Ascendis Pharma A/S (ASND) 2017 Q2 法說會逐字稿

Welcome, everyone, to Ascendis Pharma Second Quarter 2017 Financial Results Conference Call. (Operator Instructions) I'll now turn the call over to Scott Smith, Senior Vice President and Chief Financial Officer at Ascendis Pharma.

Thank you, operator. Thank you, everyone, for joining our second quarter financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me on today's call are Jan Mikkelsen, President and Chief Executive Officer; and Dr. Jonathan Leff, Chief Medical Officer.

Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, our potential to become a leading integrated rare disease company; our progress on our pipeline candidates and our expectations with respect to their continued progress; statements regarding our strategic plan; our goals regarding our clinical pipeline of rare disease endocrinology programs; statements regarding the plans for our Phase III heiGHt Trial of TransCon Growth Hormone; and the fliGHt and enliGHten Trials.

These statements are based on information that is available to us today. Actual results or events could differ materially from those in the forward-looking statements. And we may not achieve our goals, carry out our plans or intentions or meet the expectations or projections disclosed in our forward-looking statements. And you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any in-licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see the Forward-Looking Statements section in today's press release and the Risk Factors section of our annual report on Form 20-F filed on March 22, 2017.

Today, we will discuss our second quarter 2017 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Jan Mikkelsen, our President and Chief Executive Officer.

Thank you for joining our call today. This is a transformative period for Ascendis. During the last 2 years, we have been executing our Vision 20/20 strategy to build a pipeline on multiple rare disease product. In keeping to our planned timelines, we are now transitioning from having a single clinical program to having 2 product candidates in clinical development: TransCon Growth Hormone and TransCon PTH. Early next year, we expect to initiate clinical development of our third product candidate, TransCon CNP. All of our endocrinology rare disease product candidates, TransCon Growth Hormone, TransCon PTH and TransCon CNP, are designed to provide best-in-class efficacy, safety and tolerability and address the high-value markets with significant unmet medical needs.

For TransCon Growth Hormone, our Phase III program in pediatric growth hormone deficiency, is well underway. We are on track to complete enrollment as planned of our Phase III heiGHt Trial in the fourth quarter. We also expect to initiate the fliGHt and enliGHten Trials shortly. These studies will provide additional data to support our regulatory submission for TransCon Growth Hormone. For TransCon PTH, we have completed the regulatory filing in Australia that enable us to initiate a Phase I trial during the third quarter as planned. For TransCon CNP, we are preparing an IND or similar filing during the fourth quarter of this year.

With this progress, we expect to have 3 products in clinical development by early 2018. We are advancing our pipeline and taking important steps to realize our Vision 20/20 goal to become a leading integrated rare disease company with an initial focus on endocrinology. We are often asked about the competitive landscape for our pipeline. I would like to take a few minutes today to reflect on the market landscape for each of our programs.

All 3 of these product opportunities are designed to make a meaningful impact in patients' lives. TransCon Growth Hormone addresses a USD 3 billion established market, where low adherence with daily therapies reduce treatment outcomes. TransCon PTH addresses an emerging market, where the standard of care does not fully address all clinical aspects of the disease. And TransCon CNP address a market where there is currently no FDA-approved pharmacological treatment.

For TransCon Growth Hormone, the pediatric growth hormone deficiency market is nearly fully penetrated by daily growth hormone. Therefore, the real competition for TransCon Growth Hormone is daily growth hormone, which is the established benchmark for its safety, efficacy and tolerability. History has shown that when a long-acting growth hormone product achieves regulatory approval, it cannot be commercially successful without any compromises related to safety, efficacy and tolerability.

We have designed our TransCon Growth Hormone program to include optimal product feature, which will be key to its potential commercial success. This include release of an unmodified growth hormone that fully mimics the effect of daily growth hormone. As a reminder, daily growth hormone has achieved first year high velocity in registration trials of 10.5 to 12.2 centimeters with a lower [EU] dose of 0.2 milligrams per kilo per week.

In addition, daily growth hormone can be uptitrated towards the higher U.S. dose of 0.35 milligrams per kilo per week while still maintaining IGF-I values within assay fronts: the same tissue effect as daily growth hormone, such as effect on BMI; similar immunogenic potential as daily growth hormone with no neutralizing antibodies; and an easy-to-use device that enables a single, small, injection volume with minimal injection cycle reaction and room temperature storage.

We continue to believe that TransCon Growth Hormone is uniquely positioned to become the best-in-class growth hormone therapy. We believe its once-weekly dosing should help to improve adherence in real world while its target product profile offers the characteristic needed to effectively compete in this market and capture significant market share from daily growth hormone therapies.

For TransCon PTH, we are developing a product designed to be both clinically differentiated and superior to the current therapies for hypoparathyroidism. This disease has only one approved therapy, which does not fully address all aspects of that disease. TransCon PTH is designed to deliver a steady-state concentration of PTH in the physiological range for 24 hours of the day.

So (inaudible) it will have the potential to be a true PTH replacement therapy. By achieving an infusion-like profile, it is designed to normalize serum and urinary calcium 24 hours a day, 7 days a week unlike the current approved therapy. We expect TransCon PTH to establish a new standard of care for hypoparathyroidism.

Turning to TransCon CNP. We have another attractive product opportunity as there are currently no pharmacological treatments available for achondroplasia and other FGFR-related diseases balanced in the CNP and FGFR pathways, which essentially leads to normal growth. While the CNP peptide can counteract the overactive FGFR3 receptor and restore normal growth, the native CNP peptide as a pharmaceutical product has major shortcomings. This includes limited duration of action because of a very short half-life of only 2 to 3 minutes and adverse cardiovascular effect at high concentration.

Ascendis has solved these shortcomings with the TransCon technology. As TransCon CNP has a half-life of around 72 hours in timing, over 1,000 longer than native CNP and at the same time, avoiding the high concentration of CNP that promotes adverse cardiovascular effect. In our preclinical studies, we have demonstrated a dose-dependent effect of growth without adverse cardiovascular effect. Our goal is not only to enhance height but also to address the more anticipated comorbidity, such as spinal stenosis. TransCon CNP has the potential to provide enhanced efficacy with approved safety and convenience for not only achondroplasia but also all FGFR-related rare diseases.

Stepping back, why we're able to achieve differentiation for each of our products clinically? Quite simply, because of our TransCon technology. We believe TransCon technology enables products that address specific unmet medical needs by (inaudible) some of the channels of our technology. TransCon technology allows the release of an unmodified parent drug, thereby maintaining the same mode of action of the parent drug. And each of our internal pipeline of products is built upon a parent drug with established proof of concept.

We expect to have a higher success rate compared to traditional drug development. Our wholly owned pipeline represents 3 high-value product opportunities, each addressing at least USD 1 billion market. Our mission is to serve patient needs by advancing all of our 3 unique rare disease products. We are making progress towards this goal and our Vision 20/20 to be a leading rare disease company.

I will turn the call over to Jonathan for our key developments.

Thanks, Jan. I am very pleased with the progress we are making to advance and expand our pipeline. During the second quarter, we made continued progress with our TransCon Growth Hormone program as well as our TransCon PTH program, which we expect to enter the clinic soon. We're also advancing TransCon CNP, which should enter the clinic in early 2018. We believe our pipeline will soon include 3 unique programs, all in the clinic, addressing unmet needs in 3 rare endocrine disorders.

As mentioned, the pivotal program for TransCon Growth Hormone is well underway with our Phase III heiGHt Trial enrolling patients worldwide. The key objective of this program is to demonstrate similar safety, efficacy and tolerability of TransCon Growth Hormone to daily human growth hormone. We believe that this is a minimum requirement for patients and physicians to use a long-acting product as it will not be compromising the established benefits of daily therapy for a more convenient dosing regimen. The bar for efficacy has been well established by the currently marketed daily growth hormone products, where data from registration trials consistently show first year growth of 10.5 to 12.2 centimeters at the dose of 0.21 milligrams per kilogram per week. With this in mind, we were highly encouraged by results of our randomized controlled Phase II trial, which suggested a dose response in height velocity that was comparable to daily growth hormone.

Another key aspect of our long-acting growth hormone program is that it uses a unique technology. Prior efforts to develop long-acting growth hormone therapies have used fusion proteins, permanent PEGylation or depot formulations, none of which have resulted in a commercially successful program despite regulatory approval. With our TransCon technology, growth hormone is transiently bound to the inert carrier via the TransCon linker molecule. Through autohydrolysis, fully active unmodified growth hormone is then released, resulting in the same physiologic levels of growth hormone in IGF-I as seen with daily growth hormone. We believe this unique approach should result in a different outcome. And that includes a similar safety, efficacy and tolerability profile to daily growth hormone with no compromises.

Turning back to the clinical program. Our pivotal heiGHt Trial is comparing subjects with growth hormone deficiency who receive once-weekly TransCon Growth Hormone to those who receive daily growth hormone therapy. The trial is enrolling patients via a global network of sites. And we remain on track to complete our target enrollment of 150 subjects during the fourth quarter as planned.

We are also preparing to launch the fliGHt Trial this fall. You'll recall this study is designed to enroll 150 subjects who were primarily treatment-experienced and were switched from daily human growth hormone to once-weekly TransCon Growth Hormone. We have also been encouraged by FDA to enroll subjects as young as 6 months in fliGHt, some of which may be naïve to therapy. The trial will expand our safety database and help provide physicians and patients with broader experience with our product. Additionally, we plan to initiate our extension trial, the enliGHten Trial, in anticipation of subjects in height obtaining the 12-month endpoint. The first patients are expected to transition late this year.

We are also increasing our efforts to build awareness among the pediatric endocrinology community about our TransCon Growth Hormone program. We have numerous activities planned at the upcoming International Meeting of Pediatric Endocrinology in mid-September in Washington, D.C. This includes 2 poster presentations, one describing our patient-friendly device and one related to the importance of unmodified growth hormone and optimizing its effects on growth and body composition.

Now let's move to the TransCon PTH program, which is being developed as a treatment for hypoparathyroidism. We recently completed regulatory submissions to pave the way for our Phase I clinical trial and should start next month. Let me review the significance of this trial in more detail and describe how it will inform the development program for TransCon PTH.

A single and multiple ascending dose cohorts are each expected to enroll 10 healthy subjects with single and 10 daily doses, respectively. Because we plan an expedited development program for TransCon PTH, we plan to enroll a slightly larger number of subjects than a typical Phase I study. Because healthy subjects are known to respond similarly to patients with this disease, we believe the PK and PD from Phase I were adequately informed and support Phase III initiation as the next step. Specifically, the typical reasons for conducting a Phase II trial are to establish safety, efficacy and immunogenicity and to determine the Phase III dose. We believe all of these will be established at the conclusion of the Phase I trial.

Moreover, TransCon PTH is a titratable drug, so the drug will be titrated to each patient in the first period of the Phase III trial. For all these reasons, we believe there is a strong scientific and regulatory rationale for moving directly from Phase I to Phase III as NATPARA has done. We look forward to regulatory discussions to confirm our plans. Further, there is a strong clinical rationale for benefits of an infusion-like PTH replacements based on the extensive work from NIH. We believe these elegant clinical studies demonstrate the benefits of steady-state PTH delivery in patients with hypoparathyroidism.

Our TransCon PTH product candidate is aligned with this approach with an established preclinical PK profile showing steady-state PTH exposure over 24 hours. We also have robust preclinical data, where we have observed the beneficial effects of TransCon PTH on serum calcium and phosphorus as well as urinary calcium. Given the NIH experience, we have a high level of confidence in the clinical potential of TransCon PTH. We are eager to advance the program and deliver what we believe is a true PTH replacement therapy, designed to fully control all aspects of hypoparathyroidism by replacing the hormone at physiological levels.

Now let me briefly comment on TransCon CNP, our candidate to treat achondroplasia and related diseases. We are highly motivated to address the significant unmet need for patients with achondroplasia and have been actively obtaining input on our development plans from experts in the field. This input has reinforced what we believe is a tremendous opportunity to develop a product that increases height and more importantly may reduce the devastating complications of this disease. These include severe spinal cord compression, which can result in chronic pain as well as cardiovascular and dental complications, obesity and sleep apnea. TransCon CNP remains on track for regulatory submission in the fourth quarter, which would enable the Phase I trial to begin in early 2018.

This quarter marks an important turning point for Ascendis as we grow from 1 clinical stage program to 2 and soon to be 3. In addition to our internal development activities, we have an active schedule of external presentations designed to build awareness of our pipeline and our company within the endocrinology community. We look forward to continuing this momentum with all 3 of our rare disease product opportunities.

Now Scott will provide a financial update.

Thank you, Jonathan. Turning to our financial results for the 3 months ended June 30, 2017. Let me review some highlights. We ended the second quarter with cash and cash equivalents of EUR 127.3 million and approximately 32.5 million shares outstanding. For the second quarter, we reported a net loss of EUR 30.7 million or EUR 0.94 per basic and diluted share compared to a loss of EUR 13.3 million or EUR 0.53 per basic and diluted share during the same period in 2016.

Research and development costs for the second quarter were EUR 21.9 million compared to EUR 13.3 million during the 2016 quarter. R&D costs in the 2017 quarter reflect greater development costs related to our ongoing global Phase III study of TransCon Growth Hormone, including increased manufacturing costs for this product candidate; increased preclinical development and manufacturing costs for TransCon PTH and TransCon CNP, reflecting further progress of those 2 programs towards the clinic; and increased personnel and related costs due to a higher number of employees in research and development functions.

General and administrative expenses for the second quarter of 2017 were EUR 3.2 million compared to EUR 2.7 million during the second quarter of 2016. G&A expenses in the 2017 quarter reflect an increased administrative personnel costs, partly offset by a decrease in professional fees.

We continue to expect our R&D costs to vary from quarter-to-quarter as we invest in and advance our wholly owned internal pipeline programs. We expect these costs to reflect the following: advancing and expanding our Phase III program for TransCon Growth Hormone, including clinical supply and validation of our commercial manufacturing process; increased costs related to initiation of a Phase I clinical trial and Phase III enabling chronic tox, manufacturing and other activities for TransCon PTH; and ongoing preclinical development and manufacturing activities to support an IND or equivalent filing by year-end for TransCon CNP.

We are pleased with our execution this year in advancing our rare disease pipeline. Looking ahead, we're even more excited to share clinical updates with you on all 3 of our programs in the coming quarters. We are focused on developing products that both directly address market needs and also establish a new standard of care.

Operator, we are now ready to take questions.

(Operator Instructions) Our first question comes from the line of Tazeen Ahmad of Bank of America.

Jan, can you give us a little bit of color on what you think the added information from the fliGHt study could do to help you not only collect safety data for FDA but in the commercial setting once you launch? Secondly, can you give us an update on when you think you would be able to transition patients from the device that you're currently using to the device that would be used for commercial launch? And then I have a question on hypoparathyroidism.

Thanks a lot for the questions. So I think related to the first question, I will let Jonathan answer that and I will move to the next one.

Sure. So the fliGHt Trial will greatly increase our safety database. This will increase our numbers to as many as 300 subjects with at least 6 months of exposure, which is quite a lot. And that's even approaching ICH numbers, which is meant for guidance for much larger populations. Also importantly, the fliGHt Trial will investigate children as young as 6 months of age. So we were encouraged to go down to 6 months, even younger, by FDA. So that age range is not covered in the heiGHt Trial. And that will also be very valuable. So we'll really have a broad view of a broad bunch of patients with the safety exposure with fliGHt.

Related to the device, we still think that the device is an essential integrated part of having an optimal product opportunity in the growth hormone market. And therefore, we want to have as many as possible patient exposure on our device. Therefore, in the extension study, we will be ready to transfer the patients over to our device. And that will happen sometime next year. The device is in acceleration, where we have made and actually have produced all the device. Now we are integrating the cartridge into the device, so all the double packing and single packing to be sure that we have the optimal way to give the patient our TransCon Growth Hormone block.

Okay. And then just one follow-up, is it possible then that your label would allow for use of TransCon in babies as young as 6 months, should the study be successful?

Sure. Typically, you get what you study. So if we have studied 6 months of age and above, and it's safe and efficacious, then we would presumably get that in our label.

Okay. And then on hypoparathyroidism, before NATPARA launched, I think there was a view that there wasn't as much awareness of the condition, and therefore, perhaps patients weren't being properly identified. But in the couple of years since that drug has launched, have you guys been able to get any market data on whether or not awareness of that condition has increased and whether or not patients who are diagnosed may not yet be choosing to take therapy and just to give us a sense of what the untapped population might be?

So patients who have hypoparathyroidism, it's usually not a very subtle disease. I mean, it is extremely symptomatic from the hypocalcemia, the very painful muscle spasms all throughout the body. These are very educated patients. They often even know their levels of urinary calcium. And they usually become stockpiled in physicians' practices because the onset of the disease is very clearly known, it's usually in the time of surgery. And within hours or a day after surgery, their hypocalcemia becomes uncomfortably evident. So we think there's very good awareness. And we think when physicians understand the product profile, there will be a very deep penetration into that marketplace.

And so what's your view of what the addressable population in the U.S. is?

Aren't there 75,000, I believe, on patients of all types in the U.S.? And roughly maybe 1/3 of those have severe disease, which would certainly be terrific candidates. But even working into the moderate range, I think that will happen over time as well.

I believe our end goal will be all patients that is missing it should have the opportunity to get the true replacement therapy for what we really have in the disease. So surely, we will focus on what we call the severe, moderate in the beginning. But I think and believe the mission will be that all patients should have the opportunity to have such as an important treatment.

Our next question comes from the line of Jessica Fye of JPMorgan.

I wanted to ask about the competitive landscape, if that's okay. I guess heading into the Versartis top line data for their pediatric growth hormone study, what will you be watching in that top line readout, recognizing that we might not get the full details with that update? But what are you looking for in that?

Thanks, Jess, for this question. And it's definitely a question that we have been asked multiple times in the last months. And what I would like to do, go to the more holistic view and take it into the growth hormone market. The growth hormone market in pediatric growth hormone deficiency is extremely well penetrated with daily growth hormone. So who is really taking out the benchmark for how you need to compete against this daily growth hormone. And if you take the parameter that is important, has shown to be important in the market, has never been who's first in the market. but what is really the characteristic of the product. So daily growth hormone has established a really clear benchmark related to efficacy, safety, tolerability and other product features. And when you go to efficacy from another product, I would like everyone to compare the efficacy to what there is in daily growth hormone. Can you receive the same effect on growth velocity? Can you get the same effect on all tissue, like fat tissue, which indirectly (inaudible) on BMI? So you would expect that when you go to safety, you will look about another long-acting product, how do that really turn into safety related to daily growth hormone? Do you see other unexpected adverse event? Do you see an immunogenic potential that is different compared to daily growth hormone? Do you see any hint of having neutralizing antibodies? When you go to tolerability, I basically believe that the standard that has been set up with daily growth hormone is a pain-free injection. And this only happened because you have small volumes, you have a small needle and have a high level of biocompatibility. And then there is the (inaudible) on product features by having an easy-to-use device, having room temperature stability. All of that is an integrated part of driving adherence. So I believe and I think really that you need to be having a competitive story related to all these different elements. And I personally don't believe that you can compromise efficacy, safety or tolerability. And if you really want to be the market product, you need to have optimal product features. So therefore, compare all long-acting growth hormones to what has been established with daily growth hormone and then you really can just ask yourself, are there really any kind of reason that you will actually compromise efficacy, safety or tolerability?

Okay. I guess what about this argument that the bar is lower than whatever daily growth hormone will show in a clinical study because real world compliance isn't as great as in the clinical studies with daily growth hormone? How do we think about that argument that the real bar isn't as high as what daily will show in a clinical study?

I believe when -- if I was sitting as a physician in front of a patient, I always have the strong belief that my patient will be in compliance. What I prescribe and treatment received to this patient, that gives less efficacy, less safety, less tolerability because I always have this assumption my patient will be adhering. So upfront, without taking into [a group] that I'll take the efficacy, safety that we have optimized probably 15, 20 years down to what we have in the '18, '19s, I don't believe that. So therefore, I have no belief that can be any kind of compromise related to efficacy, safety because you need to take it on the patient basis. So it basically will say the 20% today, that is 100% compliant, will suddenly get less effective treatment. I have never seen that being implemented in any way in any system.

Our next question comes from the line of Alethia Young of Crédit Suisse.

I guess maybe talk a little bit about the heiGHt Trial like kind of how the process has been with enrollment and like has anything kind of come as a surprise. I also just have a hypothetical question. I mean, if you treat someone earlier with growth hormones, should you expect a faster growth velocity as well? I guess some of the basis for that question is thinking about as you treat younger and some of the very -- distribution of age of the study as well.

I'll take that Alethia. Thanks for the question. So enrollment is going on very well. We're enrolling all over the world. There's a lot of enthusiasm with our investigators. So there's no particular issues anywhere. People really are engaged with the technology. And the more they learn about it, the more intrigued they are with the technology and more interested in heiGHt and our other trials. In terms of age, the age is a predictor of growth. So the younger you start therapy, the more you tend to get better growth. There are other predictors as well as smaller height, the shorter you are, the more you grow. Lower the IGF-I levels at diagnosis, the more you grow. The lower your skin testing results, the more you grow. So age is an important one. And of course, the earlier you start, the better chance you have of attaining your mid-parental height or your maximal potential height.

And also just a little follow-up to that before I go to PTH, is there are a lot of overlap between sites on Versartis and you guys? Or is it kind of separate?

There is a reasonable amount of overlap. As you might expect, there's certain number of expert sites around the world. Certainly, we're heavily investigating patients in the U.S. That's where most of the Versartis sites are. But we have a very large program outside the U.S. And Versartis, I believe, has relatively few sites outside the U.S. So overall, there's pretty small overlap of sites if you think of it globally.

Okay. And then on PTH, did you guys say how many people you actually expect on a number basis? And then do you have any kind of theory on how long it might take to enroll like this bigger population?

So in Phase I, these are healthy volunteers. So we're literally lining them up. I mean, you get a cohort of 10 that come in on a given day and they stay in a unit overnight and for many nights. And you literally just go right down the line from bed to bed to bed injecting them all. In all, we'll probably have over 100 subjects in our Phase I. But it depends on how far we go into the cohorts, how high the dose we go in the SAD and the MAD cohorts. But it will very likely be over 100 patients. So this will be a substantial experience to define the safety and pharmacodynamic effects in healthy volunteers, which will be very informative for the Phase III transition.

And then where are you conducting this study?

In Australia.

Our next question comes from the line of Jim Birchenough of Wells Fargo.

Just on the fliGHt study and how we should think about that as a gating factor to your filing timelines, can you remind us of the filing timelines for TransCon Growth Hormone? And then separately, just on that fliGHt study, how do we think about the efficacy part of it, given that you're going to be switching patients at different points in their growth phase and maybe going earlier as well? What should be the expectations? Should we look at each individual patient and expect their prior growth trajectory to continue? I'm just trying to get a sense of how to think about efficacy in that study and then impact on timeline.

Sure. So the fliGHt Trial is obviously starting after the heiGHt Trial. But on the other hand, it should recruit very quickly. So this is a trial that's taking patients who are already on growth hormone, they've already been diagnosed on relatively loose inclusion criteria, because this is a safety study. So it will enroll quickly. It should actually enroll and finish at about the same time as the heiGHt Trial. So it will not extend any timelines. As far as filing timelines, we've not disclosed those as of yet. We will at some point. But we don't anticipate that the fliGHt Trial, adding that into our program, will delay any filing timelines at all. It will go very quickly. And we'll share progress next year as we progress. In terms of efficacy, the fliGHt Trial, as you know, is really clearly a safety trial as a primary objective of the study. That said, there will be some efficacy readouts. But it will be very challenging to draw definitive conclusions. There'll be patients who have been on growth hormone for varying periods of time, who have been on various products, who have varying levels of pre-study compliance rates. So we will look at all of that and we will make our best cut of patients who have been on therapy, maybe for 0 to 3 months or 3 to 6 months, 6 to 9 months. So we will generate some efficacy data. But I wouldn't anticipate a lot of very clear, unambiguous efficacy data. That data will come from the heiGHt Trial.

Great. And then maybe just going back to the upcoming Versartis data. When you think about some of the critical features you highlighted, how do we think about their ability to titrate further versus yours -- your device versus what you understand of theirs, your volume versus theirs, your needle gauge versus theirs, things like injection site pain? Can you remind us how we should think about those things side-by-side in advance of getting the data?

It's definitely a great question, Jim. It was an element that we actually integrated early stage in our product profile because it's pretty well-known that pain of an injection are driven by the following 3 elements: the volume of injection, the needle sites and, sure, the biocompatibility of the material injection. And the analysis that if you want to have what we call a not a high comfort or nearly a pain-free injection on the pediatric setting, you need to be down in the 0.5 to 0.6 milliliter for an injection. So basically, if you wanted to have an attractive product with optimal adherence building up, you need to have this pain-free injection. So therefore, we went in and said that we needed to be quite sure to have product opportunities where we could dose all the patients from 20 kilos up to 60 kilos and also less than 20 kilos now because we are enrolling children down through 6 months with a very, very small volume. And this is why we define that we never want to have higher than 0.6 milliliter, which are giving out to children with 60 kilos. Related to uptitrating, I actually think this is a great question because all of the Phase III trials that is running currently, including our trial, including Versartis' trial, they're actually using a daily growth hormone of 0.24 milligrams per kilo per week, which are actually less than what you could say the typical dose that is used in a U.S. setting. So even if you get what I call the same numeric growth velocity on the lower 0.24 milligrams, you still need to show that you have the possibility to increase that. And I (inaudible) some of the other products, where they don't have the opportunity really to increase the dose, either because the volume is already extremely large, related to more than 0.5 milliliter, but also you can see that they have hit some kind of saturation level on the IGF-I level, meaning that if you're already in the current setting in the Phase III, it has uptitrated up to the top level of acceptable IGF-I, you basically have no possibility to increase the dose. And that is basically what we've seen for some of the other products. So it's a great, great question.

And then just one final question on PTH, and I think we're all trying to understand the same thing. If you've got 25,000 patients with severe disease and they're easily identifiable and they've got a great morbidity of disease, why aren't they getting NATPARA? Or is it the case that they're getting NATPARA, but the product features are not sufficient to keep them on the drug? I guess I'm trying to understand what's going on with those patients and why aren't they being treated right now. Because one would think NATPARA would be a bigger drug if they were being treated.

Great question. When we see NATPARA, it's not really addressing the fundamental effect of the disease. There has no effect on urinary calcium, which are one of the important parts that actually gives the long-term morbidities related to renal damage. It has not really a major effect on hypo and hypercalcemia because you need still to titrate them down to the lower level of the normal calcium levels. So basically, when I take the NATPARA product, I believe still is impressive if that can hit the projected market potential when I look on the short term of this product opportunity. So I think this is more indication there is a huge unmet medical need out in this area for this patient group that you can take such a non-superior product and still place it into the market.

And our next question comes from the line of Joseph Schwartz of Leerink Partners.

A lot of my questions have been answered. But I was curious if you could talk a little bit more about the promotional implications of different clinical outcomes for the long-acting growth hormones, in particular how much of the growth hormone market do you think that the long-acting growth hormone treatment such as yours and the competitors can garner? And how does that long-acting growth hormone market share driven by the safety or efficacy profiles that could emerge? Is it everything but the generic share that we see today that you think is up for grabs? Are there any other parts and pieces of the market that might be more challenging to garner?

Thanks, Joe, for the question. Let me see if I get all of aspects of your question. If I don't get that, please come back. So what we have done, we have done a lot of, what I'd call, financial modeling related to penetration in the growth hormone market. We have done a lot of modeling about the competitive landscape, what is really needed to take market share from daily growth hormone product opportunities. And this is why we (inaudible) coming pretty much firm about if you really want to be a market leader, really want to take sustainable market share that you cannot compromise the efficacy, safety and tolerability. And really to be a market winner, move up to, for example, 40% to 50% market share, you need to have optimal product feature like an easy-to-use device, room temperature stability, all this built into the product opportunities. And this is what we have integrated in the market potential. So for us, it's really all this to have a competitive product profile-related daily growth hormone because this is where the market share is, where we need to take the market from. And so my basic answer to this is that we know intention modeling, we feel that we could take a sustainable, large portion of the market by our long-acting growth hormone if we do not compromise efficacy, safety, tolerability. And if we've built up the optimal product features, we believe that we potentially can be the market leader in this area. And this is where we are focused on today. And this is why we're so tight on ensuring that we could show that in all our clinical trials to be convincing not only physicians, but also we can convince patients, parents that really are giving the same optimal attitude they have in daily growth hormone together with an easy-to-remember weekly administration frequency.

Thank you. And that is all the questions we have for today. Ladies and gentlemen, that does conclude today's program. You may all disconnect. Everyone, have a great day.