line monotherapy and combo therapy dose escalation data in the Transcend IT101 clinical trial are expected in Q3 this year. And lastly, for oncology, we expect to submit an INDR equivalent for a Phase II cohort expansion for evaluating a combination of Transcon TLR78 agonist and Transcon IL-2 beta gamma therapy in the fourth quarter. Finally, we plan to announce our third therapeutic area in the fourth quarter this year. And with that, operator, we are now ready to take questions.
spk10: Thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, please press the pound key. We ask that you limit yourself to one question and to one follow-up. Stand by to compile the Q&A roster. Our first question comes from Jessica Phi of JPMorgan. Your line is open.
spk09: Hey, guys. Good afternoon. Thanks for taking my questions. Does the 708 prescriptions of the February 28th equate to 708 patients, given what you said about each script usually being written for a year? Or are any of those scripts refills? And to make sure, when you say a script is written for a year, are you saying that's like a script for, you know, the first month of therapy and it has 11 refills or is it the single script really written for like a full year's worth of product? And I have a follow-up.
spk05: I think, thanks, yes. I think it's a good clarification that we are building is that because we wanted to get it clear when a prescription is being written to because it was covering for one year. And sure, there is a lot of refills, but it's still covering under the same prescription. So when we talk about the number 704, we basically believe that all of them are independent patients. God is correcting me, 708. Okay, great.
spk09: Next one is, does the... TRL for Sumatragon affect your discussions with payers at all? I guess, were any of the payers waiting to see how that FDA decision and potential contracting with that product played out prior to finalizing contracts with Ascendus?
spk05: First of all, we are the only approved once-a-week product opportunity in the U.S. market. We have seen how oil long acting has not been approved. We have no explanation and knowledge about it. What we are moving forward is our planned commercial long strategy. And we're following it. And we really believe that we're executing as we only had hoped for. So when we saw there was a CRL for this product opportunity, We also believe that it was part of our expectations. We had different scenarios, and it was definitely one of the scenarios we were working into our launch strategy. I believe Jesper's team and the market assess team under Jesper, is doing an amazing job to get this market assessed. And I also think the numbers we've seen and how we're getting coverage is living up to exactly the plan that we expected to be at the time where we are now. So when I should summarize my read about the launch, we believe we will have been the leading brand in the U.S. market independent on other product opportunities. We only see if there will be one more or two more long acting in the U.S. market. It's only about what is the total conversion of the entire market segment over to long acting and how fast it's going. We have no doubt when we look at our product profile, we see what we have seen from our label. We believe we have everything built in to build up a leading brand here in the U.S., and we're doing it day by day.
spk10: Thank you. Our next question comes from Tazin Ahmad of Bank of America. Your line is open.
spk06: Hi, good afternoon. Thanks for taking my questions. Maybe a point of clarification around gross to net. Can you give us a sense of very early days of where you're starting out and where you might think it will flatten out as the year progresses? And then as far as the quarter goes, did you see any kind of heightened impact from Omicron, particularly in December? We just want to get a sense of any kind of additional variability to expect from COVID going forward. Thank you.
spk05: I think Scott will take the first question, and Jesper can explain how the commercial infrastructure has adapted to all different kinds of scenarios and how they're adapting to the changes in the COVID.
spk14: Tazin, on your question about growth to net, So products sold through at this point is, I would say, with minimal discount, and we're not specifically disclosing where we expect it to go. We did take a provision that you can see in the financial statements to reduce reported net sales that accounts for the initial launch phase that we're in now, and the fact you might have product returns, you might have other prompt pay discounts and chargeback and rebates. But I would say I wouldn't necessarily look at that as any forward-looking guidance.
spk04: Jesper? Yeah, if I can add, we are very pleased with where we are right now. When we were sitting doing the launch, we did anticipate COVID to be in place. And, of course, we have seen pediatric centers being locked from the point of view that our representatives have not been able to do face-to-face calls. that has then transformed into virtual calls with them. However, as we are speaking, we are certainly seeing the market, i.e. the hospitals, opening up and giving us access on a face-to-face call, which is, of course, a preference to us. So in short, we have baked it into our expectations and certainly we anticipate to see the market opening up now as spring is coming and also hopefully COVID is going to be behind us.
spk06: Okay, thanks, Jesper. Just to jump back to Scott for a second, can you just clarify on Gross2Net, are you saying that you did not discount this first quarter? I just want to understand that a little bit better.
spk14: So we have, especially pharmacy and especially distributor network that's set up, there's on-invoice discounts that are, I would say, fairly minimal, single digits in the aggregate. And we also, on top of that, booked a provision that you could see in the financials to reflect the startup phase that reduced our net sales down from the on-invoice price. That provision was about 1.2 million euro.
spk10: Thank you. Our next question comes from Michelle Gilson of Kennecore Genuity. Your line is open.
spk01: Hi. Thank you for taking my question. I guess to start, one for Scott. You know, you mentioned that the revenue recognition is to the specialty distributor. Can you maybe help us understand how much is in the channel? And then one on PTH from me, too. Can you remind us what kind of regulatory discussions you've had around PTH and, you know, to what extent the FDA had some input in the Phase III trial design and the primary endpoint? And then, you know, what really needs to be shown within the phase three data set to get a label as a PTH replacement therapy versus an adjunct to therapy and that, you know, differentiation from that PARA in the labeling in terms of what regulators want to see to differentiate, I guess, the two programs?
spk05: Michel, that was many questions. I think Dana and I can combine take the second part, but I think we should let Scott get some speaking time, so he will be first.
spk14: Thanks, Michel. So the question, I believe, was what inventory is in the channel versus what's sold through. As of December 31, as I think we just said on the prepared remarks, the initial sales were largely stocking as of that period. But separately, of course, we reported the same launch metrics that we gave you at JPMorgan through the end of February. So you can see how patient demand overall has grown.
spk05: Michel, going back to you, and I will start, and then I will turn it over to Dana, and she will explain how the interaction is done. But let us just go back and look about why are we taking a hormone replacement therapy and what do it really mean for this composite endpoint we have. First of all, we have some of the same parameters in our primary endpoint that you basically have seen in an adjunct labeling. Normalization of serum calcium, taking away vitamin D, taking away calcium supplement. But then everything comes back to what is really the definition of success for each single parameter. And just taking something like serum calcium, we need to be higher than 8.3 because we believe that it's what we call normal serum calcium. If you go into an adjunct labeling, then you say, I'm highly successful if I just take 50% away. What we did, for example, during the activated vitamin D, it needs to be down to zero because no normal person, to my knowledge, takes activated vitamin D. If you go to the junk label, you need to reduce 50% of the calcium supplement. So if you take eight grams of calcium supplement, which are not national for an HP patient, then if you take 3.9, gram per day you're successful in an adjunct labeling. We need to take it down to the level what you take with a multivitamin tablet. Because we cannot deny people to take a multivitamin tablet. So you can see, even if we have the same parameter, what our primary endpoint is really reflecting is a hormone replacement therapy where you go in and you basically take our Transcon PTAs under a daily treatment, and then you basically get a normal serum capsule, don't take activated vitamin D, and just take the same amount of a normal multivitamin tablet. That is a hormone replacement therapy, and that is why we're discussing that with the regulatory agencies. Dana, you can comment about our interaction, how we're progressing, how we have discussed it, basically agree to everything on the phase three endpoints.
spk02: Yes, sure. Michelle, thanks for the question. We've had numerous interactions with FDA and actually before, you know, we even started the phase three and even sent them the protocol. We talked with them about our phase two data and the fact that we wanted to be a replacement therapy. Okay. So we designed a fairly rigorous trial. So as soon as the protocol was done, before we started to enroll people, we sent the agency the protocol. They sent back comments. And we had sort of a few interactions as we enrolled patients and then as patients progressed through the trial. And right up until the last few months, we talked with them about our analysis plan before we hit the sort of end of the double-blind period. We had to finalize that, send that to the FDA before we do anything. And so, you know, we think we're in a pretty good place, and we've, you know, acknowledged the FDA input and are planning to analyze the data, you know, consistent with what their, you know, advice has been. So it's been, you know, an ongoing collaboration with them.
spk05: So we're really thrilled to have the data coming up in the next weeks.
spk10: Thank you. Our next question comes from Josh Shimmer of Evercore. Your line is open.
spk11: Great. Thanks so much for taking the questions. I guess first on the SkyTropical launch, why are you already noting provisions for product returns? It seems a little bit early. Have you been seeing any product returns thus far and why? And then for the PTH program, what do you see as the primary barriers to broader adoption of PTH replacement? It looks like Takeda was trying to promote some of the quality of life benefits of NatPyra and the cardiorenal benefits of NatPyra. They did have some supportive data, but didn't seem like they were gaining much traction to a broader hypoparathyroidism audience. And then the last question, as we think about the decision tree for TransConCNP at the end of the year, Are there certain phase two outcomes that you think could support filing for accelerated approval, and if so, what might they be?
spk05: Thank you. Thanks. Yes, there was more questions, but I think I'm going to let Scott start first.
spk14: Josh, related to the question, are you seeing product returns? To my knowledge, no, although it is early and is small. The reason we take a provision is from an accounting perspective, based on the experience we have commercializing, we take a conservative position and just account for the fact that there'll be a number of chargebacks, returns, rebates, write-offs, things like that. Over time, of course, we would expect the provision to bleed off if none of those things are realized.
spk05: Thanks, Scott. Related to the PTA's question, and As I understood you right, just as that you're asking the basic why some of those shorter acting PTAs have not really got the right penetration. But it goes back to how you use the best optimal way, the short action. You open the cartridge, take the content, take it into an infusion pump. so you can give it into the physiological level 24 hours, seven days a week. That is what is happening with a lot of that. If you give a short axing, the best case you can see is that you can get a partly normalization of serum calcium, partly reduction of activated vitamin D, partly reduction on calcium supplement. You're not seeing the expected 24-hour urinary calcium benefit. you're not seeing any kind of statistic effect related to quality of life. So when you compare this short-acting PTH product with the target product profile, or what we're aiming to show in our Phase 3 clinical trial that's coming up in the coming next week, it's a true hormone replacement therapy. And this is how Dana just explained how she has built up in interaction with regulatory agencies, what is the meaning of a hormone replacement therapy? This is the same thing to think about other hormone replacement therapy. Would it not be unbelievable to think any diabetes, type 1 diabetes patient not should have insulin? Why it's so difficult to believe that when you can have physiological level of PTH, every PTH patient that lack sufficient endogenous PTH, not sure have that. And this is what the benefit we want to show in all our clinical trials. Everything from the primary endpoint we discussed, urinary calcium, continuum quality of life, et cetera, et cetera, change in bone, remodeling, everything what we want to see. Really showing what is really how to normalize the life of this patient by having restoring the normal physiological PTAs. But the CMP question you're addressing is a really, really good one. And it's also one of the interactions I have done all this with Dana and her team from . What is basically the strategy to get this important product out to the patient as fast as possible? And I can guarantee you, Josh, we're working dedicated to get that done. And I think Dana and her team together, the rest of the clinical development team and everyone is trying to do that. So what we believe is an important part of that is to look and see the data we're getting out end of this year. Because this is data that's coming from a really robust treatment. Data that's coming from 57 patients, and remember, More than 40% of the patients are in the ACE group from two to five. This is not all children. More than 40% are in the ACE group two to five. And we will look on that on a double-blinded placebo-controlled efficacy and safety after one year with all the different cohort. At the same time, we're also doing cohort expansion, really enrolling on what we believe could be a recommended dose. And we also want to imitate in newborns or infants starting between zero and two years this year. So I actually believe the package we're building up now related around our transcontinental CMP is unique, not only for acromioplasty, but perhaps for many other growth disorders, because where we believe CMP could be an important compound.
spk10: Thank you. And again, we ask that you please limit yourself to one question and one follow-up. Our next question comes from Vikram Pirohit of Morgan Stanley. Your line is open.
spk12: Great. Thanks for taking my question. So I had two on Skytropha. First, of the prescriptions that you've seen written so far, could you comment on how many have been for treatment naive patients versus for patients that are being switched over from a previous daily growth hormone? And then secondly, from any conversations you may have had with doctors prescribing the therapy since launch, how have they described the authorization process where that's been applicable in terms of how long it took to get their patients approved and how much of an administrative burden the discussions with insurers have posed to their staff? Thank you.
spk05: Thanks a lot. I think I will start, and then both Jesper and Scott can help me in adding in some facts as I forget it. What we see, we see in development in the ratio between what I call the patient compared to switch patient. What we saw from the beginning was the vast majority of patients were switch patients because they didn't need to wait for the establishing of the right diagnosis which involved multiple tests including a stem test of growth hormone stimulation. So what we saw from the initial part of this is mainly switch patient. We see now it's switching more and more over to negative patients from that. And one of the things I was most surprised about was just after one week we got our first commercial patient. But I think Jesper in a general perspective can explain what our effort is really to be quite sure we are converting as fast as possible as many as possible, over to commercial patients. And we have a unique setup to our hub that really are the fundament in getting this done. Jesper? Absolutely, Jan.
spk04: Basically, what we're having is we have the ASAP program that I'm sure that you have seen become. And that is very common to have, also normally called the FASTA program. And you will anticipate that it takes anywhere between two weeks to six weeks for the normal prior off, which is the typical routine that all growth hormone patients are going through. Prior off is common standard for drugs that cost more than $1,000 a month, which is, of course, what we are talking about here. And then in case of a rejection, we are going for what's called medical exceptions. And there is paperwork involved in it, but doctors see it as an opportunity to help their patients going from you could say hard work of one-stated treatment and transferring the patients onto once weekly and thereby getting much better compliance from the patients in terms of remembering to take the injections. So all in all, that's the scheme that the patients go through. And we are certainly focusing in, as Jan says, in the first place on the switch patients because they were in the queue to get transferred first. And then, of course, as time goes by, we'll also see naive patients and new patients coming on board.
spk05: Thank you as well. Great.
spk10: Thank you. Our next question comes from Joseph Schwartz of SVB Learing. Your line is open.
spk07: Hi, I'm Doreen dialing in for Joe. Thank you for taking our questions. I know it's early days, but When can we expect to see sales guidance for SkyTrofa?
spk05: When we feel confident in giving you numbers that we believe in is going to be reflecting how the sales is progressing during the first period of time. And one of the guidance, at least for myself, and this is something we discussed, because we have different gut feelings, everyone, at least I would like to see at least two full quarters. And then when we have seen at least two full quarters, we can look at it and then think about it and say, is that really sufficient, good enough to give you guidance into a race that is not... really meaningless for you, but really give you what we call financial modeling guidance. But I really don't really care so much about the first four quarters. What I really want to know, and this is what I'm saying to Jesper, we are here to build up the leading brand. We want to have a plan that we're executing on not only be the most prescribed growth hormone product, but also the most high-valued growth hormone product. And that is what we're building our strategy on. And that is evolving, yes, from the commercial side, but also the clinical development, even Scott, where we want to go in and be sure that we're building up the right label expansion so we can address the entire growth hormone market. And this is how we build up a leading brand, not only in the U.S., but on a global basis.
spk07: Okay, great. Thank you. And then I have a question relating to TransConCNP. So a competitor recently announced that in children less than five, you know, they saw trends favoring their agent compared to placebo on an annualized growth velocity. We haven't seen the data, but, you know, it appears that there could be some differences based on age. I know that you're studying TransConCNP in children as young as two and accomplished and even younger and accomplished infants. So I'm curious what you make of that, and if you're anticipating any differences in younger children. Thank you very much.
spk05: Thanks a lot. I think I can comment about some of the facts, and Dana and her team are really always looking into the safety, and also we provide a safety update in our R&D day. But the facts are we have 42% of our children in the accomplished trials is actually in the age between 2 and 5. And we have, for many of them, we have more than one year safety database. So, Dana, perhaps you can, in some ways, sum up some of what we have seen from a safety perspective. And the easiest way for you, just take it on a blinded basis.
spk02: Yes. Well, so far, you know, the Kanban's been extremely safe, and we haven't seen any, you know, problems, you know, related to cardiovascular side effects. or things like that. So, you know, we're very pleased with that. And we also feel that the sort of continuous release of CNP, you know, is an advantage. I think, you know, to the to your other point, though, we do notice that, you know, the younger kids grow faster, right. And so there, you know, is an opportunity to potentially have a greater impact on that group once we you know, can unblind the data. But, you know, again, even sort of our natural history shows that, you know, that's, you know, sort of some of the biggest, you know, changes that they have in their growth. So, you know, we're very excited about, you know, finally being able to tease it out and break it down, right, by age group so that we can, you know, get a better idea of, you know, whether the effects are even more magnified in the younger age group.
spk05: Thanks a lot. But I think Scott can also provide you with our link or the slide related to our research and development day that we had in December last year where we provided an extensive safety update about the patient in the accomplished tribe on a blinded basis, there you can see all the concrete elements we have.
spk10: Thank you. Our next question comes from David Lebowitz of Citi. Your line is open.
spk03: Thank you very much for taking my question. I've got two for you here. A quick one on Skytropha. Given the uptick from earlier in January on prescriptions, how can we think in that in terms of cadence going forward on sales for the drugs throughout the year? And flipping over to Transcon PTH, on what basis do physicians typically prescribe for these patients? Is it based on things such as reduction of vitamin D, active vitamin D, and calcium, Is it more on intangible quality of life type items? And with that in mind, you have two different quality of life type items as secondary endpoints. Could you compare each of those endpoints and what they mean, and how would these actual endpoints be meaningful to prescribers?
spk05: Okay. There was a lot of questions related to PTHs. But let us start with Skytober first and think about what is our read about this here. And, you know, we are sharing three different KPIs with you. But Jesper, he has about 20, 40 KPIs he's looking on week by week to be sure we are matching and really going in the right direction. So the KPIs we are using in because we don't believe at our current state of our initial launch, we basically have what we call revenue basis that really are predicting how this product opportunity really are performed inside the U.S. market. And this is why we follow the different KPI. And one of the numbers, the 708, this is a pretty good number in prescription, 708 patients now under treatment with Skytrover in the U.S. I actually am pretty proud of that, and I'm proud of the organization that has managed to get this to happen. And I'm quite sure we will be marching to this number and increase it month by month. So when we look at all the different integrated KPIs we're using to follow the norms, we are in a position that we feel pretty We know we're okay because we always want to do it better, and the day we stop actually not to believe that we can do it better, I have to think we're doing a mistake. But what we have seen until now in these norms is this living up to everything what we have expected. And we will see that continue to continue, and I believe the more and more we get in market assessment, the faster and faster we can penetrate also to get not only the prescription done, but we also can get it or to commercial patients faster and faster. And that is the trend we see. I do not know if you have anything to add, Jesper, to this before I go to PJ?
spk04: No, I think it's bang on. We are following it very closely and we are very pleased with where we are right now. So week by week, we are looking at it and making judgment. And also, as you're saying, we have very positive feedback. So that's, of course, giving us momentum and trust for the future of we will be the market leader in the long-acting segment.
spk05: Yeah. Going back to PTAs, and I think this is a question that somebody going back to me when I look and what I have seen in the open-label extension trial. Because what we have seen in the open-label extension trial is that the science is really true. And true because when we see something that's not expected to happen is because we don't understand the science. But the science where you have physiological PTAs and what the impact of that is actually been proven to so many publications where they have using a short-acting PTAs and infusion pumps. And we've seen the same thing in our phase two open-label extension. But think about the facts. We have this patient now for two years in an open-label study. Two years. have 57 out of 59 taking a daily injection. It's only happening because they see a major, major benefit. And this is not long-term complication they're seeing there, because in my experience is that people don't really are compliant in any open-label extension just for long-term factors. They do it because it goes back to your question about quality of life. They are feeling they're getting their life back. Do we measure that with our SS36, where some of the subdomains are specific to some of the benefits we expect to see? We saw the benefit both on the summary and all the subdomains. Or we go to the patient-reported outcome with a more disease-specific one? I think we will see it on some of the subdomains for each of them. And that is what we expect to see also when we come to this here. But what was impressive for me was to see just after four weeks, we could see from a statistic perspective, none of the other PTH products had ever proven they could do that. From a statistic perspective, just a few weeks in, there was an improvement in the quality of life. But I think you need to take it into the science about you stabilize the CM calcium, but you're also stabilizing a physiological PTH level. And we know there's a lot of PTH receptor inside the brain, really accessible for the PTH. And this is my personal view about the science behind it, is that it's the combination of a stable CM calcium and a stable stabilization of the physiological PTH levels that provide all the benefits. But at the same time, you also see a lot of benefits on urinary tract, on bone. I can continue to talk about what it means for a person to have normal physiological levels. But sure, in our phase three trial, when we come out here, we will be in a position that we will give you what we call the numbers that are also reflecting how we see the quality of life.
spk10: Thank you. Our next question comes from Yaron Werber of Cohen. Your line is open.
spk13: Hey, this is Gabe on for your own. Thanks for taking my questions. So first, you've shared that about 369 prescriptions had been written as of December 31st. And so all of those would be at least two months ago. Can you give us a sense of how many of these patients are now on therapy, which would also help provide some insight into the success rate of the prior authorization process? that I believe was asked about previously, and then I have a follow-up.
spk05: I think Jesper indicated that what we have, we have a fast start program. So I believe the majority of all patients are what we call coming into our fast start program. So the basic will be on treatment. And then during this period, that will be converted into commercial patients. dependent on the speed, as Jesper talked about, some where we expect two weeks, some can take up to eight weeks, or something like that, related to the process of getting them moved from walking over to a commercial patient.
spk13: Okay, yeah, that makes sense. So how many of those patients have been converted among the first 369 as of December 31st? Those would be more than eight weeks ago, or can you provide any Any insight there just to give us a sense of how the conversion is going?
spk05: The conversion is going exactly as what we have expected. And Maxwell, as we said, which I indicated, saw the first commercial patient coming after one week. So the commercial patient are coming exactly as the expected speed compared to what we expected to see from our knowledge, how the growth hormone market function, how growth hormone treatment. We are not there different compared to that.
spk10: Thank you. Our next question comes from Leland Grishel of Oppenheimer. Your line is open.
spk15: Hey, good afternoon. Thanks for the update and taking my questions. Just a couple on Skytropha. Thanks for the update on the 36% of covered lives. Could you comment maybe on how that process is going in negotiating with players relative to what your expectations had been? Are there any sources of pushback or challenges that you're encountering, or is it simply taking the time that it takes? And then we'll follow up.
spk05: Thank you. That's a very interesting question, because I believe we are in a situation, and yes, well, he has the entire market assess team at his shoulder. And what we're doing to the market assess team is building on the strategy we have explained multiple times. Strategy is to build up not only the most prescribed growth hormone product, but also the most high-value product opportunity. So for us, it's basic optimizing the value of Skytrover here in the U.S. We know it's the best-in-class product opportunity. We're providing a real benefit to the region, which is providing not only a once-weekly treatment, but also an improvement in treatment outcome, which is measured by high velocity. We saw that in our Phase III study. So we're providing really benefit to the patient. And we're getting the market assets as we wanted to have in the speed we expected to have, but more important, on the right conditions. Because this is how you build up a high-value product opportunity. not just go in and get it as fast as possible. You do it in the right manner. And I think this is what Jesper and his team is doing. Do you have any comments more, Jesper?
spk04: No, I mean, we're coming in at the point of time where we're negotiating, and these things are, of course, ongoing, as we're also indicating. And so far, the access that we're having, we're quite pleased with, and also the approval rate that we're getting. So, All in all, it develops according to our plan, which we are, of course, pleased with.
spk05: And if you go to the numbers, because that is Scott's, and I think what he said was that we now have 36% of life covered now. I feel pretty good with that number. Perhaps you can correct me if you're right. I was wrong. Yeah, 36% of life is covered.
spk14: Okay.
spk05: I heard you're right, Scott.
spk14: Yeah, 36%. 36%.
spk15: Thanks. And just a question on PGH. Just with respect to the regulatory process, will the FDA be taking the Phase II and the Phase II open label extension data into account, and to what extent as they presumptively review, you know, your application, you know, pending the results from Pathway?
spk05: Yeah, you are correct. We are building up, for example, the safety database from both trials. And, Dana, do you have some further comments about that?
spk02: Well, yeah. I think, you know, the phase three, you know, pathway trial will be the sort of flagship, you know, registrational trial. I think that the long-term, you know, results from path forward, though, will be extremely helpful, not only just to show the durability of the response, right, as Yen said, 57 out of 59 are still, you know, in the trial. And, you know, that'll also give us a lot more information about what happens to the bone, right, and, you know, sort of help us to validate the sort of disease-specific quality of life instrument that we've been working on as well. So, you know, I think, you know, the two trials would be, you know, sort of going, you know, sort of hand in hand. I mean, one is the pivotal registrational trial, you could call it, and then the other one would be, you know, strongly supportive. Before we even, you know, sort of started the phase three trial, we explained to the FDA what we would have in terms of long-term safety, you know, from, you know, path forward. I think we Didn't even expect we would have such great adherence in that trial, but they were satisfied that the totality of the safety database would be sufficient for them to do their review. So I think both trials are extremely important. I think the pathway trial, though, is sort of the linchpin for the replacement concept as well.
spk05: Thanks, Damon.
spk10: Thank you. Our next question comes from Anita Dushant of Berenberg Capital Markets. Your line is open.
spk08: Good afternoon. Thanks for taking my question. Just regarding the number of prescribers for Skytropha, I think in the commentary you mentioned 263. Could you talk about maybe – when internally the sales team will be able to cover the 1,400 prescribers?
spk05: I think what we are doing already now and how our long strategy has been is to do targeting. So we are covering, Jesper correct me, I think it's more 80% of the prescriptions being done in the global hormone market by only targeting 20% of the prescriber. So typically in the states we initiated our lungs, we actually covered 80% of all the prescriptions being written in the global hormone market. Jesper, was I wrong?
spk04: understanding this right? No. What we are basically doing is we are breaking the 1400 into deciles, and then, of course, we are key targeting on the highest prescribers, and that's where we have, you could say, the best sort of penetration. So we will continue to work on it and expanding it, and in particular now that the market opens up that we can do face-to-face calls We can do it. We have a match in terms of competitive forces with our size force with the competition of both Novo and Pfizer. So we certainly believe that we can maintain and focus on the market leadership that, of course, we're having right now as we are the only one on the market, but that we're also going to continue to have when we see competition coming onto the market.
spk05: Thanks, Jesper. Thank you. Yeah.
spk10: Thank you. I see no further questions in the queue. I want to thank everyone. This concludes today's conference call. Thank you all for participating. You may now disconnect, and have a pleasant day.
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