I am Max Skor, Biotech Analyst with Morgan Stanley. Welcome. Just to start off, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. With that, I would like to welcome Jan Mikkelsen, CEO, Scott Smith, CFO, Jay Wu, Head of U.S. market. Thank you very much for joining us today, team.
Thanks a lot for inviting us.
Really appreciate it. I think in regards to the Ascendis story, let's start with last night's announcements. You have recaptured full rights to the metabolic and cardiovascular franchise. How are you thinking about what comes next for Ascendis?
That is an open question where I can come with a lot of answers because a lot of things is happening at Ascendis. First of all, we also had a press release yesterday related to buying back shares for $400 million. I think that is part of our integrated strategy that we lay out in our Vision 2030, how to be a leading biopharma. Before I start, I think Scott would like to say a few words related to our financial positioning, how we are generating a profitable company, and how we will progress in the next years.
Thanks so much, Jan. As Jan mentioned, we announced a $400 million share repurchase agreement, and that is really on the back of the strength of the financial transformation that happened with Ascendis this year in 2026, going from historically R&D, to having approval and launch of three highly differentiated products with YORVIPATH achieving blockbuster status this year. As you know, we have guided to over EUR 500 million of operating cash flow, and with the strength of the launch, as well as the new launch of YUVIWEL, we expect that that could potentially double next year or even more. It is a great time for Ascendis to buy back shares and we still retain all the capital we need to continue to advance R&D.
In particular, I think with the other announcement we made, it gives us a lot of opportunity to basically ensure the growth of Ascendis beyond 2030 into the 2040s.
When I see Ascendis, and this relate out really well in our Vision 2030, because I really like this framework where we go out and lay a five years plan and how we follow on it and how we execute it. There are two cornerstones in our 2030 plan. One is to hit EUR 5 billion in product revenue. That is EUR 5 billion coming from our three approved product, SKYTROFA, YORVIPATH, and YUVIWEL. That is the cornerstone in our revenue generation, and it is coming from U.S. and also coming from our key effort. We have to be independent on the U.S. revenue, but building up a sustainable part of our revenue flow from the ex-U.S. I think we are one of the few biotech that really have this effort going on, where we are building up a global organization.
We recognize revenue more than for 40 countries now, and it takes longer time in the ex-U.S. segment. When we come to 2027, 2028, we will see about 10 to 20 countries every year being full commercial with our product. Jay will say a few words about U.S. because U.S. is still a cornerstone in our revenue generation. Also explain a little bit about the effort we are doing really so we can grow the revenue every year.
Sure. Thanks, Jan. As Jan mentioned, from a U.S. standpoint, we now have three approved products in the U.S. We're feeling encouraging about all three of them. YORVIPATH, I know we spent a lot of time talking about, given from a pure scale standpoint, it represents tremendous opportunity as you think about not only what it's generating in the near term, but also the longer-term potential of the hypoparathyroidism space overall. Within that, we've been investing quite heavily in a few areas. One, we've talked a lot about prescriber education as being a key area. We launched during a time where following that hypopara, this is a differentiated product, and we're reshaping people's expectations for what patients that have hypoparathyroidism need and what the condition actually entails. I think the second area where we've been investing quite heavily in is patient activation.
If you think about 70,000- 90,000 patients in the U.S. having hypoparathyroidism, this is a space where many of those patients aren't actively either seeking care, have established care with their specialist, and/or are searching for something more above and beyond the conventional therapy that they're on. That takes time, but we're seeing some really encouraging signs of some of those behaviors and beliefs changing. Then lastly, with the ever-evolving access landscape patient experience, we know that this condition in particular, these patients go through things like brain fog. They might go through fatigue and making sure that they have the requisite level of patient support, both during their journey to get a prescription, as well as post-prescription, is another area that we've been ensuring that we're supporting from a seamless experience standpoint. YUVIWEL, we just recently launched this year.
You've seen some of the numbers that we've shared previously. Incredibly encouraged by what we're seeing with that new product launch to date. Again, really speaking to the fact that this is a clinically differentiated profile we believe is best in class. From a standpoint of offering something unique to this community, we're seeing really positive sentiment across providers, patients, patient advocacy groups, and conversations with payers have all been going very well.
Of course, we mentioned the cornerstone of SKYTROFA. We're still seeing continued growth in that segment, tracking with what we see in prescriptions. Because SKYTROFA is continually being developed in other areas as well, we do see SKYTROFA as a foundation to start with a very bright future ahead.
What Jay has talked about, how he implemented an excellent center of commercialization in the U.S., we are doing the same Ex-US. Building up a global organization where we want to reach more than the 400,000- 500,000 patients, for example, with hypoparathyroidism. That is sitting Ex-US. Huge amount of patients. This is one of the efforts we will continue to doing. When we talk about revenue in 2030, the EUR 5 billion, we have a strong fundament to achieve that just with our three current products. This is the fundament to hit the EUR 5 billion. This is not peak sales of this portfolio. The peak sales comes years after that. We continue label expansion. We have 5- 10 trials ongoing now.
Many of them are late stage, both in label expansion, combination therapy, really to build on further how to really reach the best kind of treatment to all the different patients. At the same time, and it is coming to the second part, if in our Vision 2030, how to be sustainable with a continued new flow of new chemical entity. Like one like SKYTROFA, like one like YORVIPATH, like one like YUVIWEL. We have now a strategic strategy to take at least one new NCE in clinical development, besides all the label expansion we continue to do with our current portfolio of products. It is coming both in rare disease endocrine. It will come in other indications outside. Part of our strategic approach for 2030 is that we have built a new fundament for a new therapeutic areas beside our rare disease endocrine.
We are not limiting ourselves to rare diseases more. We have the capacity as a company. We have the infrastructure to move outside rare diseases. When we see how we built up our rare disease endocrine, it was built on a product at least three, where we add one product more after the time. Really have the economy of scales and synergies both in commercial organization, in manufacturing, regulatory, Ex-US, really to do it. We will do the same thing in the new therapeutic area. We are not dependent on in-licensing. We are a company built on an R&D development on our strong technology platform, the TransCon technology, which have given us three out of three. Scott is still calculating what is the chance to start with three preclinical and get three products approved. He still believes it is very low.
Think about all three of them are highly differentiated. All three of them really showing best in class compared to anyone. All of them are extremely durable. They have IP up to the end of the 2030s and the 2040s. They are combination products. They do not have a patent cliff like a small tablet that just falling down the cliff one year after its basic ion position, the IP disappear. We own the products. We are not ending it like other companies that the royalty suddenly disappear the day after the IP disappear, but the product stands for 10 years more. We will own the product because we do own commercialization. When you look on the future of Ascendis Pharma, we are just in the beginning of the beginning.
We are not even in the end of the beginning because the first therapeutic area, we first starting to mature, first starting to grow. This is why I really believe when you ask me this question, this is a long answer because we have so many possibilities. We are doing so many things, but I am so happy to the state we coming. We are independent in the way that we wrote in our Vision 2030. Independent meant that we are developing everything in our, from the TransCon technology and be financial independent, and we can give EUR 1 billion back potential every year to the shareholder if we want to do that.
Okay. Maybe if I can ask on the cardiometabolic effort or what it looks like going forward, capital expenditure. Does the base business fund the expansion? Should we think about any sort of equity raise? Trying to think about it through the lens of the share buyback also.
I think the bankers-
Are your bankers in the meeting?
I think the bankers are a little bit disappointed. First of all, Scott is never getting invited out to dinner meal from bankers now because somewhere all of them have given up that we are going to raise capital. We are not really interesting more. We say thanks a lot, they are still being invited here. We are not going to raise capital, I can guarantee.
When you see our company, how we are as a company, most people expend R&D expenses because they do not take product out. Hey, we take one product out all the time, and when it is out, they are not sitting in the pipeline more. We take new one. So when I see the expenses on our basic research and development, we are pretty stable. We will have a growth every year. It will be dependent on inflation. It will be dependent on a few other element.
Perhaps we expanding a little bit more on other things like that, but it is not making material difference. Scott gave me a simple algorithm. If we grow revenue 100% year by year and we only grow expenses by 10%-15%, will that give a lot of profit? Scott convinced me about that. This is basically the story we are implementing for the time being. Should we not be raising capital? Should we for MS?
Should we think about-
There is no morning flat next year.
All right. I am very happy you guys are here. In regards to the cardiometabolic opportunity, though, should we think about it as potential upside to the Vision 2030?
This is a major upside because I want to be independent. We have multiple collaboration. All of them have actually failed, but we have been extremely successful as a company. I do not think anyone should be dependent on a big pharma. That is really a big mistake. The first major collaboration we had with Sanofi, we made the first triple agonist once weekly, but then they got a new CEO, and he did not like metabolic diseases. If they had continued on that, they will likely have been larger than Lilly today. Then we basically made ophthalmology with Roche Genentech, and that went into a CMC problem, which we solved afterwards. But now we have Eyconis. Mark is sitting there with the CEO of Eyconis, our major spin-up, extremely successful. The products are still fantastic. Then we have now a collaboration with Novo Nordisk.
In every contract, there is a way how to live together, how to work together. If one is not fast enough, the other one likely have a chance to go out of it. I think we will get it back, will give us a lot of opportunities, not only to have the best in class once-monthly semaglutide, but also have the possibility to access rare diseases in obesity and other metabolic diseases, which we could not do before to the same degree. It opened up an extremely positive for us to really expand our opportunities in this way.
I know it is early, but can you just talk about timelines and capital allocation towards this cardiometabolic effort?
The capital allocation is basically going to be in a combined phase I, phase II trial, which we will give you timelines on when we come to the beginning of next year, and it not changing any way material our expenses in any way. It's not going to be a driver of a new raising capital because that is definitely not needed from our side.
Okay. Maybe pivoting a bit, let's talk about YORVIPATH, which really anchors your Vision 2030. What are you doing to continue the momentum, potentially accelerate growth? What should we expect over the next 6-12 months?
Jay can take U.S.
Sure. When you think about YORVIPATH, transformational change from where you are requires something beyond just prescriber education, classic reach frequency, et cetera, right? Because 70,000, 90,000 patients with the number that you're treating, you actually need to get patients to raise their hand and come out of the woodwork. A lot of our investments and commercial focus has been around that piece specifically. I'll give you a few examples. We've been looking at direct consumer education. You've probably seen some of that, depending on the demographic and the shows that you watch or streaming online or however. But we are starting to see some preliminary positive signs from some of those investments that we've made from a digital standpoint. We've invested heavily in patient-facing roles, so we now have an entire infrastructure of roles that we call Patient Access Liaisons. They coordinate with patients directly.
They support them in all aspects, whether it's field reimbursement, clinical education, and essentially supporting them through their journey, both in terms of wanting information about the therapy, accessing therapy, as well as supporting them once they're on therapy. Lastly, when you're starting to think about digital infrastructure for more commercial stage organizations, how do you have channels increasingly embedded within one another? From diagnosis to field personnel to non-personnel digital channels, how do you have them all work together in a way where you're offering people a seamless experience so that they get the information they need at the right time and in the right way? So those are three examples for which we have been actively investing in activating patients more broadly. Again, we're seeing some encouraging signs, and it's really an investment in not just today, but in the future as well.
From the Ex-US on the top level is to make more and more countries fully commercial. Today, we have about seven, eight countries Ex-US that is fully commercial. Next year, we will add between 10 to 15, 27, and we will do that again in 2028. So the overall perspective, besides each country have their own, you can say, execution or commercial operational execution, is on a high level to get as many as possible country full commercial, where we still keep the value of our product because we believe the value we providing with, for example, Europe, providing a creation not only for the patient but also for the society, and this is why we not compromise really the value, what it really costs to basically implement such a treatment in each country.
Should we expect the investment in the YORVIPATH launch to increase over time? How does that look?
I think the full-blown where we can basically be in this way, being in countries, we have a mixed model in Ex-US. In countries we are direct, we basically have built up all the legal entities that affiliate the basic people on ground. In the countries where we have distribution agreement, we are basically not responsible for any further expenses in this. So out from that, you can say it's a mixed model where we basically have built up the infrastructure supporting a global launch in all the countries that is needed.
Great. I know we've talked about the benefits of once daily, being able to titrate with YORVIPATH, but can you give us any developmental timelines for the once weekly TransCon PTH candidate?
First of all, the once weekly product is not an LCM activity. It's providing a choice to patient that is stable on YORVIPATH. Meaning is that when you think about a patient journey, you come with a diagnosis of chronic hypoparathyroidism. You are on conventional therapy, which consists of two compounds or two treatment, active vitamin D and a lot of calcium supplement. When you come out from conventional therapy over to YORVIPATH, you actually go to a titration, where you remove first the active vitamin D, and then you remove the calcium supplement, and then you step up the YORVIPATH dose. When you are stable on that, you basically can be in a position that you have a lifestyle where you're not changing your activity level a lot. You basically have some of the same dietary components and other things like that.
Compared to diabetes one, if everyone somewhere had the same amount of carbohydrate, every day exercise in the same amount, then you will be really well on a stable insulin level. But if you change your activity level, get an infection or a disease, change your dietary component, you need to be sure you can titrate up and down. I got asked once, "You made SKYTROFA once weekly. You made TransCon CNP once weekly. Why did you not make PTH once weekly from the beginning?" Because we know the complication in the titration phase, and there is not an antagonist to high level of PTH. It's not like insulin where you can take glucagon. You don't do that. There is only one thing to go to, emergency room.
Out from that perspective, if we know they're getting hypercalcemic, they just stop treatment in one or two days, and then they're down slowly again. That was why we never wanted to start with a once weekly product. But if a patient have a more stable lifestyle over a period, have a stable dose, and they want to go over on a once weekly product, we will develop a once weekly product, which we're doing now, that basically will give them the same properties that you get with YORVIPATH. Endogenous replacement therapy, because the other once weekly is not endogenous replacement therapy, and only have half of the effect that you get with normal PTH. So it's not really a substitute for YORVIPATH. Forget that.
From that perspective, we want to have a once weekly product building up exactly the same active mode of action that you have in YORVIPATH with basically the same level of PTH, 24 hours to seven days a week. It basically is bioequivalent with a daily YORVIPATH treatment.
Great. Now let's pivot over to YUVIWEL. How is the launch going? What can we expect in regards to patient adds through year end?
But see, Jay, he looks such a happy person.
Yeah.
And extremely pleased. He's always negative, but when he saw all the numbers, even Jay needed to be positive.
Yes.
Now we need to be positive.
Yes, we're very encouraged by what we're seeing. I think what we last showed, again, we last reported 220 enrollments, over 100 prescribers. If you even take that, comparing it to previous analogs, that's quite outpacing, I think, what we've seen in the past as it relates to incumbent or older therapy. That's corroborated by not just, again, I said before, qualitatively beyond just what we're seeing in the numbers, there's just a high level of enthusiasm, right? A lot of patients that are on it. This is an ultra-rare community. There's word of mouth. I think you can measure a lot of leading indicators through being present, whether it's conversations with advocacy groups at congresses.
I think as you continue to see patients see their specialists throughout the year, knowing that this is an area where it's not like they just go in the next day, we do anticipate that we will see continued growth in an encouraging way from what we've seen to date. Also, when you look at the space in achondroplasia specifically, it is very center of excellence based in terms of where the patient concentration is, which is very different when you look at it relative to like a hypopara, where it's much more diffuse across a right tail of accounts.
For achondroplasia specifically, we've also been investing quite heavily in going on an account by account basis and understanding what is the unique needs of each local regional account, which is a very different type of approach for an ultra-rare category versus something that you might see in PTH. Again, all these things qualitatively leading indicators. We're feeling really good about where we are and where we'll continue to be.
Any comment on the mix of patients? I know we talk about it on the earnings calls, et cetera, but new starts, switches, patients who potentially discontinued VOXZOGO and testing, any comments around that?
Yeah. I think what we've shared before, just to reiterate, we see patients anecdotally coming across three segments. We have patients coming across patients that are currently on vosoritide that have switched over. There's a second category of patients that were previously on vosoritide but have since discontinued, maybe because they weren't seeing the efficacy that they wanted, maybe that from an injection site reaction, they didn't feel it was tolerable, and they decided to discontinue vosoritide, but then wanted to start YUVIWEL. The third one, which is patients that have been holding out because they weren't convinced by the older therapy on market.
Now that there's a new option, they're raising their hands like, "Now I'm willing to try and want to try." I think with any type of second product coming in, you naturally should expect that probably there's a greater number of patients that have been on existing therapy that are hand-raising to move over. While we don't necessarily track that with specificity, I do anticipate that earlier on, we're going to get more of the patients that are previously on therapy. But anecdotally, we see it across all three segments.
Any comment on gross to net over time? How should we think about that for YUVIWEL?
Yeah, I would say we don't usually disclose gross to net over time is probably the best way to think about it.
Okay.
That was a clear answer.
Maybe if we could just touch on the recent agreement you signed with BioMarin. If you'd like to lay out any comments on that, I have a few follow-up questions, but we can go from there.
The content of the agreement is that we will pay royalties in a limited number of countries until May 2030. It give us a global freedom for all IPs from BioMarin related to specific patents. From my perspective is that we won the case in Europe. For me, it's not really what is right, what is wrong. I'm a pragmatic person there. Out of two things, I actually prefer to pay to BioMarin instead of paying to the lawyers. At least I feel a little bit better with that.
From that perspective, it's a total win for both companies in the way that BioMarin gets compensation for the loss of revenue that they get in specific countries, and we have a freedom really to go out and really come out to as many as possible patients immediately and be in a position that we're really building up the franchises to what we believe best-in-class opportunity. This is an only product, YUVIWEL, that has shown really benefit beyond linear growth in a placebo-controlled manner. Also, when we look on how we develop this franchise further on with the combination therapy, where we combine it with SKYTROFA. We basically will provide a treatment option to this patient group.
First, achondroplasia, where they basically can avoid basic elements of surgeries, everything from spinal stenosis to arm lengthening, leg lengthening, leg bowing, really key elements that really have a major impact in a negative manner on this patient's life. From that perspective, we feel that we making a complete new standard on treatment, not only with YUVIWEL, but also what that really being created as a possibility treatment option with the combination therapy. We now have 18 months data in the combination therapy. Never seen results like that. You basically generate three to four years treatment in one year, plus additional things that we now see the same effect as with monotherapy like arm lengthening and other things like that.
We coming out now with the newborn data, children down to newborn, and we have the first data cut for the first seven patients that came in, and it looked exactly as we had hoped for. But the key element is safety.
Great.
Never forget that. I think when we look on the safety perspective of the CNP-based therapy, it's really providing no safety signals. One of the safest treatment I ever have seen would give an obvious choice for the parents and the patients.
Great. The royalty agreement runs through 2030, as you said. How should we think about margins beyond that?
At least from my side, you will see there will be some impact in the next quarterly report, and you will not even know where it is. It will be immaterial.
But also think the royalties you are talking about is not a weighted basis over the global situation. This is the countries where we pay royalties. There will be a lot of revenue generating outside. So if you really will try to calculate an effective royalty rate until May 2030, it will be likely down in the single-digit numbers and will not impact us in any way.
Okay. Over the next 6-12 months, what can we expect from Ascendis in regards to clinical readouts, clinical updates, and just the story overall?
I think it's pretty well laid out what to expect. I think from when I talk with investors, there's a lot of focus. Can we really build up the EUR 5 billion up to in 2030? I think a lot of feedback I get, how will the next quarters? We came out with the perspective that we will have more than 1,000 patients every quarter going forward. You will see that reflected in the revenue numbers. I believe you will continue to see the launch. You will see YUVIWEL still continue to grow dramatically in this way. What you see, we will see the expansion in our label expansion. There will come results. There will come two years data from our combination trial end of the year. There will be other element coming out from our portfolio.
Next year, we will have two or three phase III readout. Then you will see the new product opportunity coming in with the new chemical entities. I think we are building up two things, continue the revenue generation, at the same time, building on the sustainability, on building new chemical entities that really providing the next level of support to our sustainable revenue generation for the next 20 years.
Great. We have two minutes left. Anything you'd like to leave investors with after the updates from last night and the discussion today? I think that speaks volumes. I think we're good. Ascendis team, thank you very much for joining us today. Really appreciate it.
Thanks so much.