Ascendis Pharma A/S (ASND) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Ascendis Pharma Full Year 2022 Financial Results Conference Call. (Operator Instructions)

I would like to turn the call over to now for your speaker for today. Tim Lee, Senior Director of Investor Relations. Please go ahead. The floor is yours.

Thank you, operator, and thank you, everyone, for joining our full year 2022 financial results conference call. I'm Tim Lee, Senior Director of Investor Relations of Ascendis Pharma. Joining me on the call today is Jan Mikkelsen, President and Chief Executive Officer; Scott Smith, Executive Vice President and Chief Financial Officer; Dr. Stina Singel, Executive Vice President, Head of Clinical Development Oncology; and Joe Kelly, Senior Vice President, Head of U.S. Commercial, Endocrinology. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act.

Examples of such statements may include, but are not limited to our U.S. commercialization and continued development of SKYTROFA for the U.S. market, the commercialization of TransCon hGH for the EU market, statements regarding the expected timing of approval and launch of TransCon PTH in the U.S. market this year, statements regarding the expected timing of approval of TransCon PTH in Europe, statements regarding the potential size of the TransCon the market size for TransCon PTH, 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, including the timing of clinical results, statements regarding our pipeline product candidates, statements regarding our planned regulatory filings, our expansion into new therapeutic areas and statements regarding the ability to create a sustainable leading global biopharma company.

These statements are based on information that is available to us today. Actual results and events could differ materially from those in the forward-looking statements, and we may not be able to achieve our goals, carry out our plans, our intentions, our 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 actual results to differ materially, please see our forward-looking statements section in today's press release and the Risk Factors section of our most annual report on Form 20-F, which is being filed today, February 16, 2023.

TransCon Human Growth Hormone or TransCon hGH, is approved by the FDA in the U.S. under the brand name SKYTROFA for the treatment of pediatric patients 1 year or older weighing at least 11.5 kilograms and have growth failure due to inadequate secretion of endogenous growth hormone. In addition, the European Commission has granted marketing authorization for SKYTROFA to Ascendis Pharma developed under the name TransCon hGH, is a once-weekly subcutaneous injection for the treatment of children and adolescents age 3 to 18 for growth failure due to insufficient secretion of endogenous growth hormone. In general, we refer to this product as TransCon Growth Hormone, and unless we're referring to the product in the context of particular jurisdictions such as the United States or the European Union.

Otherwise, please note that our product candidates are investigational and are not approved for commercial use. As investigational products, the safety and effectiveness of their product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our product candidates shall be viewed as promotional.

On the call today, we'll discuss our full year 2022 financial results will provide further business updates. Following some prepared remarks, we'll then open up the call for questions. I'll now turn the call over to Jan Mikkelsen, President and Chief Executive Officer. Jan?

Thank you, Thomas, too. As said this is built on the unique TransCon technology platform, which enables development of highly differentiated product candidates across multiple therapeutic areas. Combining with TransCon technology with our algorithm method product innovation has enabled us to create and develop product candidates with a higher likelihood of success than seen with conventional drug development. One of our key product selection criteria is to fulfill best-in-class potential on each of the 4 key pillars of drug development, safety, efficacy, tolerability and convenience. In addition, this product candidate must have the potential to achieve $1 billion or greater revenue in a single therapeutic indication.

With this approach and driven by our values of patients, science and passion, we have demonstrated our ability to continuously build out a robust pipeline while taking product candidates from concept through approval and launch. We -- with expected regulatory approvals of a new product or additional indication every 1 to 2 years. We are fulfilling our Vision 3x3 goal of building a sustainable, profitable, leading biopharma company and creating long-term value for all stakeholders. This past year, we have advanced our pipeline as planned. entering 2023 with an April 30 PDUFA date and expected U.S. launch of TransCon PTH for adult patients with hypoparathyroidism by the end of Q2, along with an expected European Commission decision during Q4 as well.

TransCon PTH is our second endocrinology rare disease product opportunity, representing a potential global opportunity greater than $5 billion. Turning to TransCon CNP. Last November, we reported 12 months data from our first -- from the first-ever randomized, double-blinded, placebo-controlled Phase II trial in children diagnosed with achondroplasia. These results give me confidence that this third endocrinology rare disease product candidate may have its first approval by 2025 as target in our Vision 3x3. Another component of VISION 3x3 is label and geographic expansion. We continue to build the value of our existing programs through additional clinical studies for label expansion and global commercial reach. Starting with our newly expanded European organization, which is preparing for launch of SKYTROFA in Germany this year, and if approved, TransCon PTH next year.

With this great momentum across our pipeline, I would like to review additional details from our major programs. Turning to Growth Hormone. During the fourth quarter of this year, we plan to report top line results from our global Phase III foresiGHt trial in adult growth hormone deficiency. Our potential second indication for TransCon Growth Hormone. Adult growth hormone deficiency is a serious endocrine their disease characteristic by abnormal body composition, dyslipidemia, insulin resistance and impaired quality of life. Analysis has shown these consequence of adult growth hormone deficiency results in mean annualized health care costs more than 4x that of a nongrowth hormone-deficient population. Because TransCon Growth Hormone is the only once-weekly growth hormone product, releasing unmodified Soma. We expect it to be the first adult growth hormone treatment to meet or exceed the safety, efficacy and tolerability of daily growth (inaudible).

Meanwhile, in the U.S., SKYTROFA is experienced that the commercial success it deserved because of its unique product strengths. As we preannounced during JPMorgan, fourth quarter 2022 U.S. SKYTROFA revenue growth to EUR 17.1 million, providing a strong fundamental growth in 2022 and after. With our progress towards label expansion and planned commercial loans in markets outside the U.S. We believe we can track -- we are on track to build SKYTROFA into the leading growth hormone product in value by increasing the total market size.

As we have predicted, we are seeing the consolidation of the data growth hormone market as other manufacturers begin to exit the U.S. market. Turning to TransCon PTH. Excitement continues to build among stakeholders around this potential treatment for adult patients with hypopara ahead of the upcoming PDUFA date of April 30. Our expanded teams are hired, trained and working to deepen physician and payer awareness of this serious health and quality of life issue that hypopara causes. We have already made more than 2,000 calls to physician related to disease awareness, and we are encouraged by their interest in learning more about the multi-organ impact of this disease and its negative effect on patient quality of life.

Our commercial team, medical affairs, feeling reimbursement and a manufacturing themes are ready to launch TransCon PTH in the U.S. market as soon as possible after approval. Importantly, we are launching TransCon PTH, our second endocrinology rare disease product with the same commercial infrastructure that has proven its success with SKYTROFA. Coming back to CNP. As we did with TransCon Growth Hormone and TransCon PTH, we ran a robust Phase II trial to confirm TransCon CNP target [proforall] 4 key pillars: safety, efficacy, tolerability and convenience and derisk it at the Phase II level.

This can only be done with a robust, randomized, placebo-controlled trial that will mimic that people will try. We saw clear success in the complex with TransCon CNP, demonstrating to PAG over placebo at the 12-month primary endpoint in children 2 to 10. In addition, we saw clear dose response. All 57 patients who started this trial remain in the open-label extension today. To extend and confirm this result, including positive treatment effect observed on achondroplasia related comorbidities, we are running our Phase IIb ApproaCH trial. As investigators are aware of the Phase II results, we experienced very high interims in our ApproaCH trial. And we expect to complete target enrollment of around 80 patients in the next quarter.

During our upcoming end of Phase II meeting with FDA, we expect to collaborate on how to best achieve a broad treatment labeling rather than a linear growth plan alone. Shifting to oncology. We are progressing with the developing of our 2 novel immuno-oncology programs, TransCon TLR 7/8 Agonist and TransCon IL-2 beta/gamma. With these 2 clinical programs, we are positioned this year to start evaluation of clinical efficacy in 7 specific tumor types, 9 different indications with 4 different combination therapies included by combining our 2 TransCon product candidate with its oil.

Clinical proof of concept Phase II top line results are expected starting in 2024. In addition, this year, we will initiate a randomized Phase II tried believe to 1 using TransCon IL-2 beta/gamma and TLR7 agonist combination therapy in head and lip cancer. As we successfully demonstrated with our endocrinology programs, we are building a solid Phase II clinical proof of concept for our oncology products in multiple tumor types in the next 1 or 2 years.

As you can see, we have and will always focus on receiving best-in-class product profile to benefit patients on the 4 key pillars of safety, efficacy, tolerability and convenience, areas in which we will not compromise. This development approach, including extremely robust clinical trial design has positioned Ascendis to potentially launch a new product or indication every 1 to 2 years, building sustainability, long-term value for all stakeholders. Each successful clinical trial further confirms the power of the [TransCon] technology platform and our product innovation algorithmic and increase our confidence and likelihood of success for future product candidates.

With an expanded pipeline and commercial successes as Ascendis remains on track to meet or exceed our goals outlined in our Vision 3x3. I will now turn the call over to Scott for a financial review before we open up for questions.

To follow on Jan's comments, we are excited to see the realization of Vision 3x3 with a continued flow of new products and additional indications every 1 to 2 years. For example, as Jan noted, we expect to launch TransCon PTH in the U.S. and SKYTROFA in Germany this year, followed by the first European country launch of TransCon PTH in early 2024, with results for SKYTROFA in adult growth hormone deficiency and TransCon CNP and achondroplasia on the horizon, we expect this cadence of approvals and launches to continue beyond 2024.

In this way, we are creating sustainable long-term value for Ascendis and our stakeholders through our proven R&D development capabilities. I will quickly touch on a few points. For further details on our full year 2022 financial results, please refer to our Form 20-F, which is being filed today. As we previously announced in early January, SKYTROFA U.S. revenue for the fourth quarter of 2022 grew to EUR 17.1 million. These results exceeded the algorithm that Jan laid out last May, which projected EUR 16 million.

For the full year 2022, total revenue was EUR 51.2 million, including SKYTROFA revenue of EUR 35.7 million as well as license, clinical supply and services provided to third parties, primarily VISEN Pharmaceuticals. With profitable growth of SKYTROFA, our overall operating loss grew about 2% sequentially to EUR 147.4 million for the fourth quarter from EUR 144.5 million in the third quarter of 2022. Finally, we ended 2022 with cash, cash equivalents and marketable securities totaling EUR 743 million.

Looking forward, as Jan described at the JPMorgan conference, annualizing fourth quarter SKYTROFA revenue of EUR 17.1 million provides a foundation for 2023. In addition, we expect to add at least as many reimbursed patients this year as we did in 2022, which would provide even greater growth. As a result, at this time, we believe we are on track to exceed the current Ascendis compiled consensus estimate for 2023 SKYTROFA revenue of EUR 96 million. Switching to TransCon PTH, our PDUFA date is April 30 this year. If approved, we expect to begin shipping product by the end of the second quarter.

A quick reminder on selected key 2023 corporate milestones. For TransCon Growth Hormone, as mentioned, we plan to launch SKYTROFA in Europe, starting with Germany in Q3, and we also expect to report top line data from the global Phase III foresiGHt trial in adult growth hormone deficiency, our second indication in Q4. TransCon PTH, we are planning for FDA approval by the PDUFA date of April 30 and launch in the U.S. by the end of Q2, and we expect the European Commission decision in Q4. For TransCon CNP, we are on track to complete enrollment of the Phase IIb ApproaCH trial in achondroplasia in Q2. Within our oncology therapeutic area, we expect to report top line results and declare the recommended Phase II dose for monotherapy dose escalation cohorts for TransCon IL-2 beta gamma later this quarter and to declare the recommended Phase II dose from TransCon IL-2 beta gamma combo therapy with checkpoint inhibitor in Q3.

Finally, as you see with our reporting today, continued optimization of finance systems and processes have enabled us to accelerate our year-end reporting. With that, operator, we are now ready to take questions.

Our first question for today will be coming from Fye of JPMorgan.

And next for the comments on how to think about SKYTROFA sales this year. Can you comment on your comfort level with consensus estimates for TransCon PTH this year? And actually, while we're at it, where is that consensus figure based on your latest compilation of the analyst numbers?

Jess, are you reflecting into SKYTROFA or TransCon PTH?

For PTH.

I actually have not looked under consensus number for PTH. So, I don't think we have collected that information. So, I don't think we can really address that. We can mainly address the places where we feel confident to give an algorithm that can reflect our expectation as we have done from SKYTROFA.

Okay. I'm going to ask something else then. Can you tell us how many cumulative new patient prescriptions there were for SKYTROFA as of year-end? I think you were previously giving that quarter-by-quarter. And can you also tell us when we should look for the next update from the Phase II extension for TransCon CNP?

Jess, just go back to how we basically are looking on the forecasting related to the revenue of Gate in the U.S. in 2022. What we have seen in -- here in '22, that month by month, we have increased the number of new patients that got reimbursed, and we have continued to see this trend also in 2022. This is why it was important to look on the fourth quarter because we are also seeing, at the same time, we're seeing an usually really strong retention. When you start on SKYTROFA stay on SKYTROFA. So when we take the EUR 17.5 million and [Multivista] before Scott is calculating is about EUR 70 million. And we basically will expect an acceleration of the number of new patients because of a lot of good reasons, and I can come back to that, Jesse, if you want that. So we actually expect to see more patients per month of new reimbursed patients that we actually saw in '22.

We're feeling really, really, really confident that we will exceed the consensus number that is out on the street today related to SKYTROFA. The element that basic are providing our increase in number of monthly new reimbursed patient is that the physician is starting really to get the knowledge about the product strength of SKYTROFA, it's not something you experienced in 1 month. You need to see 6 months, 12 months growth data. And this is what we're starting to see. So we're really seeing how we really have a highly differentiated product compared to daily growth hormone.

The other point is that we see the consolidation of the daily growth hormone market that started for about 2 years ago, where we saw after our Phase II data that the consolidation of the daily growth hormone market is really kicking in now. So, there is a major, major switch away from some of the sixth daily growth hormone player, which all had the same product. So, this is why we feel we're very, very confident about how we really will grow SKYTROFA into the most valued product in the growth hormone market in the near future. Related to CNP, you had a question related to CNP. Just perhaps you can specify exactly what you wanted to know there.

Well, I think in the past, you talked about the height velocity for a proportion of patients that had been on out to a certain time point, and I think we're going to maybe update that when all of the patients got out to that time point. Is there kind of a plan to update that data? And when should we expect it?

Yes, we are planning to give you this data. We think it's extremely important to give you this data where we see the continuous effect of Ascendis Pharma's TransCon CNP because I'm still in this extremely struggling manner, and this is what we really have got a lot out of analyzing all the data for our accomplished trial to find out why they're staying 100% on this treatment. And we're starting to get a much, much better understanding of that. And this is why we will now are discussing the regulatory agencies how we can have other secondary end points that really are reflecting how we are addressing really the comorbidities and not just linear growth.

Linear growth is not really the biggest issue for this patient group, basically the comorbidity and other effect of disease. And this is where we believe TransCon CNP is a unique product because you have continuous exposure of the CNP molecule and therefore, changing things that is not only related to linear growth.

Our next question will be coming from Ahmad of Bank of America. (Operator Instructions)

As it relates to HPT, can you just give us an update if you haven't felt ready on how many patients you've enrolled in the early access program so far? And do you have a sense of how many patients will be enrolled in that program by the time of the PDUFA and then following with the launch?

I think that is an extreme -- we -- first of all, we are extremely pleased with how the program is progressing and our precatory interaction and also that we got the approval to start and ERP program, which basically can give the opportunity to get patients under the treatment before we get the expected approval. We are executing on that, really starting the entire system. And we will explain when we come to the approval process. What is the number of patients we will have in this trial and also how we continue with these patients.

Okay. Maybe just a follow-up then. Would you expect that to be an early source of patients to convert to commercial?

I actually think we are addressing a key element in the ERP program. We are addressing the patient group that already were experienced with a PTH treatment regime, a short-acting PTH treatment. It could be that part, it could be for to, it could be times or someone else, but that was exactly what we're addressing. The last population, where we basically [ecute] patients to our Phase II program and our Phase III program, they're coming from what we call patient that never really have been exposed to PTH treatment. So, I don't see that as really, really a differentiation between these 2 patient groups. I think both patient group have the same high unmet medical need that have the same benefit of the PTH treatment. So I don't see any kind of difference between these 2 groups related to the fast data in our programs.

Our next question will be coming from Tazeen Ahmad of Bank of America.

I think she just asked the question. So go to the next one.

The next question is coming from David Lebowitz.

As the PDUFA date is approaching, could you give us any insight into what the label might ultimately look like? I know that NATPARA was considered an adjunct, you seek to be going more as a hormone replacement and NATPARA has the presence of a black box for osteosarcoma, but you didn't really have an osteosarcoma experience. So put that black box be removed. Just be curious to hear your thoughts.

Thanks, David. I think when we look on the biology and the product design of TransCon PTH, we are providing a stable physiological level of PTH 24 hours, 7 days a week. We are not providing any hyper physiological concentration of PTH that can provide to the anabolic effect that in animal model have been associated with osteosarcoma, specific the rat model. And often that perspective is that -- and also why we got a waiver to make a carcinogenic trial or animal trial. We will not expect, and we have not seen any indication in our labeling discussion that we will be coming in the same, you can say, group of short-acting PTH that basically got the same class labeling because we are providing a complete different product profile than the short-acting PTH.

So, to our best noise today and in our discussions, we don't expect any REMS program, but we don't expect any black box. So that was your first question. And you're quite right. How we designed TransCon PTH was really to prove a product profile that was reflecting hormone replacement in state of in at Jon. There is why to be successful in the clinical trial, you need to stop 100% from activate active vitamin D and you also need only to take catch supplement that really are just reflecting a normal multivitamin from Costco. So, we are really addressing a complete different product file.

And our next question is coming from Li Watsek of Cantor.

I guess for TransCon PTH, just wondering if you can share some of the latest feedback that your sales team may be received from payers and physicians. And then maybe talk about your latest thoughts on how you might approach pricing and market access.

When I think about the patients, when I think about the physicians, the measures have not been different for the latest -- everyone recognize that hypopara is a serious disease, and everyone understands the benefit of replacing and missing hormone with the physiological level 24 hours, 7 days a week. How it both address short-term like quality of life, urinary calcium, but also a long-term risk. And what we're seeing is that the awareness of that is being building up, much, much more about the awareness of the disease.

And I believe this is where we come in with our indication, first, telling about our -- the awareness of the disease, which are really a big part of what is happening today with all our established infrastructure here in the U.S. And after an approval, we can go out and explain how we can benefit this kind of disease, both short term and long term. So, I really, very, really feeling that we are right. What we did with SKYTROFA is the guidance we do with always our product.

We develop best-in-class products, addressing real unmet medical need. And we take premier responsible pricing situation, where we believe if we really develop a product that really address a real unmet medical need with a real product, there is enough for both the patient, the physician, the society and the payer for us to share that cake because then everyone is winner, no one is losing. And this is where we want to be with each of our products. We need to have them so highly differentiated addressing a real unmet medical need, and everyone believes is a win for everyone. And we can see that with TransCon PTH.

Our next question is coming from Paul Choi of Goldman.

I want to ask, given that you're using the same infrastructure to market PTH in the U.S. that you're currently using for SKYTROFA. I guess, are there any learnings that you might share on the -- from the launch of SKYTROFA that you would think be applicable? Or what changes would you make, I guess, in terms of either your thoughts on approaching payer access and/or contracting compared to SKYTROFA? And then I have a pipeline question as a follow-up.

Okay. Let me start on that. We are utilizing the same infrastructure. Sure. We have dedicated sales force. We will have dedicated people for the 2 different products. But there's a huge difference to be the first product to grow other launch where you establish all the infrastructure, IT systems, all the different necessary teams that is necessary to really to launch a commercial product. We have derisked that now. We're coming from a state where we launch inform an already successful established commercial infrastructure built from Joe and the other people in Preston here in the U.S. So, what we're doing is that we basically are placing what I call TransCon PTH into an infrastructure that already has proven its capability with a product, I believe, really addressing a huge unmet medical need where there's no alternative treatment. I think this is a fundamental for a huge success.

Okay. And then as a follow-up, just in terms of the pipeline, do you plan to publish the baseline patient characteristics for the 80 children that are being enrolled in the ApproaCH trial. And then could you also specify in terms of your oncology program, the head and neck population that you're planning to pursue? Is it just HPV positive? Or is it post PD-1 and post [Herbatox]? If you could maybe add a little color on that, that would be great.

I think Stina will take number 2 or you can take one and I can take this -- let me take number one. It's a very, very interesting question because I do not know if the question where it really are addressing because I had to think we have published all the demographics from our patient population and demographic that have been into the ACcomplisH trial, the 57% that's still in it. So, I actually are somewhat a little bit puzzling with that question because all data is out. Then you can say, hey, why did not come in with the analyzed height velocity prescreening because a total era event for the clinical efficacy of it.

You cannot analyze height velocity that have been collected before they go into the trial because we have 40% of the titan 5, which you look and on place Chinas nearly built the normal analyzed height velocity. And the first 4 years, you have a heavily deceleration of analyzed height velocity. So, if you take an analyzed height velocity just collect it up to 12 months before they go into a trial, it's not reflecting any meaningful value that go in and compare to the analyzed height velocity you compare in this patient group because they start on the already 2.

This is why you do what is obvious in drug development. You're making a placebo group. This is why you have a placebo group. And I think that is the key element to do. Look at our dosing from 6 to 100 and then you can take 6 like merely also placebo group. And then you can take the 6 and placebo group, move them into the achondroplasia specific height [StandCap] matching. They are matching 100%. But compare this is my basic scientific nonsense and only are misleading and have not reflecting any kind of solid scientific value in interpreting the data. Stina?

In oncology, we are evaluating for proof-of-concept efficacy in 7 different tumor types. You're right, we do have one of our priority areas is head and neck cancer. -- we are evaluating in first or second-line metastatic head and neck cancer as a dose expansion a single arm in the IDE study, and those patients will be -- will have had no more than 1 line of chemotherapy containing regimen in the advanced metastatic setting. And the randomized Phase II study BELIEVE IT 201 study will be in the neoadjuvant setting. So, these are patients in a non-metastatic setting. Before they get surgery, they will get systemic treatment before surgery. And we're looking at pathologic response as our primary endpoint to look for evidence of proof-of-concept efficacy.

Our next question is coming from Derek Archila of Wells Fargo.

So just 2 really quick ones from us. Jan, I just wanted to confirm, I caught you saying that you were in labeling discussions for TransCon PTH. So, I just wanted to confirm that. And then also, I guess, when should we expect additional updates from accomplish? Is that something we should see again in the first half of this year or second half of this year?

When you go to an approval process, I think for me is suffer plan process, 4 months before an expected approval date this need d to happen 3 months before and expect approval this need to happen 2 months for that. And so, if anyone somewhere have been to an approval process. And you -- I think we have 10 weeks before the PDUFA date now. If you're not a start a label discussion, the risk of not getting approval is high. So therefore, I believe this is a rare eye tracking, how we are progressing to the approval process. Are we really on track of what everything needs to happen as the expected time. Is that not happening? I would be actually met world and for now what is going on. And so yes, we are in a label discussion because you should be that at least 3 months before an expected approval. And this is why I feel that I'm confident that I have not seen anything that not give me a belief that TransCon PTH is a product that is approved.

I believe, and I cannot really remember all our corporate milestones now. Sorry for that because that's still a bit too many of them. But I believe that is in Q4, we will give you an update again related to the 57 patients that will come out from the accompany tribes. So, it will be in the second half of this year.

The next question -- the next question is coming from Josh Schimmer of Evercore.

First on SKYTROFA, could you elaborate a little further on what you're seeing in terms of daily growth hormone options withdrawing from the market? I know there have been some reported shortages, but I didn't realize that reflected the outflow withdrawal. So, who -- have you seen this drug? And do you expect others to follow? And then how do you anticipate the impact of Novo Nordisk potentially launching a once-a-week growth hormone option as well in the market later this year?

Let me start first on the daily growth hormone because I actually believe that it's a textbook really and if I have taken an NBA potential, I have done that in my study and my final project. But it's really, really what I call a textbook example. Growth hormone -- or the daily growth hormone market was the first I got biosimilar, where senders and Teva entered there with their [bioequalnt] version on it. And there some had 6 player in this daily market segment, all of them providing exactly the same entity, the same treatment.

So, you can change it back and forward between the product dependent on rebates and other things like that, that was different in formulation. That was a little bit different in devices and other things like that. So, what we saw for about 3, 4 years when we came out with our Phase II data, we saw already that some of the big players or many started some way to reconsider how do we really play when that's coming and superior treatment into this segment and there will be -- which will be highly differentiated compared to what we call the daily market segment. At that time, we already saw 3 of the company's basic removing their safe force.

This is a step on to remove sales force. The second one is that you go to a next stage, you remove the hub, then you stop up manufacturing, which I think 3 or 4 of them have done it now. And then you basically are in a position where you are providing mainly patients that already are established on your product because you have no hub where you can change and take new patient in and you're providing them. What happened is that enough for the patient now that they look like Novo Nordisk went into a shortage of multiple product, multiple presentation of the growth hormone. And because that consolidation of the data growth hormone happened and really is in the final place.

I believe none of the other one could take over. So you have to see a shortage of growth hormone treatment in the U.S. And sure, I need to accept that the benefit of that is a great thing for us because it's very both accelerating at the same time where people really see the benefit, get the clinical experience, how we differentiate, be having patients for 1 year or something on treatment. So, we really, really see this benefit. And I think this is a great thing for us, and we are really hopeful we can help as many, many as patients to avoid that going into a shortage of the treatment effect.

Very helpful.

Your second question, just...

Actually, I was going to ask whether given your view of the differentiation of TransCon CNP, if you considered filing for breakthrough designation.

Yes. First of all, Josh, you also have the question reflecting about a potential the intern of Novo Nordisk long-acting product. When I look on the paradigm shift, I call it paradigm shift because it comes from the time where all the daily growth hormone were identical, the same treatment, the same mode of action. When you go over to the long-acting, all of them are providing complete different clinical profile. They are the only one that really match an improved version of the daily growth hormone, where you get all the benefit endocrine benefit, both related to changing not only linear growth in the pediatric segment but also the other associated into prime benefit like body compensation, metabolic profile, lipid muscle cognitive effect and everything that you see because we have the same unmodified TOMO2P molecule. So, this is why it's also important for us to look in our Phase III in adult growth hormone deficiency because there are 2 other potential long-acting where we believe there's potentially one left now. But the [Opcofiser] showed basic not any improvement on body composition in the Phase III trial.

Novo Nordisk shows that colony get the half of effect basic to daily growth hormone. And this is where we believe with our unmodified -- some 2P potential, we will be at least as good as daily growth hormone. So, we believe that our product profile is always so highly differentiated to both daily growth hormone and other long-acting growth hormone that we always will provide us the clinical benefit compared to all other treatment regimes.

Our next question will be coming from Milan Verso of Oppenheimer.

Two from me. I know you had responded earlier that you don't expect a REMS or a black box warning on the PTH label, but could you comment on any potential for monitoring requirements with patients on the product?

Could you clarify your question? What do you mean exactly?

Well, in other words, if patients need to be monitored for serum calcium bone biomarkers, whatnot?

That is a question where you will say, will we provide a better stability for this patient group than they have in their current setup where the basic are being monitored for calcium really, really, really often. And I believe you will see it in different stages. I believe when you transition over from what we call the conventional part of therapy over to TransCon PTH, I think there will be at least the same kind of monitoring because you want to be quite sure you stabilize the patient in the right manner. When they are stable, which we see after 1 to 2 years on a PTH dose, where we see more and more stability coming in because the catch on metabolic system get or has some hemostasis starting to be stabilized. I will potentially see from a patient perspective that you will potentially need less what we call monitoring of it.

I think this is where I believe that element like homemaker, it's not typical something you typically will analyze for any patient group in this way. What we have seen in our clinical study where we're now patient up for over 3, 4 years, you're basically seeing that we do normalization more and more and more of every parameter. And that includes both bone density and is also including bone markers. So, I will not expect that it will be part of a standard monitoring.

Okay. And second question for me is with respect to achondroplasia. Obviously, the primary endpoint and for regulatory purposes, it's about height velocity. But as you had mentioned earlier, there are many other benefits that a replacement CNP could provide. Could you just sort of inform us as to which of the other benefits that may be not captured by primary endpoint type data, but would be very important seen as most important by the [Econo] community?

Yes. I think this is why we're developing TransCon CNP. We really are developing it to provide a treatment that sure is addressing linear growth. But we can combine it with SKYTROFA and I can from a clinical concept, I will expect nearly you can decide what kind of linear growth you will have. So -- but what we really want to ensuring that we are addressing the underlying comorbidities of the patient. And how we measure them is to have specific achondroplasia, specific Kuma, this is comorbidities that is coming and being reported on high, high, high frequent from achondroplasia from when you see them on.

And then we also are developing a patient specific reported outcome measuring where we're trying to capture all the benefits they are feeling because they are really seeing a huge benefit. One of the thing is clear for us. It's not -- we see a lot of other factors, not just related to go. We see muscle chains. We see how the function better in the physical way to balance, do normal work, do normal operation and other things like that. And this is all this element we will try to capture. At the same time, we will cash contact specific element like basically like a number of action and other things like that.

(Operator Instructions) Our next question is coming from Andreas Argyrides from Wedbush.

So when you're thinking about -- this is for PTH, when you're thinking about the opportunity to launch and the opportunity in PTH, how are you thinking about it compared to the NATPARA launch? And then maybe you can give us some insights on how NATPARA coming off the market at the end of '23 is informing your expectations for the launch? And then I have a follow-up.

I'm not comparing TransCon PTH in any way to NATPARA. It will have completely different labeling, have complete different clinical outcomes, have complete different clinical benefit. So just complete different impact on quality of life. So, I'm not using that as a benchmark on anything. I'm not comparing that. There was a product that came out with a leading as an Jon. This is not what we are addressing. There was a product that came out, not seeing benefit on quality of life. It was a product that came out, not showing any benefit on 24-hour urinary calcium, not really addressing the underlying disease. So, you can -- I don't use that at also any benchmark. It's completely less for me.

Okay. Great. That's helpful. And maybe -- okay, I guess maybe the opportunity that there is no approved product on the market. There were some patients mostly in Europe as well, but you still on it or had access to it no longer. Are those going to be early adopters or yes. And...

Yes, I think Al, this is exactly, as some addressed before. Yes, there is a patient that has been exposed to short-acting PTH treatment. They are used to daily injection and other elements like that. But where we see the huge benefit is independent on the background if they have been exposed to short-acting PTH or not. So I don't believe there is a less need for a patient to get on TransCon PTH treatment if you come from the group that have been on short-acting PTH or have never seen a short-acting PTH. The patient that have been on short-acting PTAs have perhaps a more common understanding of a daily injection, have more common understanding about what they need to do as a procedure to get that happen. But I don't believe that is a big barrier for any of the groups.

Okay. Great. And then just a quick one on SKYTROFA. And maybe you can elaborate and I don't know if you covered this already, sorry, if you did, and I missed it, but if you can elaborate on the launch dynamics that are driving growth, are you seeing higher switch rates from daily growth hormone?

We always see a higher switch rate from daily growth hormone, but we're also seeing an increased number of naive patients coming on the treatment. But the overall number goes up everywhere. So, it's not like one getting less, both of them are improving up to really, really new height over time.

And our next question is coming from Yaron of Cowen.

Jan, I have 2 interrelated questions on more coverage. With PTH coming soon, there isn't really a competitor. Do you need to contract or will you contract with PBMs to get on formulary? Maybe kind of talk about your thoughts there. Obviously, the discounting shouldn't be very high at that point. And then secondly, now that you'll have a second program, a second product approved sort of within the endocrine bag, does it give you more leverage to negotiate better for placement for SKYTROFA?

Yes. Well, we never really comment about how our market asset strategy is and will be and how we really are addressing the reimbursement system in the U.S. But for your information, when we always look at other product because you can do the same thing, I can give you name of products in the U.S. that basic are in a position to generate multiple billion in revenue in the U.S. without basic being provided high rebate. And I think we will follow this pathway because we are providing such a benefit to the patient, the physician and the society that we feel this is a way we will continue our market asset strategy. Compared to SKYTROFA, we're actually pretty satisfied with our coverage. We believe the strength of the product, the differentiation don't really lead us to provide into a highly rebated product. I think that is the strength of having a highly differentiated product.

That's all the time that we have for today. Thank you for joining the conference call. You all have a good evening.

Thank you.

Thank you so much. See you.