Okay. Good morning, and welcome to day two of the Goldman Sachs Global Healthcare Conference. My name is Paul Choi, and I cover the SMID-cap biotechnology sector. My pleasure to welcome to our first session here, Ascendis. And, what we'll do is let Jan and Scott kick it off maybe with a little bit of prepared remarks, and then we'll go into Q&A. If anyone in the audience has questions along the way, please raise your hand and I'll try and squeeze you in. Otherwise, I'll turn it over to Jan and Scott to kick it off.
I'm Tim Lee, Senior Director, Investor Relations. Just a quick comment. We may make forward-looking comments during this discussion. Examples of such statements may include, but are not limited to, our financial expectations and expected timing of the FDA review of our NDA for TransCon PTH and potential launch of TransCon PTH in the U.S. Actual results may differ materially from those expressed or implied, and you should not place undue reliance on these statements. For information concerning the factors that could cause actual results to differ materially, please see the Risk Factors section of our most recent annual report on Form 20-F. Note, a brief regulatory comment. On May 14th, we announced that the FDA extended the PDUFA date of our NDA for TransCon PTH in adults with hypoparathyroidism until August 14th.
We recently engaged with FDA as we seek to begin finalizing remaining items, including labeling. Given these ongoing interactions, we do not intend to comment further on the status of our NDA at this time, and we will not be taking any questions on this topic today. We expect to communicate an update at a further time when we have additional material updates about the FDA regulatory process. With that, let me turn it back.
Okay.
So first of all, thank you, Paul, for inviting us. 2024 is always an interesting year for us because we are born as a platform company, and we can utilizing the TransCon technology in basic every therapeutic area. And we have explored mainly the technology in rare disease endocrinology, and built up a pipeline of three, what we call large, rare disease endocrinology products. The most advanced one we had is one that both been approved in Europe and U.S., and now in multi other countries, and being sold under SKYTROFA in the U.S. And I think you have seen how we have progressing to really building up SKYTROFA to what we really want to do, at the leading brand in value first, and then to a blockbuster here in the U.S.
It means that we go through a changing environment, where we're getting more and more coverage in our SKYTROFA revenue sales, because there's some way necessary to achieve that by really getting the penetration. We see the penetration increasing year by year, and we have the landmark and going for 10,000 patients. 10,000 patients being treated with the TransCon technology. 10,000 patients really seeing the benefit of the SKYTROFA. We will penetrate the sales of SKYTROFA by multiple means. It's not only increasing our market access, but also to label expansion. The first indication we are fighting for is our adult growth hormone deficiency. We got all the data, we're getting ready for the filing. We will progress further in other indications like Turner, where we will come up with phase II data later this year.
So you can see that we really are investing in our SKYTROFA brand, the TransCon growth hormone, both related to global commercialization, but also in label expansion to build it up to the blockbuster status we want. Our second product is our TransCon PTH, which are the brand name in Europe, YORVIPATH. We got it approved in Europe last year. We're now getting for approval in multiple other countries. We have seen the successful launch in Germany. It's what we gave of an update after our first quarter is continue. We see the same really positive development that we expected, where we see more and more prescribing physicians taking, more and more patient on it. So we have no doubt when we really are going Europe direct, where we will be directly in 12, 14 countries, really being initiated in the end of this year.
2025 will be the big year, where we're getting more and more countries launching into our direct. We also are in a situation where we're going to sales and distribution agreement with both SKYTROFA and YORVIPATH, and building up a network of really how we need to do global commercialization. Our aim is basically in the next 3 years-4 years, to hit about 50 countries where we're commercializing our rare disease endocrinology pipeline. Why do I call it pipeline? Because we actually have our third TransCon candidate getting out with pivotal data later this year. This is our TransCon CNP. We have a strong aim for being into achondroplasia, because we want to be the leader in growth disorder. From the fundamentals that we have the leading best-in-class product in growth hormone, we also believe we have that in TransCon CNP.
We are trying really to aim what we believe is the key element, how to address the comorbidities of achondroplasia. Not only provide the linear growth, but really address the comorbidities. We have really positive readout of our phase II data, and we really hope we can confirm that in our pivotal trial. So that was our rare disease endocrinology. But don't forget our oncology pipeline. I do not know if some of you have seen our initial data with a small subset in our ASCO presentation. And I always believed in our TransCon IL-2. I always believed that we will be the first at really coming up with a best-in-class product opportunity, as we did in growth hormone, where there was 25, 30 years development before we saw it.
So that is basically what we want to do in IL-2, and with the initial data look extremely promising. We also have utilizing our TransCon technology in ophthalmology, which is now a spun-out company, independently funded, called Eyconis. And exactly how we want to continue to develop, utilizing the TransCon technology, to really develop best-in-class product opportunity. We're also doing that in obesity. We will do it other big product, where we really will use the TransCon technology. So that was a short introduction.
Great. Thank you. Maybe we'll kick it off with what's top of mind with investors and just sort of what happened with the recent PDUFA extension. Can you maybe walk us through the mechanics as to why the FDA considered it a major amendment and pushed off the PDUFA to August?
It's always an element in any review process that FDA always can decide what they really want to do. We can always speculate, we can always think about it, but I believe, we believe, as I said, that we have a clear pathway. We hope we will get the approval here in, in August, and this product opportunity, it really have proven its benefit when we see it, not only in our phase II trial, not only in our phase III trial. We're also seeing how it in our EAP program in the U.S., where we basically taking more and more patient in every week. We also have seen the benefit of that in our launch in Germany, where we really see the penetration and all the benefit to the product.
I have no doubt that people in the U.S. also should, with hypoparathyroidism, also should get the benefit for that, and that is what we're aiming for.
Okay, great. In many ways, we've sort of seen this movie before with SKYTROFA, and just can you maybe remind us, you know, how that PDUFA was extended and how quickly it ended up being approved?
Yeah. If anyone can repeat what happened about 2.5 years ago, we also got a major amendment to SKYTROFA. And when you're dealing with a combination product, it's a more complicated pathway than, for example, in a straight NDA, where you have a tablet, because we are involving many more divisions by FDA, so there is much more alignment between the regulatory system, and therefore, it often somebody goes through a more complicated process.
Okay, great. Maybe touching on something you brought up with regard to the EAP, I guess, just in terms of sizing, and you talked about patients joining on a weekly basis. Where do you think in terms of the sizing of the EAP, it might ultimately end up roughly between now and the PDUFA potentially?
Yeah. The U.S. EAP program is very much restricted to a subpopulation of adult patients with hypoparathyroidism because you basically only can be eligible in our EAP program if you have previously been treated with PTH therapy. And at the same time, it's restricted not to every physician, it's restricted to a few sites that basically are going to do all the different and necessary contract work to be part of such a program. So therefore, it's only a subpopulation of the subpopulation we can enroll. We are extremely enthusiastic about what we're seeing of this program. We are extremely enthusiastic to see how we really are providing benefit to this patient group, too.
Okay. Great. Maybe you can comment with regard to the AP, what you've seen in terms of patient behavior, compliance and adherence, you know, particularly following the titration period. Kind of, you know, outside of a clinic, you know, a controlled clinical trial setting, what does the patient experience look like to date?
Yeah, I think it comes back to the question because if people have followed our phase II trial, have followed our phase III trial, the retention we have seen in this trial has been far over any kind of expectation we ever have seen. We have lost very, very, very few patients in a period of four or five years. We see exactly the same pattern in our EAP program. And, when we go back to, for example, in Germany, we actually, for first time, had an investigator collecting data on how to directly transfer patients from Natpara over to TransCon PTH.
And I believe when I watched this data, it really proving with all the data she collected, both related to biochemical control but also related to healthcare measures, how we really are providing a treatment benefit compared to what we call was established by Natpara treatment. So it's really is a superior treatment, you get that back.
Okay. You bring up something interesting, which is, you know, as people size up the market opportunity, you know, people just think about how many patients are in Natpara, which is relatively small. But, you've talked about how patients' adherence here on TransCon PTH has been quite durable and extended, and so essentially becomes continuous therapy. So as, at least as we think about it, seems like the market sizing and opportunity here could be substantial, you know, far and above beyond what the Natpara sales are, even at a peak. And so maybe, you know, first, you know, how do you, and the team internally think about sizing up the PTH opportunity and, you know, about the switch opportunity versus the de novo patient opportunity?
Yeah. There is the indication we are getting approved first is adult growth hormone, adult hypoparathyroidism. This is a patient population that really contain two major group. One coming with a genetic background or immunological background, and typically due to either the pediatric phase and when they go up to adult, be identified with the disease. The second part is post-surgical, and this is a population when you go in, typically to get a head and neck operation, you have an incidence of actually ending up with hypoparathyroidism, because the four different glands is really hard to avoid, not to damage. So many cases I have seen frequency down to best cases, 1%-2%. The patient that go to such an operation will have chronic hypoparathyroidism.
Some cases I have seen up to 8%-10%, dependent on the specialty, how aggressive they are in the operation. We see a big demographic difference in the number of patients with post-surgical. For example, in Germany, there is about 70,000 patients with diagnosed chronic hypoparathyroidism. And when you go to, U.S., our best number is between 80,000-100,000. And when you look on the demographic between these two regions, you will say, "There's something wrong." No, but because if you take the correlation to the number of head and neck operation, it fit very, very, very well. So we see the same pattern that in Germany, in Austria, we see it in South Korea, we see it other countries where there is a different way of treatment.
So when we went into our phase II trial and phase III trial, we saw all patient benefit for this treatment. There was no subpopulation of the hypoparathyroidism patient, we say, "We don't, we don't have any benefit." All of them have the benefit for it. When we then talk about a target population of 20,000 in Germany, we take the patient group that really are a big burden for the society, meaning that, for example, are coming to a late stage of renal diseases. They got diagnosed with renal diseases. They often go to emergency room because they have high level of calcium, they have huge issue to manage their quality of life in a normal manner. This is what we call the initial target population. We still believe every patient with chronic hypoparathyroidism will benefit from it.
This is where I believe we will see different penetration in different countries, where there will be much more openness to take this kind of treatment into a higher population of the patients, compared to other places where we only potentially see 10%-20% of the patient being treated. Nothing to do if there is not a treatment benefit, but its basis is what we call the health economic cost for the society to support it.
Okay. Maybe sticking on the subject of Germany here and the launch to date of YORVIPATH in Europe. Can you maybe remind us what the cadence of reimbursement approvals might look like over the next 12 months-18 months? And then, I had another follow-up commercial question for that.
Germany is very different compared to what you see in U.S., because when the doctor really meet the patient, prescribe it, it's immediately reimbursed. It's not like in U.S., where you go in and get a prescription, then you find out if someone really want to fund it. And this is where you have a prescription, it's automatic funding in from the healthcare system in the specific country.
So what we see, we see the growth of the prescription, and typically, when we look on a very, very successful launch, we had defined 260 physicians as the target physicians, first in our initial phase, and we basically are going up and climbing and said, "We wanted to have 50% in the first period of launch, and we getting it." And typically, we will see a pattern where they take one, two, three patients first on it, see how the product really are function, and then they're expanding for the patient population. It's typical how we see a German launch happening.
It's a little bit more conservative than other regions, but it's very, very successful, what we have seen until now, where we basically are getting exactly the number of physicians that we basically wanted to see, and we will penetrate the 260 up to the level here in the first period of launch. Scott, do you have any comments?
Yeah, I agree, and I think that, as Jan said, as the physicians get experience and the patients get experience with the product, we'd expect essentially same store sales to increase toward the back half of the year. The other thing to keep in mind is some patients do have supply of another product that's running out, and they. And typically in Germany the patient has to finish the product running out, for example, from another short-acting PTH product that's being pulled from the market.
Okay.
So I'd say the initial groundwork is pretty good, with the KOLs deliver accelerating growth towards the back half of the year.
Yeah, I think the acceleration will come from two places. They will come from directly our launch in Germany, because there, the physician will have experience. For example, one physician that was in our short-term VIP program in Germany, which was only running from three or four months, but one of them got a kickstart. And this physician today have more than 20 patients on treatment now. And I think we will see the same pattern in the second part of. The other part is that, Natpara, which we know is going out of the market, and to our knowledge, there is still 600 patients-800 patients on Natpara in Germany, and they need to get switched basic in the end of the year because this is where the supply of product is running out.
Okay.
Maybe just a further comment, too, because you asked earlier on the Natpara market. Keep in mind, in our clinical trials, almost all the patients were naive, in addition to being spread across all the post-surgical, nonsurgical, like ADH1. And in Germany, that's actually what we're seeing, both experienced and naive patients as well.
Okay, great. And Scott, maybe one more for you. You can just remind us what is embedded in the revenue guidance, the mix of SKYTROFA versus, and it includes international sales for YORVIPATH?
Yes. So our guidance for the EUR 320 million-EUR 340 million is specifically for SKYTROFA only.
Okay.
So we gave three components. That was one component, the second component being, operating expenses at EUR 600 million, and the third component, becoming cash flow, operating cash flow break even on a quarterly basis in 2024.
Okay, great. Question from the audience?
Hi. Okay, there we go. So my understanding of the FDA review process is that in order for something to be classified as a major amendment, it needs to be submitted within three months prior to the PDUFA date, and it's typically either new clinical data or new analysis of the clinical data, which necessitates a three-month extension versus manufacturing data, which typically necessitates a two-month extension. So can you comment on the information request or the type of information request that you got, to which you submitted the response? And then the second question pertains to comparison between Natpara and TransCon PTH, as far as fibrillization rates are concerned, that may or may not contribute to an inconsistent delivery of the product. Thank you.
Maybe I can just start off. On the 2-month, 3-month, I have to admit, I've never heard of that before. That's totally new to me. I think I'll just refer to Tim's prepared remarks, that now that we've engaged with FDA around finalizing all of the remaining items, including labeling, we don't intend to comment further on the specific review, as it's ongoing.
Okay, maybe turning to the commercial side and SKYTROFA here. Your commercial progress to date on the launch has been solid, and you've reached significant dollar share here in the U.S. market. Maybe you can comment on how you think about the trajectory over the intermediate to longer term, and does growth primarily come from market expansion, further share gains, some mix of both, and how do you sort of think about the longer-term sales growth trajectory for SKYTROFA here?
Yeah. So maybe I'll start off on that, Paul. So, so you're right, it was great to hit market value leadership so quickly after the launch. And we're really proud of what we've accomplished and now hitting over 10,000 patients prescribed SKYTROFA really is a major milestone. As we expand to the next phase, and basically to ensure that we hit not only the revenue goals we laid out for you this year, but also, in the long term, to make SKYTROFA a blockbuster, itself, I think there's probably two elements. One is simplifying and expanding market access, and we've already done that. And you'll see, in the short term, there'll be more rebating, but longer term, it'll support the revenue goals for 2024 and for achieving blockbuster status.
But in addition to just the pediatric growth hormone deficiency labeling, as Jan mentioned earlier, we're totally focused on label expansion and making SKYTROFA the, in maintaining SKYTROFA as the number one product.
Okay. You know, you, you've talked about some interesting expansion opportunities, starting with adult growth hormone deficiency and also, you know, Turners down the road here. And so maybe one question is, you know, I think, you know, the IMS data suggests that the growth hormone market is about $3 billion, give or take, based on sales data, three-quarters of which is currently still branded sales, yep, approximately. So with regard to the adult growth hormone opportunity and Turners, can you maybe size up those opportunities there? And maybe, you know, as you sort of do your market research, what are some of the potential challenges of developing and growing those particular markets here?
Going back to the adult growth hormone market, is very different compared to the penetrated pediatric market, and 90% of the growth hormone market is the pediatric part on it. So 10% is basically the adult. And, to our best knowledge, we believe that the penetration is between 5%-10%. Meaning is that there is a huge opportunity still to grow this segment, and I believe one of way we can grow this segment is really proving now with our data, how we really have an improvement in not only the primary endpoint, because the primary endpoint is basically not the only reason why you treat the patient. You treat them because they're missing an essential hormone, growth hormone, and you see a positive endocrine effect on multiple organs. It's not only what we call the body composition.
This is cardiovascular effect, it's on bone, it's on cognitive effect, and et cetera, et cetera. That is what we really want to educate on. Having this weekly treatment, I believe, will someday remove one of the limitations for why there's only 5%-10% penetration in this segment here.
Okay, great. Another interesting expansion opportunity is, you know, potential combination with TransCon CNP, which is a program you've talked about here. And, I guess maybe can you tell us, you know, what your scientists and teams suggest about the clinical potential here? And, you know, you have an ongoing study, and maybe you can share with us, you know, what you would disclose with your initial phase II top-line results expected before year-end.
So, when we look on achondroplasia, this is one of a growth disorder. There is about 20-40 additional growth disorder. We want to be the leader in growth disorder, and how can we do that? Because we have our cornerstones product, TransCon Growth Hormone and TransCon CNP. If you go specific to achondroplasia, it's caused by a hyperactivation of the FGFR3 pathway with different mutations. And what we can do with the CNP therapy, what you can do by inhibition of the tyrosine kinase, is basic doing a normalization of this pathway. And what do you see of the outcome in growth velocity? You basically are taking the limitation in growth up to be normal growth. So all of the children suddenly will be in a position where they'll have normal growth.
That is what when you look on annualized height velocity on an absolute level, this is what you see all products basically ending up in the same absolute annualized height velocity, which are between 5.5-6, which are depending on the geographic, depending on the child, age, and gender, and other things like that. So what do you then do with a child that has not been treated for, for example, seven or eight years before they go to treatment? They will basically have what we call lack of growth. The only way we know today how to do that is to give a growth hormone, because growth hormone promote and catch up growth, as they do in growth hormone deficiency.
So, if you have a child with growth hormone deficiency, not being treated by 5 years-7 years, they lack 5 years-7 years of normal growth. The first two or three years of treatment, they have a spurt coming up where you have more growth than you see in a normal child. This. This is what we call catch-up growth. And then they start to grow as a normal child, and they get exactly, as you can see out of our long-term data with SKYTROFA, they are hitting exactly 50% is getting higher than their parental height, meaning is that they're just growing exactly as they should do out from their genetic materials. And this is what we want to give to the children. The basic, f or example, if there's desire from the child, from the caregivers, we want to have more growth.
We believe that the combination of growth hormone and CNP is basically the optimal combination because the CNP not only are ensuring that the growth plate is getting normal functional, but we also ensure we can address the comorbidity with our continuous exposure of CNP, because it need to hit multiple pathway to reach that. And this is why we were running the trial, to ensure that patients, caregivers, where they want to have more height than just normal growth, a catch-up growth, then they can come on the combination therapy in this way.
Okay, great. You'll have your phase III data from your pivotal trial for CNP also before year-end. And so I guess the question here is, with a product approved on the market, are you assuming a regular review or potentially accelerated or faster review with the U.S. FDA? And then can you maybe just remind us what, how you're thinking about the regulatory timing for European approval?
Yeah. I think it's a little bit early to speculate about what pathway we're getting, because I would like to see the data, and the data is always providing you the right pathway. We got accelerated approval for our TransCon PTH. When I look on the element of a CNP, we know that the primary endpoint is annualized height velocity, and we have a good feeling where we will end. What we really are looking at is the comorbidities, which we have built in, in lot of secondary endpoint, and we're really looking forward to really coming out and show how we can address this comorbidity, because I believe this is the aim of this treatment.
Okay. You know, beyond the dosing schedule difference versus BioMarin's, what else do you think will potentially resonate with achondroplasia patients, beyond maybe the comfort with CNP here?
In 20 years-30 years, everyone have understood how difficult it is to provide an daily injection of a child. This is the burden and the reason why for the last 20 years-30 years, people have tried to make a once-weekly growth hormone product. And I don't believe there's a big difference between a child with growth hormone deficiency and achondroplasia. I believe that will be the same. So there will be a huge desire to go to a, a once-weekly treatment. I do think there's no doubt about that. What you cannot compromise is safety, and you cannot compromise efficacy. And when we look on the safety, yes, our safety is exactly as other CNP. I still think it's approved because we don't have a C max, so we have no risk of vasodilation because the C max is driving this vasodilation effect out of CNP.
I also believe when we look on efficacy, we are not only aiming of providing annualized height velocity, we aiming on providing, also addressing the comorbidity. So when I see on all the key element of tolerability, efficacy, and safety, and I think safety and is the key one in this treatment, everyone should focus on safety and efficacy and tolerability. I see us as a best-in-class on all these product opportunities. And you have seen how we have penetrated with SKYTROFA in the growth hormone deficiency market. And I think we can do it in each single segment where we are best-in-class.
Okay, great. We have a few minutes remaining, so I want to just briefly touch on oncology updates that might be coming in the next year or two, since that often doesn't get as much attention. Can you maybe just remind us in terms of what IL-2 and TLR updates we'll get this year and set the sort of the appropriate medical meeting at which we might expect those updates?
Yeah, we had our first already here in ASCO, where we actually came out and illustrate how, for first time, there is an IL-2 treatment that both have the right safety, the right efficacy, and the right duration. For first time, you have seen the team at three weekly, using your basic have dose stacking in immunological system. We see for first time a clear response effect. We see it now in what we call well-defined subpopulation. We are enrolling about 20 patients-30 patients in each single of this subpopulation. We are enrolling them with different speed, and I believe end of 2024 will be the year of Ascendis Oncology, where you will start to see the first well-defined subpopulation with 30 patients being treated in this way. And I just, I really end of the year.
Okay, great. We're nearly up on time, so I think we'll maybe just end it on that note. My thanks to Jan and Scott for joining us today, and we'll end the session. Thank you very much.
Thanks, Paul.