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Edited Transcript of ASND earnings conference call or presentation 18-Nov-19 9:30pm GMT

Q3 2019 Ascendis Pharma A/S Earnings Call

HELLERUP Nov 24, 2019 (Thomson StreetEvents) -- Edited Transcript of Ascendis Pharma A/S earnings conference call or presentation Monday, November 18, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Dana Pizzuti

* Jan Møller Mikkelsen

Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director

* Juha Punnonen

Ascendis Pharma A/S - Senior VP & Head of Oncology

* Scott T. Smith

Ascendis Pharma A/S - CFO, Senior VP & Member of Executive Board

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Conference Call Participants

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* Adam Anderson Walsh

Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst

* Alethia Rene Young

Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research

* David Neil Lebowitz

Morgan Stanley, Research Division - VP

* Jessica Macomber Fye

JP Morgan Chase & Co, Research Division - Analyst

* Joseph Patrick Schwartz

SVB Leerink LLC, Research Division - MD of Rare Diseases & Senior Research Analyst

* Joshua Elliott Schimmer

Evercore ISI Institutional Equities, Research Division - Senior MD & Equity Analyst

* Michelle Lim Gilson

Canaccord Genuity Corp., Research Division - Analyst

* Nicholas M. Abbott

Wells Fargo Securities, LLC, Research Division - Associate Analyst

* Tazeen Ahmad

BofA Merrill Lynch, Research Division - VP

* Vasiliana Vireen Moussatos

Wedbush Securities Inc., Research Division - MD of Equity Research

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Third Quarter 2019 Ascendis Pharma Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

Now I would like to hand the conference over to our Senior Vice President and Chief Financial Officer, Mr. Scott Smith.

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Scott T. Smith, Ascendis Pharma A/S - CFO, Senior VP & Member of Executive Board [2]

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Thank you, operator. Thank you, everyone, for joining our third quarter 2019 financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendis.

Joining me on today's call is Jan Mikkelsen, President and Chief Executive Officer; Tom Larson, Chief Commercial Officer; Juha Punnonen, Head of Oncology; and Dr. Dana Pizzuti, Head of Development Operations.

Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, our progress on our pipeline candidates and our expectations with respect to their continued progress; statements regarding our strategic plans; our goals regarding our clinical pipeline; statements regarding the market potential of our pipeline candidates; and statements regarding the planned regulatory filings.

These statements are based on information that is available to us today. Actual results or events could differ materially from those in the forward-looking statements, and we may not achieve our goals, carry out our plans or intentions or meet the expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. We assume no obligation to update these statements as circumstances change, except as required by law.

For additional information concerning the factors that could cause actual results to differ materially, please see the forward-looking statements section in today's press release and the Risk Factors section of our annual report on Form 20-F filed on April 3, 2019. Please note that our TransCon product candidates are investigational product candidates and are not approved for commercial use. As investigational products, the safety and effectiveness of the TransCon product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our TransCon product candidates shall be viewed as promotional.

On today's call, we will discuss our third quarter 2019 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions.

I will now turn the call over to Jan Mikkelsen, our President and Chief Executive Officer.

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [3]

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Thanks a lot, Scott. Good afternoon, everyone. Thank you for joining us today. This quarter was marked by several milestones and achievements in our journey to build a leading, fully integrated, patient-focused biopharma company, as outlined in our Vision 3x3.

We are on track towards filing the TransCon Growth Hormone BLA in the U.S. in the first half of 2020 and the MAA in Europe in the second half of 2020. We are also advancing our 2 endocrinology rare disease programs. For TransCon PTH, we announced last week an expansion of our Phase II trial, which I will discuss in detail. And we indicated, as planned, our TransCon CNP Phase II trial.

We also continued to make progress with our plan to establish global clinical and commercial reach for our endocrinology rare disease pipeline, as our partner in China, VISEN Pharmaceuticals initiated a Phase III trial for TransCon Growth Hormone for pediatric growth hormone deficiency.

Let me start with an update on TransCon Growth Hormone. Preparation for BLA filing in the first half of 2020 and MAA filing in the second half of 2020 are both on track. Last quarter, we discussed the 2 items remaining to be completed prior to filing: finalization of our long-term safety data and completion of our PPQ manufacturing validation batches. As planned, in Q3, we reported the last subject visit for the long-term safety database, consisting of around 300 subjects on drug for 6 months, 120 subjects for 12 months, 45 subjects for 2 years. We have also now completed the production of our [drug] product validation batches required for regulatory filings. We are now finalizing the associated analytical and qualification reports for the BLA and MAA filings.

Recently, the European Commission granted us Orphan Designation for TransCon Growth Hormone for pediatric growth hormone deficiency in Europe. Orphan Designation is provided to the therapeutics for certain health conditions that affect a limited number of patients, and if a treatment already exists, the major theme must be of significant additional benefit. This is an early indication that the European health authorities recognize the unmet need in pediatric growth hormone deficiency and the clinical benefits of our once-weekly TransCon Growth Hormone therapy.

In addition, in the U.S., in the enliGHten trial, around 150 patients have now successfully been transferred over to our intended commercial presentation of TransCon Growth Hormone, consisting of our auto-injector and dual-chamber cartridge. We believe this patient data will be sufficient to support our auto-injector to be part of our initial BLA submission.

In light of recent clinical development with other long-acting growth hormone products, I would like to address the fundamentals of growth hormone treatment. A successful product needs to have both the direct and indirect benefit of growth hormone, to be safe and effective long-acting growth hormone therapy. We have stated for many years that the target product profile for a commercial successful long-acting growth hormone must have all the integrated benefits of daily growth hormone therapy. This benefit of growth hormone treatment include not only catch-up, sustained high velocity, but also improved body composition, including fat mass and muscle BMI normalization, improved bone health, bone age advancement and improved quality of life. We believe maintaining the same mode of action and tissue distribution as data growth hormone is critical to mimic all this effect of native growth hormone.

TransCon Growth Hormone is the only long-acting growth hormone product in clinical development that is based on the release of an unmodified human growth hormone, the same as (inaudible) somatropin and somatropin used in daily growth hormone products. Our TransCon technology allows the least unmodified growth hormone to diffuse into the target tissue, maximizing its ability to carry out the same effect as (inaudible) or daily growth hormone.

We are also developing our once-weekly TransCon Growth Hormone to have the optimal product features from the daily growth hormone products. We developed our auto-injector to build in optimal product features such as room temperature choice, small injection volume and a needle and an integrated connected health care platform, all to help clinician and the patient with a great adherence and convenience.

We're also making good progress developing our connected health care support program. We expect this program to generate data to support adherence and include apps and interface point for both patient and provider at launch.

We have advanced the TransCon Growth Hormone program from the idea stage all the way to clinical trials involving around 400 patients. And we're now on the threshold of submitting marketing applications. TransCon Growth Hormone has the potential not only to match the current daily standard, but if approved, may in fact offer great, high velocity outcome.

With TransCon PTH, we have followed the exact same development agreement designed to address a major unmet medical need. In hypoparathyroidism, patients are in urgent need of a therapy that sustains physiological levels of PTH 24 hours a day, 7 days a week as a true replacement therapy. The burden of this disease is enormous. With current standard of care, patient and physician must balance the trade-off between managing short-term symptoms and reducing risk of long-term complications. The dilemma is that the treatment of short-term symptoms with calcium and activated vitamin D at the same time also increase the long-term complications. Short-term symptoms have a significant impact on patient productivity and daily lives.

In our patient experience research, about 30% were no longer able to work and over 76 patients reported interference with work productivity. Meanwhile, the long-term complications add yet another layer of economic burden to the health care system. Complications include kidney failure at four to eightfold greater risk, with hospitalization or ER visit experienced by 79% of patients. In recent months, this burden has been at the forefront of our minds, given the recall of the only approved PTH therapy for HP in the U.S. NATPARA.

Since the September recall, we have been talking with sites and patient about their experience. Originally, we saw that NATPARA might be back on the market and in patients' hands quickly. Then at a recent patient conference hosted by the Hypoparathyroidism Association, our team learned how the patient community has been significantly affected by this situation. We heard stories of desperation from patient, faced with difficult choices about the care. Importantly, we also understood that it was uncertain when a short-acting PTH therapy may again be available for the patient.

So we had been considering what could we do to help some of these affected patients, while still advancing our clinical program as quickly as possible and preserving the robustness of our PaTH Forward clinical trial. Initial in PaTH Forward, we were planning to enroll subjects who were naïve to PTH replacement therapy or who had undergone a long washout period of at least 12 weeks and a stabilization period. By putting the addendum in place, we are now able to include patients impacted by the recall with only minimal change to our planned time lines.

We concluded, this was the best course of action we can take to address the patient need. By reducing the washout period and over-enrolling the current Phase II trial, we may now obtain data about the safety and efficacy of TransCon PTH in both PTH-naïve and experienced subjects. Depending on our final sample site across the 2 groups, we can conduct various sub analysis across the Phase II trial endpoints, including potentially informative data about the relative affects on bone turnover and bone health. We will also look at how the 2 groups perform during the long-term extension phase in 2020.

Since the addendum will have no other impact on design or endpoints of the trial, including no impact on the subjects outside of the U.S., it's also a relative streamed operational process. Importantly, we will not be expanding the patient population in our Phase II trial if we did not believe TransCon PTH is functioning as designed as a true replacement therapy. In addition, one of the key elements for the overall program is building the proper size safety database, both in PTH-naïve and PTH-experienced subjects. With a larger Phase II trial, we believe we are in a good path to realize this objective.

We are very confident in our decision in the potential of TransCon PTH and in the data to be generated from the expanded PaTH Forward Trial. We are very excited about the potential of TransCon PTH to change patients' lives and look forward to a readout of the PaTH Forward Trial expected in Q1 2020.

Our third endocrinology product candidate, TransCon CNP, we're also advancing the initiation of our Phase II ACcomplisH Trial. With TransCon CNP, we are again aiming to achieve the optimal balance of safety and efficacy. Upon exposure to the growth plate, CNP is both a modulator of growth and regulator of the FGFR3 pathway. In achondroplasia, CNP counterbalance the constant overactive signaling pathway caused by the mutation of the FGF receptor 3. Therefore, continuous exposure to CNP at effective levels should result in normalization of the parents between the activity of the FGFR receptor 3 and the CNP signaling pathway, a balance that is essential for normal bone growth. CNP short half-life in humans of 2 to 3 minutes had made it impractical to maintain constant drug exposure from one administration to the next.

With our TransCon technology, we have demonstrated that we could overcome this challenge. By providing continuous exposure to CNP for 24 hours a day, 7 days a week, we believe we can develop TransCon CNP as a therapeutic option not only for achondroplasia, but potentially for various other growth disorder. Our Phase I clinical trial of TransCon CNP demonstrated we can achieve our target product profile.

Now we are evaluating TransCon CNP in the Phase II ACcomplisH Trial, where we aim to evaluate its safety and efficacy in around 60 subjects with achondroplasia from the age 2 to 10 years. In this study, we're looking at a primary endpoint of annualized high velocity as well as other key secondary endpoints, which include change in body proportionality, other comorbidities and patient-reported outcomes.

Building from our Phase I data, our goal is to demonstrate that once-weekly TransCon CNP (inaudible) it's not only high, but the many comorbidities that can have a life-altering implication for children with achondroplasia.

During the quarter, we also continued with our global ACHieve Study, our national history study, which is now enrolling at around (inaudible). ACHieve will provide important insight in the experience for children with achondroplasia. Both the ACcomplisH and ACHieve clinical trials demonstrate our commitment to develop a new therapeutic option for children with achondroplasia, one that is designed to improve the overall health and wellbeing.

In oncology, we recently presented data from our TransCon TLR7/8 Agonist product candidate at the Society for Immunotherapy in Cancer. The data indicates potent antitumor effect in both injected and noninjected tumors. Perhaps more importantly, TransCon TLR7/8 Agonist resulted in lower induction on systemic cytokines when compared to uncommunicated parent TLR7/8 Agonist and triggered strong hemological memory when the animals were rechallenged 2 months later with a new tumor without any further treatment. We continued to advance several new and exciting programs in this therapeutic area, including our receptor-biased long-acting TransCon IL-2 beta/gamma candidate. In this area, as claimed, we are working towards our first oncology IND or equivalent filing in 2020.

With our progress this quarter, we are one step closer towards achieving our Vision 3x3 for building a leading fully integrated biopharma company.

Now let me turn the call over to Scott for a financial update.

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Scott T. Smith, Ascendis Pharma A/S - CFO, Senior VP & Member of Executive Board [4]

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Thanks a lot, Jan. Turning to our financial results for the 3 months ended September 30, 2019. Let me review some highlights. For the third quarter, we reported a net loss of EUR 25.1 million or EUR 0.53 per basic and diluted share compared to a net loss of EUR 34 million or EUR 0.81 per basic and diluted share during the same period in 2018.

The third quarter 2019 net loss includes an unrealized noncash gain of EUR 27.4 million compared to an unrealized noncash gain of EUR 3.2 million in the 2018 quarter due to foreign currency exchange rate fluctuations.

Research and development costs for the third quarter were EUR 46.3 million compared to EUR 31.5 million during the same period in 2018. Higher R&D costs during the 2019 quarter reflect increased personnel and infrastructure costs due to growth in headcount to support development of our product candidates.

Then for TransCon Growth Hormone, costs were higher, primarily due to increasing costs for manufacturing of validation batches and initial cost of building inventory in anticipation of a commercial launch, which for now will be recognized as R&D costs when incurred.

Declining clinical trial costs following the completion of our Phase III heiGHt Trial. For TransCon PTH, costs were slightly lower, primarily due to a decline in the preclinical -- due to a decline in costs for preclinical research and manufacturing, which were partially offset by higher costs associated with our Phase II PaTH Forward clinical trial. For TransCon CNP, costs were slightly higher, primarily due to an increase in clinical trial costs related to our ACHieve Study and ACcomplisH trial, which were partially offset by lower manufacturing costs.

Other R&D costs were higher, primarily reflecting activities within our oncology therapeutic area. As a reminder, our R&D expenses, including manufacturing-related expenses, vary from quarter-to-quarter, reflecting the timing of ongoing development activities.

General and administrative expenses for the third quarter of 2019 were EUR 10 million compared to EUR 6.8 million during the 2018 period. These higher costs primarily reflect an increase in personnel and site costs as well as costs of building out commercial capabilities. We ended the third quarter with cash and cash equivalents of EUR 658.7 million and 47,739,647 ordinary shares outstanding. As a reminder, our quarterly ending cash balance may be impacted by a combination of items, including exchange rate and working capital fluctuations, which this quarter led to a net positive impact on the ending cash balance.

During the quarter, we continued to execute on our Vision 3x3 strategic road map, including completing our long-term clinical follow-up and manufacturing of drug product PPQ batches for TransCon Growth Hormone and increasing our global reach through VISEN's initiation of a Phase III trial of TransCon Growth Hormone in Greater China.

And looking forward, over the near term, we plan to continue progress toward a BLA filing for TransCon Growth Hormone in the first half of the next year and the MAA filing in Europe in the second half of next year. Continued growth of our endocrinology rare disease pipeline through label expansion of TransCon Growth Hormone into adult GHD and expansion of our Phase II trial of TransCon PTH to include subjects previously treated with short-acting PTH. Report our top line Phase II TransCon PTH data in Q1 2020 and open-label extension data for up to 6 months during 2020. Continued execution on the TransCon CNP ACcomplisH trial as we march toward identifying an effective dose in 2020. Advance our oncology product candidates toward first IND or equivalent filing in 2020. And continue increasing global rates for endocrinology rare disease pipeline.

Operator, we're now ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question is from Jessica Fye with JPMorgan.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [2]

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First one is on manufacturing. I think you've previously mentioned that you are expanding your manufacturing capacity in order to ensure you have enough drug supply for the launch. Can you just provide a little more of an update on the manufacturing progress and your confidence level that you have enough in place to be ready for the launch?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [3]

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Thanks, Jess. What we're doing now is actually not really affecting our launches, because we already have the capacity really to work and provide necessary material for entire launch space. And the basic already are manufacturing on the high speed on -- every day, we really can do just really to build up as much as possible TransCon Growth Hormone that can go out to the patients. What we more or less are really building up the second layer, supplier, is what we call the global reach, because we now really are implementing clinical trials for rest of the world to ensuring we're not only addressing a U.S. population, but really expanding the TransCon Growth Hormone to be available basic on a global basis. And this is why we are expanding the capacity. And the capacity is built up in such a manner, when we're starting to get through what I call the clinical operation, the clinical approval process for rest of the world, we will be in a position that we also have sufficient manufacturing capacity. So to make it very short, the expected capacity is not really mainly focused on the U.S. market. It's mainly built out to have global capacity.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [4]

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Okay. And then I know you recently got orphan drug designation in Europe for TransCon Growth Hormone, and there's been some debate among investors about the regulatory requirements in Europe related to pegylated products in children. So how much can we or can't we read into the orphan drug designation as kind of a good sign on that front? Did the European Commission review any data in granting that designation? Or was it more just based on the market size and the potential for benefit over existing therapies without a specific read on the data?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [5]

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Sure. They're reviewing our data, because we're sending in application describing the concept of our product compared to the clinical data we have achieved. From that perspective, I think what we're recognizing is basic -- is that we are in a position that we really have a product opportunity that is really from an initial groove. It also see it adding a benefit to the patient. And that is where we are. We're still in a continuous dialogue with the European authorities. And just to cap that discussion is that we're feeling pretty confident we are coming as one of the first companies that had dedicated pediatric development plan, have always developed this TransCon Growth Hormone as a pediatric product. And what we have observed or what we have seen is giving a high confidence that we really have a product opportunity to have a global reach. Just recall, we have been through the entire preclinical path at both in Japan, South Korea and China and work out any kind of pushback to our preclinical package.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [6]

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Okay. And last one from me, can you guys talk about the changes at the SVP level, including Jonathan Leff's departure, are you guys looking for a new CMO at this time?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [7]

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We are, from a company politic, never comment on single position and single cases. And what we're doing is that we were in a position that Jonathan has left the company for months ago. And we are in a position where we have dedicated a lot of the operation parts to 3 different areas. And it's really function extremely well, and we have high level of confidence that we now are developing an organization that really can support that we can implement our Vision 3x3. And I'd say that is really the highly effective thing we want to do. And there has not been any kind of change in time lines or anything like that. What we have done in the last 18 months is basic after we implemented our Vision 3x3, we're now trying to develop the organization, so the organization also can be developed to a state that it can support and successful implementation of our Vision 3x3. And this is what we're doing in a strategic manner to assure that we can be accessible as we want to be.

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Operator [8]

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(Operator Instructions) And our next question is from Alethia Young with Cantor Fitzgerald.

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Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [9]

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I was just curious about -- maybe thinking a little bit more into -- maybe how opportunistically think about the PTH kind of pathway if you were able to get some patients who had seen that power in the past. And the -- and the follow-up is, of the 70,000 patients in the United States or so, I mean, how many do you really think are kind of at need if we're trying to kind of think about an addressable market size here?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [10]

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That was a lot of questions. But I think -- that was a lot of questions. So let me try to take the question in different stages. And if I miss any one of them, please come back. So let me first take the patient population. I think we have it there very clearly in our investor deck, how many patients we believe to have HV in the U.S. And we think it's about 70,000 to 110,000. But I think really what the issue is, is the dilemma that physicians are in and the patients are in, because both have an issue with short-term symptom, long-term complication. And better you control the short-term symptom, you basically worsen the long-term complication. So therefore, you can have a patient that basic feeling, someway with my disease, but then the basic worsening the long-term complication. There is no win here. And from my perspective is, I personally believe that the majority of this patient should really be on treatment when there is a true replacement therapy. And how many will be there? I think there's always a good discussion, but I think from a patient focus, I believe the majority should be on this treatment here.

So coming back to some of the other thing about NATPARA, where we saw the element coming out with the desperation. And just recall, NATPARA is a compound that basic are not -- it's a true replacement therapy. And even with that, what you can call a compound that's providing some benefit, we really saw a basic desperation by the recall of this product. For me, it's really illustrated again and again. We're really addressing a major unmet medical need. And we will start focus and focus on how fast can we get the TransCon PTH out to the patient. And here's what we took this initiative is to say, we want also to show that basic, and you can say, in a switch therapy switching for patients that are coming nearly off NATPARA transfer maneuver to the product. We also see the same kind of benefit that we receive more in a native patient population.

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Operator [11]

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Our next question comes from Tazeen Ahmad.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [12]

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Jan, just wanted to get your thoughts on the bit of the update that BioMarin provided for the achondroplasia drug. Obviously, they're waiting for their pivotal results to read out, but I would be interested in hearing your thoughts about what kind of read through we should expect for your product, just given the similar mechanism?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [13]

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I actually think we agree a lot with BioMarin. The CNP is actually an optimal way to address this condition or disease and potential many other areas. Where we some way have a different idea, and it's actually going back to answer your question. If you have a hyperactive signaling pathway 24 hours, 7 days a week, how can you really in a meaningful way balance this pathway back to a normal level by only having drug exposure for 2 to 3 hours. Basic saying is that 10% of the time you have an active drug. This is why we believe when we designed our target product profile that we need to have a continuous exposure. It will be like taking a diabetic drops only for 2 to 3 hours. No one wants to do that. They want to have a continuous exposure of a basal insulin. And this is where we basic want to be in a position that we can provide a continuous exposure. And we know from basic growth hormone market, how difficult it is to provide really optimally adherent on any kind of patient group in a pediatric with daily injection. And this is why we also designed it as a once-weekly dosing. And that is exactly where we believe we're highly differentiated to the BioMarin product. So I hope for the patients, I hope there will be some clinical effect on it. And I think this is what we -- everyone is waiting forward to see later this quarter.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [14]

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Okay. And can you just remind us when your next data update is for your program in CNP?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [15]

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You're asking me a question, which I really can't answer, because I really do not know exactly when we're hitting the effective cohort. We believe we will reach it in -- for some of the first cohorts, but exactly when we're getting that, it's really -- I cannot really give you any kind of forward-looking statement related to it.

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Operator [16]

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And our next question comes from David Lebowitz with Morgan Stanley.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [17]

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First question, did you happen to mention how many patients you're ultimately expanding the Phase II PTH trial to and how ultimately with that analysis of the separate populations look?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [18]

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Thanks, David. I think we need to separate it in different kind of endpoint, because when we look at the primary endpoint, normalization of calcium, withdrawal of activated vitamin D, withdrawing of calcium supplement, normalization of urinary calcium. I don't think that will have any kind of effect where the patient is coming from. But if you look an element like, for example, on a long-term extension data, where you think about bone quality, bone density, we know that a new HP patient because of lack of bone turnover basic is building up much higher bone density than a normal person. That happened not because it's really -- is a positive thing, because what they do will lack the normal bone turnover. So you basic are building up old bone. And this is where we will potentially see a development that is very different in bone density from a person that have been on a highly -- a product like a short-acting product like NATPARA or FORTEO, which are basic is an osteoporosis drug. And therefore, you will see they're coming from a complete different bone density structure. And this is where you will segregate the analysis on the primary endpoint, no difference. But when we go to element like bone density and other related bone thing, you basic -- I believe we will see a different for the 2 different groups, and that's why we're prepared to make SOP analysis of this.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [19]

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Makes sense. So it'll ultimately be about 40 patients in each site total?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [20]

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What we're trying to aim -- because we already have randomized large portion of patients, we couldn't change our block randomization. And in the block randomization, we have a ceiling on 64 patients. So from that perspective, we are in a position is that it's very, very hard for us to move higher up than around 60, because we -- it's too high burden to start to really do the entire randomization. So from that perspective, we would believe that we hope to have about 40 new patients, which we are on track to enroll, and then the 20 patients on previous treated with NATPARA.

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Operator [21]

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Our next question comes from Michelle Gilson with Canaccord.

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Michelle Lim Gilson, Canaccord Genuity Corp., Research Division - Analyst [22]

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I was just hoping you could perhaps elaborate a bit on how the clinical profile of a typical NATPARA patient where at this point previously on NATPAR patient differs from recombinant PTH-naïve patients, perhaps beyond bone turnover? And if you think things like the higher amount of supplements that these patients might be on might affect the Phase II results? And then should we be expecting the reduced washout period to complicate the supplement titration or how patients should respond to TransCon PTH in any way?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [23]

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That was exactly why we limited down to 4 weeks, because we believe, and I think data showing that after you've stopped NATPARA for 4 weeks, we actually are in a position where we both had dealt with the hungry bone syndrome and other things like that. So we basic are stabilizing, you can say, the serum calcium with supplements in a level where it's really, really much more reflecting that it's basic will be coming into the study related to the primary endpoint exactly as the more naïve patient.

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Michelle Lim Gilson, Canaccord Genuity Corp., Research Division - Analyst [24]

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Okay. And then can you just -- after you get the results from the Phase II study, can you just talk about time lines for initiating the Phase III? And if this Phase II change affects the way that you think about that Phase III for TransCon PTH?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [25]

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I think for us, it's really, really, really important to have the 2 patient group now. And what other thing we also are really excited about in some time next year, as both have 6 months' data, where really, really is in a large patient population. So -- but from -- related to the Phase III design, what we're measuring on, for example, the 6-point endpoint is exactly the same thing we also will be measuring in the primary endpoint on our Phase III trial. So I actually think that is not changing anything. We are utilizing the same primary endpoint that we have agreed with regulatory agencies for -- as an indication for both our Phase III trial, and we are also testing them in the extension study.

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Operator [26]

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Our next question comes from Liana Moussatos with Wedbush Securities.

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Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division - MD of Equity Research [27]

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What are the steps to filing the IND for the oncology program?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [28]

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That is a good question, where we are in a situation where we basic are finalizing the CMC upscaling to make GMP material. And we are finalizing and working on our preclinical safety packet that is the normal safety packet that will be part of the IND or equivalent filing. Perhaps, Juha, you will say something on -- we are really excited to go out and showing our data here in -- for first time in a setting where we really representing a complete new concept of having long term intra tumor delivery. And Juha, perhaps you can talk a little bit about the excitement that was showing from this poster presentation.

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Juha Punnonen, Ascendis Pharma A/S - Senior VP & Head of Oncology [29]

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Right, yes. And regarding the IND-enabling studies, it really is a very standard package for safety and GMP manufacturing, nothing unusual there. We're very excited by the programs. There's a lot of potential in multiple indications and looking forward to the IND filing by the end of next year.

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Operator [30]

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Our next question is from Josh Schimmer with Evercore ISI.

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Joshua Elliott Schimmer, Evercore ISI Institutional Equities, Research Division - Senior MD & Equity Analyst [31]

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Jan, in your prepared remarks, you indicated that you had plans to evaluate the TransCon CNP in settings beyond achondroplasia? Can you give us a sense of time lines to start some of those trials and what the development program might look like? Will you be pursuing a basket approach similar to what BioMarin discussed on their analyst event? Or are you going to target individual short-stature indication separately?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [32]

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Yes. It is actually plan we really, really are developing a lot now. We have a complete list of lot of interesting indication where we really see huge unmet medical need that we really, really can address not only in growth disorder, but it could also be in potential outside growth disorder. I think CNP, from my view, it's one of the most interesting new discovery pathway, where you really can see how we can affect a lot of diseases. But going back to growth disorder, I could think that potential CNP would be exactly be a cornerstone in many growth disorder as you have growth hormone being cornerstone today. And potentially, you can also see indication where both of them will be used in combination to get the optimal efficacy. And that was why it was extremely important for us to have really both of them as a once-weekly product and potentially have the opportunity to also make combination therapy. So what you will see later this next year, you will basic see our plans being disclosed about what kind of indication we want to go in and what -- and when we're going to do it. But we just -- I can guarantee, we're really going in very broadly with this compound. We will like to see some of the first cohorts now. And then when we have seen that, we basic have a strong idea where to position it.

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Joshua Elliott Schimmer, Evercore ISI Institutional Equities, Research Division - Senior MD & Equity Analyst [33]

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And then for the TransCon PTH program, what do you ultimately see as the gating steps for approval? And how -- where are you in terms of CMC and characterization and stability testing? And is it more likely to be long-term safety generation that determines the timing of the potential filing?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [34]

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I think 2 elements were different compared to the growth hormone. One element that's very, very different for what we did with growth hormone, already in the Phase II, we're using the commercial presentation, which are major, major difference. Basic Phase II are being conducted with the commercial presentation we are going to market with. So we do not somewhere need to bridge or anything that is already established now. The second thing is that we are executing on the validation batches on high speeds. We have it up in full scale. We already had in the scale we want to go from into our Phase II material. So -- also because the need for the material is so much, much, much less in this. The third element is that we're filing an NDA instead of BLA, meaning is that basic, the validation and PBQ batches don't need to be finalized at the day of filing, but you need to have a justification of the process validation at that time. So we are in a much, much more pole position compared to the TransCon PTH that we ever have been compared to the growth hormone. PTH is also much, much more simpler to synthesize and produce, because it's done by chemical sensors in state-of-the-art biological manufacturing.

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Operator [35]

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Our next question comes from Joseph Schwartz with SVB Leerink.

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Joseph Patrick Schwartz, SVB Leerink LLC, Research Division - MD of Rare Diseases & Senior Research Analyst [36]

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Great. So I noticed that the primary endpoint for the PaTH Forward Trial is evaluated at 4 weeks, but it seems to have taken much longer for NATPARA to work on some of the endpoints you're evaluating. So can you give us a sense of the time course that you expect and whether the time will be adequate? And which of the endpoints do you think would be more or less challenging to achieve?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [37]

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I think the main huge difference between NATPARA and what we're doing is that you should -- much more compare us to what you see with an infusion pump, where you're providing PTH1-34 in infusion pump. What can you do with infusion pump study today? You can withdraw all the supplement basic on day 0. Could I do that in the past? (inaudible) titrating forever weeks for weeks for weeks for weeks? So what we believe we need about 6 to 8 days to come to a steady state or PTH level. And we believe after 6 to 8, we have really, really mimicked what you do with infusion pump. So when we come to 6 to 8 days, we basically should be in a position that we can do all withdrawal of all the supplements. And that is a huge, huge step on to what you saw with NATPARA.

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Joseph Patrick Schwartz, SVB Leerink LLC, Research Division - MD of Rare Diseases & Senior Research Analyst [38]

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Okay. And then as you look at the market for TransCon hGH, what percent of triggers are sophisticated enough to figure out how to titrate TransCon hGH dosage and patients switching from daily growth hormone in order to keep IGF levels under the threshold of 2 or 3 standard deviations? I ask because a lot of the physicians we speak with at academic sites describe themselves as IGF people who are comfortable that they can push on this growth accelerator pedal appropriately. But they acknowledge that there may be community sites who are less adept. So if you look at the marketplace and think about who would be ready to adopt TransCon hGH, who do you see?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [39]

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I have to think that what we have done. We have done an extensive survey about 120 endocrinologists and we're asking exactly all these different questions. And sure, we're seeing exactly the same thing you see, a difference between the academic centers and other ones. This is really 100% right. But what we also know that all the patients -- that all the physicians that used to use daily growth hormone. And you know the TransCon Growth Hormone luckily can be as easily titrated as daily growth hormone. The only difference we need to have to measuring average IGF. We need to measure that on day 5. And if we measured outside day 5, that is a correlation factor that correlated back to an average IGF-I. So all the knowledge, all the thinking about how to titrate it, you can do exactly the same thing with TransCon Growth Hormone, because we have the same unmodified compound as daily growth hormone and basic has the same mode of action and biology. So all the learning for the last 20, 30 years, you can basic transfer all to TransCon Growth Hormone. Only main difference, you need to measure at day 5, where you get the average IGF-I.

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Joseph Patrick Schwartz, SVB Leerink LLC, Research Division - MD of Rare Diseases & Senior Research Analyst [40]

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So is that -- does that entail additional monitoring? Or is it the same amount of monitoring is currently applied to the day 1?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [41]

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It would be -- we believe it will be the same kind of monitoring, and they will not be more or less restrictive. The only thing is that you need to have a correlation factor. If you miss it not on day 5, but on other days, then this correlation factor will transfer you over to an average IGF-I, which are exactly what they're used to, to apply this.

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Operator [42]

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Our next question is from Adam Walsh with Stifel.

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Adam Anderson Walsh, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst [43]

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On the PTH PaTH Forward, now that you've increased the enrollment with the NATPARA patients, your guidance previously had been to not expect any kind of statistical outcome. Should we get our hopes up there with the trial expansion? And then are we still on for starting a growth hormone trial next year? And I'm going to sneak one final one in here. On the achondroplasia, if vosoritide gets approved, what do you think that means for enrollment for your future trials? How should we think about that?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [44]

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I've got 3 different questions. I think, Adam, if I got all right. The first question, it's really very, very, very simple. It's clear now. I think this expansion has not anything to do with statistic power. I actually think we can achieve the statistic power we want to do with much less than the 40 patients. So it's nothing to do with that. We're pretty confident this product will function as a true replacement therapy. Next year, yes, we will plan for additional label expansion of our TransCon Growth Hormone, and we're working dedicated for that to achieve.

The last one on vosoritide, I actually believe every parent, every child should be treated with the optimal product. And I think this is typical of what we also see in all indications. And I think and I hope we really would be in a position that we can provide an optimal treatment for patient with achondroplasia that is not just giving a small height improvement of potential 1 to 2 centimeters. What we really can be in a position that really also can address the real comorbidity of this condition or disease, because they don't have all the comorbidity just because of height. They have lot of other elements that we would like to address.

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Operator [45]

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And our next question is from Jim Birchenough with Wells Fargo.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [46]

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It's Nick on for Jim this afternoon. With the NATPARA outage, if that continues, is there -- have you discussed with regulators the opportunity to get a more rapid path to [the table] for TransCon PTH?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [47]

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We are coming from that position that we want to really show it in the patients, and that is what we're going to do now. And this is why we have expanded the trial also to that. What we always hope that we can be in a positive dialogue with regulatory agencies and be in a position that we potentially can help this patient group in the best possible manner. And this is what we're dedicated to do, and this is why we're doing this change in this way. Dana, do you have any comments?

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Dana Pizzuti, [48]

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Yes, I think our plan is, as soon as the data are available, that we would intend to show those to the regulatory agencies. And assuming they come out the way we think they will, we are fairly confident that they'll help us to expedite the program. But until the data come out, we can't be any more explicit than that.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [49]

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And then just a follow-up on that. Is the linker chemistry for the TransCon moiety the same the PTH that you can borrow [lock up the data] you've already developed the growth hormone?

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [50]

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The entire concept of the TransCon technologies is very much identical across both the growth hormone, PTH and CNP. So definitely, there's a lot of learning from the different places. I also believe that when we saw that in TransCon CNP, we basic got the opportunity to move down to children of the age 2 in our initial Phase II, I think it's just building on a great knowledge about the safety of the TransCon technology.

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Operator [51]

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And with that, we end our Q&A session and program for today. And we thank you, ladies and gentlemen, for participating. You may now disconnect, have a wonderful evening.

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Jan Møller Mikkelsen, Ascendis Pharma A/S - President, CEO, Member of Executive Board & Executive Director [52]

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Thanks a lot.

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Scott T. Smith, Ascendis Pharma A/S - CFO, Senior VP & Member of Executive Board [53]

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Thanks a lot, everyone.