Ascendis Pharma A/S (NASDAQ:ASND) Q4 2023 Earnings Call Transcript
Ascendis Pharma A/S (NASDAQ:ASND) Q4 2023 Earnings Call Transcript February 7, 2024
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Operator: Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 Ascendis Pharma Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tim Lee, Senior Director of Investor Relations. Please go ahead.
Timothy Lee: Thank you, operator and thank you everyone for joining our full year 2023 financial results conference call. I'm Tim Lee, Senior Director of Investor Relations at Ascendis Pharma. Joining me on the call today are Jan Mikkelsen, President and Chief Executive Officer; Scott Smith, Executive Vice President and Chief Financial Officer; Dr. Stina Singel, Executive Vice President and Head of Clinical Development, Oncology; and Joe Kelly, Senior Vice President, Head of US 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 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 SKYTROFA for the US and European markets.
as well as certain financial expectations for 2024, our commercialization and development of YORVIPATH in the EU and expected timing of the FDA review and potential launch of TransCon PTH in the US, our pipeline candidates and our expectations with respect to their continued progress and potential commercialization, our strategic plans, our goals regarding our clinical pipeline, including the timing of clinical results, our ongoing and planned regulatory filings and our expectations regarding the timing, and the results of regulatory decisions. Our ability to create value in multiple therapeutic areas outside of endocrinology rare disease, our progress towards Vision 2030, and the potential success of Eyconis. These statements are based on information that is available to us as of today.
Actual results could 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 the factors that could cause actual results to differ materially, please see our forward-looking statements section in today's press release and the risk factors section of our most recent annual report on Form 20-F filed with the SEC later today, February 7th, 2024. TransCon Growth Hormone or TransCon hGH, is approved in the US by FDA and the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency.
The European Commission has 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 full year 2023 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 Jen.
Jan Mikkelsen: Good afternoon everyone. 2023 was that transformative year for Ascendis Pharma. We streamlined the company, including our structure, our processes, and operating expense allocation. And at the same time, we believe we are on track to achieve our Vision 3x3 by 2025. SKYTROFA is the leading growth hormone product in value in the US. The launch of YORVIPATH in Europe Direct and international markets is underway, beginning with Germany and Austria. And our clinical program for TransCon CNP is progressing to what people were data expected in Q4. We believe Ascendis is advancing to become a leading biopharma company with a strong focus on endocrinology rare diseases and capabilities to also create value in other therapeutic areas as we're doing in oncology, ophthalmology, and metabolic diseases.
Because of the decisions we took in 2023, we believe Ascendis is a leaner, more efficient organization in 2024, well-positioned to fulfill Vision 2030 with three independent endocrinology rare disease blockbuster products and expand our engine for future innovation. Now, let me provide an update on each programs. From the beginning, we designed SKYTROFA to be best-in-class growth hormone product by releasing unmodified somatropin. By addressing the needs of the patients, caregivers, physicians, and payers, SKYTROFA achieved US market value leadership in 2023, just two years after launch. We estimated that SKYTROFA penetration in the US pediatric growth hormone deficiency patient population was around 16% at the end of 2023. With SKYTROFA expanding the US growth hormone market to the potential of $3 billion, we believe SKYTROFA has the potential to be a blockbuster on US revenue alone.
Built on this value leadership, we expect our first label expansion to be adult growth hormone deficiency. For this, we plan to submit and supplement BLA to the FDA in the second quarter of this year. In addition, we expect topline data from our Phase II trial in Turner syndrome in the fourth quarter of 2024. Now, turning to TransCon PTH. Last week, we initiated the launch of TransCon PTH in Europe direct and international market. Market, as you know YORVIPATH with full commercial availability in Germany and Austria at an initial list price of €105,000 per patient per year. An estimated 70,000 adult patients in Germany are living with chronic hypoparathyroidism and our initial launch will target 22,000 of those. YORVIPATH Europe Direct launch is off to a great start with our first prescription and orders perceived at the first day of launch, demonstrating the severeness of the disease and the unmet medical need.
We are continuing to expand our EU Direct infrastructure and expect ability of YORVIPATH across Europe by the end of 2025. In parallel to meet the needs of the patient, we plan to provide commercial reimbursed product to early access routes such as main patient programs. The US PDUFA date for TransCon PTH is May 14th. If approved, we plan to launch our YORVIPATH as quickly as possible thereafter through our status US commercial infrastructure. Moving now to TransCon CNP. Our clinical program is designed to support approval of TransCon CNP as a treatment for patients of all ages with achondroplasia. TransCon CNP dosed at 100 mg per kilo per week has demonstrated superiority compared to placebo in two 52-week trials. In the open-label extension, we observed unexpected strong patient retention of 97% for now up to four years.
As a result of this unexpected finding, we continue to review our own data and scientific literature. We believe now that achondroplasia is both a growth disorder and a muscle disorder. As presented at the JPMorgan Conference in January, we showed significant improvement in health and quality of life for children with achondroplasia treated with TransCon CNP compared to placebo. With this growing insight, we have designed our pivotal ApproaCH to evaluate meaningful benefits related to all aspects of achondroplasia. Including linear growth and improvements in comorbidity as measured by radiological endpoints, physical function, body compensation, and quality of life. We expect to share topline data from this trial, and we plan to submit an NDA in the fourth quarter of this year.
In addition, we are pursuing additional treatment opportunities in achondroplasia. Infant trial age zero to two years, first patient already had been enrolled. Combination trial with SKYTROFA age two to 11, week 26 topline annualized growth velocity in the fourth quarter of 2024. Adult plan to file an IND similar in the third quarter of this year. Switching now to oncology. Both TransCon IL-2 β/γ and TransCon TLR7/8 Agonist has shown favorable safety profiles and single-agent clinical activity. We expect 2024 to be an extremely important year for oncology pipeline with data readout in well-defined patient population in the fourth quarter. Also in the fourth quarter, we expect to have completed enrollment of our randomized Phase II trial in neoadjuvant head and neck cancer.
Longer term, to maximize this potential reach and value of these oncology product candidate, we aspire to commercialize our oncology assets to partnership with companies with specialized oncology experience and capability in late-stage development and commercialization. Moving now to ophthalmology. We recently announced the formation and launch of an independent company Eyconis to develop and commercialize TransCon ophthalmology products globally. We have received an equity position in the newly formed company and we are electable to receive development, regulatory, and sales milestone plus single-digit royalties. In January, we introduced Vision 2030. Our strategic roadmap to achieve blockbuster status for each of our three endocrinology rare disease products and expand our engine for future innovation.
With the broad applicability of the TransCon technology platform, our goal, as laid out in Vision 2030, is to apply our algorithm for product innovation to established opportunities in greater than $5 billion indication as we did with an anti-VEGF and anti-peer bond [ph] classes where we believe we have designed the best-in-class programs. We are pleased with the interest in our once-monthly GPL-1 program and from our platform technologies, we expect to continue to generate many more opportunities in the future. I will now turn the call over to Scott for financial review before we open for questions.
Scott Smith: Hi Jan. We continue making significant progress towards our financial goal of becoming operating cash flow breakeven on a quarterly basis by the end of 2024. I will touch on some key points surrounding our financial results, but for further details, please refer to our Form 20-F filed today. . As we previously announced in early January, SKYTROFA revenue for the fourth quarter of 2023 was €64.2 million compared to €47 million reported in the third quarter and €17.1 million reported in the same period last year. 37% sequential growth in SKYTROFA revenue from Q3 to Q4 was again driven primarily by strong underlying demand in the US. Total revenue for the fourth quarter was €137.7 million, including the one-time $70 million Teijin upfront payment recognized as €63.7 million of license revenue.
Turning to expenses. R&D costs in the quarter totaled €90.9 million, down 18% sequentially from the third quarter of 2023, primarily driven by lower endocrinology rare disease related costs as trials and development complete and lower oncology-related costs. SG&A expenses were essentially flat at €64 million compared to the third quarter of 2023, reflecting commercialization synergies and expense controls. Total operating expenses were €155 million for the fourth quarter, down 12% sequentially from the third quarter. Overall, our operating loss for the fourth quarter declined sequentially by 73% to €37 million from €134 million in the third quarter of 2023. We ended the fourth quarter with cash, cash equivalents, and marketable securities totaling €399 million.
Last month, we announced the formation and launch together with an investor syndicate of Eyconis to develop, manufacture and commercialize TransCon ophthalmology assets globally. As a result, we expect minimal, if any, P&L burden from ophthalmology in 2024. As a reference point for Q4 2023, external ophthalmology project costs totaled €6.4 million. As previously announced for the full year 2024 based on current plans, we expect SKYTROFA revenue to be in the range of €320 million to €340 million at average 2023 exchange rates. Total operating expenses, SG&A and R&D together to be approximately €600 million and we expect to be operating cash flow breakeven on a quarterly basis by the end of 2024. Let me now also provide a review of selected key program milestones.
For TransCon Growth Hormone, we plan to submit an SBLA to FDA for adult growth hormone deficiency in the second quarter of 2024, and we expect to report topline results from our Phase II Turner syndrome trial in the fourth quarter of 2024. For TransCon PTH, in the US, our PDUFA date is May 14, 2024. If approved, we plan to launch it as YORVIPATH as quickly as possible thereafter. Outside the US, we initiated the launch last month of TransCon PTH marketed as YORVIPATH, with full commercial availability in Germany and Austria. We plan to roll out YORVIPATH in our Europe Direct and international markets segments throughout 2024 and 2025. For TransCon CNP, our clinical program evaluating TransCon CNP as a treatment for achondroplasia advances with topline results from the pivotal ApproaCH trial and an expected NDA submission for the treatment of children with achondroplasia, both in the fourth quarter of 2024.
In addition, during the fourth quarter of 2024, we expect to report week 26 topline data from the COACH trial in combination with TransCon Growth Hormone and submit an IND or similar for adults with achondroplasia. Within our oncology therapeutic area, we plan to provide a clinical update from indication-specific dose expansion cohorts in the IL Believe and TRANSCEND IT trials during the fourth quarter. In addition, we expect to complete enrollment of our randomized Phase II trial in neoadjuvant head and neck cancer. With that, operator, we are now ready to take questions.
Operator: Thank you. And this time, we'll conduct a question-and-answer session. [Operator Instructions] Our first question will come from the line of Jessica Fye from JPMorgan. Your line is open.
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