Ascendis Pharma A/S (ASND) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q3 2018 Ascendis Pharma Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call may be recorded for replay purposes. It is now my pleasure to hand the conference over to Mr. Scott Smith, Chief Financial Officer. Sir, you may begin.

Thank you, operator. Thank you, everyone, for joining our third quarter 2018 Financial Results Conference Call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me on today's call are as usual, Jan Mikkelsen, President and Chief Operating 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 progress on our pipeline candidates, and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline of rare disease endocrinology programs, statements regarding the market potential of our pipeline candidates, and statements regarding the planned regulatory filings. 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 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 the 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 28, 2018.

On today's call, we will discuss our third quarter 2018 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.

Thanks, Scott, and good afternoon. We continue to make progress towards our goal to create sustainable growth by building a diversified pipeline of 3 independent product opportunities in rare disease endocrinology. Let me review our recent progress. We are reporting today the expected and predicted Phase I clinical results for the third rare disease endocrinology product candidate in a row, TransCon CNP.

Our clinical results to date support our target product profile and confirm findings from our preclinical results. Our goal is to provide continuous and therapeutic levels of CNP for [24] hours a day, 7 days a week, without increased cardiovascular risk and with a weekly administration. We have now clinical data that reinforce our target product profiles.

We expanded our global footprint to the formation of VISEN Pharmaceuticals in Greater China. Earlier this month, we announced the VISEN partnership which provides us with a compelling upside opportunity in China. VISEN also expands the potential reach of our rare disease clinical programs into China, which has a larger population than the United States and Europe combined.

And at the end of the third quarter, we completed recruitment in our fliGHt Trial, which brings us up to more than 300 pediatric subjects enrolled in our TransCon Growth Hormone Phase III program. This was another key step to advance our long-acting growth hormone therapy towards patients, as we await read out of the Phase III heiGHt Trial in the first quarter of 2019.

My reflections today will focus on TransCon CNP. TransCon CNP is now the third rare disease endocrinology product candidate, where we have created a potential best-in-class therapy. The clinical results presented today also demonstrate, once again, an excellent translation from preclinical to clinical data, and the broad applicability of the TransCon technology. As you may know, the fibroblast growth factor receptor 3 is a negative regulator of bone growth, as activation of the receptor-signaling pathway in the growth plate inhibits chondrocytes, proliferation and differentiation. Achondroplasia is caused by a continuous overactivation of the FGFR3 signaling pathway by dominant mutation in the receptor. This continuous over activation severely limits bone growth. We believe to provide a highly effective treatment for achondroplasia, the continuous overactivation of the receptor signaling pathway must be counterbalanced 24 hours a day, 7 days a week.

CNP and its receptor NPR-B are well established as positive regulator of growth. CNP binds to its receptor in the growth plate, and counterbalance the signaling pathway of the FGFR3. Increased CNP levels are closely related to linear growth in healthy children at all ages. In achondroplasia, CNP counterbalances the constant overactive signaling pathway caused by receptor mutation. Therefore, continuous exposure to CNP at effective levels should result in normalization of the balance between the activity of the [FGFR3] and the CNP pathways, a balance that is essential for normal bone growth.

The biology of CNP has been known for many years, but the use of CNP as a pharmaceutical product has been limited by shortcomings of the native CNP peptide. These include firstly, a short duration of action. Natives CNP has a half-life of only 2 to 3 minutes in humans, making it impractical to maintain constant drug exposure from one administration to the next. Secondly, degradation of the native CNP in the subcutaneous tissue and blood compartment by neutral endopeptidases requires IV administration in humans to maintain an effective CNP level. Lastly, high systemic concentration of CNP causes vasodilation, which can trigger adverse cardiovascular effects. Therefore development -- developing a safe and effective CNP therapy is difficult, but a challenge that our TransCon technology is uniquely designed to overcome.

Today we are reporting top line clinical data from our TransCon CNP program. Let me review these finding. First, we have demonstrated in the clinic that a single dose of TransCon CNP provides continuous CNP exposure, all the entire week with a half-life of around 90 hours, an improvement of around 2,000x the half-life of native CNP. The continuous release of CNP from TransCon CNP also avoids high peak levels that trigger adverse cardiovascular effects. TransCon CNP PK profile also support a once weekly administration.

The PK profiles of different doses of TransCon CNP show that it has dose-related increase in CNP exposure and low intersubject variability. These data suggests the ability to titrate TransCon CNP to the target CNP levels 24/7. At the target CNP levels, we believe we can balance the CNP FGFR3 pathways and normalize growth in achondroplasia and other diseases that CNP mainly may treat.

Turning to safety findings. Our results in healthy adult subjects who received single injection across 5 different dose cohorts of TransCon CNP show no impact on mean resting blood pressure and heart rate compared to pre-dose levels, even at the highest tested dose of 150 micrograms per kilo. These findings are consistent with our preclinical studies and publications with continuous IV infusion of native CNP in healthy subjects.

Finally, our preliminary safety data suggests an attractive safety profile with no severe or serious drug-related adverse events and well-tolerated injection site reactions. In fact, orthostatic changes appear unrelated to the study drug and consistent between placebo and treated cohorts. There is currently no FDA approved medical treatment for achondroplasia. Our goal is to develop TransCon CNP as a new therapeutic option that has a significant impact on patient's life, not only affecting height but potentially addressing the many comorbidities associated with this disease. TransCon CNP has the potential to deliver a continuous exposure of CNP at therapeutic levels for 24 hours a day, 7 days a week without adverse cardiovascular effects. Most importantly, it provides patients with achondroplasia and other FGRF receptor-related diseases the potential for an effective and safe therapeutic option.

Today, daily growth hormone therapy is the cornerstone treatment for many growth disorders, including growth hormone deficiency, idiopathic short stature, Turner syndrome and others. With today's data, we believe Ascendis Pharma has the potential to bring both a once weekly growth hormone and once weekly CNP therapy to patient. Given the promise of these 2 product opportunities, Ascendis is in a unique position to have the potential to treat a broad spectrum of growth disorders. Some disorders may be optimally treated with TransCon Growth Hormone, and others with TransCon CNP. Indeed some growth disorders may potentially be treated optimally with a combination of both TransCon Growth Hormone and TransCon CNP. And we are intrigued to explore this opportunity and position Ascendis on the frontier of growth biology. Today's data is an important step forward for our TransCon portfolio. Now I turn it over to Jonathan for an update on the clinical programs.

Thanks, Jan. I am pleased to provide an update today on recent pipeline developments, including additional details on our TransCon CNP program. First, I will share some highlights for our other 2 clinical candidates, TransCon Growth Hormone and TransCon PTH. We remain on track to report top line results for our Phase III heiGHt Trial in the first quarter of 2019. As a reminder, heiGHt is a randomized, open label, active control trial comparing once weekly TransCon Growth Hormone to daily Genotropin in treatment naïve pediatric subjects with growth hormone deficiency. The primary endpoint is annualized height velocity at 52 weeks. A non-inferiority analysis will compare both treatment groups. We enrolled 161 subjects ranging in age from 3 to 12. We believe the strong statistical power of heiGHt bodes well for the potential of TransCon Growth Hormone.

We also recently passed our third data safety and monitoring board review for heiGHt, during which independent experts evaluated the safety data and recommended the trial continue as planned. We are pleased with the safety profile for TransCon Growth Hormone as our review of aggregate data from heiGHt continue to be consistent with that of published literature and experience with daily growth hormone therapies.

Our second clinical trial for TransCon Growth Hormone, the fliGHt or SWITCH trial, also completed enrollment at the end of the third quarter. A total of 146 subjects were enrolled, which means we now have more than 300 pediatric subjects enrolled in our Phase III clinical program. The combined safety data will form an important component of our filing package and achieves the safety database as agreed with regulatory authorities in Europe and the U.S.

To review, the fliGHt Trial is evaluating safety in subjects who switched from daily growth hormone therapy to weekly TransCon Growth Hormone, with a follow-up of 6 months. The results of this trial will not only strengthen the safety experience for TransCon Growth Hormone, but are also expected to guide physicians on switching patients from daily to weekly therapy. Importantly, fliGHt includes some who are below 3 years of age. This will provide important information on utilization of TransCon Growth Hormone in subjects younger than those enrolled in the heiGHt Trial.

Finally, enrollment continues in the third component of our Phase III program, the enliGHten Trial, an open label long-term extension that include subjects who participated in either the heiGHt or fliGHt Trials. To date, about 165 subjects have been enrolled as subjects complete the heiGHt and fliGHt Trials. While we proceed with our clinical programs, our underlying focus remains on patients.

We believe a once weekly growth hormone therapy could overcome a key challenge that hinders children with growth hormone deficiency, the continued struggle of adherence with daily therapies. Missed doses not only impact height but can also adversely affect bone, muscle, heart and brain development. With the potential to provide the same efficacy, safety and tolerability of daily growth hormone, TransCon Growth Hormone is designed to overcome this barrier, and have a positive impact on patients' lives.

Turning now to our second pipeline candidate, TransCon PTH, we are making good progress preparing to initiate a randomized, placebo-controlled Phase II trial in the first quarter of 2019. As a reminder, TransCon PTH is a long acting prodrug of parathyroid hormone or PTH. It is in development to treat hypoparathyroidism, a rare endocrine disorder characterized by insufficient levels of PTH, resulting in low calcium and elevated phosphate levels in the blood. Maintaining continuous and sustained levels of PTH in the physiological range has been shown to not only raise serum calcium levels but also normalize the processes related to bone turnover and kidney function.

We expect a Phase II trial to enroll approximately 40 subjects in North America and Europe. The primary endpoint will be a composite endpoint representing control of serum and urinary calcium levels as well as reduction in calcium and vitamin D requirements. In this trial, TransCon PTH will be administered via an injection pen. As mentioned previously, the trial will explore a titration schedule designed to evaluate the ability to completely remove standard of care with activated vitamin D and calcium supplementation. The trial duration will be 4 weeks, after which subjects may enter a long-term extension trial.

Finally, let me add some comments on our third pipeline candidate, TransCon CNP, including details related to the preliminary data presented today and shown in the deck posted on our website. The phase I trial was a double-blind, randomized, placebo-controlled trial, evaluating the safety, tolerability and pharmacokinetics of TransCon CNP in healthy adult subjects. In this trial, a total of 45 subjects were enrolled. The trial tested 5 doses sequentially, 3, 10, 25, 75 and 150 micrograms per kilogram. Up to 10 subjects were randomized to receive TransCon CNP or placebo in a 4 to 1 ratio. After each dose level was completed, a DSMB was convened to review the blinded data and approve escalation to the next higher dose. The data were unblinded after each assessment.

As Jan described, the preliminary data from this trial support our moving ahead with plans to file a U.S. IND in mid-2019, and initiate a Phase II trial of TransCon CNP in subjects with achondroplasia soon thereafter. They also support our desired profile for TransCon CNP. In addition, we plan to initiate the [Achieve] trial, our natural history study in achondroplasia by the end of this year. We believe the Achieve trial will provide important observational insights into the experience of children living with achondroplasia, further informing our clinical program going forward.

We are all acutely aware of the need for a safe and effective therapeutic option for achondroplasia. It is the most common form of dwarfism occurring in about 1 in 10,000 to 30,000 newborns, or approximately 250,000 worldwide. Current treatments in development may increase height, but for patients the associated comorbidities are much more devastating. These include spinal stenosis, narrowing of the spinal canal that can compress the upper part of the spinal cord; hydrocephalus, a buildup of fluid in the brain; and sleep apnea, among many others. With the potential of TransCon CNP to deliver continuous levels of CNP over 1 week, our hope is to develop a treatment option that improves many aspects of patients' lives well beyond just height.

All 3 of our pipeline programs have now been clinically validated, and we are exploring opportunities to strengthen our global presence and bring our innovative therapies to patients worldwide. Our VISEN partnership enables this for all 3 of our clinical programs in China. And in parallel, we continue to pursue additional opportunities in other parts of Asia with our other programs.

Throughout the year, we have made great strides with our 3 potential therapies for rare endocrine diseases. Looking ahead to 2019, we are enthusiastic about reporting pivotal data for our TransCon Growth Hormone program and ramping up clinical activities for our other 2 programs in hypoparathyroidism and achondroplasia. Our pipeline now includes 3 endocrinology programs with strong target product profiles, all 3 supported by clinical data.

In closing, I would like to thank our investigators and patient communities for their contributions in supporting our efforts to develop new and differentiated therapies to treat rare endocrine diseases. Now Scott will provide a financial update.

Thank you, Jonathan. Turning to our financial results for the 3 months ended September 30, 2018, let me review some highlights. For the third quarter, we reported a net loss of EUR 34 million or EUR 0.81 per basic and diluted share compared to a net loss of EUR 33.9 million or EUR 1.04 per basic and diluted share during the same period in 2017. The third quarter 2018 results reflect financial income of EUR 4.3 million due to foreign currency exchange rate fluctuations of our cash holdings.

Research and development costs for the third quarter were EUR 31.5 million compared to EUR 29.1 million during the same period in 2017. The overall higher costs were primarily attributable to an overall increase in R&D activities across all programs, including an increase in personnel costs due to a higher number of employees in R&D functions and general increases due to growth in headcount and activities, including an increase in facility, IT and patent costs allocated to R&D.

For TransCon Growth Hormone, external development costs were lower due to lower costs associated with manufacturing TransCon Growth Hormone for use in clinical trials, partially offset by an increase in costs related to the continued execution and expansion of our Phase III clinical program, and the ongoing development of the auto-injector as well as the preparation and manufacturing of TransCon Growth Hormone validation batches.

For TransCon PTH, higher external development costs were driven by costs related to phase II enabling activities, including manufacturing of TransCon PTH and device development, partially offset by lower preclinical costs and lower clinical trial costs due to completion of our Phase I trial. And for TransCon CNP, external development costs were comparable to the same period in 2017, reflecting higher costs associated with execution of the Phase I trial and ongoing phase II enabling activities, offset by lower preclinical costs.

General and administrative expenses for the third quarter of 2018 were EUR 6.8 million compared to EUR 2.8 million during the third quarter of 2017. These higher costs primarily reflect an increase in administrative personnel, including increased site costs as well as the initial costs of building out a commercial organization. We ended the third quarter with cash and cash equivalents of EUR 310.3 million and 42,032,522 ordinary shares outstanding.

We expect costs to continue to increase as we advance our internal pipeline programs and further invest in the TransCon technology. Costs are expected to include: for TransCon Growth Hormone, costs associated with our Phase III program, including manufacturing of clinical supply and validation batches, as well as continued development and manufacturing of the auto-injector used for administration. For TransCon PTH, ongoing IND-enabling activities, including nonclinical talks, manufacturing of clinical supply and validation batches, regulatory and device development activities, as well as preparation for and execution of our Phase II clinical trial. For TransCon CNP, costs associated with initiation of the Achieve natural history trial and activities related to Phase II, including nonclinical talks on manufacturing; further development of commercial capabilities and related activities; and finally, outside of our rare endocrine diseases product candidates, costs associated with further developing the TransCon technology, including potentially entering into new therapeutic areas.

We plan to continue to create long-term sustainable growth as we apply our innovative TransCon technology and product development algorithm in other therapeutic areas, and expand on a global basis. To that end, subsequent to the completion of the third quarter, we announced the formation of VISEN Pharmaceuticals with an investor syndicate led by Vivo Capital to develop, manufacture and commercialize our endocrinology rare disease therapies in Greater China. With VISEN, Ascendis found a partner with a great management team dedicated to accelerating development of our rare endocrine disease product candidates in the world's second largest pharmaceutical market.

Our equity ownership will be carried on the balance sheet under the equity method of accounting, adjusted for our share of the profit or loss of VISEN. Development of the rare endocrine disease product candidates will be governed by agreements including a research and technical development plan. VISEN has agreed to reimburse Ascendis for services delivered under the plan. Ascendis will also provide product supply to VISEN for use in conducting clinical trials in Greater China pursuant to separate clinical supply agreements for which VISEN will also reimburse Ascendis. Operator, we are now ready to take questions.

(Operator Instructions) And our first question will come from the line of Michelle Gilson with Canaccord Genuity.

I was just wondering, can you talk a little bit about the path forward for TransCon CNP? And what is the age range of patients that you plan to enroll in your Phase II study? And then you talk a lot about correcting comorbidities. And can you talk a little bit about how young you think that patients may be treated in order to correct for those comorbidities? And then I have a follow-up as well.

Thanks a lot for the question. And it's going back to our vision about what we really want to achieve with TransCon CNP. Our hope with TransCon CNP is really not only addressing height, but really can address the comorbidity of this disease. And you're 100% right, to address these comorbidities, we strongly believe that we need to go down to basic newborn children. So we can ensure they get a balanced growth of bone, so they can develop them in a more normal manner, because sometime, you potentially first see the physical symptoms later on in life, but potential is already predetermined in the beginning of the early part of the development.

So therefore, we are not spending years on making heiGHt Trial. Our vision is to move as fast as possible through a staged process that we will discuss with the regulatory agencies, and ensure we can get the right pathway forward so we can get this treatment as fast as possible down to newborn children. This is basic, our overall vision for that. More concrete question, I'm quite sure Jonathan can follow up with.

Yes, I don't have a whole lot to add. I mean, we'll likely start because of our very clean safety profile in children as young as 2 and above, and then move quickly -- as quickly as we can after discussions with regulatory authorities to newborns. So our clear goal is to get to the newborn children. Those are the ones with the greatest need where the impact can be the greatest. So we look forward to those discussions with regulatory authorities based on our safety profile that we've developed in the Phase I study.

Okay. And then when you think about dose in that Phase II, when you're choosing a Phase II dose range or dose, are you looking at trends that you see in nature with CNP within the population or data from others in the space or what you're seeing in animals? And then are you thinking about it, about looking at it based on concentration or titrating that dose?

That is an excellent question, and what we have done, we have done an integrated analysis where we are integrating preclinical finding in models of achondroplasia and other related diseases. What we have seen of what CNP can promote in overgrowth in humans, and also the literature, all the data that is related to CNP and the propeptide of CNP in patients with achondroplasia. I can give you a little bit of flavor on this last integrated analysis. For example, when we look on continuous exposure on preclinical model, there is a clear effect on dose, and the effective dose is down for 2 to 15 picomole, so we're down in a range of very, very low dose of CNP if it's just being provided on a continuous manner.

If we go to overgrowth in humans -- there was a girl with overgrowth, meaning that you go up to 97% of the percentile, and this person only had twofold higher concentration than normal people of CNP. And when we go to achondroplasia children, there is a really nice correlation between height velocity and the propeptide of CNP and always what we are seeing with data is the propeptide of CNP is already correlating to the CNP. And what you see with the propeptide is that a 2- to 3-fold increase in this propeptide can promote or correlate up to growth up to 8, 10 centimeter in achondroplasia. So this is why we some ways know exactly what the dose and potential the dose need to be individualized to each single patient, what we believe a range between 4 to 30 picomole is where we expect and perhaps 30 is just too high. But this is the level where we exactly believe where we will be in our -- what we call our target therapeutic range.

And just to add, I think it's very unlikely there'll be a single target level that we want to achieve in all subjects. I think it's very likely there'll be a distribution of response. And as you suggested, it may well be that titration individually by patient is the way to go here. So we look forward to learning a whole lot in our Phase II study where we will explore different doses and begin to correlate the growth that we see and other beneficial effects versus the target levels that we see in their blood.

And our next question will come from the line of Jim Birchenough with Wells Fargo.

Just a question on each program. So for TransCon Growth Hormone, the patients that have gone into open-label extension, what proportion of available patients does that represent? On the PTH program, I'm interested in if you've got more detail on what defines a responder. It seems like you're contemplating serum calcium, urine calcium, use of vitamin D in calcium. Just understanding more explicitly, what a responder might be. And then finally on CNP, do you think the natural history study could provide a control arm ultimately for registration of the product, and when do you think you'll get better visibility from FDA on what an approvable profile would represent?

Okay, thanks, Jim for all the questions. Starting with Growth Hormone. As I said, we have a 165 subjects in the enliGHten Trial. So that's over 1/2 of all the subjects are now already in enliGHten. So we're really thrilled with the execution of the trial. It's moving along as expected, and we're just accumulating more and more data every week. In terms of PTH, our primary endpoint will be a composite endpoint, requiring normalization of serum calcium; importantly, normalization of urinary calcium; and a reduction in calcium and vitamin D, which may be quite extensive in some subjects. So in order to achieve the primary endpoint, you need to achieve all 3 components of the composite. And that will be in both our Phase II and our subsequent Phase III study.

In terms of CNP, the natural history study will be beneficial in a lot of ways. It will form a control group. There's also published literature in norms that can represent a control group. It's a little premature to talk about the actual Phase II and Phase III study designs. We've not finalized those yet. But certainly, the natural history study will form an important component to the analysis of those studies.

And Jonathan, just to follow up on the question on TransCon Growth Hormone. Just on the 165 patients that have gone into enliGHten, what proportion of eligible patients does that represent? It sounds like it represents 50% of total, but patients may not yet be eligible to go in to the open-label extension. So what proportion of eligible patients does that represent? And what reasons are you seeing for patients not going into open-label extension if there are many?

Sure. So that represents the vast majority of patients who are capable. So there were literally 1, maybe 2 who, for logistical reasons, chose not to enter enliGHten, but they were not due to any adverse experience. One patient moved from 1 site away from the site, for example. So the vast majority of patients have very willingly joined the enliGHten Trial.

(Operator Instructions) And our next question will Jessica Fye with JPMorgan.

I wanted to follow-up on one of the earlier questions. I'm curious as you think about discussing Phase II with the FDA for TransCon CNP, what you want to measure and what you might kind of ask the FDA for feedback on in terms of what you measure in that study, I guess, outside of just growth?

I think this is really a great question, and this is actually where we're spending a lot of thinking about what is the optimal end point that really are reflecting comorbidities. And we also need to be practical. It needs to be something that we can measure pretty fast. We don't want to wait 3, 4, 5 years. So we basically have generated and integrated a list of opportunities. We are evaluating all this list of opportunities to concur with the key opinion leaders, getting a lot of feedback with them. We also will discuss that with the regulatory agencies, but the obvious one from the list is, some way where we really can address something that are extremely meaningful for the patient. It can be something like severe sleep apnea. It can be a way to look on spinal stenosis. It can be other element. This is thing we're thinking about.

Sure, we will also measure height, because there's also some way to test the efficacy of the compound. But our -- what we -- when we saw this results, there was basically the best we ever had hoped for. And when we saw that, we really for the first time got a strong belief that we have an opportunity to provide a highly effective treatment. And we know from preclinical models, we can basically reverse the phenotypes and I also think that is what we want to achieve.

Okay. And I guess I'm just kind of asking because if you're-- if you think titration to maybe a given free CNP level may be how the product is used, I'm curious what you might measure to establish an association that different levels have different effects on whatever those metrics are.

You are 100% right. This is what we call the feasibility of conducting the trial, and out from that we are addressing a lot of aspect and it could be specific biomarkers that's reflecting growth velocity or effect on a growth plate. It could also be different kind of imaging system where we're looking about how can we see the development of the growth plate. So that is what we are integrating into our decision how really to bring forward this product as fast as possible and really address some of the morbidities.

Okay. And I'm trying to re-ask my question from last quarter. Can you just provide the latest status of where you stand on manufacturing for TransCon GH and those validation batches?

It's going forward as we have hoped according to our plans. No deviation, no change. So we are executing as we had planned for, and every month we're executing on our plan, are getting more and more happy.

And our next question comes will the line of Liana Moussatos with Wedbush Securities.

Will VISEN Pharma have the same pipeline as Ascendis? What is the cash runway from the EUR 310 million? And did the third DSMB meeting have a futility analysis?

So I will take first part of the first question. No, VISEN Pharmaceutical will not have the same pipeline as Ascendis Pharma. They have -- we are providing to VISEN Pharmaceuticals and 3 defined product opportunities in the area of TransCon Growth Hormone, TransCon PTH and TransCon CNP, and we have provided them an option for and negotiation on looking on other endocrinology product we potential will develop. So there is no overlap between the 2 pipeline. Scott will take the second part of that question and then Jonathan will take the last one.

So we had about EUR 310 million as of the quarter end. As you know, we don't give cash burn guidance, but if you proforma our cash from the beginning of the year, we had about 300 -- a little over EUR 390 million, so if you do the math, that's EUR 80 million or so for the 9 months. Jonathan?

There is no futility analysis in the DSMB meetings.

Right. But you said, Scott, that costs are going to increase from the EUR 80 million over the 9 months, so that's a base and what are you thinking over the next 12 months increase over that base?

I mean, look, we haven't changed our policy. We still don't give official forward looking guidance. But you're right, we would expect costs to increase in those different categories, overall, but specifically because of those categories. But we have -- I mean, we have plenty of cash going forward if that's the question. I mean, there's no liquidity concerns.

And our next question will come from the line of Adam Walsh with Stifel.

I got a couple of quick ones here. The first one's for Jonathan. Obviously the safety data looks pretty clean here with no serious AEs. I'm just curious to check a safety box here. What were the most commonly observed AEs in the CNP study, TransCon CNP? And then a second question in terms of advancing the CNP program next year, can you give us some guess at what the timing could be in terms of trial launch and what the expected duration of such trial would be? Just trying to figure out when we might see that data point from the CNP program.

So in terms of AE, there was really nothing remarkable. I mean, it's headaches. It's just the usual AEs that you see in a clinical trial: back pain, that sort of thing. When you look for orthostatic blood pressure changes, you can see some of that even in placebo, pre-dose levels, post-dose. So just the normal scattering of AEs that you see in trials. The CNP study we would initiate it mid next year. So that will take many, many months. So we don't even have our timelines for recruitment established yet. So it certainly would not be in 2019.

So Adam, I think it's a great question. I think it's a question where we will come with the key milestones when we feel confident that we really have been in a sufficient high-level discussion with regulatory agents that we feel comfort with the timeline. So when we give you a timeline, this is timeline we basically believe we can reach and keep.

And our next question will come from the line of Tiago Fauth with Crédit Suisse.

So for the fliGHt Trial, I understand that, that's mostly a safety study, but should we be looking for anything on the secondaries? And can you perhaps recap the work that you're doing to introduce the device into the extension study for GH?

You're really nailing it down to a great point because I actually think when I think on heiGHt, this is the most important for regulatory approval, but the fliGHt Trial is really the most interesting trial related to the commercial opportunity we have with our TransCon Growth Hormone. Because we basically will know what is the prescription of a daily growth hormone before they had -- meaning is that we get the reality check what -- do you really prescribe of daily growth hormone before you go out to a TransCon Growth Hormone that will provide much, much higher adherence? And this is why it's so -- really interesting to get this data, analyze them and we will -- can provide you with guidance about what is really the ratio that will be when you have, for example, 0.30 milligram on average of a daily growth hormone? Do you need to go down to 0.24 or 0.27 or what is the ratio you need to go -- or 0.20 for having the amount of our TransCon Growth Hormone. Besides that, Jonathan is thrilled to get all the safety data. He is because that is what he has committed himself into in both Europe and U.S. and this is why he's so -- want to get it done so he can start closing his databases.

You're also probably wondering height and efficacy data, and we will measure height, of course, in every patient. And I only caution you that there's patients or subjects who are on daily growth hormone therapies for varying lengths of time: some for a few months, some for a year, some for 2 years. So when you do those analyses, it will be confounded in our assessment. So we will, of course, look at it. We will do our best to ferret out real height data. Jan already mentioned the varying potency of -- on the effect of IGF-1 when we switched to 0.24 mgs/kg per week. And in terms of the device, we're in the second quarter of 2019 beginning to roll the device into our extension program. So patients won't come in specifically for that. They're on a schedule of every 3 months. So the next visit that they come in, they will get the device. So over the course of 2019, we'll be rolling out the device beginning in the second quarter.

And our next question will come from the line of Joseph Schwartz with Leerink Partners.

So regarding the CNP data first, I was just wondering if you captured any pharmacodynamic biomarkers which you could present beyond this preliminary data: things like collagen X or alkaline phosphatase or anything else within all the complex bone signaling pathways?

So a great question. What we're using here is adult and typical adult we're using would have closed growth plates. Yes, so therefore in measuring some of the things that you basically can measure in a pediatric population where the child is still growing is not possible in an adult population. And we had a lot of funny discussion about cyclic GMP and Jonathan came back to me and say Jan, if we see cyclic GMP, I would be worried, because then I will actually believe we see vasodilation. And definitely, this is very, very clear. The cyclic GMP in our view the best predictor of vasodilation and cardiovascular risk because the cyclic GMP not likely is coming from the growth plate, but highly, highly likely coming from the cardiovascular system where you actually are introducing in vasodilation effect. So therefore, when you see that with other CNP product you'll see cyclic GMP, I don't think you can ever reflect that into any kind of effect related to its effect on growth rate but it's mainly effect on how you actually see cardiovascular risk effects.

Right, okay, that makes sense. And then regarding TransCon PTH, NATPARA was associated, or is associated, but in its pivotal trials, it was associated with hypo and hypercalcemia. I was wondering if, based on your agreement with the FDA to do this dose ranging study how you're ensuring that patients will be titrated accordingly?

Well, we -- it's pretty straightforward with a infusion like profile like we see. Of course, we're going to measure serum calcium levels very frequently in these subjects. So we'll be monitoring them very closely. We don't think we will see the hypo or hypercalcemia that NATPARA saw because we think that's very clearly related to the pharmacokinetics of NATPARA where you have very high Cmax and then a very low Ctrough over the course of a day. Instead we'll have a steady level over the course of the day, which should make it much easier to monitor the calcium levels and we should see much fewer excursions of serum calcium. So we'll essentially just monitor it, and I'm sure FDA will be very comfortable with that approach.

(Operator Instructions) And our next question will come from the line of Jim Birchenough with Wells Fargo Securities.

We get a lot of question on how we -- how to think about the scenarios in the heiGHt trial. So maybe from a commercial planning perspective, you can give us your thoughts on the different outcomes, and whether it's just success or failure in noninferiority or whether you think numerical superiority's important for growth velocity? And then I've got a follow-up.

Jim, that is a great question. But what we did, we tried to derisk everything on a Phase II stage. That was where we had the same setup with inclusion/exclusion criteria as we now have in Phase III. This is where we use the same compared to active arm. This is where we have the same clinical end point. So what we did and what we hopefully will see here in our Phase III study that we can repeat what we did in our Phase II study because that is basic what we are trying to attempt to happen with our Phase III study. Main difference, this is 1 single dose and it's a 12 month instead of 6 months but the fundamentals are not changed.

We are providing the same mode of action as daily growth hormone and [that is] growth hormone in the same framework. Being proven to give optimal efficacy out from daily growth hormone. And that is what we're doing. So I think that the question is not so much a speculation. I think the best thing you can do, analyze our Phase II data and see how robust they are and how well we can predict. And this is why we're happy to have all this data they have provided us the best biostat analysis to really give us comfort in the outcome on our heiGHt Trial.

That's helpful, Jan. And just on CNP, it seems like spinal stenosis contributes a fair amount of morbidity to these patients. And so do you have a sense from the published literature on how early you'd have to treat to have some hope at having an effect on spinal stenosis or is that still to be determined from your own natural history work?

I think it's a great, great, great question. I think I would take from where I got confident. Jonathan will go out and can explain when it's closer because it's actually pretty well known. Where I got confident is for -- on our preclinical model where we can really prevent the premature fusion of the single doses. Meaning is that if we give TransCon CNP after birth, then we have really the impact we want to have on the four-arm. And this is where I actually believe that it give me a confident that I really hope that we have an opportunity to really, really address one of the severe morbidities as spinal stenosis.

So Jim, I think it's pretty clear that the spinal stenosis begins to occur very, very early, even beginning near birth. And the way you know that, though, is heavily dependent on the treatment patterns at the sites. So there're some centers that routinely measure MRI in everybody. And of course, when you do that, you see a lot of spinal stenosis that would otherwise go unnoticed. Even as high as 47% of children in the first 2 years if you do routine MRIs. Other sites don't do MRIs other than for clinical reasons, and they will see a little bit less. But I think it's really clear that you start to see changes soon after birth, which is why we are so eager to get down to the neonates as soon as we can to make the biggest difference.

Exactly.

There are no further questions in queue at this time. Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program, and we may all disconnect. Everybody, have a wonderful day.