10 Largest Biotech Hedge Funds and Their Top Stock Picks

2. Ascendis Pharma A/S (NASDAQ:ASND)

Number of Hedge Fund Investors  in Q2 2024: 35

RA Capital’s Q2 2024 Investment Stake: $1.3 billion

Ascendis Pharma A/S (NASDAQ:ASND) is a commercial stage biotechnology company whose drugs target hormonal disorders and cancer. Its commercially available drug is Skytrofa, and it is used to treat children who suffer from growth hormone deficiency. Crucially for Ascendis Pharma A/S (NASDAQ:ASND), Skytrofa targets a rare disease market, which means that it has few competitors. This means that the firm’s ability to grow revenue is simply dependent on its ability to scale up production, allowing it to benefit from robust margins stemming from lower marketing and other expenses. Ascendis Pharma A/S (NASDAQ:ASND) also has an upcoming drug to treat hypoparathyroidism in adults. This drug, called TransCon PTH, has already secured approval in the European Union, and its approval in America should further expand Ascendis Pharma A/S (NASDAQ:ASND)’s revenue base. However, since the firm generates 73% of its revenue from Skytrofa, any slowdown in the rare disease drug’s sales will hit its shares hard. This was also the case in September when Ascendis Pharma A/S (NASDAQ:ASND)’s shares tanked by 11% after it cut Skytrofa sales estimates by €100 million and pricing pressures led to a 27% annual drop in quarterly revenue despite a 134% annual jump in prescriptions.

So what happened to Skytrofa? Here’s what Ascendis Pharma A/S (NASDAQ:ASND)’s management had to say during the Q2 2024 earnings call:

“Key component of our strategy to make SKYTROFA a blockbuster product in the US include simplifying broaden market access for both treatment naive or switch patients as well as expanding our label. In the first half of the year, the reset to broader market access for SKYTROFA was largely completed. While this broader access to SKYTROFA will support long-term demand, in the short term, it negatively impacted our first half net revenue. Scott will share more details. With our market access transition largely completed, SKYTROFA is now positioned as a premium product with a net value per patient of around 3 times compared to daily growth hormone. We are now focused on using our new market access coverage to drive further demand, continue to expand the overall growth hormone market and are aiming to reach blockbuster data for SKYTROFA in the US alone.”