Ascendis Pharma A/S (NASDAQ:ASND) Q1 2024 Earnings Call Transcript

Ascendis Pharma A/S (NASDAQ:ASND) Q1 2024 Earnings Call Transcript May 4, 2024

Ascendis Pharma A/S isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to the Q1 2024 Ascendis Pharma Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. [Operator Instructions] As a reminder, this call may be recorded. I would now like to turn the call over to Tim Lee, Senior Director, Investor Relations, Ascendis Pharma. Please go ahead.

Tim Lee: Thank you, operator, and thank you, everyone, for joining our first quarter 2024 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 of Clinical Development, Oncology; and Joe Kelly, US General Manager. 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 statement 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 and our progress towards Vision 2030.

These statements are based on information that is available to us today. Actual results may differ — 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 can 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 on February 7, 2024. TransCon Growth Hormone, or TransCon hGH, is approved by the — 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 and the United Kingdom Medicines and Healthcare products Regulatory Agency have granted marketing authorization for TransCon PTH as 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 first quarter 2024 financial results and we’ll provide further business updates. Following some prepared remarks, we’ll open the call up for questions.

Note, with our PDUFA date for TransCon PTH coming up in less than two weeks, we will not comment on our ongoing discussions with FDA and we will not be taking any questions on this topic today. With that, let me turn it over to Jan.

Jan Mikkelsen: Thank you, Tim. Good afternoon, everyone. Ascendis is applying its TransCon technology platform to build a leading fully-integrated biopharma company focused on making a meaningful difference in patients’ life. Two approved TransCon products and solid progress across programs, growing commercial presence, and strong partnerships, we believe Ascendis is on the path to sustainable growth and operating cash flow breakeven on a quarterly basis by the end of 2024. Our long-term commitment in the last three, four years to build out profitable and robust supply chains and the decision we took in 2023 to streamline the company and make ourselves leaner and more efficient organization. You can see the progress towards operating cash flow breakeven later this year, without compromising our development and commercialization progress.

We believe we are well positioned to successfully deliver on our strategic goals and close out our Vision 3×3 with regulatory approvals for three independent endocrinology rare disease product and continue building a pipeline in other therapeutic areas. Looking to Vision 2030, we believe each of our three rare disease endocrinology products has the potential to achieve blockbuster status, while we also further expand our pipeline and TransCon platform for future innovation. We have seen validation of our commercialization approach with the ongoing success of SKYTROFA in the US, and are seeing it again with successful launch of YORVIPATH in Germany and Austria. In the US, the PDUFA date for TransCon PTH is coming up in less than two weeks on May 14.

If approved, we expect to be ready to launch in the US soon thereafter in the third quarter. Now, let me give an update on each of our programs. When we launched SKYTROFA in the US about two years ago, we had two goals: one to make SKYTROFA the leading product in there; the second to drive US growth hormone market to become a $3 billion market. Our strategy is working. Thousands of patients are now treated with SKYTROFA, the value leader in the US. We have a reliable supply chain, ensuring that every patient can benefit from SKYTROFA once they have approval from their insurance company. We estimate that SKYTROFA penetration in the US pediatric growth hormone deficiency patient population grow to about 17% at the end of the first quarter. We are proud to observe SKYTROFA extend its market value leadership as the only growth hormone product to grow in value in the third quarter of ’24 based on reported results.

And we believe SKYTROFA will expand the US [go-to-market] (ph) with the potential to become a blockbuster in the US alone. SKYTROFA sales this quarter more than doubled compared to the first quarter of 2022, with a steady quarter-to-quarter increase in treated patients. We expect to continue this trend rest of this year. With these strong SKYTROFA results, we continue to expect the full year 2024 SKYTROFA revenue will be between €320 million to €340 million, representing year-to-year growth of 80% to 90%. We expect SKYTROFA sales to continue to grow through further penetration in the pediatric growth hormone [deficiency] (ph). To further solidify growth, we are also pursuing our first label expansion in adult growth hormone deficiency, for which we plan to submit a supplemental BLA to the FDA in the third quarter of this year.

In addition, we expect top line data from our Phase 2 trial in Turner syndrome in the fourth quarter of 2024. Now, turning to TransCon PTH. In Europe, YORVIPATH was launched in Germany and Austria at the end of January with the early launch objective of building physician experience with YORVIPATH. Initial physician feedback from YORVIPATH has been positive. Just eight weeks in the launch, we estimate prescriptions have been written by 55 doctors, representing around 25% of the target prescribing base with about 100 patients receiving commercial product. As physicians begin to get comfort with the treatment benefit of YORVIPATH in the first patient, we expect physicians to take more and more of the patients on treatment. As we expand our geographic reach of YORVIPATH to our Europe Direct and our International Markets segment, we are supporting named patient supply programs and plan to provide reimbursed products to meet the needs of patients.

In the US, pre-launch preparation are underway, including the expansion of the US field infrastructure, while we are waiting FDA’s decision. Moving now to TransCon CNP. Our value proposition with TransCon CNP is simple. It’s to establish a treatment for patients of all ages with achondroplasia. Our ambition is to address the significant comorbidities associated with achondroplasia that impact health and quality of life, as well as linear growth. Later this year in the third quarter, we plan to report top line results for our pivotal ApproaCH Trial, which is measuring not only linear growth but also physical function, body compensation, and quality of life parameters. We are also evaluating TransCon CNP in newborns with achondroplasia less than two years of age.

We believe that treatment achondroplasia with TransCon CNP as early as possible might mitigate associated comorbidities. In addition, to provide catch-up growth for children who did not receive early treatment, we are evaluating TransCon CNP in combination with TransCon Growth Hormone. We expect to enroll all patients in this trial this quarter and provide 26-week top line data for this trial in the fourth quarter this year. This is our integrated approach to address achondroplasia with multiple trials that are all building towards one goal to treat the disease. And we are optimistic that our highly differentiated product candidate will continue to show best-in-class potential across these multiple studies. Switching now to oncology. Both TransCon IL-2 beta/gamma and TransCon TLR7/8 Agonist have shown promising clinical activity as monotherapy and in combination treatment with pembro in late-stage patients whose disease has progressed after standard of care treatments.

Next month at ASCO, we will report updated patient data from the ongoing Phase 1/2 trial. I believe that has been reported last year at ESMO. We will present updated clinical data and new biomarker data that further differentiates our clinical program. We will also report promising early data from the ongoing dose expansion cohort of patients with melanoma who had progressed from checkpoint using the combination of TransCon IL-2 beta/gamma and TransCon TLR7/8 Agonist in these patients. Later this year in the fourth quarter, we expect data readout in several well-defined patient population from our TransCon IL-2 beta/gamma and TransCon TLR7/8 Agonist programs. Our achievement this quarter give me further confidence that all the elements are in place to fulfill our strategic goals to deliver three independent endocrinology rare disease products and a strong pipeline in larger therapeutic areas such as oncology, ophthalmology and metabolic diseases with much more to come.

I will now turn it over to Scott.

Scott Smith: Thanks, Jan. In Q1, we demonstrated significant financial progress toward our 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 6-K filed today. SKYTROFA revenue for the first quarter of 2024 was €65 million compared to €31.6 million reported in the first quarter of 2023, an increase of 106% year-over-year. This growth was driven by significant increase in demand volume, more than doubling compared to the prior-year period, with a slight offset by a combination of slower channel build, coverage mix, and a modest negative currency impact of €0.8 million. On a sequential basis, first quarter SKYTROFA revenue increased 1% compared to the fourth quarter of 2023.

Strong mid-teens percent demand volume growth was offset primarily by seasonal channel inventory, co-pay resets, insurance reauthorizations, and a modest negative currency impact of €0.6 million. Q1 was in line with our high internal expectations. And with seasonal headwinds behind and the steady pace of new patient adds expected to persist, we continue to expect full year SKYTROFA revenue to be in the range of €320 million to €340 million at average 2023 exchange rates. Shifting to TransCon PTH. YORVIPATH contributed for the first time this quarter with revenue of €1.5 million, representing two months of shipments. In Germany and Austria, we ship directly to retail pharmacies for patient pickup. And as a result, there is no channel inventory buildup compared to a typical US launch like we saw with SKYTROFA, where specialty pharmacies hold channel inventory.

Closing out the top line, total revenue for the first quarter was €95.9 million, including €24.8 million of non-cash license revenue recognized in relation to the formation of Eyconis and €3 million of service revenue related to Eyconis, which is offset in operating expenses. Turning to expenses, R&D costs in the first quarter totaled €70.7 million compared to €106.1 million during the first quarter of 2023. The 33% decline was largely tied to lower external development costs for TransCon Growth Hormone and TransCon PTH, including a reversal of prior period write-downs of pre-launch inventories, as well as oncology programs, partially offset by an increase in TransCon CNP costs. Sequentially, R&D costs declined 22%. SG&A — sorry, SG&A expenses in the quarter totaled €66.8 million, essentially flat compared to €66.5 million during the first quarter of 2023.

Higher employee costs, including the impact from commercial expansion, was partially offset by lower external pre-launch and administrative expenses. Sequentially, SG&A expenses increased 4%. Total operating expenses were €137.5 million for the first quarter, a 20% decrease compared to the €172.7 million during the first quarter of 2023. Sequentially, operating expenses declined 11%. Overall, our operating loss in the first quarter totaled €49.1 million compared to an operating loss of €143.7 million during the first quarter of 2023 as a result of increased revenue and lower operating expenses. Sequentially, operating loss increased 34%. Finance expense in the quarter was €77.2 million compared to €8.4 million expense in the fourth quarter of last year.

This higher finance expense was largely driven by a non-cash derivative loss tied to our outstanding convertible notes. Quick comment on the balance sheet. As of March 31, 2024, due to amended IFRS rules, which came into effect on January 1, 2024, you’ll notice our convertible notes with face value of US$575 million are now reported as current liabilities, even though they do not mature until April 2028 and would not require cash settlement in case of conversion by holders. IFRS still requires the carrying value of the convertible notes and associated derivative liabilities to be presented separately within current liabilities, which together total €622 million. As per IFRS rules, comparative amounts have been reclassified to reflect the change in presentation.

The applied amendments had no other impact on the financial statements. We ended the first quarter with cash and cash equivalents totaling €320 million. And for the full year 2024, based on current plans, we expect SKYTROFA revenue to be in the range of €320 million to €330 million — sorry, to €340 million at average 2023 exchange rates, we expect total operating expenses, SG&A, and R&D 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 highlight selected key milestones. For TransCon growth hormone, we now plan to submit an sBLA to FDA for adult GHD in the third quarter of 2024 compared to the previous plan of Q2, and we expect to report top line results from our Phase 2 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 with a commercial rollout of YORVIPATH underway 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, we expect to report top line results from the pivotal ApproaCH Trial as well as submit our NDA for treatment of children with achondroplasia, both in the fourth quarter of 2024, and also report week 26 top line data from the COACH Trial in combination with TransCon Growth Hormone also in the fourth quarter of 2024. Within our oncology therapeutic area during the fourth quarter of 2024, we plan to provide a clinical update from the Phase 2 indication-specific dose expansion cohorts from our TransCon IL-2 beta/gamma and TransCon TLR7/8 Agonist clinical trials.

With that, operator, we are now ready to take questions.

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Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from Jessica Fye with JPMorgan. Your line is open.

Jessica Fye: Hey, guys. Good afternoon, and thanks for taking my question. I was hoping you could talk about how April looked for YORVIPATH in Europe. And maybe elaborate a little more on some of those 1Q dynamics you mentioned for SKYTROFA? Thank you.

Jan Mikkelsen: Should you start, Scott?

Scott Smith: Yeah. So, related to the Q1 dynamics, what we saw — for SKYTROFA, I’ll take the second part first, what we saw would be, I would describe as, typical seasonality that you would see with other maturing launches where coverage updates at the beginning of the year led to insurance reauthorizations, co-pay resets, and also led to a slightly different mix in the channel, and the — our channel partners basically updated their inventories as appropriate. And it feels like those basically all cleared out by the end of February. And then, on the first question related to the development of YORVIPATH in April, we continue to — as we said, we’ll come out with an update overall in revenue later this year. But essentially, we’re pretty happy with the results of the launch with the primary goals that Jan laid out in his prepared remarks.

Jan Mikkelsen: So, yeah, just to give you a little bit of flavor from our own expectations, we launched SKYTROFA in the typical way that — sorry, YORVIPATH inside the German market, Austrian market upon this assumption that we are adapting to the German market. And what we typically will see and what we hope for was to get a broad prescriber base. The broad prescriber base, we expected them to take typical one to two patient on treatment. Then they get really the feedback, seeing really the unique benefit of this. And as soon as we’re really getting over that some comfort period where they really get the comfort, you take more, more on treatment. So, when we saw when we got 25% of our target physician already in eight week to make a prescription, I believe there were some of the most successful launch I have seen and we have not ourselves imagined that.

The number of patients we see is around 100, meaning, there is a few physicians that started early in our EAP program or CUP in Germany. Some of them are up on 20, 30 patients already now, because we’re already building up this comfort on how really this product are giving unique benefit to the patients. So, this is why we were really feeling this is really the start we had hoped for, the start where we’re looking on the different KPI, it really turned out to what we wanted to see and what we hoped for.

Scott Smith: And just to reiterate, the results are essentially sales direct to the patient. They go to the retail pharmacy, the patient picks up. There’s no channel inventory with YORVIPATH.

Jessica Fye: Thank you.

Operator: Thank you. Our next question comes from David Lebowitz with Citi. Your line is open.

David Lebowitz: Well, thank you very much for taking my question. If you jump back about a year where you were in the run up to YORVIPATH’s potential approval for the regulatory setback, could you juxtapose your current — the current status of your sales preparation, what the market looks like now versus what it looks like then and how you see things, similarly or differently?

Jan Mikkelsen: I believe we are in a much, much better place. First of all, the awareness of hypopara has been — really been coming to a much better awareness level where physician and the patient just in the latest effort when — if you really want to hear the patient voice, watch the YouTube, that is reflecting how the patient explains the unmet medical need that is in hypopara to — at the FDA Advisory Board. And I think that is only one element of it why I believe we are in a much, much better place. And I think the realization of the unmet medical need we have already and always seen up from the patient, but I think the awareness of, is on a much, much better level today. And I think this is why when we see our success with the initial part of our launch in Germany, Austria, we know we can repeat that in all our EU Direct as soon as we get fully reimbursed in these countries, mainly end of this year and the beginning of next year and during ’25.

We see it already coming in for the International Market, mainly to named patient programs, which are patient-driven program, physician-driven program. So, the general awareness about the unmet medical need in hypopara, I believe, has really, really gone to a stage where I hope we really can understand this unmet medical need to a much better way. One thing that also have driven is the new guidelines that came up from US and other places, really describing how basic conventional therapy, basic not providing an optimal treatment, if you can call it a treatment. I was basically saying there is a balance between treatment for short-term symptoms and to avoid long-term complication, and you can never get that right. So it basically — we are in a position that the recommendation of PTH therapy is really the way to treat this disease, which are pretty obvious when you treat insulin diseases with not insulin, like diabetes, yes, you will always treat them with insulin.

David Lebowitz: Thanks for taking my question.

Operator: Thank you. Our next question comes from Rosemary Li with Cantor. Your line is open.

Li Watsek: Hey. Sorry, I should have put Li Watsek. I’m Li Watsek from Cantor. So, just for TransCon PTH, in terms of payer access and formulatory placement, have you had any pushback from payers on showing clinical benefits such as hospitalization rate or kidney benefit? Thank you.

Jan Mikkelsen: Is that question related to Europe or US?

Li Watsek: Both, if you may.

Jan Mikkelsen: Okay. I think in Europe, when we do make, what we call, the health economic impact of our treatment, we are integrating all aspects on how we addressing short-term symptoms, the benefit of the patient to have a normal life again, benefit of having a balanced calcium, and more important, the quality of life these patients are experiencing, mainly after starting treatment. The other part is what we call the long-term risk. One part of the long-term risk is what we call renal impairment, renal damage. There is other long-term complications like cardiovascular impact, there is calcification on lot of different organs, cataract, and [indiscernible] and will get with hypopara just dependent on time. All of this element is being built into our health economic iteration that we are providing to each single European countries to be quite sure that we’re getting the right reimbursement on right prices.

So, it’s basically built on the European way of really being responsible in our pricing, where we have an health economic calculation on how we basically are providing both a benefit to the patient, the benefit to really to the society in helping the patient on an reasonable accessible cost.

Li Watsek: Okay. Thank you.

Operator: Thank you. Our next question comes from Joseph Schwartz with Leerink Partners. Your line is open.

Joseph Schwartz: Thanks very much. I was wondering if you could talk about how many physicians in the US have had experience with YORVIPATH in the EAP versus how many you’ll be going out to de novo once it’s hopefully launched commercially soon. And could you also talk about how many of the physicians who might be targets for using YORVIPATH in their patients have you’ve been interacting with for SKYTROFA already?

Jan Mikkelsen: I think the first question was reflecting YORVIPATH and the US EAP program. And what I can do, I can give you the general aspect of our EAP program. The general aspect of our US EAP program, because it’s very, very different compared to what we had in Europe, which now have been stopped after we got our approval and got full commercials in Germany. Our EAP program in the US is only addressing patient that really are PTH experienced, meaning is at 3%, 4%, 5% subset of patient of hypopara that basically are electable to come into our EAP program. The EAP program is a very difficult program for basically large academic institutions to handle. So because of contracting and the incentive for them is not high because it’s not really a paid program for the physician, so therefore, you will always find a subset of this site that typically have a lot of patients in hypopara, will not really be part of such an EAP program.

It will only be more private site, small site. We are extremely enthusiastic about what we have seen with our EAP program and all the treatment benefit that we have observed in our clinical trial. Both Phase 2 and Phase 3 has been 100% confirmed what we have seen out from the EAP program and the patient experience there.

Joseph Schwartz: Okay. And so, how many new sites will you have to go to then that are — that treat hypoparathyroidism patients who have not had experience in the EAP or with using SKYTROFA?

Jan Mikkelsen: SKYTROFA, we don’t have any EAP site at all in this way. SKYTROFA didn’t ever had any EAP program running. So, from that perspective, it’s really hard for me to compare these two.

Joseph Schwartz: Well, I meant commercial SKYTROFA or the EAP for YORVIPATH. I’m just trying to get a sense of the footprint now, how much overlap there is with — between the two products that you’ll have shortly.

Jan Mikkelsen: You will basically say there is not a large overlap in directly to the physician prescription phase because it’s typically more specialist sites that take care of both sites. One of them is, for example, a pediatric first indication. The other one is an adult indication. So, when you look at the overlap for that, there is not a large overlap. And Joe, I can — I’m not seeing any data where I will indicate support and saying there is a big overlap. Where there is a great overlap is 80%, 90% of the commercial effort that basically are built on taking the same endocrinology product out in the same infrastructure. And what we basically are building, we are building independent sales forces that really [were tailor-made] (ph) exactly the right physician to have the most prescribing physician being covered as fast as possible.

Joseph Schwartz: Thank you.

Operator: Thank you. Our next question comes from Gavin Clark-Gartner with Evercore ISI. Your line is open.

Gavin Clark-Gartner: Hey, congrats on the progress, and thanks for taking the question. I’m just wondering, out of the 100 YORVIPATH patients in Germany, how many of these were previously on NATPARA? And was this in line with your expectations heading in?

Jan Mikkelsen: I will say, surprisingly, we see many more naive patients than we actually have thought we will see. So, this is one of the surprises we have seen that the physicians basically are looking at the patients and saying is, we have so many on-patient that not have been in treatment that we also are focused on taking when a new patient into a treatment regime. And I have to say there was one of the surprises, at least for me, where I will believe that it was initially just a change of NATPARA patient, but we have seen many more new patients than we actually expected.

Gavin Clark-Gartner: Great, thank you.

Operator: Kelly Shi with Jefferies, your line is open.

Kelly Shi: Thank you for taking my questions. SKYTROFA, could you provide your perspective into the competitive landscape, given that two other long-acting growth hormone commercial products are there and one of them, if we check on the scripts, actually approaching schedule for — on both TRx and Rx? And also, like are you curious like whether your launch strategy remain the same?

Jan Mikkelsen: So, one of the complication, at least I always have, is to utilizing the different databases you can get to get scripts. In this case, you can use this kind of datasets is to look on trends, but never absolute levels because the sampling is really different between different provider. So, you are only sampling a small amount of the prescribing base of where you get the information from. So, out from that perspective, you cannot really compare the absolute level. You cannot compare also because when we talk about the unit, the unit is really different between the different products. So, some unit is giving — providing you that. So therefore, if you really want to get a really effective and most solid data, you need to take each single company, go into the line item and look on the revenue basis. This is where I get the best confirmation about data and how we see their progression. And there is no doubt when we look on that.

Kelly Shi: Thank you…

Jan Mikkelsen: For the growth hormone market, it was a very difficult Q1. And what we saw really have seen how we were the only one of the reported data really have growing, where everyone had declined, which you typically will see in the first quarter.

Kelly Shi: Thank you.

Operator: Thank you. Our next question comes from Derek Archila with Wells Fargo. Your line is open.

Derek Archila: Hey, thanks for taking the questions. Congrats on the progress. So, we have a question on the OpEx progression this year. I guess based on the 1Q OpEx, it seems like you might come in a fair bit below the €600 million guidance. So just, any color there on how we should be thinking about that? Thanks.

Jan Mikkelsen: I think Scott is so happy today because he’s really getting a good question.

Scott Smith: Yeah, Derek, thanks for the question. We’ve been pretty — yeah, no, we’re pretty proud of the our ability to basically reduce OpEx pretty significantly while growing — doubling revenue. It’s not a bad thought, but as of now, our guidance remains $600 million OpEx for the full year based on current plans.

Operator: Thank you. Our next question comes from Paul Choi with Goldman Sachs. Your line is open.

Paul Choi: Good afternoon, and thank you for taking my question. And also let me offer my congratulations on the progress. I want to turn maybe to CNP for a moment. And if you could maybe sort of comment on what your market research ahead of your top line results later this year, such as in terms of how endocrinologists might be thinking about using TransCon CNP, either as new patient starts, or do you possibly anticipate switches from VOXZOGO, just given the different dosing frequency and how you’re thinking about what those kind of shares might look like in terms of the launch? And then, could you maybe comment on what your sort of post approval requirements might potentially look like for TransCon CNP, pending an approval down the road from the FDA? Thank you.

Jan Mikkelsen: It’s really extremely interesting question from the perspective on when we’re looking on all the research we have done, because the key topic and the key feedback we’re getting in all interaction with physician, caregivers, patients is addressing comorbidities. Being short is not a disease, but really to have the sign of comorbidities is really providing really the impact on having achondroplasia. And this is why we have so much strong focus really to address the comorbidity and also sure to address also linear growth, but the key objective of our program is to do address the comorbidities. We cannot avoid a primary efficacy endpoint is linear growth because it has been established from regulatory agencies, both in US and Europe.

And it’s really, really difficult to change that. If we have been the first, it will not have been linear growth, it will be addressing comorbidity as the fundamental of the disease. And this is how our integrated program has really been built up to show that in all our programs, and I think where we both addressed the linear growth, but also muscle weakness and other things like that. And when I see how we can already get the feeling about what it means for the patient is when we look on the quality of life questions that we are giving to both patient and caregivers, how they really are addressing the benefit of our treatment. And we also see that in our retentions. When we see the retention and our recruitment, we recruited our pivotal trial in less than four months.

On site, we have — vosoritide had [accepted] (ph) other treatment, it got recruited in four months. I’ve never seen that before. And this is because the physician could talk to the parents about the benefit they have seen basically on providing our TransCon CNP product to them. Related to commitment afterwards, we have no comments or anything we have received from regulatory agencies in all the different places we have been and discussed the pathway for regulatory approval to any kind of commitment.

Paul Choi: Thank you.

Operator: Thank you. Our next question comes from Vikram Purohit with Morgan Stanley. Your line is open.

Vikram Purohit: Hi. Thanks for taking our questions. We just had one on the pipeline. So a few months ago, you discussed with us a novel TransCon carrier platform and you cited your work here with semaglutide through a case study. I just wanted to see how your internal work with this novel platform and the GLP-1 program is progressing? And what the next milestones could be here that we could learn about? Thanks.

Jan Mikkelsen: We are extremely as excited about this lead candidate that we were for when we came out. There’s no doubt that once the treatment regime is the way to go, and we’re building up the same fundamentals that we built up all our pipeline. I call it a pipeline because we basically are not taking the target engagement risk that you typically have when you make highly differentiated products because we’re building through TransCon technology on semaglutide molecule that basically had the broadest way to show clinical benefit everywhere. We are progressing with that. At the same time, we also have an intense discussion about how we basically are doing the best value proposition of this compound and this area of metabolic diseases because we’re talking about metabolic diseases and we will keep you updated as soon as we someway have made a decision what way we’re going.

Operator: Thank you. Our next question comes from Yaron Werber with TD Cowen. Your line is open.

Unidentified Analyst: Hey, guys. This is [Joyce] (ph) on for Yaron. Thanks for taking our question. In the US, can you talk about your planned launch strategy for TransCon PTH in terms of the initial target population and prescriber base? And how much of it will marry your strategy in Germany, where you’re initially targeting roughly one-third of the total population? Thank you.

Jan Mikkelsen: I think what we’re doing now is to really integrating the learning from the first country where you’re launching a product. And the first country we launched is in Germany, Austria, and we’re getting a lot of good learning. I have to say, we basically got confirmation about how we should do it because we basically have seen everything what we have hoped for in this launch. So it’s not like we’re coming on with a complete different strategy. We are more proud about the commercial execution from our people in this region, how we basically made it exactly after what I call the playbook. So when I come to the playbook of US, there is always Hartvig, our — Camilla, that is our Head of our Global Commercial Operation.

She is coordinating everything from US, coordinating into International Market, coordinating into EU Direct, every place to be sure that we’re building up the right strategic approach for basically have the optimal commercial launch on a global base. We will be here and we basically have seen really the huge interest. I can say we have the first commercial US product or person on commercial product for YORVIPATH. There’s a person living in US that took the consequence on the delay in the US to basically fly to Germany and get the product out there. So we know it, we see it, we know YORVIPATH making really a huge difference for the patients really get them their life back and we really have seen how patients also see this benefit.

Unidentified Analyst: Thank you.

Operator: Thank you. Our next question comes from Leland Gershell with Oppenheimer. Your line is open.

Leland Gershell: Hey, good afternoon. Thanks for taking our questions. Two from us. First, Jan, if you could just comment on the plan for rolling out YORVIPATH in Great Britain following the approval? Is that something you’re doing immediately or will there be any delay? And secondly, in the past, you had mentioned hypochondroplasia is a indication that you were — you’ve decided to not pursue. Just wondering if that outlook might change following the data from the achondro Phase 3 that you’ll be seeing later this year and/or any information that may be coming out from the companies that are pursuing achondroplasia? Thank you.

Jan Mikkelsen: Yeah. UK is part of our Europe Direct plan. And we have a rollout on all our countries that is in our EU Direct and UK is integrated in this rollout. So, after we basically had the UK approval, which are now separated from an EU approval like other countries that we are also getting approval in now, we have continued filing everywhere from the different countries. And for example, Australia, everywhere, where we also need an independent approval, we will then come in and go in and do what we call [indiscernible] filing of a dossier that really are describing the health economic impact as we have done in many EU Direct countries, what we’re also doing in other countries. And when we have reached an agreement with the agencies in this specific country about reimbursing price, your [indiscernible] will come into what we call a full commercial launch.

What we’re doing in the meantime, until we have this full commercial launch, we’re building up the infrastructure, and we have done that in most of the EU Direct countries where we have a general manager, we have medical affairs, we have market assessment teams, all that is basically already being established and they are ready to be coming out and doing a full commercial launch that, for example, which we have done in Germany and Austria. In the meantime, a physician, patient can go to a named patient program, where we can get fully reimbursed patient with a built on a named patient program or similar structures in lot of different countries. In this timeframe, until you will be fully commercial, you basically can provide commercial reimbursed product to the patient to all these specific programs.

So, this is what we call the dual strategy we are utilizing in the Europe Direct, which we also will someway implement in the International Market, but we will not be the M&A holder in the International Market. It will typically be handed to our sales and distribution agents. For the other thing about hypochondroplasia, it really, really is an interesting aspect for us, because we are the only company that have two cornerstone in growth disorders. Growth disorder is about 30, 40 different diseases. We are the only company that have a once-weekly growth hormone, a once-weekly CNP molecule with really the best-in-class properties for both of these two mode of actions. So, what we are doing and that is part of our Vision [2030] (ph), making an integrated strategy how we are going to be the leading company in growth disorder.

And that is not only to address hypochondroplasia, but address the other — including the other — 30 other diseases that is in growth disorder. And we believe some of them will be best treated with growth hormone, some of them will be best treated with CNP, but also many of them will potentially be integrated in a combination therapy. And this is why we believe why we can be positioned to be the leader in growth disorder because we have the two cornerstone for basically to handle all the 30 diseases. So, much more to come when we come up next year, where we will come with our integrated strategy, how we’re building up to be the leading company in growth disorders.

Leland Gershell: Thanks.

Operator: Thank you. And our last question comes from Sushila Hernandez with Kempen. Your line is open.

Sushila Hernandez: Yes, thank you for taking my question. Could you elaborate on SKYTROFA becoming a blockbuster in the US alone? What needs to happen? What are the key drivers? Thank you.

Jan Mikkelsen: The key driver is continue what we’re doing. This is exactly what we’re doing. We are doing — continue showing the physician, the patient to really getting the treatment benefit of SKYTROFA as the best-in-class product opportunity inside the growth disorder. We will be helped by a lot of different things. The consolidation of the daily growth hormone market. We saw one of the major player is now stopping. We see all of the major player with daily growth hormone stopping. So, the consolidation of the daily growth hormone, where potentially one or two player will be left in more or less in a cash segment, it’s really, really, really only the beginning of it. We’re still in a small part of it. We believe we have less than 20% of the growth hormone deficiency, pediatric growth hormone deficiency.

We can also grow it now in adult growth hormone deficiency. We have our Turner trial coming in now. And then, we also see where more and more experienced people get of the long-acting, they’ll realize there’s only one choice. And I don’t need to say that name because there’s only the sky that really somewhere keep the limit for this product.

Sushila Hernandez: Thank you.

Operator: Thank you. There are no further questions. Thank you for your participation. This does conclude the program and you may now disconnect. Everyone, have a great day.