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Operator
Good day and thank you for standing by. Welcome to the Ascendance Pharma second quarter 2022 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 the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Mr. Tim Lee, Senior Director of Investor Relations for Ascendis Pharma. Please go ahead.
Tim Lee
Thank you, Operator, and thank you, everyone, for joining our second quarter 2022 Financial Results Conference call today. I'm Tim Lee, Senior Director of Investor Relations of Ascendis Pharma. Joining me on the call today is Jen Mickelson, President and Chief Executive Officer of Scott Smith, Senior Vice President and Chief Financial Officer. Dr. Dana Fizzuti, Head of Development Operations and Chief Medical Officer. Dr. Steena Singhal, Head of Clinical Development Oncology. And Joe Kelly, Head of U.S. Commercial Endocrinology. Before we begin, I would like to remind you that this conference call will include four looking statements that are intended to be covered under the safe hardware 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 Skycopo for the U.S. market, the commercialization of Transcontinental HGH for the EU market, our progress in our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline, including the timing of clinical results, statements regarding the U.S. market approval of Skytropha and our product pipeline candidates, statements regarding our planned regulatory filings, our expansion into the new therapeutic areas, and statements regarding our ability to create a sustainable, leading global biopharma company. These statements are based on information that is available to us today. Actual results and events could differ materially for those in the four linking statements and we may not be able to achieve our goals, carry out our plans or intentions or 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. Expect as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see our forward-looking statement section in today's press release and the risk factors section of our most recent annual report on Form 20F filed with the SEC on March 2, 2022. Transcon Human Growth Hormone, or Transcon 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 weighing 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 marking authorization for Lonepeg Somatropin Ascendant Pharma, developed under the name Transcon HGH, is a once-weekly subcutaneous injection for the treatment of children and adolescents aged 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. Otherwise, please note that our product candidates are investigational 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 our second quarter 2022 financial results and will provide further business updates. For honest and prepared remarks, we'll then open the call up for questions. I will now turn the call over to Yen Mickelson, President, Chief Executive Officer.
Tim Lee
Thanks, Tim, and good evening, everyone here from Copenhagen. With our recent clinical and regulatory progress for Transcon PTH and the commercial progress for Skynetropa, we continue to work toward fulfilling our vision tree by tree to become a sustainable, profitable, leading biopharma company. For Transcon PTAs, we have reported positive phase three data, which met the compulsive primary endpoint and all key secondary endpoint, highlighting its potential to address a major unmet medical need for adult patients with hyperparathyroidism. After a positive and constructive pre-NDA meeting with FDA, we are on track to submit regulatory findings in the US in the coming week and in EU during Q4. This year, we continue to advance our goal of making Skytofa the leading product in a growing growth hormone market. in our planning to launch SCARTOFA in Europe next year. We have now achieved successful phase 3 results for two independent product candidates in a row and continue to see highly consistent clinical trial results across multiple geographies and populations. We believe that we are well positioned to drive sustainable long-term growth with our three additional independent clinical product candidates in rare disease endocrinology and oncology. That applies the same algorithm for innovation that we use for scitopha or transcomptase. We believe that we are on track to become cash flow positive. Given our strong cash position, of around 1 billion euro, combined with the expected revenue from Skartrofe in the U.S., combined with the expected U.S. launch of Transcon PTAs in the middle of next year. Now, let me update you on each of our programs. For Transcon growth and more, market at Skartrofe in the U.S. Our commercial strategy is to build Skytober into the leading growth hormone product in value, while growing the overall value of the growth hormone market. Our once-weekly Skytober is differentiated from other once-weekly growth hormone products in multiple ways that reinforce its value. Skytober is the only once-weekly product to deliver unmodified somatopine, thereby maintaining the same mode of action as denicotinol. In addition, it's the only product with room temperature storage, no preservatives, and an empty old cartridge which provides clear, visible evidence to patients and caregivers that injection has been delivered. I'm also proud to share with you that the Skytropha Autoinjector was awarded PharmaPax 2022 Patient-Centric Design Award. This prestigious award recognized pioneering drug-delivered solutions that have significantly contributed to improved design innovation, patient experience, and ease of use. This changed the U.S. commercial leadership in May. And the new leadership immediately implemented improved commercial tactics for SkyFOFA. One of the goals behind these changes was to increase conversion of prescription to paid reimbursed therapy. We have already seen the benefit of this effort. With a more than doubling sequential resulting in a reported revenue of 4.4 million euros in Q2 compared to 1.9 million euro in Q1. Nearly half of Q2 revenue were generated in the month of June alone. We also seen an increase in the number of Skytrover prescriptions written for new patients. With a total number more than 1,700 at the end of Q2. A typical prescription has a duration for one year. This is an increase of 75% compared to the end of Q1. With this improved commercial tactics, we believe we are on track to achieve current 2022 full-year a census-compiled, sell-side-analyst-consensus-Skytofer revenue estimate of around 25 million euros. We continue our efforts to build Transcon-Glutamone to a leading global product with a global phase 3 adult Glutamone deficiency trial. pediatric growth hormone deficiency trial, and a planned Turner syndrome trial. Let us now turn to Transcon PTH, potentially our most valued product candidate in endocrinology rare disease pipeline. We designed Transcon PTH to release PTH and physiological levels over 20 hours to deliver the missing endogenous PTH. We believe that Transcon PTAs has the potential, if approved, to become the first hormone replacement therapy to address the underlying cause of this disease. For this reason, we believe that Transcon PTAs is the only product candidate that can properly and completely address this more than 5 billion market opportunity. The results from our Phase 3 trials, which met the composite primary endpoint and all key secondary endpoints, along with our Phase 2 trials, support our belief in this potential. Even more promising, 57 out of 59 patients continue in the open-label portion of the Phase 2 trial during two years of treatment. And 78 out of 79 patients continue in the open-label portion of the phase three trial. All that reinforce our view that this product candidate is having an ongoing impact on this patient's life. These positive results were consistent across Transcon PTH-treated adult patients, independent of their disease background or conventional therapy dose at baseline. which gives me comfort that basically all adult hyperparaparism patients have the potential to benefit from treatment with transcomptetase. With this long-term and pivotal data in hand, and our planned NDNA submission in the coming weeks, we are focusing on preparation for the expected U.S. approval and longs in mid-2021. We have identified three segments within the estimated 70,000 to 90,000 patients with chronic HP in the U.S. The first segment consists of adult patients in the U.S., previously or currently treated with short-acting PTH preparation. All true, most of them no longer have access to this treatment because of the recall of NatPara in the U.S. This patient group, we believe, can be the early adapters of Transcode PTAs, as they have previous experience with PTAs treatment. The second and last segment consists of chronic adult HP patients. currently on conventional therapy with active vitamin D and calcium supplement, who remain PTH treatment aid. In this segment, we will focus on building awareness for patient, providers, and healthcare system to understand the clinical value of transcom PTH treatment. The third segment consists of newly diagnosed adult patient with chronic HB. Patients in this group often develop chronic HB as a result of next surgery on therapies that result in removal or damage to the parathyroid glands. In addition, we plan to explore the potential benefit of Transcon PTA more broadly in post-surgical settings and pediatric patients in future clinical studies. Expanding global reach for Transcon PTA. We expect a potential approval in EU in Q1 2024, followed by a long shortly thereafter. For Japan, we plan to report top-line results for our Phase 3 partway Japanese trial in the fourth quarter of this year. Switching now to Transcon CLP. The countries trial, our Phase 2, randomized, double-blinded, placebo-controlled clinical trial of Transcon-CMP in children with echocardiopathy from the age of 2 up to age of 10 continuous. We are pleased to report that we continue to see a well-tolerated safety profile, and all patients continue in their trials with the longest treatment duration now about two years without any dose reduction or discontinuation. All patients in the open labelling extension are now on 100 micrograms per kilo per week at dose. We look forward to sharing the top-line results from the double-blinded placebo-controlled part of the ACOMDIS trial and the open labelling extension results during the fourth quarter of this year. We are planning to submit a new protocol to our in the U.S. and submit CTAs in countries in the EU in Q4 this year in order to initiate a new global randomized double-blind placebo-controlled phase two trial in a contemplative patient down to the age of two. The trial is expected to enroll around 80 patients and measure analyzed growth velocity at the primary endpoint. We expect to have the top line results at this clinical trial in 2024. With this, we believe that we remain on track to our overall vision, three by three, goals of attaining approval for three endocrinology rare disease product by 2025. Turning now to oncology. Based on our recent progress, I am more and more convinced that we can make a paradigm shift in the treatment of cancer because of our unique Transcon technologies. The Transcon TLR78 agonist is designed to kickstart the immune system inside the tumor, where our hydrodialysis technology provides sustained release of the TLR78 agonist, thereby activating the immune system without systemic Enrollment continues in our phase one to trial of transplant TLR agonist therapy alone in combination with a checkpoint inhibitor in patient with solid tumor who has failed prior lines of therapy. The trial continues to show transplant TLR agonist is well tolerated as a monotherapy or in combination with a checkpoint inhibitor. consistent with low systemic exposure of TLR78 agonist and demonstrating preliminary evidence of anti-tumor activity as monotherapy or in combination with a checkpoint inhibitor. Our Transcon IL-2 beta-gangloprotein candidate is designed to broadly increase systemic stimulation of the body's only anti-cancer system and to become a new backbone for cancer immunotherapy. The phase one to dose escalation and dose expansion trial continues to evaluate this product candidate alone or in combination with a checkpoint inhibitor or chemotherapy in patients with solid tumor who have failed prior line of therapy. During the second quarter, we dose our first patient in the combination transcon IL-2 beta gamma and checkpoint inhibitor. The phase 1-2 trial continues to show transcon IL-2 beta-gamma is well tolerated as mono-3 or in combination therapy. Today, we have seen dose-dependent increase in absolute lymphocyte count, along with increases in pseudotoxic subset cells of CD8-positive cells and NK cells, without an increase in in eosinophils, indicated the intended design bias towards beta gamma activity. There had been no dose limit toxicity reported to date, and we continue with dose escalation. I will now turn the call over to Scott for additional details and a financial review before we open for questions.
Tim
As Jen noted, we are in a very strong position to achieve Vision 3x3 to become a sustainable, cash flow positive biopharma company. With the U.S. commercialization of Skytropa, near-term regulatory filings for Transcon PTH, and nearly 1 billion euro on hand. Reported U.S. SkyTropa revenue for the second quarter more than doubled sequentially to €4.4 million from €1.9 million in Q1. Growth in SkyTropa revenues reflects a strong increase in reimbursed demand, and we continue to see robust increase in cumulative new patient prescriptions as summarized in the press release. Based on the increasing success rate of patient reimbursement and our continued momentum gaining prescriptions, I want to reiterate Yen's comments. We believe we can achieve the current Ascendus-compiled self-hide analyst consensus estimate of €25 million for the full year 2022 SCITROPA revenues, which consists of 14 publishing analysts. Now turning to operating expenses, research and development costs for the second quarter were €90.4 million compared to €83.3 million during the second quarter of 2021. This reflects ongoing normalization of our overall R&D cost structure as more programs progress from early through late-stage development and approval. Selling, general, and administrative expenses for the second quarter were 56.6 million euro, compared to 35.3 million euro during the second quarter of 2021. These expenses primarily reflect higher commercial costs in the U.S. following the launch of Skytrophos. Finance income for the second quarter was 71.1 million euros, which includes a net foreign exchange rate gain of 30.6 million euros related to translation of our U.S. dollar holdings of cash, cash equivalents, and marketable securities, and our U.S. dollar-denominated convertible senior notes to euros, and a non-cash 39.3 million euro gain from remeasurement of the conversion option embedded in the convertible notes. Finance expenses for the second quarter were 9.3 million euro, primarily related to amortization of transaction costs and interest expense related to our convertible senior notes. In future quarters, the following items related to the convertible notes will continue to impact finance income and expenses. First, remeasurement of the U.S. dollar-denominated convertible notes from U.S. dollar into euros. Second, remeasurement of the conversion option embedded in the convertible notes, which IFRS accounting rules require us to remeasure on each reporting date. Third, interest expense related to the cash coupon. And finally, amortization of costs from issuing the convertible notes. Overall, we had a net loss of 81.3 million euro, or 1.46 euro per basic and diluted share, compared to a net loss of €134.4 million or €2.5 per basic and diluted share during the second quarter of 2021. We ended the second quarter with cash, cash equivalents, and marketable securities totaling nearly €1 billion, which we believe will enable us to become cash flow positive. Turning to the remainder of 2022, we expect our operating expenses to increase modestly, as our pipeline matures and as we prepare for anticipated product launches. Let me now also provide you an update on timing for select milestones for the remainder of the year. For Transcon PTH, we're on track for a planned NDA submission this quarter and a planned European submission in Q4. And for Pathway Japan, top line results are expected in Q4. For TransConCNP, we look forward to sharing the top-line results from the double-blind, placebo-controlled period of the accomplished trial, and also the open-label extension results during Q4. And we plan to submit regulatory filings in Q4 for a new, randomized, double-blind, placebo-controlled Phase 2b trial in children with achondroplasia. For Transcon TLR78 agonist, top-line monotherapy and combotherapy dose escalation data from the Phase 1-2 Transcend IT101 clinical trial are expected in Q3. For Transcon IL-2 beta gamma, monotherapy top-line results are expected from the Phase 1-2 IL-BELIEVE trial in Q4. Within oncology, we expect to submit an IND or equivalent for a phase two cohort expansion in order to evaluate the combination of transcon TLR78 agonist and transcon IL-2 beta gamma therapy in Q4. And finally, we plan to announce our third therapeutic area by the end of the year. As you can see, it's a busy second half of the year for Ascendus with key catalysts across the pipeline, both in endocrine rare disease and oncology. As the NNI noted, with approximately 1 billion euro on our balance sheet, we have the capital to fund our growth initiatives, and we are positioned to fulfill vision 3x3 and cash flow positives. With that, operator, we are now ready to take questions.
Operator
As a reminder, to ask a question, you will need to press star 1-1 on your telephone. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jessica Phi from JP Morgan. Your line is open.
Jessica Phi
Hey, guys. Good afternoon. Thanks for taking my questions. I have one high-level question and then a few specific ones. First, what are the PTH and or Skytropa assumptions that are embedded in your expectation to become cash flow positive? And just to confirm, should we take that to mean you expect to become cash flow positive without the need for additional capital? Maybe I'll stop there and come back with the other product specific ones.
Tim Lee
Thanks. We are in a unique position at Ascentis. During the last years, we have built up a unique pipeline of five independent product opportunities. Each of them have a plus billion potential. But what is unique with the pipeline? We believe we can make it extremely successful. We have not failed in one single clinical trial yet. We have managed to move each single product opportunity from preclinical stage out to get Skytrover approved now in Europe and U.S. We have moved Clanscon PTAs from preclinical into positive phase three client And we now expect to file in the next weeks here in the U.S. If you just focus on these two product opportunities. And to be profitable and to be cash positive, there is two different elements. This is like a bucket. You fill in the bucket when you start with some water. And then you have a hole where things run out. We started with one billion of water now. And then we fill in with revenues from Skytrofa in the US, our expected norms of Transcom PTH next year. And then we have a whole. What is interesting now, we have such a mature pipeline, we're not really in reality increasing R&D expenses because we take product out nearly in the same stage as we take it in. So this is why Scott and I the management and everyone feeling now we are in a position we can hit profitability with our current one billion in the pocket of cash. Scott, any additional thing? I don't have anything to add to that yet.
Tim
That was great.
Jessica Phi
Great. The other ones I had was just how many of the 1,707 patients who have gotten a Skytropa prescription have received a pen or started taking Skytropa at this point. And then switching to CNP, what do you expect to learn from the ACCOMPLISH data and the Open Label Extension data that will become available in the fourth quarter? And I'm also curious of your thoughts on it. It seems like now two other agents in the space have had a tough time detecting an efficacy in kids under age five, what proportion of the kids in your ACCOMPLISH trial are under age five?
Tim Lee
Yes, there was a lot of questions. Let me start on the last part because then I can still remember most of the questions here in the later Copenhagen hours. But I believe that you need to think about how we decide our ACCOMPLISH trial. We decided out from the perspective is that we wanted to really to see the expected strengths of our product opportunity. And we did it in a way where we double-blinded it and having an internal placebo control where we randomized each single of the four cohort to one to three. So we basically have in our account this time the same amount of as we have treated patients in each single arm. Very different compared to anyone else. There are some trying to compare to historical data, some are trying to compare to pre-teasement outcome. That is a big difference. So we basically will have one year of analyzed growth velocity data in a well-controlled, double-blinded trial with about 10 to 12 patient in each single arm. We will be in a position that we really want to treat all the patients. We will not just select it to flash over and anything. We believe that basic down for newborn, you should have the treatment option. And we believe we also have such a strong product opportunities we can see an effect there. So what we are doing and what we expect to share with you in Q4, we will share with you All the data so you can take an informed decision about the strength of this product opportunity, how it can really help the patient. We will show you the analyzed growth velocity for each single cohort. One year, we will compare to placebo. We will give you absolute value so you can make a real adjustment and not just a delta. Because this is the only way you can do it. We will show you, which is much more important also, the safety profile, how it's safe for this treatment group, because that is priority one in the pediatric setting. It needs to be safe. But what is more potentially interesting, we have patients now that have been in the trial for more than two years. Meaning is that they have been in open-label extension trial for up to one year. We have not seen any single patient leave this trial. all the patients are still in there. And I always feeling that it gives me comfort that if you in up to two years treating the pediatric population and not see anyone leave, it's because they see an effect. Also feeling that it's very important to show to you what is happening in organ-label extension because the first group, the six microgram group, I would call it was a very low group in treatment basic got switched up now to 100 microgram because then you have basic and situation where you also can follow and patient group that got treated for one year with six microgram and then suddenly got switched up to 100 microgram and then see what is the expected outcome. So we basically have two ways to judge it and we will be as we always are when we share data transparent. giving you potentially too much data sometimes, but we really want to share so you really can understand why we excited about our product opportunities.
spk11
Yes, do that explain my excitement about CMP?
Operator
As a reminder, please limit your questions to one question and one follow-up only. Should you wish to ask more questions, please press star 11 again to re-enter the queue. Your next question is from the line of Josh Shimmer from Evercore. Your line is now open.
Josh Shimmer
Hey, thanks for taking the question. A couple of questions about Skytropha. First, in terms of access dynamics and parameters, can you give us a sense of the percent of targeted covered lives that are able to access Sky Trophy. There is a frontline option or a switch option without any step edit requirements. And we've also heard some concerns about the device potentially jamming at times. Maybe you can help quantify the rate at which that is occurring and whether there are any mitigation steps to correct that, especially as Novo Nordisk may be launching once a week with a competitive device as well. Thanks so much.
Tim Lee
Yeah, thanks. Let me start on the last question. It's always easier for me to remember. And Scott, you give me the thing for the first one. Let us talk about the Skytropha device. When you talk about device, you talk the way you treat the patient. and how you basically have a treatment option for the patient. And what we did develop with vescalitropa and its developed autoinjector, which we just really got the award for, because basically how we were patient-friendly and other things like that, really showing how we really have succeeded with what we tried to develop with the vescalitropa autoinjector. So one of the things we wanted to build in this autoinjector is basically to have room temperature stability. And this has really been the key element for the leading position of the daily growth hormone market, because it's really a huge burden for patient, caregiver, always to have a cool change stories when you're traveling or other things, just moving from one home to the other home, doing other things. And this is why we built it up in this way. But one of the unique we could build up was this single-use cartridge because it also gives a unique opportunities for the caregiver never being doubt did I really give the child an injection that week or not and we really seeing unique benefit with that. What I get from every week I get an update about complaints because in the complaints we have an actual monitoring about what do we see out in the market and now we have basic thousand patients in treatment and other things like that so the numbers start to come in and I can guarantee when I look the numbers there I'm not getting any data that indicating that we have any issues with what you are referring to with the autoinjector. We cannot see it from the data. Sometimes perception are stronger than reality, but when I look on the data, we have no indication from that perspective. The first question. I think the first question we can answer, but we can answer under this assumption that it's basic is a situation that is changing day by day. Because as you see in our press release, we have about 5-7% of US lives covered. But it's meaning that it really is a highly diverse positioning and this position is changing by day, week by week, because as Joe is doing with his people, the commercial team, they are trying to the market assess team to improve every day, every week, that our patient and the physician have the most optimal way to get access to the patient of Skytofa.
Scott
Scott, do you have any comments or to Joe? Yeah.
Tim
Maybe augment that, Josh, by saying there's a variety of coverage. And, you know, we believe that our formulary positioning is basically in line with our goal of preserving and growing the value of this market, specifically for our Skytrover product, which we believe is a premium product.
Tim Lee
Yeah, I think one of the key elements, you can have different kind of strategy and position about a brand, about the Skytrover, how we want to be having an award strategy for us. We have a superior product. We believe we have a best-in-class product opportunity. We believe the properties that we have with Skytrover is providing the endocrine benefit that a patient should deserve. What we see today is that when we position that into the market, we have two goals. to be number one in value in the U.S. market, but we also want to ensure that the entire growth hormone market will grow to a level from the current 1% to 3% to a higher level because we are providing a better treatment outcome for patients. And therefore, from the society perspective, we can some way share the benefit everyone gets out of it. This is why we believe our market assets strategy is building on not being in a position where we're not getting and taking market assets, except that we're feeling this is into the framework where we believe we can see these two elements. Joe, I would like to introduce you to Joe. Joe is the head of our U.S. commercial team. And Joe, do you have some further comments to this discussion?
Joe
Yeah, thanks, Jens and Scott. Hello, Josh. But yeah, I'll just really reinforce our strategy around gaining Profitable access horse guy trope and that's something we're continuing to execute on and as yen has mentioned a couple times already You know commercially we've made some tactical adjustments by reallocating resources to capitalize where we know we have access opportunities with better targeting and we're also reinvesting in areas that has and will continue to help us increase the number of patients and that get reimbursed. And if you look at June by itself representing half of our revenues in Q2, it's an example of our approach working and we're just getting started.
Josh Shimmer
Thanks very much.
Tim Lee
One thing I would like to say, I would like to see what we have seen here in the last two quarters. Now what we have doubled the revenue from last quarter to this quarter. Our goal is we can continue doing that. This is how we want really to build up the brand. And I believe Joe and the entire commercial team, because they really function as a team, is really now dedicated to get that to happen. We believe patients in the U.S. with growth hormone deficiency deserve to have the treatment option of Skytover and get what we believe the benefit of this treatment.
Operator
Your next question is from the line of Dazeen Ahmad from Bank of America. Your line is open.
Dazeen Ahmad
Hi, good afternoon. Thank you for taking my question. Yeah, and I just wanted to get your thought about the competitive landscape for achondroplasia. So we know about the competitive advantage your products would have potentially on dosing, dosing frequency. But also wanted to get your thoughts on BridgeBio, which recently did show some early stage data for an oral molecule that it's developing. It's early, of course. It'd still be several years ahead. But I guess in theory, how do you view the potential profile of an orally delivered drug if efficacy is somewhat comparable to your proposed weekly injection? Thank you.
Tim Lee
Yeah. It's not really my job to make comments about other companies' products, but I'm always willing to share my personal analysis of the entire competitive landscape. First of all, my fundamental from the scientific perspective, and this is where I always believe a product opportunity's mode of action direct the clinical outcome in the end, independent on how you do the clinical trials. Number one, this is an oncology doc that got positioned into a pediatric indications. From the mode of action and where the target tissue are in the growth plates, I need to be convinced by data data and data that is a safe product because that is priority number one. It need to be safe in the doses where it provided a therapeutic effect. And there my question come in when I look at the data. I have no clue how to analyze it because one of the key element I need to understand Because I've seen so many, many, many, many data with analyzed growth velocity for three months, six months and everything like that. If you just see a delta, it's meaningless for me. I need to see absolute growth velocities. I need to see background. I need to see other things like that. So for me, I have no evidence. I have no opinion that this product is functional or not because I can personally not judge it. For the competitive landscape is that safety is number one in a pediatrics and contemplation thing. You cannot compromise safety, whatever you talk about. You can never compromise safety. And this is why we believe, together with others, see absolute growth velocities. I need to see background. I need to see other things like that. So for me, I have no... I have no opinion if this product is functional or not, because I can personally not judge it. For the competitive landscape is that safety is number one in a pediatric acondyloplasia thing. You cannot compromise safety, whatever you talk about. You can never compromise safety. And this is why we believe, together with OIRS, that the CMP pathway has now proven with so many patient data is an extremely safe pathway to utilize. So now we just need, I say just need, We need to find out how we can optimize the treatment regime so we really get the best out of the CMP treatment. And that is what we hopefully will get some clues about we can just need. We need to find out how we can optimize the treatment regime so we really get the best out of the CMP treatment. And that is what we hopefully will get some clues about. We can give you some comfort that is possible when we come out with our data in Q4. We're basically coming from a patient group from the age 2 up to age 10, because we also believe they should have a treatment option under 5.
Operator
Please stand by for your next question. Next question is from the line of David Lebowitz from Citibank. Your line is open.
David Lebowitz
Thank you very much for taking my question. I guess with respect to the number of prescriptions at this point, to what extent are the patients getting reimbursement overall? And to what extent are patients receiving discounts or through the launch at this point? And in addition, how long are the prescriptions for each one mentioned as far as duration?
Tim Lee
Typically, a prescription is for one year. Typically, a patient gets drugs for months. Some patients will get drugs for three months, but I would say it's much, much, much more common just to get a one-month supply. So when we talk about a prescription, it basically will have a duration for one year before it starts to be renewed. What Joe has indicated, we had the overall goal when we launched Skype over here in the U.S., We wanted to build it up in the leading brand in value. We also wanted to do it in a growth promote market that will be increased in value at the same time. After that, we built up our commercial long strategy, our market access strategy. And you can have different tactics to achieve our overall goals. And what Joe and his team have done is really optimizing this tactic. And that is why we see the results now, where we really see the benefit of a change of tactic and how really to achieve our corporate goal on how we want to develop SkyClover. So what we're doing now, we're converting on a higher and higher rate that prescription over to reimbursed life. And that is our goal because this is where we recognize revenue. We don't recognize revenue out from prescription. We recognize revenue when we're sending to the system in the U.S. that distributes the drug to the patients.
David Lebowitz
Got it. And with respect to an initial prescription, how long does it actually take until that patient becomes a full paying customer? And do you have enough data to see how that's evolved since launch?
Tim Lee
We have a lot of data and it's evolving week and once per month. Some of them is a few days. Some of them I do not know because we have not got it yet. But, Joe, if you can comment about some of our own metrics and how we're really improving, how we really can optimize this, because this is one of the ways how we see we have changed a lot of tactics.
Joe
Yeah. Hey, David, you know, it really varies quite a bit from patients that already come in approved, reimbursed, to folks that go on our free drug programs. And within those 1,700 patients that have been prescribed Skytropa, there is a subset that, again, are reimbursed rather quickly, a subset that do go on our free drug program. And then there's another subset that don't go on free drug but are going through the reimbursement process through medical exceptions and sometimes appeals. But at this point, David, we're not willing to share specifics about that data, but I can tell you that some of the tactics that we have adjusted are really showing that we can accelerate that process to where we are getting approvals much quicker now than we were before from the PBMs and the payers. Whether we're on formulary or not on formulary, We're seeing patients get the authorizations in both categories.
Scott
Thanks, Joe. Scott had an additional comment.
Tim
I would just say, importantly, Dave, the increase in Skytro for revenue from Q1 to Q2 reflects the underlying increase in reimbursed demand. And you can see there the acceleration based on the tactics that Joe and the team have implemented. Thanks, Scott.
Operator
Your next question is from the line of Lee Watzek from Kantor. Your line is open.
Lee Watzek
Hey, thanks for taking my questions. I guess I'll start with transconstant P. Just can you remind us, I guess from the Phase II data, would be considered, I guess, good clinical outcomes? And I guess other than the growth velocity, what other clinical outcomes that we should focus on that are most relevant for these patients?
Tim Lee
It's an extremely interesting question. All from the perspective is that from the regulatory perspective, there has now been a clear acceptance of a position that the primary endpoint is analyzed growth velocity. And this is when a procedure has been established, it's really, really hard to drive away from that perspective. So this is why we have focused so much on analyze growth velocity as a primary endpoint, because that is how regulatory want to have approval of this product. But you're 100% right. 100% right. Analyze growth velocity is only an indication of effect. We want to treat the comorbidities. We want to improve the quality of life. We want to improve the wellness and lifespan. And this is why I'm so thrilled and honestly, I'm thrilled because if you have so many pediatric patients now going up for two years and none of them have stopped, missed or anything like that, but continue to be on treatment. That is some clear benefit in the trials. At least that is my belief. What we'd love to do, and this is what we're going to do when we have unblinded all the data, we're looking on all the different elements on clean data and other things like that, we're hopeful we can see potential some effect that we basically can follow up on and try to understand data. But currently, I have only a lot of ideas on a huge menu list of what we potentially could see, but I need to look at the data and understand the data to such a level where we can do it. But what we'd like to do, and this is why we now are initiating the 2B trial, which is eight seropatients, pediatric children from two enough that basic are starting now on treatment. And we know when we have analyzed the first series of data, we potentially can take endpoint from that error into our phase 2b trial and potentially start to have that in our interaction with regulatory agencies of taking them on secondary endpoint or other part. So what we trust and we believe And hope that we can prove some benefit that really addressing the COBRA businesses.
Lee Watzek
Okay, great. So I guess just to follow up here, you mentioned maybe the regulatory pathway and maybe a possible, maybe an accelerated one. So I just wonder if you have any interactions with FDA about this possibility. And again, get a sense of what agency would like to see. Because it seems like trans constant P is quite safe. So I wonder how you're thinking about this possibility from here.
Tim Lee
I can start with my thinking and then Dana can follow up. But I think the key element we're waiting for is the data. It's much, much productive. It's much more effective to come and discuss when we have the data here in Q4. Today, we can only speculate, we can think, but we need to see the data, and then we can start the positive dialogue with regulatory agencies in different places in the world to find out how can we as fast as possible get this unique product opportunity out to the patient on a broadly perspective. Dana, do you have any comments?
Dana
Yeah, you're absolutely right. We haven't had any communication with FDA, and our plan is to take the phase, you know, the accomplished data, and then, you know, we are already planning the phase 2b, and then, you know, we will have, you know, two studies eventually that will form the basis of our discussion.
Tim Lee
So more to come after the data.
Operator
Your next question is from the line of Vikram Purheet from Morgan Stanley. Your line is open.
spk02
Good afternoon. Thanks for taking my question. So I had one on Skytropha. As you've progressed now through another quarter of the launch, are you still seeing the majority of patients coming from being switch patients versus treatment naive patients and for patients switching over to another therapy? Is there a particular agent that you're seeing a majority of patients switch from?
Tim Lee
I think still we see what we actually experienced in the first quarters or the first full quarter, Q1. We also saw that in Q2. We see a small majority of the patients coming from switch patients. So it's a small majority of patients are switch patients. And there is no single daily growth hormone they're coming from. It's basically broadly among all the daily growth hormones. Honestly, this is pretty expected because there is no difference between the daily growth hormone. All of them are identical. So there is no difference. So I think this is part of the science. There is no difference with daily growth hormone. We see no switches. from anyone that is preferable.
spk02
Got it. That's helpful. And a follow-up question on a separate topic. For the Transcend IT 101 data we're expecting to see in the third quarter here, first, what parameters of data do you expect to report out on? And then how are you defining success for this readout? And what is the internal hurdle you're trying to meet here from this data set?
Tim Lee
Yeah, I can start initially, and I think Stine is on the call from Paolo also, and she can follow up. The Transcend IT is where we take our Transcon TLR78 agonist. We inject it inside the tumor in patients with solid tumor. The mechanism is to kickstart the tumor. the immunological system and at the same time you provide very low systemic exposure to ensure that you are having an extremely safe program. So one of the elements which we already have disclosed has shown the successful design of these product opportunities. We have disclosed the safety. We have disclosed the PK profile. We have disclosed how we have sustained release inside the tumor with a low systemic toxicity. So from that perspective is that what we are optimizing now is how we can also see the clinical activity or the target engagement in injected tumor and not injected tumor. Stine and her entire team have designed a huge plan, both related to biomarkers, tissues, other things like that. And Stine, you can in some way explain how we are progressing and when we will select and recommend phase two dose.
Stine
Thank you, Jan. So at the end of quarter three this year, we expect to have a formal analysis of the phase one dose finding portion of Transcend IT 101. We expect, as Yen mentioned, we'll summarize what we have seen in dose escalation cohorts for monotherapy in combination with PEMBRO, our PK, thrombodynamic data, clinical safety, and initial look at anti-tumor activity.
Yen
Does that answer your question? Vikram's line is already closed.
spk00
Next question.
Operator
Our next question is from Joseph Schwartz from SVB Securities. Your line is now open.
Joseph Schwartz
Hi, I'm Doree Dalyan for Joe. Thank you for taking our question. The first one is on Skytrosa. I was just wondering, what are some factors that went into building your competence to reach 25 million euros by year-end? And when could we expect to see an upper bound in guidance? And I have a follow-up.
Tim Lee
So what we're doing at the company is that we have coming up with CLIAs. description of some of the key parameters we are following along with. What we are giving you now is the revenue that we have seen quarter by quarter for the last two quarters. We have seen more than 100% increase in the revenue from last quarter to this quarter. We believe we can continue doing that because we see the continued execution of some of the KPIs that is really following the launch. And I think we have provided you a guidance today. We have come up with a clear mission. We feel comfort that we can reach what you for cell site research have in a consensus, we feel comfort we can reach that. And I don't believe we actually can move further into more discussion about what our own expectation is. We give you the comfort that the guidance that you have as consensus, we can reach.
Joseph Schwartz
Okay, that's helpful, thank you. And then my next question is on TransCon CNP. I was just wondering if you could elaborate more on your Phase IIb trial that you plan to conduct. You know, how does this fit in and complement your two Phase II trials? And do you have plans to go higher than the 100 micrograms per keg per week that all your patients in your OLE studies is on? Thank you.
Tim Lee
First of all, one of the elements in conducting this trial is that we have an achieved trial. And we have 100 patients now, I think, in mainly Europe and US. We have not seen any of these patients move away from our national history study. They are still in there. Basically, they have a high level of expectation that potentially we will give them a treatment option. And that is exactly one of the reasons why we are initiating the Phase 2b trial, to give them a hope, a treatment option for a product. From our side, it also is a trial. that will give us the insight in potential, how we can explore other parameter except analyze growth velocity, which are the key parameter we have now been focused on in the accomplished trial. When we have the data in Q4, we basically will analyze the data back and forward as we always do, go deep in the science, try to understand the data, look on each single patient, what's happening, what is done. And then we will potentially can incorporate other secondary endpoint in that trial and build it up in our living discussion with regulatory agencies. So the purpose of the Phase 2b is basically improve clinical evidence of what we can achieve with Transcon-CNP.
Yen
This concludes today's conference call. Thank you all for participating. You may now disconnect.
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