Ascendis Pharma A/S

Good day and welcome to the third quarter 2025 Ascendus Pharma earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1. If your question has been answered and you'd like to remove yourself from the queue, press star 1-1 again. We ask that you limit yourself to one question and one follow-up. I would now like to turn the call over to Chad Fugier, Vice President of Investor Relations at Ascendus Pharma. Please go ahead.

Thank you, Operator, and thank you, everyone, for joining our third quarter 2025 Financial Results Conference Call. I'm Chad Fugere, Vice President of Investor Relations at Ascendus Pharma. Joining me on the call today are Yen Mickelson, President and Chief Executive Officer, Scott Smith, Executive Vice President and Chief Financial Officer, Sherry Glass, Chief Business Officer, Jay Wu, EVP and President, U.S. Market, and Amy Hsu, EVP and Chief Medical Officer. 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 harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, statements regarding our commercialization and continued development of Skytropha and YorviPath, as well as certain expectations regarding patient access and financial outcomes, our pipeline candidates, and expectations with respect to their continued progress and potential commercialization, our strategic plans, partnerships and investments, our goals regarding our clinical pipeline, including the timing of clinical results and trials, our ongoing and planned regulatory filings, and our expectations regarding the timing and the result of regulatory decisions. These statements are based on information that is available to us as of today. Actual results may differ materially from those in our forward-looking statements, and you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning these factors that could cause actual results to differ materially, please see our forward-looking statements 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 February 12, 2025. Transcon Growth Hormone, or Transcon HGH, is now approved in the U.S. by the FDA for the replacement of endogenous growth hormone in adults with growth hormone deficiency. In addition to the treatment of pediatric growth hormone deficiency, and the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency, Transcon TTH is approved in the U.S. by the FDA for the treatment of hypoparathyroidism in adults and European Commission and the United Kingdom's Medicines and Healthcare Products Regulatory Agency have granted marketing authorization for Transcon PTH as a replacement therapy indicated for the treatment of adults with chronic hypoparathyroidism. Otherwise, please note that our product candidates are investigational and not approved for commercial use. As investigational products, the safety and effectiveness of product candidates have not been reviewed or approved by any regulatory agency. None of the statements during this conference call regarding our product candidates shall be viewed as promotional. On the call today, we'll discuss our third quarter 2025 financial results and we'll provide further business updates. Following some prepared remarks, we'll then open up the call for questions. With that, let me turn it over to Jan.

Thanks, Chad. Good afternoon, everyone. In the third quarter of 2025, we accelerated our momentum towards fulfilling our vision 2030 with key achievements in three areas. First, the global launch of EUROPAT continues to be strong with a steady increase in new unique patient prescriptions and prescribers as seen in Q1 and Q2 along with expansion in new geographic markets. We made great advancement towards leadership in growth disorders during the quarter. We saw the US approval of Skytropha in adult growth hormone deficiency. And following our late cycle meeting with FDA, we are progressing toward expected approval of Transcon-CMP in the US. Third, our strong operating fundamentals led to positive operating profit, signaling the beginning of sustained revenue and earnings growth for Ascendis. Now I will provide some specific comments on our commercial and day-to-day portfolio. Starting with EuroPath. EuroPath continues its strong global launch with revenue of 143 million euros in the third quarter. Nine months in the lungs in the biggest market, the U.S. Patient demand continues growing quarter by quarter. From lungs to the end of September, more than 4,250 patients have been prescribed UOPADS in the U.S. by over 2,000 unique healthcare providers, highlighting the strong, steady demand for UOPADS. even during the summer months. In October, the positive trend continued with EUAPET being prescribed for more than 400 new patients in the US alone. Positive physician and patient experience are driving a high rate of compliance. And we expect most patients will be on lifelong PTH therapy. We are expanding our physician weeks each quarter within the endocrinology community. And we are also expanding to other physician groups who manage hyperparapathies. An example, at last week's American Society of Nephrology meeting, we presented three years of kidney function data across our combined clinical trials, demonstrated sustained clinical meaningful improvement in kidney function in the UOPATH-treated patient. In addition, we continue working hard to expand patient access in the U.S. The overall insurance approval rate since the start of the launch is around 70% of total enrollment. And we believe this figure will continue to increase over time. We currently see approval across all payer types with a majority of approvals within eight weeks. We are pleased by the robust uptake of Europass. in our first three quarters of commercialization in the US. Today, less than 5% of US patients are currently on UroPath treatment. We see significant room to grow with around 80,000 to 90,000 patients already diagnosed with chronic hyperparalysis in the US and 3,000 to 4,000 new patients being diagnosed every year. Outside the US, EUROPATH is now available commercially or to name patient program in more than 30 countries. In Germany, Austria and Spain, we have now full commercial reimbursement. In Japan, our partner ChaiGen launched EUROPATH commercially last week following approval in August. We are looking forward to the commercial launch of UroPath in additional countries in the coming years. With a broad label covering hyperparathyroidism for all causes, international treatment guidelines that recommend PTH replacement therapy, and UroPath positioned as first-in-class therapy, we expect sustained patient growth and revenue growth for years to come. As we're building this global market, we're expanding our offerings to patients with hyperparam. We are conducting the part-way 60 trial to support doses up to 60 micrograms of UOPAD in the US. We plan to begin a clinical trial for people under 18 this quarter, and we are advancing our new one-weekly Transcon PTH product candidate, which we believe will be an attractive option for patients on stable doses of UroPads. In the new year, we will share more on our plans to maximize UroPads' value and reach even more patients. Let us now turn to growth disorder, which today compiles of our once-weekly growth hormone Skytropha approved for growth hormone deficiency and our once-weekly Transcon CP currently under review by FDA in the US and by EMEA in EU for children with achondroplasia. Skytropha is approved in the US and EU for treatment of pediatric growth hormone deficiency. With this single indication, Skytrofa is established as a high-value brand and treatment of choice for pediatric growth hormone deficiency. Q3 revenue for Skytrofa was 51 million euros. In July, we received our first label expansion with FDA approval for adult growth hormone deficiency, the first of multiple planned label expansion. In Q3, we initiated our Phase III basket trial of Scottsdorfer with a range of established growth disorder, including ISS, shock deficiency, Turner syndrome, and SDA. Turning to Transcon-CMP, we recently completed a late cycle meeting with the FDA and are in the final stage of the label discussion. Transcon-CMP is under priority review in the US with a due date of November 30 and is also under review in the EU where our MIA file was recently validated. Transcon-CMP once weekly is well positioned to become the leading treatment for children with acondoplasia. with the full degree of linear growth outcome that can be achieved with monotherapies addressing the overactive tyrosine-3 kinase. In addition, Transcon-CMP achieved statistical improvement in leg bowing compared to placebo, increasing spinal canal dimension, a safety and solubility profile compared to placebo, with a very low rate of injector site reaction. and no cases of symptomatic hypertension. We are confident in Transcon-CMP's ability to be a leading therapy. While we believe Transcon-CMP monotherapy is transformative by itself, we want to further enhance outcomes for people living with achondroplasia. Earlier this year, we presented 26-week results from the Phase II COACH trial of Transcon-CMP in combination with Transcon-Grotamo, which showed around three times improved linear growth compared to what had been observed with monotherapies over the same time period. This resulted in healthy linear growth in children with achondroplasia. higher than that observed with an average state of children, accommodated by improvement in body proportionality and without acceleration of bone age. This data has been recognized by key opinion leaders as groundbreaking. Based on this data, we believe, over time, the standards of care in achondroplasia will include combination therapy as a treatment option. building on the potential role of transcon-CFP as the backbone therapy. Following our recent FDA End-of-Phase II meeting related to our combination therapy, we plan to initiate a Phase II trial this quarter. We anticipate disclosing 52 RIG data from the close trial in early 2026. With one weekly growth hormone and one weekly CMP, two highly differentiated medicines, both as monotherapy and in combination, we believe Ascend is in a well-positioned to become the global leader in many different growth disorders. Our vision 2030 also includes creating value through partnership. And we see that being achieved through the rapid progress of Taijin in Japan, Vision in China, Iconis in ophthalmology, endovenolates in metabolic and cardiovascular diseases, where the once-monthly semi-glutide program is making fast progress towards the clinic. And finally, the commercial success of EUROCAT and SCARTOVA has already transformed the financial profile of attendees. In the third quarter, we achieved positive operating income. along with positive cash flows. For the near time, the building out of our commercial organization is largely completed in advance of future global launches. For the medium term, labor expansion, LCM activities have been indicated to maximize the value of our current products. At the same time, for long-term sustainability, our R&D organization continues to advance the Transcon technology platform to ensure a constant flow of new programs and potential new products. In summary, with Transcon CMP nearing potential approval, Ascendis is well positioned to get approval of its third Transcon-based product in a row. This highlights the uniqueness of Ascendis that continues to develop a highly differentiated product created by the Transcon Technology Platform and our unique low-risk drug development algorithm. Importantly, our current three rare disease endocrine products position us for doable future growth and give us confidence in our aspiration to achieve €5 billion or more in annual profit revenue in 2030. I will now turn it over to Scott

Thank you, Yen. I would like to reiterate Yen's comments that the positive operating income development seen in Q3 signals the transformation of our financial profile with sustained revenue and cash flow growth. With that, I will touch on some key points surrounding our third quarter financial results and outlook, but for further details, please refer to our Form 6-K filed today. In Q3, EuroPath global revenue grew to €143.1 million, up from €103 million in Q2, with strong growth partially offset by a €3.6 million foreign currency headwind compared to the previous quarter. In Q3 2025, Skytrofa contributed €50.7 million, with 3% growth in demand offset by a €1.6 million foreign currency headwind compared to the previous quarter. including €20 million in collaboration revenue driven by a €13 million milestone related to Yorvipath and increased partner activity. Total Q3 2025 revenue amounted to €214 million. Continuing on to expenses, R&D costs in Q3 were €66.9 million down from €73.5 million in Q3 2024, primarily driven by completion of certain clinical trials and development activities. SG&A expenses rose to €113.4 million in Q3 2025 compared to €69.8 million in the same period last year, reflecting continued impact of global commercial expansion. Total operating expenses for Q3 2025 were €180 million and operating profit for Q3 2025 was €11 million. Net finance expense for the third quarter of 2025 was €60.9 million, primarily driven by non-cash items, including non-cash remeasurement loss of financial liabilities of €47.2 million. Net cash financial income over this period amounted to €400,000. Note that in our 6-K file this evening, we provide more detail on the components of finance income and expenses. In future periods, we plan to introduce a non-IFRS EPS measure, adjusting for the impact of certain non-cash, non-operating items, including related to our convertible notes. This is intended to increase comparability of period-to-period results. Finally, we ended the third quarter of 2025 with €539 million in cash and cash equivalents, up from €494 million at the end of Q2. Turning to our commercial outlook, primarily driven by the ongoing global launch of Yorvipath, we expect continued revenue growth in the fourth quarter. For Yorvipath specifically, we expect continued growth driven by new patients, stable pricing, payer mix, and contracting in Q4. Longer term, we expect Yorvipath to be driven by continued growth in new patients on therapy, including expansion into additional markets. For Skytropha, we believe that sequential revenue growth should continue to track growth in prescriptions with stable pricing, payer mix, and no changes in contracting, with offsets potentially driven by currency, as we saw in Q3. Longer term, we expect growth for Skytropha to be driven by geographic and label expansion. With that, operator, we are now ready to take questions.

Thank you. As a reminder, to ask a question, please press star 1-1. Our first question comes from Jess Phi with JPMorgan. Your line is open.

Hey, guys. Good afternoon. Thanks so much for taking my question. I was hoping you could speak to your expectations for the rate of new patient enrollments on YourVPath in the U.S. from here. I think you talked about more than 4,250 as of the end of 3Q putting you at, what is that, about 1150 ads or maybe a little more relative to June 30th. Can we think of that as kind of like a good number to work off of from here? Should it continue to kind of drift lower a little bit? Just hoping you can frame some expectations there. Thank you.

Thanks, yes. First of all, we see a really stable number of prescription being written in the U.S. when we take away the bonus that we have from the ERP program of the 200 plus patients we have in the ERP program. When we think about Q3, I'm actually pretty surprised positively about Q3 because I was Prescription number will be written in the three weeks every physician typically take out of their quarter in that time. And what I saw, we saw nearly the same number of prescriptions being written that we actually had seen in Q1 and Q2. And it's also following up with what we said in the October months. we saw more than 400 prescriptions being written in October, unique prescriptions being written in October. So when I look at these lungs, look at the US, I see a very, very stable lungs. And what we're also doing, we're building a fundament, like a strong, strong fundament, because patients stay on light lung treatment. And therefore, when you start a patient, it basically is continued quarter by quarter. So it's building at a house where you have a strong fundament, taking one break around every quarter, and the house getting taller and taller every, every quarter.

Thank you.

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. Your line is open.

Hi, good evening, guys. Thanks for taking my questions. I just wanted to get a sense of how you're thinking about the rest of this quarter. Are you expecting to see impact from seasonality, I guess we can call it, just because of the upcoming holidays, Thanksgiving, Christmas, into New Year's? And do you think that the script trends for December would be directionally lower, let's say, than what you saw for October? And then if I could ask about the TransCon CNP review. You said you're in final labeling discussions, which is good to hear. Can you just confirm whether or not you've had any requests for any type of data from the agency in the review cycle?

Thanks. Let me take the last question. Thanks, Christine, first. Let me take the last question first because it's an easy one because just no, just no, no, no, no. So it's really simple. So going to the next one, it's more of a Scott looking. He didn't read the FLS this time. Chad did the FLS this time. But when I'm looking forward in the future, yes, there is some holidays come up. But when I could look back, I was more worried about Q3 actually compared to the Q4, because I actually believe that it's a longer sample vacation than in Q3 compared to basic what you will see in Q4. So I see pretty positive on Q4. I see we actually increasing our prescription basis for physician writing prescription with more than 500 new prescribers, meaning that having a broader, broader boat where there's more and more that can come in rowing on the ship, and this is where I feel pretty confident about it. So no worry from my side to see.

Okay. Thanks, Jan.

Thank you. Our next question comes from Gavin Clark Gardner. With Evercore ISI, your line is open.

Hey guys, thanks for taking the questions. I wanted to focus in on the conversion rate for EuropaPath. I'm wondering why it's only 70% and you noted that you expect it to be higher over time. How much higher do you expect it to be and when do you think it'll be higher? Just had a follow up on this too.

Yeah, this is a question we have gotten multiple times every quarter and what we have said in the previous quarter We expect that it's going to be maturing over time, and it will go higher than that. And that is typical what we have seen in launches. And I actually had a long discussion with Jay about it today. And what is when we see a mature brand? Is that 85% or is it 90%? Or what is really for the mature brand? brand that you basic some way are ending up at that time. And I think from a modeling perspective is that we feel extremely well where we are today. We still have NCE's block taken into situation. We're getting the patients, we're getting not only the prescription done, we're also getting the approvals done, and we're getting it done in a speed And as Scott also put emphasis on this, we don't expect anything changing in the contracting environment in Q4. So we expect the same for this product that we have seen in both Q1, Q2, and Q3, and no changes to it. But Jay, you can also take a little bit of our discussion about the future, about what is really for a mature brand is that where we are today. and also we see a much higher number for Skytrover after it got matured.

Yeah, thank you for the question. As mentioned before, we're really encouraged about the 70% approval rate that we're seeing now. It's actually about what we expected or guessed at the beginning of the year, just based on what we know about the clinical value proposition of the drug, which, again, is incredibly positive and has been resonating with a lot of the payer accounts for which we are speaking with. To answer your question, Gavin, directly in terms of what that peak approval rate could be and at what timeframe, that's really hard to say, right? When you look at some of the analogs for similar drugs, that could in some instances take multiple years. And the reality is once you get to a certain high percentage, the remaining becomes a little bit more difficult simply just given the heterogeneous landscape of the pairs, right? It becomes quite fragmented. A lot of the government payers might review it on different timetables. So we are meeting a lot of those timetables where they're at. Again, we're continuing to talk about the incredible positive clinical value proposition that we're seeing, and that alone is resonating with a lot of them, which is why we continue to see that approval rate go up over time.

That is super helpful. If I could just ask a specific follow-up on that. For the 4,250 forms... reported through the end of this quarter. Are you guys basically saying you expect the conversion on this to be 70% and then trending higher per everything you just laid out after that?

No, that's not what we're saying, Gary. Because if we go back and look on the early cohort, meaning it's cohort from March, April, it's much, much higher than the 70%. So this is what you see. The longer time it takes, the more and more will be getting approved. And that is basically the element. And this is the question we have. Can we really take this tail and shorten down the tail so we're basically getting the higher percentage that we see from the cohort we had in the beginning of the year, which are much higher than the 70%, can we start that to get it in a shorter time frame?

The point I'm trying to get at is for a lot of the start, let's take the 3100 at the end of June. Maybe you've had close to 70% conversion, but the rest of the 30% is not really lost at this point. Some more still may come through as conversions. It's just a matter of time.

Exactly. So if you take, for example, going to the cohort from March, April, March higher, if you take the earlier state cohort now that is near this month we have, it's lower than that. So this is how you see it. It's only question about time.

Very helpful. Thanks so much.

Thank you. Our next question comes from Joe Schwartz with Lyric Partners. Your line is open.

Great. Thanks very much. A question on Yorvi Path, and then on Transcon CMP. Can you give us your latest views on how Yorvi has been penetrating the different segments of the hypo-paramarket as you see it? Where is it beginning the most traction, and where could it do better? And then you previously emphasized the desire to do more than enhance linear growth and econ-deplasia. So I'm wondering, to what extent do you think you can obtain differentiated label claims on the Transcon CMP label? Thank you.

Let me take the last question. As I said in the prepared remark, we are in the late stage discussion about the labeling. And I cannot really comment about what will really be in the final labeling in this perspective. What is really the key element for me in my discussion with patient, my discussion with physician, Amy Hsu's discussion, our medical affair discussion with the teams? It's really to explain the benefit they see behind the ear growth. And it's clear, unique effect in leg bone, unique effect in changing body proportionality. And we will have peer review publication really supporting all this claim that will come out, really give us an opportunity to take and talk with the patient, talk with the physician about this benefit in it. I think this is the key thing for me. We, I saw, and I saw an element once with a hypopara where facing, it was impossible to forget into the labeling our element of patient benefit related to cognitive function, quality of life and everything like that. And everyone recognized it. Everyone see it. Anything see that is the best thing. I think this is the key thing from our labeling discussion is have no restrictions, have a really safe product, really show our efficacy and safety in the best possible manner in this way. Jay, will you take the first part of the question in this way to Joe?

Yeah, could we repeat the first part of that question?

Yeah, sure. I was just wondering, you know, you've outlined the different segments of the market based on how controlled the patients are. So I was wondering, you know, how are you making inroads into those segments lately? Where are you getting the most traction and where could you do better?

Yeah. So when you think about the 80, 90,000 patients that Yen had referenced earlier in the call, I think there's probably a group that we would describe as highly symptomatic. Patients are well aware of their symptoms, articulating those symptoms to a physician. And within those, I would say we're doing quite well, particularly since the patients themselves are likely the ones that are in the offices most frequently and are keeping the appointments on the books to be able to essentially get some of that information and also help be on their way to actually get prescribed the product. I think where we're continuing to work on are some of the patients for which maybe they're not either self-identifying some of their symptoms as being related to the underlying condition and or perhaps they've gotten used to some elements of it and therefore haven't been as motivated to establish care and retain established care with a specialist. And I think that's why as we think about how we can continue to transform this market, there will be an element of patient activation as well, simply because there is going to be a certain level of disease education required, particularly for a space like this, where it is about redefining what's possible and kind of the status quo for how to manage this type of condition.

Yeah, if I can add something, Jay. I see it from two different perspectives. how often you come into the endo. This is one way. It was how we targeted it and defined something that is not defined on medical terms, but only on how often you see an endo related to being controlled, partly controlled. And what I'm also trying to look at, I'll try to look on where are they coming. Are they coming from the post-surgery? Are they coming from the genetic part? Are they coming from the hemological part? I see them coming from everywhere. So for example,

Ladies and gentlemen please stand by. Again, please stand by.

The conference call will begin to resume momentarily.