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spk05: Thank you for standing by and welcome to the Q1 2023 Ascender's Farmer Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentations, there'll be a question and answer session. To ask a question at that time, please press star 11 on your telephone. As a reminder, today's call is being recorded. I will now turn the call over to your host, Mr. Tim Lee, Senior Director of Investor Relations. Please go ahead.
spk07: Thank you, operator, and thank you, everyone, for joining our first quarter 2023 financial results conference call. I'm Tim Lee, Senior Director of Investor Relations at Ascendus Pharma. Joining me on the call today is Yen Mickelson, President and Chief Executive Officer, Scott Smith, Executive Vice President and Chief Financial Officer, Dr. Steena Singhal, Executive Vice President and Head of Clinical Development Oncology, and Joe Kelly, Senior Vice President and Head of Commercial Endocrinology. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe hardware 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 Skytropha for the U.S. market, our revenue projections for Skytropha, the commercialization of Transcon HGH for the EU market, Statements regarding the expected timing of potential approval and launch of Transcon PTH in the US market. Statements regarding the expected timing of the potential approval of Transcon PTH in Europe. Statements regarding the potential market size for Transcon PTH. 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, including the timing of clinical results, statements regarding our pipeline product candidates, statements regarding our ongoing and planned regulatory filings and our expectations regarding the timing of the results of regulatory decisions, our expansion into new therapeutic areas, and statements regarding our ability to create a sustainable, profitable, leading global biopharma company. These statements are based on information that is available to us today. Actual results and events could differ materially from those in our forward-looking statements, and we may not be able to achieve our goals, carry out our plans, our intentions, our expectations, or our 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 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 linking statement section in today's press release and the risk factors section of our most recent annual report on Form 20F, filed February 16th, 2023. Transcon Human Growth Hormone, or Transcon HGH, is approved by the FDA in the U.S. under the brand name Skytropha for the treatment of pediatric patients one year and older weighing at least 11.5 kilograms and having growth failure due to inadequate secretion of endogenous growth hormone. In addition, the European Commission has granted a marketing authorization for Skytropha Two ascendant pharma developed under the name Transcon HGH as a once-weekly subcutaneous injection for the treatment of children and adolescents aged 3 to 18 for growth failure due to insufficient secretion of endogenous growth hormone. In general, we refer to this product as Transcon growth hormone unless referring to the product in the context of particular jurisdictions such as the United States or the European Union. Otherwise, please note that our product candidates are investigational and are 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 the call today, we'll discuss our first quarter 2023 financial results and we'll provide further business updates. Following some prepared remarks, we'll then open up the call for questions. I'll now turn the call over to Jan Mikkelsen, President and Chief Executive Officer. Jan, to you.
spk06: Thank you. Good afternoon, everyone.
spk27: CENTI continues to execute on the strategy we have laid out in our vision 3x3 and our commitment to improve patient lives. while building a sustainable, profitable, leading biopharma company. Based on the strengths of our clinical data for Transcon PTH, including the positive feedback from patients and their physicians, and the significant unmet medical needs of patients living with hyperparathyroidism, we remain convinced that Transcon PTH can be approved and become an important new treatment option. We remain dedicated to working with FDA to bring this product to the US market as quickly as possible. And we are on track in EU with an expected regulation, regulatory decision later this year. In the US, our PDUFA date of April 30, 23 is coming up. and we expect to get feedback from FDA soon on the next steps forward. There are multiple possible scenarios. Our team is well prepared, and our belief in the approvability of Transcon PTAs in the US is unchanged. We launched Skytrooper with a commercial strategy built on its product strength. with the goal of making it the leading product in value in a growing growth hormone market. With each quarter, we believe that it is more and more clear that Skytover is on track to become the US market leader in value in a growing growth hormone market and a blockbuster product. We believe the success of Skytover we are seeing now is driven by the following three factors. treatment experience. Many physicians have now had patients with 12 months weird world experience with Skytropha, the time period that is necessary to observe an improvement in linear growth and other endocrine benefits. Second, consolidation of daily growth hormone market. This consolidation started three, four years ago when daily growth hormone companies began to realize that their existing daily product would be phased out with time when once-weekly treatments came to the market. We saw daily growth among companies reduce investment and optimize their business in this phase-out period. We believe the current supply challenge of daily growth among products are a consequence of this, which further supports the uptake of Skytofe. Ascentis dedication and investment in endocrinology. We are investing in building relationships with physicians, patients, caregivers, providers. With our investment in a dedicated commercial organization and medical affairs team supporting our endocrinology efforts. We are also building a robust supply chain for Skytofa. indicating to patient, physician, and provider that we are a trusted partner with a solid supply chain. As a result, first quarter, 23 Scratchover revenue grew to 31.6 million euros. Based on the algorithm we described earlier this year for 23 outlook using first quarter sales of 31 million euros, and our goal of adding as many new reimbursed patients in 2023 as we did in 2022. We now expect full year 2023 Skytrofer revenue between €150 million and €160 million. Our revised outlook for 2023 provides a new higher foundation for 2024. We are pushing global market leadership for Skytrofa to geographic expansion and potential labor expansion. The Skytrofa commercial launch in Germany is on track for the third quarter of 2023. In the fourth quarter, we expect top-line results for the Phase III foresight trial in adult growth hormone deficiency, which is designed to demonstrate the impact of Skytrofa on body composition in adult patients with growth hormone deficiency. Turning now to Transcon PTAs. As I mentioned at the start of today's call, we are dedicated to get Transcon PTAs to patients suffering from the serious health and quality of life issues caused by hyperparathyroidism. And we know that the patient community share our goal. We continue to be excited about the potential Transcon PTH could have on addressing the significant unmet medical needs of hyperparathyroidism patients. The open-label extension of our Phase II, Part IV, and Phase III part-way trials for Transcon PTA are ongoing, with 145 of 154 of the original clinical trial patients continue on treatment with Transcon PTAs for now up to three years. In addition, in the US, our expanded SS program continues to enroll new patients every week. As previously announced, we received the comprehensive day 120 response from European Medicines Agency and we are very pleased with the feedback. We anticipate a decision on our M&A during the fourth quarter and if approved by the EC, we expect to launch in Germany in early 2024, levering our established commercial infrastructure. We also applied to initiate an early assets program for Transcon PTH initially in Germany. Assuming approval for this program, we expect to indicate and erode the first patient in Germany disk border. Moving to acondoplasia, Transcon CMP. Our clinical data and positive physician feedback continues to differentiate Transcon CMP. and reinforce our conviction that it has a potential best-in-class product profile in the four key pillars of drug development, safety, efficacy, toolability, and convenience. More importantly, we believe Transcon-CMP also has a beneficial effect on acondylplasia co-morbidity, besides promoting increased linear growth. That is why all 57 patients who started in our Phase 2 accomplished time remain in this open label extension. Later this year, we will have an R&D event focused on Transcon-CMP to share new clinical data and the science that we believe support its best-in-class profile. Switching to oncology, we have two programs moving ahead with recommended phase 2 doses in specific indications. Transcon-GLR78 agonist and Transcon IL-2 beta gamma. Next month, in May, we will hold an oncology R&D event in New York around ASCO to give you an update on these two important programs. At this event, essential and key opinion leaders with experience in our clinical studies plan will share key data from the dose escalation portion of our two first in human tribes. Finally, as I said before, we are managing our business for long-term value creation and continue to aim to achieve cash flow break-even without the need for additional dilutive equity financing. I will now turn the call over to Scott for a financial review before we open for questions. Thank you, Jens.
spk09: I will quickly touch on the key points surrounding our financial results. For further details, please refer to our Form 6K filed today. As Jens noted, Skytrofa revenue for the first quarter of 2023 was €31.6 million. Revenue in Q1 would have been €1.4 million higher, excluding a negative foreign currency impact compared to the fourth quarter of 2022. Total revenue was €33.6 million, including Skypropa revenue, as well as license, clinical supply, and services provided to third parties, primarily Visa and pharmaceuticals. During the quarter, we continued to demonstrate our cost discipline, offsetting seasonally higher employee costs in Q1. Total operating expenses were €173 million for the first quarter, up 5% sequentially from the fourth quarter of 2022. Overall R&D costs declined 2% sequentially, primarily driven by lower endocrinology-related costs, partly offset by an increase in oncology-related costs. SG&A expenses grew 18% sequentially, primarily due to increased support for Skytrofa commercialization and pre-launch activities for Transcon PTH. Overall, our operating loss declined sequentially by 3% to €144 million for the first quarter from €147 million in the fourth quarter of 2022. Our main 2023 commercial product manufacturing campaigns which are capitalized rather than expensed, are expected to be completed in the first half of 2023, which would further reduce cash expenses in the second half. Finally, we ended the first quarter with cash, cash equivalents, and marketable securities totaling €586 million. Based on Q1 results, we are on track to exceed the current Ascendus-compiled 2023 consensus estimate of €98 million for Skytrofa. Using the algorithm Yen laid out in his remarks, Skytrofa revenue is expected to reach €150 to €160 million for full year 2023. Supporting our goal of achieving cash flow break-even without additional dilutive equity financing, we are implementing additional cost controls and productivity improvements, which we anticipate will be realized starting in Q3 and beyond. Let me now also provide an update on selected key 2023 corporate milestones. For Transcon Growth Hormone, we are on track to launch Skytropha in Germany in Q3, and we expect to report top-line data from the Global Phase III foresight trial in adult GHD, our second indication, in Q4. For Transcon PTH, in the U.S., our PDUFA date is April 30th, so we expect additional clarity on our NDA application in the coming days. We expect a European Commission decision in Q4. If approved, we plan Transcon PTH as our second product launch in Germany in early 2023. For Transcon C&P, we are on track to complete enrollment of the Phase 2b approach trial in achondroplasia in Q2. And later this year, we will share long-term follow-up data from patients on 100 micrograms from our open-label extension of our Phase 2 accomplished trial. Within our oncology therapeutic area, as Yen mentioned in his remarks, we will host a research event on May 31st in New York to review the science underlying our oncology portfolio, review initial data on transcon IL-2 beta gamma, and hear from KOLs who have clinical experience with both of our oncology product candidates. As you know, the PDUFA date for our NDA for TransCon PTH is this Sunday, April 30, and we expect to receive a response from the FDA by then. Given the proximity to the PDUFA date for the NDA for TransCon PTH, we will not be providing additional details regarding this NDA at this time. With that, operator, we are now ready to take questions.
spk05: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press Star 1-1 on your telephone. Again, to ask a question, please press Star 1-1. We do ask that you please limit yourself to one question and a follow-up, and feel free to rejoin the queue. One moment, please, for our first question. Our first question comes from the line of Jessica Fye of JP Morgan. Your line is open.
spk08: Great. Good afternoon. Thanks for taking my question. I know it's difficult to comment in advance of the PTH PDUFA, but at a minimum, can you just say if you now know the deficiencies that the FDA has regarding the PTH NDA? I believe those were not previously outlined in the letter. Do you know them now?
spk27: I can say no to your question and have no further comments.
spk08: Okay, and then when you talk about managing the business to achieve the goal of cash flow break-even without the need for dilutive equity financing, can you elaborate just on like what your expectations are for PTH that are kind of embedded in that break-even assumption?
spk27: We are dealing with a lot of different scenarios. because as we indicated before, we do not know the exact nature of the deficiency. And we are working with what we call the best case and worst case. We're looking at our vision three by three. We want still to fulfill that. We want to build up a leading biopharma that's both sustainable and profitable. We can continue to this. So from our perspective is that We are taking into the assumption we are launching Skytrofa in Germany here in Q3. We're taking into the assumption we are launching Transcon PTH in Germany and Europe through different systems in beginning of 24. We are building that Skytrofa in the US. It's going to the assumption we have laid out in 23. and will continue that growth in 24. And even from the worst case to the best case, we can get the two things together and still fulfill our vision tree by tree.
spk23: Thank you.
spk05: Thank you. One moment, please. Our next question comes from the line of Tazine Ahmad of Bank of America. Your line is open.
spk29: Hi guys, good afternoon. A couple of questions, if I can, on GHD. You visited sales guidance for the year. I think as recently as the beginning of the year, you might have been more tentative on that prospect. I guess what's changed during the quarter to, I guess, number one, make you feel confident that you can project out the rest of the year? And can you tell us some of the major drivers you took into consideration when putting together the sales guidance, such as perhaps switch rates versus new patient starts, and any assumptions you can share on compliance would be great as well. Thank you.
spk27: Thanks for the question. We're feeling much more confident now when we go to a Q1, because now we accumulated on top of a big sum. That is a mathematic algorithm even I can understand without an MBA. So the situation is very, very simple. have 31 million here in q1 we have seen and our experience for the many months we have with skytover we're not basic not using patients so if i multiply the 31 million with four times and then we just add the same amount of new patients as we did in 22 are getting exactly to this number 100 and between 150 and 160. I think it's a very simple algorithm built on solid number, and this is exactly why I feel I can stand in for this year. I have everyone in this organization to sign on for this. So we feel confident that we can fulfill this. And this is why I'm feeling we will come up with guidance. When we're feeling we can give you reliable guidance that you can use in the modeling so you're feeling that revealing that we give you a number that we can stand in for.
spk06: Thank you. One moment, please.
spk05: Our next question comes from the line of David Lebowitz of Citi. Your line is open.
spk17: Well, thank you very much for taking my question. When you look at Sky Trofa into the rest of the year, and the dramatic growth you're expecting, how should we look at that in the US versus Europe?
spk27: The guidance we are providing to you is only reflecting US sales. We have not given you a guidance related to Europe. There will be on top of that.
spk17: Got it. And I guess, could you just remind us of when we can expect the next TransConCNP updates and what your expectations are going into that?
spk27: The update we will provide for you, as we indicated here, when we come to the beginning of the fall, likely in Q3, we will host and research event in New York, as we do now in oncology here in May. where we will go through the science behind the CMP. Because I think sometimes it's getting forgotten that every product has its own mode of action. It's science. And the science in the end will decide the clinical outcome you will get and how to understand the clinical outcome. We have always said we are not here for just addressing linear growth. We're here for addressing the key element of what a treatment for account of patient need, treatment of co-morbidities. And that is what we always have been focused on. And I believe we at that resource event can give you the data, the science behind the data that really can give you the way we are thinking and believe that we're building up in best-in-class product opportunity in this disease era.
spk18: Thanks for taking my question.
spk05: Thank you. One moment, please. Our next question comes from the line of Paul Choi of Goldman Sachs. Your line is open.
spk16: Hi. Thank you, and good afternoon, and thanks for taking our questions. Jens and team, I guess one question that investors have with regard to PTH is as you think about your earlier statement where you expect a clarification from the FDA shortly. Have you, since the call that you held a few weeks ago, provided any additional data updates or have there been any other requests from the agency?
spk27: I think we need to refer to the statement that Scott clearly wrote up that we will not comment further on any interaction we have of FDA at this time.
spk16: Okay. And then on the commercial side, with regard to the European launch for growth hormone, can you maybe comment on any preliminary discussions you either have had with iWIG or GKSB and just kind of how to think about the reference pricing versus the potential reference pricing in Germany versus some of the other available products in the category?
spk27: I believe the dynamic we saw in the U.S. and how we tackle it in the U.S. is exactly happening in the same way in Europe. That is established daily growth hormones. They have the same issue that they have here in the U.S. We will come in with a treatment regime that is superior for the patients. And I believe we will have the same responsible superior pricing that we do in the U.S., also in Europe.
spk15: Okay, thanks. I'll hop back in queue.
spk05: Thank you. One moment, please. Our next question comes from the line of Lee Wacek of Cantor. Your line is open.
spk28: Hey, thanks for taking our questions. I guess can you provide maybe some guidance on the OPEX side? I mean, I guess starting in Q3, given that you may have a delay with transplant PTH, and you mentioned earlier that you have a focus on cost control. Maybe help us understand how should we think about, you know, OPEX going forward. And for the early access program in Germany, how many patients will be eligible for this?
spk27: Let me take the last question first, because the program in Germany, where we start in Germany, where we have applied for an approval for initiated, it's different compared to the U.S. program, because it's actually electable for both all patients with hyperparalysis. and not as for US is highly restricted to patient that basic is highly PTAs experience. So it will be a much broader program. The dynamic is also very, very, very different because, for example, the program is terminated automatic the day you're getting approval and the patient needs automatic conversion or to reimburse patient. So it's a different system than you actually have in the US system. So this is why we will some way give access to the patients. That is the same unmet medical need. There is a series of patients, multiple hundreds of patients on that path today. There are no, they're under highly restricted constraints because NEPA is disappearing in the beginning of 24. So they want to have time to really change this patient over to Transcon PTH. At the same time, we open it up for all other patients because there was so much and you can say strong desire from the treatment physician also to give it to patients that actually never have seen other PTH program before. So this is why it's a different program. Going back to your comments about how we are some way outrunning the financials at Ascendis. And I actually made it very, very simple in this way. We have one bucket with cash in, which are the water. And then we take something in every day. And you can see we grow it and grow it, grow it now with U.S. We will grow it with U.S., outside U.S., also revenue there. And we always want to have a solid amount of water into this bucket. And we do that by basically ensuring that we run our business, optimizing our business, optimizing the way we perform our procedure. What function passed for two years ago is not functioning today. It's not the most productive way to do it. This is how we adapt it. We are a global company, which gives us a lot of benefit to really optimize our business in different means. And that is exactly what we are doing to ensure we always will have enough water in the bucket to feel safe. If it starts to be dry around us, we always have enough to drink.
spk05: Thank you. One moment, please. Our next question comes from the line of Derek Archilla of Wells Fargo. Your line is open.
spk13: Hey, great. Good afternoon. Thanks for taking the questions. Just two from us. Jan, you mentioned earlier in the call, yeah, you're not commenting on interactions with the FDA. So is it fair to assume that you've had some interactions since the deficiency letter that you do not want to comment on? So that's question number one. Question number two is, you've talked about this attrition strategy in the growth hormone market. So of expecting these competitors to exit the market maybe because it's not profitable for them leaving you and maybe one or two other players in the market so i guess what catalyst needs to happen for this to play out and you know what's kind of the timing on that thank you yeah obvious it's easy for me to answer first question because there's no answer so going to the second question which are a really a a high valid question because there's actual
spk27: I believe someone should write a textbook of what happened in the growth hormone market here in the U.S. It was the first place you saw biosimilar having TBR centers coming in. We saw how the entire market developed. And now we're coming to the next stage. The first thing, the biosimilar going in, then it went over to market access. And I can guarantee we had so much interaction with nearly every one of the daily growth hormone companies, except one, I think. And we somehow got a really, really good insight in their thinking. And the insight is exactly how I also would act. The element is that when you have a superior treatment coming into that basic making a paradigm shift in the treatment regime, you know if you're sitting with what we call the established that cannot follow this treatment regime, it's only how really to optimize your business at that time. So you follow the classical textbook. First of all, you get rid of the sales force. The second one, you get rid of all promotion. You get basic optimizing the manufacturing process where you never invest in it. Then you terminate the manufacturing after you have a bulk product sitting. And then you're just selling that. And then you're out. And I can guarantee it's one of the best P&L you can get out of that business. This is really where you have a great P&L. But the problem is it's not sustainable. Some of the daily growth hormone, you can find that out. They tried to sell it. No one wanted to buy a dying product. That was why no one could sell it. So therefore, the entire consolidation started three or four years. What you start to see now is the consequence of it. And you're likely right. There will only be one or two daily growth hormone provider because there will potentially be a cash segment. There will be other things where there potentially will be an element of what we can call a low-priced element where they don't really need optimal treatment or anything like that. And this is where you typically will see one or two player be.
spk05: Thank you. One moment, please. Our next question comes from the line of Leland Gershaw of Oppenheimer. Your line is open.
spk22: Hey, good afternoon, and thanks for taking my question. Just another question on the spectrum. trajectory is obviously a very healthy bump up from fourth quarter. And one thing that's been commented, you know, is that as it coincides with the turn of the year, were there any aspects related to more favorable reimbursement with the new year and or changing dynamics of the daily growth hormone space, as you talked about, that may have favored Sky Trofa? Thank you.
spk27: I think we have the three pillars we discussed in my part of the script, which I actually think illustrate very, very well the transition becoming thing. And I believe when we first go to the first treatment experience, it actually takes 12 months for a physician really to see the improvement in linear growth and other endocrine benefits. And when you see a new product, I think often, as a physician, you will wait to see in a few number of patients before you expand further on. The second thing is the consolidation of the market, which, sure, is happening. And there was just a consequence when it started to tick in. Will it tick in in 23? Will it tick in in 24? We know it will happen, but we didn't know exactly when it will be. And I also believe, and this is where Joe comes in and will talk about how we are investing in a dedicated, best-in-class endocrinology dedicated Salesforce and our medical affairs teams.
spk21: Yeah, yeah. So yeah, the commercial team really has done a good job of executing in this particular market where we really disrupted how growth hormone is prescribed and also reimbursed by the PBMs and the payers. And really, it comes down to the clinical strength of Skytropha. Its efficacy, the fact that we don't have a preservative, a best-in-class auto-injector, And again, the support that we can provide the offices and the patient to get reimbursed so that they can enjoy Skytrova for their entire course of therapy. But the compelling story that we do have from a clinical standpoint is really a motivating factor for these healthcare providers to do the appropriate documentation so that that patient can get approved and stay on our product.
spk27: Thank you.
spk21: Thank you.
spk05: Thank you. One moment, please. Our next question comes from the line of Vikram Parahote of Morgan Stanley. Your line is open.
spk14: Hi, good afternoon. Thanks for taking our question. We had one on TRNSC on HGH. Could you just help us frame expectations for the foresight data expected in adult GHD in the fourth quarter and also speak a bit about how you're viewing the commercial potential for HGH for this part of the GHD population versus the pediatric population. Thanks.
spk27: Really, really interesting way to look and why the adult growth hormone deficiency trial is so really interesting for us. It's because we are in a situation where many of the other indication that where you use growth hormone, you use linear growth as the primary outcome. In adult growth hormone deficiency, the primary endpoint is built on change in body composition, which are also one of the elements you want to achieve in the pediatric population, but it's not really the primary endpoint. What we also have, we have a situation where we have a benchmark related to the daily growth hormones. We have a benchmark related that both The two other long-acting have initiated phase 3 trials, have reported phase 3 trials in adult growth hormone deficiency. One of them didn't manage to be better than placebo. The second one showed half of the effect compared to daily growth hormone. We believe, because Skytrover is built on somatopoeia, an unmodified molecule that can have the same mode of action like data growth mode and industrious growth mode, we will be in a position that we hope at least we can see the same benefit as data growth mode. Potentially we will be superior as we were in a situation in the pediatric, but we will wait to see the data. So we believe that it's a really, really strong integrated packet to see because it's first time where you really go out and analyzing really the impact on a growth hormone treatment on the endocrine health, which body composition is part of it. But it's really parallel to some of the other benefits where you need to have the distribution throughout the body.
spk05: Thank you. One moment, please. Our next question comes from the line of Joseph Schwartz of SVB Securities. Your line is open.
spk19: Hi. Thanks very much.
spk20: So how leverageable is a sales force across the three endocrine indications you're currently pursuing? I know when we look for physicians to speak on these topics, it seems a bit fragmented to us, and we almost never find anyone who can speak on two, never mind three, of these endocrine conditions. So can you just talk a little bit about how the sales force is currently structured and whether you won't have to actually expand it significantly in order to reach achondroplasia and hypoparathyroidism specialists in addition to growth hormone folks?
spk27: Yeah, this is the holistic picture. You're basically saying, why should we focus on building up as really, really a strong pipeline of three independent products really focused on endocrinology. So the first one we have is chytophthora. It both have a pediatric and adult indication. We have pursued the pediatric, now we go for the adult. We have trans-compete AIDS. The main indication is adult, but it also have a pediatric. We are going now As I said before, we expect to getting an approval in what we call the adult hyperparathyroidism. As soon as we get the feedback, what is the deficiencies? When we know what the deficiencies is, we can address it. And this is what we will do extremely fast and ensure this product going out to the market. We will also pursue the pediatric indication in this segment. Then we have Transcon CMP. People believe this is pediatric disease because they're just focused on linear growth. We believe that basic is a treatment regime for achondroplasia or the rest of their life. And this is one of the things we also would like to discuss when we come to the basic, the research state. So when you see the holistic part on it, yes, it gives us a lot of synergy, specific when you think about reach out We go to endo. We have one stand. People come to us, perhaps interested in PTH, perhaps interested in CMP, perhaps interested in growth hormone, and they get the entire packet. They see endocrinologist, the physician, they see us dedicated to be a leader in endocrinology because we so much focus on all different product opportunities. When you go to dedicated Salesforce, you can build it up in different means, and it's very much dependent on geographic regions. If you just think about US, I actually think what Joe and his team have done, they're actually building up what we call a Salesforce that basically are dedicated to Skytrover, dedicated to PTH, but the basic can exchange it back and forth between the different Salesforce because both have all the capability to be in it in this way. So I actually believe that we have so much synergy in this way of operating.
spk05: Thank you. One moment, please. Our next question comes from the line of Andreas Argyrats. Again, Andreas Argyrats, your line is open.
spk10: Yeah, good afternoon. Thanks for taking that question. A quick one here on Trincon CMP. So looking at the growing of contemplation marketing in the competitive landscape, Could you expand on what data you're tracking and plan to provide to support transplant CMPs' impact outside of height? And do you see a potential to expand into patients or children under two years old? And forgive us if that was already addressed.
spk27: No, I believe that it's some way. What we want to do is that you have linear growth with an element where we believe, sure, we can help a lot, we can do a lot, and we can also potentially accelerate it in a combination between Skytropha and Transcon-CMP. The element of what we call agronucleases-specific co-morbidities. And in the presentation we did when we released our accomplished data, we basically indicated that we could see an effect on the account to place a specific side effect, meaning is that they got less. We are building on that, and we have regulatory interaction, how we potentially can prove that in a more clinical specific manner in our phase 2b, which we hope is our pivotal trial that we basically are recruiting now for full speed and hope to have all patients in this quarter here. So this is where we see the element of us providing and treatment of acondoplasia, really to ensure that we are not only correcting linear growth, but also addressing the comorbidities.
spk11: Great. Thanks for taking the question.
spk05: Thank you. One moment, please. Our next question comes from the line of Yaron Werber of Calwin. Your line is open.
spk03: Hi, this is Joyce. Thanks so much for taking our questions.
spk04: Historically, I think you've held this Q1 call in early May, and I think some investors were maybe thinking that the call was moved up this time to get ahead of the PDUFA date, and that we might get an update on the deficiencies. If you could just help us understand this a little bit more, that'd be helpful, and then Just quickly, secondly, I know you're not able to comment that much, but just given the lack of interactions it seems with the FDA, are you expecting a CRL? And if that does happen, how quickly do you guys think you can refile? Thank you.
spk27: Let me take the last question. As I said before, we have no knowledge about the deficiencies and we cannot comment further on anything of regulatory interaction related to TransCon PTAs and FTAs. And I actually believe what we illustrate to optimize processes. Optimize processes to do things smarter and faster. And I actually think I give all the credit to Scott. It's not often I do that, but I will actually give him credit to Scott or Matt, the head of finance that is sitting here beside us today too. And they can tell about how they really have optimized all our financial process. So I think we're just pressing a button and then we get everything finalized. Scott, Matt?
spk09: Yes, so just as we reported earlier for the annual report, we'll now report earlier for the quarterly report. So I would say nothing specific to look into it. In fact, if anything, I think next year we'll probably report the annual even earlier. Right, Matt? Yes.
spk24: 31st of January.
spk27: The 31st of January next year. I hope that answers your question. It's just because we increase productivity and do it faster.
spk05: All right. Thank you so much. Thank you. One moment, please. Our next question comes from the line of Caroline Palomique of Bearburg. Your line is open.
spk02: Hi. Good afternoon. Thanks for taking the question. Were there any material differences in the MAA application in Europe versus the MDA application in the U.S., given that, to my understanding, there hasn't been any feedback from the European regulatory agencies? And then a second question is just a follow-up on expenses. Just given the updated SkyTrofa revenue guidance, do you also anticipate adjustments in SG&A expenses, such as in Salesforce? Like, will you add any more people out there.
spk27: Thanks. In our regulatory finding between the different regions, Europe and US, is basically built on exactly the same data packet that will be filed both places with, sure, there is a different formatting of a different filing because they need to be made in a different format. But the data is exactly the same. for both Europe and US. And related to the last question is a clear no.
spk05: Great. Thank you. Thank you. I'm showing no further questions at this time. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect.
spk06: Have a great day. you Thank you. Thank you. Thank you.
spk05: Thank you for standing by and welcome to the Q1 2023 Ascender's Farmer Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentations, there'll be a question and answer session. To ask a question at that time, please press star 11 on your telephone. As a reminder, today's call is being recorded. I will now turn the call over to your host, Mr. Tim Lee, Senior Director of Investor Relations. Please go ahead.
spk07: Thank you, operator, and thank you, everyone, for joining our first quarter 2023 financial results conference call. I'm Tim Lee, Senior Director of Investor Relations at Ascendus Pharma. Joining me on the call today is Yen Mickelson, President and Chief Executive Officer, Scott Smith, Executive Vice President and Chief Financial Officer, Dr. Stina Singal, Executive Vice President and Head of Clinical Development Oncology, and Joe Kelly, Senior Vice President and Head of Commercial Endocrinology. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe hardware 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 Skytropha for the U.S. market, our revenue projections for Skytropha, the commercialization of Transcon HGH for the EU market, Statements regarding the expected timing of potential approval and launch of Transcon PTH in the U.S. market. Statements regarding the expected timing of the potential approval of Transcon PTH in Europe. Statements regarding the potential market size for Transcon PTH. 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, including the timing of clinical results, statements regarding our pipeline product candidates, statements regarding our ongoing and planned regulatory filings and our expectations regarding the timing of the results of regulatory decisions, our expansion into new therapeutic areas, and statements regarding our ability to create a sustainable, profitable, leading global biopharma company. These statements are based on information that is available to us today. Actual results and events could differ materially from those in our forward-looking statements, and we may not be able to achieve our goals, carry out our plans, our intentions, our expectations, or our 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 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 linking statement section in today's press release and the risk factors section of our most recent annual report on Form 20F, filed February 16th, 2023. Transcon Human Growth Hormone, or Transcon HGH, is approved by the FDA in the U.S. under the brand name Skytropha for the treatment of pediatric patients one year and older weighing at least 11.5 kilograms and having growth failure due to inadequate secretion of endogenous growth hormone. In addition, the European Commission has granted a marketing authorization for Skytropha to Ascendus Pharma developed under the name Transcon HGH as a once-weekly subcutaneous injection for the treatment of children and adolescents aged 3 to 18 for growth failure due to insufficient secretion of endogenous growth hormone. In general, we refer to this product as Transcon growth hormone unless referring to the product in the context of particular jurisdictions such as the United States or the European Union. Otherwise, please note that our product candidates are investigational are 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 reading regarding our product candidates shall be viewed as promotional. On the call today, we'll discuss our first quarter 2023 financial results and we'll provide further business updates. Following some prepared remarks, we'll then open up the call for questions. I'll now turn the call over to Jan Mikkelsen, President and Chief Executive Officer. Jan, to you.
spk06: Thanks, Tim. Good afternoon, everyone.
spk27: Centis continues to execute on the strategy we have laid out in our vision 3x3 and our commitment to improve patient lives by building a sustainable, profitable, leading biopharma company. Based on the strengths of our clinical data for Transcon PTH, including the positive feedback from patients and their physicians, and the significant unmet medical needs of patients living with hyperparathyroidism, we remain convinced that Transcon PTH can be approved and become an important new treatment option. We remain dedicated to working with FDA to bring this product to the US market as quickly as possible. And we are on track in EU with an expected regulation, regulatory decision later this year. In the US, our FIDUFA date of April 30, 2023 is coming up. And we expect to get feedback from FDA soon on the next steps forward. There are multiple possible scenarios. Our team is well prepared, and our belief in the approvability of Transcontinental PTAs in the U.S. is unchanged. We launched Skytrooper with a commercial strategy built on its product strength, with the goal of making it the leading product in value in a growing growth hormone market. With each quarter, we believe that it is more and more clear that Skytober is on track to become the U.S. market leader in value in a growing growth hormone market and a blockbuster product. We believe the success of Skytober we are seeing now is driven by the following three factors. First, treatment experiences. Many physicians have now had patients with 12-months weird world experience with scitosis, the time period that is necessary to observe an improvement in linear growth and other endocrine benefits. Second, consolidation of daily growth hormone market. This consolidation started three, four years ago when daily growth hormone companies began to realize that their existing daily product would be phased out with time when once-weekly treatments came to the market. We saw daily growth among companies reduce investment and optimize their business in this phase-out period. We believe the current supply challenge of daily growth among products are a consequence of this, which further supports the uptake of Skytofe. Ascended dedication and investment in endocrinology. We are investing in building relationships with physicians, patients, caregivers, providers. With our investment in a dedicated commercial organization and medical affairs team supporting our endocrinology efforts. We are also building a robust supply chain for Skytofa. indicating to patient, physician and provider that we are a trusted partner with a solid supply chain. As a result, first quarter 23 Sklejtove revenue grew to €31.6 million. Based on the algorithm we described earlier this year for 23 outlook, using first quarter sales of €31 million, and our goal of adding as many new reimbursed patients in 2023 as we did in 2022. We now expect full year 2023 Skytrofer revenue between €150 million and €160 million. Our revised outlook for 2023 provides a new higher foundation for 2024. We are pushing global market leadership for Skytrofa to geographic expansion and potential labor expansion. The Skytrofa commercial launch in Germany is on track for the third quarter of 2023. In the fourth quarter, we expect top-line results for the Phase III foresight trial in adult growth hormone deficiency, which is designed to demonstrate the impact of Skytrofa on body composition in adult patients with growth hormone deficiency. Turning now to Transcon PTAs. As I mentioned at the start of today's call, we are dedicated to get Transcon PTAs to patients suffering from the serious health and quality of life issues caused by hyperparathyroidism. And we know that the patient community share our goals. We continue to be excited about the potential Transcon PTH could have on addressing the significant unmet medical needs of hyperparathyroidism patients. The open-label extension of our Phase II, Part IV, and Phase III Partway trials for Transcon PTA are ongoing, with 145 of 154 of the original clinical trial patients continue on treatment with Transcon PTAs for now up to three years. In addition, in the US, our expanded SS program continues to enroll new patients every week. As previously announced, we received the comprehensive day 120 response from European Medicines Agency and we are very pleased with the feedback. We anticipate a decision on our M&A during the fourth quarter and if approved by the EC, we expect to launch in Germany in early 2024, levering our established commercial infrastructure. We also applied to initiate an early assets program for Transcon PTH initially in Germany. Assuming approval for this program, we expect to indicate and enroll the first patient in Germany this quarter. Moving to acondoplasia, Transcon CMP. Our clinical data and positive physician feedback continues to differentiate Transcon CMP. and reinforce our conviction that it has a potential best-in-class product profile in the four key pillars of drug development, safety, efficacy, toolability, and convenience. More importantly, we believe Transcon-CMP also has a beneficial effect on acondylplasia co-morbidity besides promoting increased linear growth. That is why all 57 patients who started in our Phase 2 accomplished time remain in this open label extension. Later this year, we will have an R&D event focused on Transcon-CMP to share new clinical data and the science that we believe support its best-in-class profile. Switching to oncology. We have two programs moving ahead with recommended phase 2 doses in specific indications, Transcon-GLR78 Agonist and Transcon IL-2 Beta Gamma. Next month in May, we will hold an Oncology R&D event in New York around ASCO to give you an update on these two important programs. At this event, essential and key opinion leaders with experience in our clinical studies plan will share key data from the dose escalation portion of our two first in human trials. Finally, as I said before, we are managing our business for long-term value creation and continue to aim to achieve cash flow break-even without the need for additional dilutive equity financing. I will now turn the call over to Scott for a financial review before we open for questions.
spk09: Thank you, Jens. I will quickly touch on a few points surrounding our financial results. For further details, please refer to our form 6K filed today. As Jens noted, Skytrofa revenue for the first quarter of 2023 was 31.6 million euro. Revenue in Q1 would have been €1.4 million higher, excluding a negative foreign currency impact compared to the fourth quarter of 2022. Total revenue was €33.6 million, including scitropa revenue, as well as license, clinical supply, and services provided to third parties, primarily these and pharmaceuticals. During the quarter, we continued to demonstrate our cost discipline, offsetting seasonally higher employee costs in Q1. Total operating expenses were €173 million for the first quarter, up 5% sequentially from the fourth quarter of 2022. Overall R&D costs declined 2% sequentially, primarily driven by lower endocrinology-related costs, partly offset by an increase in oncology-related costs. SG&A expenses grew 18% sequentially, primarily due to increased support for Skytrofa commercialization and pre-launch activities for Transcon PTH. Overall, our operating loss declined sequentially by 3% to €144 million for the first quarter from €147 million in the fourth quarter of 22. Our main 2023 commercial product manufacturing campaigns which are capitalized rather than expensed, are expected to be completed in the first half of 2023, which would further reduce cash expenses in the second half. Finally, we ended the first quarter with cash, cash equivalents, and marketable securities, totaling 586 million euro. Based on Q1 results, we are on track to exceed the current Ascendus-compiled 2023 consensus estimate of 98 million euro for Skytropha. Using the algorithm Yen laid out in his remarks, Skytropha revenue is expected to reach €150 to €160 million for full year 2023. Supporting our goal of achieving cash flow break-even without additional dilutive equity financing, we are implementing additional cost controls and productivity improvements, which we anticipate will be realized starting in Q3 and beyond. Let me now also provide an update on selected key 2023 corporate milestones. For Transcon Growth Hormone, we are on track to launch Skytropha in Germany in Q3, and we expect to report top-line data from the Global Phase III Foresight Trial in adult GHD, our second indication, in Q4. For Transcon PTH, in the U.S., our PDUFA date is April 30th, so we expect additional clarity on our NDA application in the coming days. We expect a European Commission decision in Q4. If approved, we plan Transcon PTH as our second product launch in Germany in early 2023. For Transcon C&P, we are on track to complete enrollment of the Phase 2b approach trial in achondroplasia in Q2. And later this year, we will share long-term follow-up data from patients on 100 micrograms from our open-label extension of our Phase 2 accomplished trial. Within our oncology therapeutic area, as Yen mentioned in his remarks, we will host a research event on May 31st in New York to review the science underlying our oncology portfolio, review initial data on TransCon IL-2 Beta Gamma, and hear from KOLs who have clinical experience with both of our oncology product candidates. As you know, the PDUFA date for our NDA for TransCon PTH is this Sunday, April 30, and we expect to receive a response from the FDA by then. Given the proximity to the PDUFA date for the NDA for TransCon PTH, we will not be providing additional details regarding this NDA at this time. With that, operator, we are now ready to take questions.
spk05: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press Star 1-1 on your telephone. Again, to ask a question, please press Star 1-1. We do ask that you please limit yourself to one question and a follow-up, and feel free to rejoin the queue. One moment, please, for our first question. Our first question comes from the line of Jessica Fye of JP Morgan. Your line is open.
spk08: Great. Good afternoon. Thanks for taking my question. I know it's difficult to comment in advance of the PTH PDUFA, but at a minimum, can you just say if you now know the deficiencies that the FDA has regarding the PTH NDA? I believe those were not previously outlined in the letter. Do you know them now?
spk27: I can say no to your question and have no further comments.
spk08: Okay, and then when you talk about managing the business to achieve the goal of cash flow break-even without the need for dilutive equity financing, can you elaborate just on like what your expectations are for PTH that are kind of embedded in that break-even assumption?
spk27: We are dealing with a lot of different scenarios. because as we indicated before, we do not know the exact nature of the deficiency. And we are working with what we call the best case and worst case. We're looking at our vision three by three. We want still to fulfill that. We want to build up a leading biopharma that both sustainable and profitable. We can continue to this. So from our perspective is that we are Taking into the assumption, we are launching Skytropha in Germany here in Q3. We're taking into the assumption we are launching Transcon PTH in Germany and Europe through different systems in beginning of 24. We are building that Skytropha in the US. It's going to the assumption we have laid out in 23. and will continue that growth in 2024. And even from the worst case to the best case, we can get the two things together and still fulfill our vision tree by tree.
spk23: Thank you.
spk05: Thank you. One moment, please. Our next question comes from the line of Tazine Ahmad of Bank of America. Your line is open.
spk29: Hi, guys. Good afternoon. A couple of questions, if I can, on GHD. You visited sales guidance for the year. I think as recently as the beginning of the year, you might have been more tentative on that prospect. I guess what's changed during the quarter to, I guess, number one, make you feel confident that you can project out the rest of the year? And can you tell us some of the major drivers you took into consideration when putting together the sales guidance, such as perhaps switch rates versus new patient starts, and any assumptions you can share on compliance would be great as well. Thank you.
spk27: Thanks for the question. We're feeling much more confident now when we go to a Q1, because now we accumulated on top of a big sum. That is a mathematic algorithm even I can understand without an MBA. So the situation is very, very simple. You have 31 million here in Q1. We have seen in our experience for the many months we have with Skytober, we're not basic, not using patients. So if I multiply the 31 million four times, and then we just add the same amount of new patients as we did in 22, are getting exactly to this number, between 150 and 160. I think it's a very simple algorithm built on solid numbers, and this is exactly why I feel I can stand in for this year. I have everyone in this organization to sign on for this, so we feel confident that we can fulfill this. And this is why I'm feeling we will come up with guidance. When we're feeling we can give you reliable guidance that you can use in the modeling, so you're feeling that revealing that we give you a number that we can stand in for.
spk06: Thank you. One moment, please.
spk05: Our next question comes from the line of David Lebowitz of Citi. Your line is open.
spk17: Well, thank you very much for taking my question. When you look at Skytropha into the rest of the year, and the dramatic growth you're expecting, how should we look at that in the U.S. versus Europe?
spk27: The guidance we are providing to you is only reflecting U.S. sales. We have not given you a guidance related to Europe. There will be on top of that.
spk17: Got it. And I guess, could you just remind us of when we can expect the next TransConCNP updates and what your expectations are going into that?
spk27: The update we will provide for you, as we indicated here, when we come to the beginning of the fall, likely in Q3, we will host and research event in New York, as we do now in oncology here in May. where we will go through the science behind the CMP. Because I think sometimes it's getting forgotten that every product has its own mode of action. It's science. And the science in the end will decide the clinical outcome you will get and how to understand the clinical outcome. We have always said we are not here for just addressing linear growth. We're here for addressing the key element of what a treatment for account of patient need, treatment of comorbidities. And that is what we always have been focused on. And I believe we at that resource event can give you the data, the science behind the data that really can give you the way we are thinking and believe that we're building up in best-in-class product opportunity in this disease era.
spk18: Thanks for taking my question.
spk05: Thank you. One moment, please. Our next question comes from the line of Paul Choi of Goldman Sachs. Your line is open.
spk16: Hi. Thank you, and good afternoon, and thanks for taking our questions. Jens and team, I guess one question that investors have with regard to PTH is as you think about your earlier statement where you expect a clarification from the FDA shortly. Have you, since the call that you held a few weeks ago, provided any additional data updates or have there been any other requests from the agency?
spk27: I think we need to refer to the statement that Scott clearly wrote up that we will not come further on any interaction we have of FDA at this time.
spk16: Okay. And then on the commercial side, with regard to the European launch for growth hormone, can you maybe comment on any preliminary discussions you either have had with iWIG or GKSB and just kind of how to think about the reference pricing versus the potential reference pricing in Germany versus some of the other available products in the category?
spk27: I believe the dynamic we saw in the U.S. and how we tackle it in the U.S. is exactly happening in the same way in Europe. There is established daily growth hormones. They have the same issue that they have here in the U.S. We will come in with a treatment regime that is superior for the patients. And I believe we will have the same responsible superior pricing that we do in the U.S., also in Europe.
spk15: Okay, thanks. I'll hop back in queue.
spk05: Thank you. One moment, please. Our next question comes from the line of Lee Wacek of Cantor. Your line is open.
spk28: Hey, thanks for taking our questions. I guess, can you provide maybe some guidance on the OPEX side? I mean, I guess starting in Q3, given that you may have a delay with transplant PTH, and you mentioned earlier that you have a focus on cost control. Maybe help us understand how should we think about, you know, OPEX going forward. And for the early access program in Germany, how many patients will be eligible for this?
spk27: Let me take the last question first, because the program in Germany, where we start in Germany, where we have applied for an approval for initiated, it's different compared to the US program, because it's actually electable for both all patients with hypopara. and not as for US is highly restricted to patient that basic is highly PTAs experience. So it would be a much broader program. The dynamic is also very, very, very different because, for example, the program is terminated automatic the day you're getting approval and the patient needs automatic conversion or to reimburse patient. So it's a different system than you actually have in the U.S. system. So this is why we will some way give access to the patients. That is the same unmet medical need. There is a series of patients, multiple hundreds of patients on that path today. There are no... under highly restricted constraints because NEPA is disappearing in the beginning of 24. So they want to have time to really change this patient over to Transcon PGH. At the same time, we open it up for all other patients because there was so much and you can say strong desire from the treatment physician also to give it to patients that actually never have seen other PTAs program before. So this is why it's a different program. Going back to your comments about how we are some way running the financials at Ascendis, and I actually made it very, very simple in this way. We have one bucket with cash in, which are the water, and then we take something in every day and you can see we grow it and grow it, grow it now with U.S. Skytrofa, we will grow it with U.S., outside U.S., also revenue there. And we always want to have a solid amount of water into this bucket. And we do that by basically ensuring that we run our business, optimizing our business, optimizing the way we perform our procedure. What function passed for two years ago is not functioning today. It's not the most productive way to do it. This is how we adapt it. We are a global company, which gives us a lot of benefit to really optimize our business in different means. And that is exactly what we are doing to ensure we always will have enough water in the bucket to feel safe. If it starts to be dry around us, we always have enough to drink. Okay, Cass.
spk05: Thank you. One moment, please. Our next question comes from the line of Derek Archilla of Wells Fargo. Your line is open.
spk13: Hey, great. Good afternoon. Thanks for taking the questions. Just two from us. Jan, you mentioned earlier in the call, yeah, you're not commenting on interactions with the FDA. So is it fair to assume that you've had some interactions since the deficiency letter that you do not want to comment on? So that's question number one. Question number two is, You talked about this attrition strategy in the growth hormone market, so kind of expecting these competitors to exit the market maybe because it's not profitable for them, leaving you and maybe one or two other players in the market. So I guess what catalyst needs to happen for this to play out, and what's kind of the timing on that? Thank you.
spk27: Yeah, obvious. It's easy for me to answer the first question because there's no answer. So going to the second question, which is really a highly valid question, because I believe someone should write a textbook of what's happening in the growth hormone market here in the U.S. It was the first place you saw biosimilar having TBR standards coming in. We saw how the entire market developed. And now we're coming to the next stage. The first thing, the biosimilar going in, Then it went over to market access. And I can guarantee we had so much interaction with nearly every one of the daily growth among companies, except one, I think. And we somehow got a really, really good insight in their thinking. And the insight is exactly how I also would act. The element is that when you have a superior treatment coming into that basic making a paradigm shift in the treatment regime, you know if you're sitting with what we call the established that cannot follow this treatment regime, it's only how really to optimize your business at that time. So you follow the classical textbook. First of all, you get rid of the sales force. The second one, you get rid of all promotion. basically optimizing the manufacturing process where you never invest in it, then you terminate the manufacturing after you have a bulk product sitting, and then you're just selling that, and then you're out. And I can guarantee it's one of the best P&L you can get out of that business. This is really where you have a great P&L. But the problem is it's not sustainable. Some of the daily growth hormone, you can find that out. They tried to sell it. No one wanted to buy a dying product. That was why no one could sell it. So therefore, the entire consolidation started three or four years. What you start to see now is the consequence of it. And you're likely right. There will only be one or two daily growth hormone provider because there will potentially be a cash segment. There will be other things where there potentially will be an element of what we can call a low-priced element where they don't really need optimal treatment or anything like that. And this is where you typically will see one or two player be.
spk05: Thank you. One moment, please. Our next question comes from the line of Leland Gershaw of Oppenheimer. Your line is open.
spk22: Hey, good afternoon, and thanks for taking my question. Just another question on the spectrum. trajectory is obviously a very healthy bump up from fourth quarter. And wondering if you can comment, you know, as that coincides with the turn of the year, were there any aspects related to more favorable reimbursement with the new year and or changing dynamics of the daily growth hormone space, as you talked about, that may have favored Sky Profile?
spk27: Thank you. I think we have the three pillars we discussed in my part of the script, which I actually think illustrate very, very well the transition becoming thing. And I believe when we first go to the first treatment experience, it actually takes 12 months for a physician really to see the improvement in linear growth and other endocrine benefits. And when you see a new product, I think often, as a physician, you will wait to see in a few number of patients before you expand further on. The second thing is the consolidation of the market, which sure is happening, and there was just a consequence when it started to tick in, whether it ticked in in 23, whether it ticked in in 24, we know it was happening, but we didn't know exactly when it would be. And I also believe, and this is where Joe comes in and will talk about, how we investing in a dedicated, best-in-class endocrinology dedicated Salesforce and our medical affairs teams.
spk21: Yeah, yeah. So, yeah, the commercial team really has done a good job of executing in this particular market where we really disrupted how growth hormone is prescribed and also reimbursed by the PBMs and the payers. And really, it comes down to the clinical strength of Skytropha. Its efficacy, the fact that we don't have a preservative, a best-in-class auto-injector, And again, the support that we can provide the offices and the patient to get reimbursed so that they can enjoy Skytrova for their entire course of therapy. But the compelling story that we do have from a clinical standpoint is really a motivating factor for these healthcare providers to do the appropriate documentation so that that patient can get approved and stay on our product.
spk27: Thank you.
spk21: Thank you.
spk05: Thank you. One moment, please. Our next question comes from the line of Vikram Parahote of Morgan Stanley. Your line is open.
spk14: Hi, good afternoon. Thanks for taking our question. We had one on TRANSC on HGH. Could you just help us frame expectations for the foresight data expected in adult GHD in the fourth quarter and also speak a bit about how you're viewing the commercial potential for HGH for this part of the GHD population versus the pediatric population. Thanks.
spk27: Really, really interesting way to look and why the adult growth hormone deficiency trial is so really interesting for us. It's because we are in a situation where many of the other indication that where you use growth hormone, you use linear growth as the primary outcome. in adult growth hormone deficiency, the primary endpoint is built on change in body composition, which are also one of the elements you want to achieve in the pediatric population, but it's not really the primary endpoint. What we also have, we have a situation where we have a benchmark related to the daily growth hormones. We have a benchmark related that both The two other long-acting have initiated phase 3 trials, have reported phase 3 trials in adult growth hormone deficiency. One of them didn't manage to be better than placebo. The second one showed half of the effect compared to daily growth hormone. We believe because Skytrover is built on somatopoeia, an unmodified molecule that can have the same mode of action like data growth hormone and endogenous growth hormone, we will be in a position that we hope at least we can see the same benefit as data growth hormone. Potentially we will be superior as we were in a situation in the pediatric, but we will wait to see the data. So we believe that it's a really, really strong integrated packet to see because it's first time where you really go out and analyzing really the impact on a growth hormone treatment on the endocrine health, which body composition is part of it, but it's really parallel to some of the other benefits where you need to have the distribution throughout the body.
spk05: Thank you. One moment, please. Our next question comes from the line of Joseph Schwartz of SVB Securities. Your line is open.
spk19: Hi. Thanks very much.
spk20: So how leverageable is a Salesforce across the three endocrine indications you're currently pursuing? I know when we look for physicians to speak on these topics, it seems a bit fragmented to us, and we almost never find anyone who can speak on two, never mind three, of these endocrine conditions. So can you just talk a little bit about how the sales force is currently structured and whether you won't have to actually expand it significantly in order to reach achondroplasia and hypoparathyroidism specialists in addition to growth hormone folks?
spk27: Yeah, this is the holistic picture. You're basically saying, why should we focus on building up as really, really a strong pipeline of three independent products really focused on endocrinology. So, the first one we have is chytophthora. It both has a pediatric and adult indication. We have pursued the pediatric, now we go for the adult. We have trans-compete AIDS. The main indication is adult, but it also has a pediatric. We are going now As I said before, we expect to getting an approval in what we call the adult hyperparathyroidism. As soon as we get the feedback, what is the deficiencies? When we know what the deficiencies is, we can address it. And this is what we would do extremely fast and ensure this product going out to the market. We will also pursue the pediatric indication in this segment. Then we have Transcon CMP. People believe this is pediatric disease, because they're just focused on linear growth. We believe that basic is a treatment regime for achondroplasia or the rest of their life. And this is one of the things we also would like to discuss when we come to the basic, the research state. So when you see the holistic part on it, yes, it gives us a lot of synergy, specific when you think about reach out We go to endo. We have one stand. People come to us, perhaps interest in PTH, perhaps interest in CMP, perhaps interest in growth hormone, and they get the entire packet. They see endocrinologist, the physician, they see us dedicated to be a leader in endocrinology because we so much focused on all different product opportunities. When you go to dedicated Salesforce, you can build it up in different means, and it's very much dependent on geographic regions. If you just think about US, I actually think what Joe and his team have done, they're actually building up what we call a Salesforce that basically are dedicated to Skytrover, dedicated to PTH, but the basic can exchange it back and forth between the different Salesforce because both have all the capability to be in it in this way. So I actually believe that we have so much synergy in this way of operating.
spk05: Thank you. One moment, please. Our next question comes from the line of Andreas Argyrats. Again, Andreas Argyrats, your line is open.
spk10: Yeah. Thanks for taking that question. A quick one here on Trincon CMP. So looking at the growing of chondroplasia market in the competitive landscape, could you expand on what data you're tracking and plan to provide to support transplant CMPs impact outside of height? And do you see a potential to expand into patients or children under two years old? And forgive us if that was already addressed.
spk27: No, I believe that it's some way. What we want to do is that you have linear growth with an element where we believe, sure, we can help a lot, we can do a lot, and we can also potentially accelerate it in a combination between Skytropha and Transcon-CMP. The element of what we call agronucleases-specific co-morbidities. And in the presentation we did when we released our accomplished data, we basically indicated that we could see an effect on the account of patient-specific side effects, meaning is that they got less. We are building on that, and we have regulatory interaction, how we potentially can prove that in a more clinical, specific manner in our Phase 2b, which we hope is our pivotal trial that we basically are recruiting now for full speed and hope to have all patients in this quarter here. So this is where we see the element of us providing and treatment of acondoplasia, really to ensure that we are not only correcting linear growth, but also addressing the comorbidities.
spk11: Great. Thanks for taking the question.
spk05: Thank you. One moment, please. Our next question comes from the line of Yaron Werber of Calwin. Your line is open.
spk03: Hi, this is Joyce, thanks so much for taking our questions.
spk04: Historically, I think you've held this Q1 call in early May, and I think some investors were maybe thinking that the call was moved up this time to get ahead of the PDUFA date, and that we might get an update on the deficiencies. If you could just help us understand this a little bit more, that'd be helpful, and then Just quickly, secondly, I know you're not able to comment that much, but just given the lack of interactions it seems with the FDA, are you expecting a CRL? And if that does happen, how quickly do you guys think you can refile? Thank you.
spk27: Let me take the last question. As I said before, we have no knowledge about the deficiencies and we cannot comment further on anything of regulatory interaction related to TransCon PTAs and FDA. And I actually believe what we illustrate to optimize processes. Optimize processes to do things smarter and faster. And I actually think I give all the credit to Scott. It's not often I do that, but I will actually give him credit to Scott or Matt, the head of finance that is sitting here beside us today too. And they can tell about how they really have optimized all our financial process. So I think we're just pressing a button and then we get everything finalized.
spk09: Scott, Matt? Yes, so just as we reported earlier for the annual report, we'll now report earlier for the quarterly report. So I would say nothing specific to look into it. In fact, if anything, I think next year we'll probably report the annual even earlier. Right, Matt? Yes.
spk24: 31st of January.
spk27: The 31st of January next year. I hope to answer your question. It's just because we increase productivity and do it faster.
spk05: All right. Thank you so much. Thank you. One moment, please. Our next question comes from the line of Caroline Palomique of Bearburg. Your line is open.
spk02: Hi. Good afternoon. Thanks for taking the question. Were there any material differences in the MAA application in Europe versus the MDA application in the U.S., given that, to my understanding, there hasn't been any feedback from the European regulatory agencies? And then a second question is just a follow-up on expenses. Just given the updated SCI-TROFA revenue guidance, do you also anticipate adjustments in SG&A expenses, such as in Salesforce? Like, will you add any more people out there.
spk27: Thanks. In our regulatory finding between the different regions, Europe and US, is basically built on exactly the same data packet that will be filed both places with, sure, there is a different formatting of a different filing because they need to be made in a different format. But the data is exactly the same. for both Europe and US. And related to the last question is a clear no.
spk05: Great. Thank you. Thank you. I'm showing no further questions at this time. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.
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