Ascendis Pharma A/S (ASND) 2020 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Q4 2020 Ascendis Pharma Earnings Conference Call. (Operator Instructions) This call is being recorded.

I would now like to turn the conference over to your host, Mr. Scott Smith, Senior Vice President and Chief Financial Officer of Ascendis Pharma. Please go ahead, sir.

Thank you, operator. Thank you, everyone, for joining our full Year 2020 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; Dr. Mark Bach, Head of Clinical Development and Medical affairs for Endocrinology and Rare Diseases; Jesper Hoiland, Global Chief Commercial Officer; Dr. Dana Pizzuti, Head of Development Operations; and Dr. Juha Punnonen, Head of Oncology.

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, statements regarding the market potential of our pipeline candidates and statements regarding our 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 actual results to differ materially, please see the forward-looking statements section in today's press release and the Risk Factors section of our prospectus supplement filed on July 9, 2020 and our annual report on Form 20-F being filed today.

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

On today's call, we will discuss our full year 2020 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, everyone. For Ascendis, 2020 was a year to remember. We succeeded as a team and were able to meet and, in some cases, exceeded all our cohort goals in 2020. I'm proud to be able to say that the Ascendis team was adaptive, creative and focused on achieving the goals we outlined at the beginning of last year to bring our TransCon product candidates to patients as fast as possible. For 2021, we are well positioned to continue to execute and achieve the milestones we have laid out across all of our 5 independent product candidates.

Going back, the importance of the science, one of the Ascendis core values is really at the center of what we do 365 days a year. Our understanding of the biology and the science it was drives our top development process. I see it again and again. If we stick to the science, understand and respect the biology, we will be successful. With our algorithm for product development focused on the patient and the unmet medical need, combined with the TransCon technology, we have a powerful platform that has allowed Ascendis to create not just 1 potential blockbuster product candidate, but a portfolio of 5 potential blockbuster candidates in 2 therapeutic areas, with more to come.

Beginning with TransCon Growth Hormone. Throughout the development, we have kept the patient needs in mind. From the beginning, we were committed to build on the last 30 years of knowledge with daily growth hormone and other long-acting growth hormone programs. We designed our TransCon Growth Hormone to have a similar tissue distribution pattern, receptor activation and exposure as seen for daily growth hormone once somatropin is released from the TransCon Growth Hormone product.

For more than 30 years, multiple companies have tried to develop a long-acting growth hormone product using several different technologies, providing comparable safety, efficacy, tolerability, immunogenicity, mode of action as daily growth hormone. In spite of all this effort, today, all patients are still being treated with daily growth hormone in the U.S., Europe and Japan.

I'm excited to be close to our potential regulatory approval of TransCon Growth Hormone in the U.S. and Europe. Last June, we submitted our BLA for TransCon Growth Hormone for the treatment of pediatric growth hormone deficiency, and we have a PDUFA date of June 25, 2021. Later in September last year, we submitted our M&A in Europe, and we expect potential approval in the fourth quarter this year.

Since our regulatory submission, I can see the payoff from our design of TransCon Growth Hormone and the extensive preclinical and clinical programs in our interaction with FDA and EMA. We believe our data clearly demonstrates once-weekly TransCon Growth Hormone has comparable mode of action and distribution in key growth hormone responsive tissues, such as brain, bone, muscle, liver and fat tissue as the growth hormone administered for daily growth hormone and in doses growth hormone.

In our discussion with FDA and EMA give me comfort that we have developed a convincing body of non-clinic and clinical data to support our belief. In December last year, we had a positive mid-cycle meeting with FDA, where they indicated the agency has no plans for an advisory committee. We continue to have a constructive dialogue and have begun labeling discussions with the FDA, and we're looking forward to a potential regulatorial approval next quarter.

In Europe, our M&A submission for TransCon Growth Hormone last September follow the agreement with PEDCO to our proposed pediatric investigation plan, or called PIP, covering the nonclinical and clinical development of TransCon Growth Hormone in children down to 8 of 6 months. To our knowledge, no growth hormone or growth hormone analogs has an approved PIP. Our expectation for potential approval of the M&A in the fourth quarter of this year is unchanged, but our innovation did not stop with the science of our drug substance. As part of our effort to address the unmet medical need, we have also developed an auto-injector for the administration of TransCon Growth Hormone, providing room temperature stability and a small injection volume via a 31 g needle.

We introduced a TransCon Growth Hormone auto-injector into the Phase III enliGHten trial, where it's currently being successfully used by over 160 subjects in the U.S. with accumulated use of more than 225 device years. We expect the TransCon Growth Hormone auto-injector will be available to patients at the same time as the potential commercial launch.

Going forward, we are developing an integrated connected health program that links the TransCon Growth Hormone auto-injector with an app and provides information for the patient and caregivers related to adherence and doses.

The pediatric growth hormone market is an established market in the U.S. and Europe with several daily growth hormone products, but we also know that drugs don't work in patients who don't take them. Even modest lack of adherence leads to suboptimal outcomes and potentially to drop out of therapy. In fact, we see that almost all pediatric patients in the U.S. stop therapy after 3 to 4 years of treatment. We have submitted for publication a manuscript based on claims data, demonstrating that the problems of adherence and lack of treatment are potentially much worse than reported in published literature.

I often get asked if we think we can expand the current market with TransCon Growth Hormone. These new data describing lack of adherence and a lack of treatment tell me that there is a potential big opportunity to improve patient care by improved adherence, persistence and penetration, which will lead to better outcomes for patients and better outcome for the society.

So far, I have talked about U.S. and Europe, but we're not stopping there. Ascendis is a global company with a global thinking, addressing unmet needs for a worldwide population. In Japan, we filed a clinical trial notification last year to initiate the Phase III riGHt trial for pediatric growth hormone deficiency. In China, in 2018, we formed VISEN Pharmaceutical with an investor group to develop TransCon endocrinology rare disease product in Greater China. VISEN continues to execute on its Phase III clinical trial of TransCon Growth Hormone in children with growth hormone deficiency and will initiate clinical development for TransCon PTH and TransCon CNP soon.

Moving to label expansion. We have the global Phase III foresiGHt trial underway for adult growth hormone deficiency. The primary objective of the foresiGHt trial from a regulatory perspective is to demonstrate efficacy compared to placebo. However, the most important comparison is to daily growth hormone, which is included as a third arm in the foresiGHt trial, where we plan to randomize 240 subjects 1:1:1. I'm often asked, why is adult growth hormone deficiency is so important? What do you get out of the foresiGHt trial?

Growth hormone efficiency is not just about height. In children, height emerged as the primary regulatory endpoint. Since adults are not growing in height, the primary regulatory endpoint is to measure the metabolic consequence of growth hormone deficiency to measure change in truncal fat. Only if a once-weekly growth hormone therapy is equivalent or better to daily growth hormone in both the pediatric and adult growth hormone-deficient population, then it will provide all the endocrine benefits of daily growth hormone. We believe from our Phase III pediatric programs that TransCon Growth Hormone can provide all these endocrine benefits, combined with the success in adult growth hormone deficiency Phase III trial. We believe we will continue to differentiate from oral once weekly growth hormone product candidates. We expect to complete enrollment of the foresiGHt trial by late 2021 or early 2022.

Moving to TransCon PTH. I've never seen a product like this before, a product that not only can address short-term symptoms of the disease by restoring biochemical control and the quality of life for patients, but also potentially can address the long-term complication of the disease as well. Hypoparathyroidism, HP, is a condition with, I expect, more than 200,000 patients just in the U.S., Europe and Japan. Similar to growth hormone deficiency, the problem is (inaudible) or insufficient amount of their respective hormone, in this case, for HP PTH.

In chronic post-surgery HP in around 75% of all cases, the parathyroid glands, the organ that produce PTH, have been damaged or destroyed, and the body cannot be stimulated to produce sufficient amount of PTH. Therefore, the only way PTH can be restored to normal physiological level is by PTH hormone replacement. TransCon PTH is designed to replace the hormone at physiological levels and restore the patient to normal health.

When we speak to patients suffering from HP, we hear over and over again about how poor the quality of life is, how they had to stop going to work, all worried about calcium crashes and making it to an emergency room. These are the short-term symptoms, driven by lack of serum calcium control and physiological PTH levels. In addition to a short-term effect, HP patients have multiple long-term complication as insufficient kidney function, cardiovascular risk and abnormal [bone] turnover.

As TransCon PTH is designed to restore PTH to physiological levels 24 hours a day, we will expect to normalize serum calcium to improve short-term symptoms. We also expect to normalize kidney function and normalize bone health to reduce long-term complication.

So what have we seen? With our 6-month open-label extension or OLE data, we saw all mean summary and sub domains, SF 33 quality of life scores being normalized. Later this month, we will present data at an oral presentation at ENDO, where you will see results for the first time from our HP disease-specific patient-reported outcome instrument after 6 months in the OLE. Since then, all 58 subjects have now completed 12 months of treatment on TransCon PTH without any additional dropout, which gives me confidence that these subjects are continuing to see the quality of life benefit with a safe once-daily PTH injection.

In addition to the great data on quality of life, TransCon PTH also demonstrated normalization of key biochemical parameter related to long-term complication. After 6 months in the OLE, mean 24-hour urinary calcium excretion fell on average 57% compared to baseline. Almost all subject demonstrated a normalization or improvement in urinary calcium excretion.

On measures on bone health, HP patients typically have low bone turnover, and as a consequence, abnormal dense bone compared to people without HP, particularly the trabecular bone. As expected, as we restore physiological PTH level, we saw bone turnover increases with the initiation of TransCon PTH treatment, resulting in a trend towards normalization of the abnormal dense bone, particularly the trabecular bone.

So what is next for TransCon PTH? During the second quarter of 2021, we plan to provide 12 months OLE data. We expect to see continued normal quality of life, sustained reduction of HP symptoms, continued normal serum calcium, continued normal level of urinary case and continued normal bone turnover.

As part of extending our global reach for this potential life-changing therapy, during the second quarter, in addition to the 12-month PTH forward update, we plan to submit a clinical trial notification for a trial evaluating TransCon PTH for adult HP in Japan. Later this year in the fourth quarter, we plan to report top line results from the PaTHway trial, a Phase III randomized, double-blinded, placebo-controlled trial, investigating the safety, tolerability and efficacy of TransCon PTH in adult with HP. The trial is expected to enroll 76 subjects at sites in North America and Europe. We are pleased by the data that we have generated so far, and we believe the data support a profile for TransCon PTH to be a potential first-line therapy for HP. We are confident we can truly make a difference in the life of HP patients.

Turning to TransCon CNP. We are conducting 2 double blinded placebo-controlled Phase II trials in children aged 2 to 10 years old. The first, the ACcomplisH trial is a dose escalation trial of 12 to 15 subjects in each cohort conducted mainly in North America and Europe. The second is the ACcomplisH China Trial, which is a cohort expansion trial of at least 60 subjects conducted in China.

VISEN received approval for the Chinese Center for Drug Evaluation to conduct their ACcomplisH China trial with a design for dose expansion at an effective dose determined from the ACcomplisH trial. Combined, these 2 studies will enroll more than 120 subjects aged 2 to 10 to be followed for 12 months in a double-blinded manner. Both ACcomplisH and ACcomplisH China will remain blinded until the 12 months follow-up is completed. Once completed, we will have robust clinical data from 2 independent, randomized, double-blinded, placebo-controlled trials. We plan to provide a TransCon CNP clinical program update in the fourth quarter of 2021.

Finally, in endocrinology, we announced today that Ascendis will have statement presentation at the ENDO 2021 annual meeting. This will include an oral presentation of the 6-month open-label extension from the PaTH Forward trial for TransCon PTH, as I mentioned.

In our second therapeutic area, we hosted our first oncology R&D day back in November to share our vision on how to use TransCon systemic and intratumor technology to establish a new paradigm for treatment of cancer. We think we can develop entirely new treatment paradigm in oncology using TransCon technologies and address all step of the immunity cycle. We're applying the same product development aggregate in oncology as we have successfully used it in endocrinology, applying TransCon technology to clinical validated parent docs and biological pathways.

For TransCon TLR7/8 agonist, an R&D was submitted in December 2020 to initiate the Phase I/II transcendIT-101 trial. During the second quarter of 2021, following monotherapy dosing, we plan to initiate dose escalation in combination with a checkpoint inhibitor. Initial monotherapy dosing results are expected in the fourth quarter of 2021.

For TransCon IL-2 beta/gamma, earlier this year, we reported potential best-in-class preclinical data. Our TransCon IL-2 beta/gamma is designed to have best-in-class potency receptor bias, combined with a long half-life of around 22 hours and a low Cmax concentration. In nonhuman primate study, we have observed a highly biased potent activity with sustained exposure, leading to best-in-class immune cell expansion with minimal effect of eosinophil, IL-6 or IL-6 and vascular leak mark. Based on this data, we believe TransCon IL-2 beta/gamma has the potential to become a backbone agent in oncology treatment. We expect to submit an IND of similar for TransCon IL-2 beta/gamma in the third quarter of 2021.

I sincerely believe that our goals of building a fully integrated global biopharmaceutical company gets one step closer each day. 2020 was a great year, a year to remember for Ascendis as we advanced our endocrinology rare disease and oncology product candidate. In 2021, we look forward to achieve additional successes as we advance our pipeline ahead and closer to patients with unmet medical needs.

We are continuing to apply our algorithm to build a pipeline in oncology and are committed to entering a third therapeutic area. This is how we will achieve sustainable growth, not by advancing just one program, but succeeding with multiple potential blockbuster program in multiple therapeutic areas in mutable geographies.

Now let me turn the call over to Scott for a financial review before we open up for questions.

Thanks a lot, Jan. Turning to our financial results for the full year ended December 31, 2020. We reported a net loss of EUR 419 million or EUR 8.28 per basic and diluted share compared to a net loss of EUR 218 million or EUR 4.69 per basic and diluted share during 2019.

Now let me run through some components of these results. Research and development costs for 2020 were EUR 260.9 million compared to EUR 191.6 million during 2019. R&D costs in 2020 reflect continued advancement of our pipeline with the primary drivers of the increase including an overall increase in personnel-related and R&D infrastructure costs. And for TransCon Growth Hormone or lonapegsomatropin, costs were higher due to buildup of prelaunch inventories as well as increased clinical trial activities. As a reminder, we currently expense manufacturing costs of lonapegsomatropin as R&D in advance of our anticipated product launch. At the time of product approval, a portion of these R&D costs may be reversed and capitalized as inventory, which will result in a onetime benefit to R&D costs.

For TransCon PTH, costs were higher primarily due to device development and increased clinical trial costs. For TransCon CNP, costs were higher primarily due to increased manufacturing and clinical trial costs. And finally, for our oncology therapeutic area, costs were higher due to increased manufacturing and preclinical activities primarily related to TransCon TLR7/8 agonist and TransCon IL-2 beta/gamma.

Selling, general and administrative expenses for 2020 were EUR 76.7 million compared to EUR 48.5 million during 2019. These higher costs primarily reflect an increase in personnel-related, IT and other infrastructure costs as well as expenses associated with the continued build-out of our commercial capabilities.

Finance income and expenses in 2020 included a foreign exchange rate loss of EUR 78.9 million compared to a gain of EUR 7.7 million in 2019, primarily related to unrealized losses on translation of our U.S. dollar holdings of cash and marketable securities to euros. We ended 2020 with cash, cash equivalents and marketable securities totaling EUR 834.1 million. As of December 31, 2020, Ascendis had 53,750,386 ordinary shares outstanding.

Subsequent to year-end, on January 8, 2021, we invested $12.5 million in VISEN Pharmaceuticals $150 million Series B financing. Following the financing, we own approximately 44% of VISEN's issued and outstanding shares. As a result of this transaction, we expect to recognize a noncash gain in the first quarter of 2021 of EUR 42.3 million.

Turning to 2021, we expect our expenses to increase as we continue to build our commercial capabilities and prepare for launch, advance our endocrinology rare disease pipeline, expand our activities in oncology and continue to invest in the TransCon technology platform, including lonapegsomatropin; buildup of commercial inventory ahead of potential launch; execution of commercial prelaunch and launch activities; investment in expanded commercial manufacturing capacity to support anticipated future demand; continued execution of the foresiGHt trial; a global Phase III randomized controlled clinical trial in adult GHD; an execution of the riGHt trial; a Phase III randomized controlled clinical trial in pediatric GHD in Japan.

For TransCon PTH, continued execution of the Phase II PaTH Forward trial, which continues to retain 58 subjects in the open-label extension; an execution of the PaTHway trial, a North American and European Phase III randomized controlled clinical trial in adult HP. For TransCon CNP, execution of the clinical program, which includes 2 randomized placebo-controlled Phase II clinical trials in achondroplasia, the ongoing ACcomplisH trial and the ACcomplisH China Trial, which is being conducted through our strategic investment in VISEN Pharmaceuticals. And lastly, in our oncology therapeutic area, execution of the transcendIT-101 clinical trial for our TransCon TLR7/8 agonist and advancing the TransCon IL-2 beta/gamma program into clinical development.

We expect other SG&A expenses in addition to lonapegsomatropin commercial prelaunch and launch activities will include continued investments in personnel, systems and infrastructure to support our rapidly progressing portfolio and growing organization.

For 2021, we remain on track for hitting our corporate milestones. For lonapegsomatropin, these include with a PDUFA date of June 25, 2021, we anticipate approval for pediatric GHD in the second quarter, followed by commercial launch in the third quarter, and we anticipate European Commission approval for pediatric GHD in the fourth quarter. For TransCon PTH, we plan to file a clinical trial notification for our Japanese Phase III trial in adult HP in the second quarter, followed by reporting top line results for the Phase III PaTHway trials in North America and Europe for adult HP.

For TransCon CNP, we expect to provide a clinical program update in the fourth quarter. For TransCon TLR7/8 agonist, after dosing in the monotherapy part of the transcendIT-101, we plan to initiate the dose escalation part in combination with a checkpoint inhibitor in the second quarter and plan to present initial transcendIT-101 results in the fourth quarter. And finally, for IL-2 beta/gamma, we plan to submit an IND or similar filing in the third quarter.

Before we open up the call for questions, I want to make some points about our anticipated commercial activities for lonapegsomatropin in 2021. During Q2 this year, we anticipate approval for pediatric GHD on the PDUFA date of June 25. Then during Q3, we expect to have product available in the U.S. for pediatric GHD. During Q3, once product is available, we anticipate beginning to provide access to lonapegsomatropin for pediatric GHD patients by onboarding patients through our dedicated patient hub, and we do not expect to have placement on commercial formularies at that time. Finally, during Q4, we anticipate European Commission marketing approval for pediatric GHD. We plan to provide guidance on the timing of launch in Europe later this year.

With that, operator, we're ready to take questions.

(Operator Instructions) Your first question comes from Michelle Gilson from Canaccord Genuity.

I guess the first one, can you maybe discuss the cadence for TransCon GH of getting onto the formularies? How did that happen over the course of the year?

And then my second question. For TransCon PTH, from a safety perspective, is there a difference between replacing PTH at physiological levels in hypopara patients, I guess, at the dosage you're evaluating versus adding pulses of PTH to stimulate an anabolic effect? And then, I guess, at the doses that you're evaluating for TransCon PTH, would you expect there to eventually be a black box warning or limitation on duration of therapy, like there is for Forteo, given these different effects on the bone?

Thanks, Michelle. So before I potentially will turn it over to Jesper, I could potentially take a little of the PTH question that you take up. And let me just repeat what we're doing with TransCon PTH related to bone structure. If you have an untreated HP patient, they have a higher bone density because you basically have an unnatural low bone turnover because you have not the physiological PTH level of PTH. And if you look on the serum level of PTA, it's well documented in the literature that you basically see and basic a curve that have a peak to trough about 30% during the entire 24-hour cycle.

And what we saw in the 6 months open-label extension data, what we saw that when we restored physiological PTH level, we basically activated the normal bone turnover that you see in a normal human being that had no issue related to potential lower level of PTH. We saw that by accelerating a higher level of both the anabolic and catabolic bone markers, but still being placed in what we call the higher level of the norm levels. And what we saw was the associated consequence of that. We also saw that this bone density that is abnormal dense because it actually have a structure that basic are not like a normal bone because it has no bone turnover start to be normalizing.

So therefore, we saw that trend to approaching the normal level with our Z-score is defined as 0. That is what we observed in the 6 months data. This is a continued process where we saw the main effect on trabecular bone. If we basically looked on cortical bone, that was not the same kind of decline in Z-score, it was basically stable because they don't have the elevated high density that you basically see specific for trabecular bone structure.

What we saw with our bone markers, what we saw in our bone density is just following exactly as what we have expected up from the physiology of restoring a normal PTH level. In our interaction with FDA and EMA, our first discussion related to PTH and effect as an anabolic compound was when we discussed basic conduct a [COG] study. The COG study is basically a study that has been done for all other PTH product to my knowledge. We got a clear answer back from justification and scientific justification that there was no need to do it because what you are applying in the TransCon PTH product is just a normalization of PTH level and not generating a, what I call, super physiological PTH level that you do with a classical compound of PTH that's being used as a (inaudible) agent in osteoporosis.

Therefore, I believe there is a fair chance that we can avoid any kind of REMS program because what we continue to see with our clinical data -- and remember, at the date of filing, we will have 18 months, so we basically can follow this for 1 month more. We expect to have such a strong data target that we can provide what we see is just a normalization of this. So I'm hopeful that the science will continue to play in so we can be in a position that we can do a scientific justification saying there's no need for a REMS program.

And also, we're also seeing now that if you look on the osteoporosis compound that the black box has been removed for Forteo. And also, that is a basic in U.S. seration because in Europe, they are not believing that the preclinical finding you take with osteoporosis or osteosarcoma for short-acting PTH is relevant for humans. So from that perspective, I think we have a strong scientific justification to avoid both a black box warning and a REMS program.

The other part, which also is scientific justification is that patients have been on pump where they're using either Forteo or NATPARA for multiple, multiple years. And just recall, if you use a pump system with either Forteo or PTH, you basic have an IV injection for 8 to 12x in a subcutaneous tissue in 1 hour. This will provide a flat, flat, flat, continuous exposure inside the plasma compartment. And when you look on long-term case studies, even in children, pediatric, you see normal growth there. So I don't believe there is any kind of scientific justification that is possible that there is a lot of discussion basic have a meaningful impact on the bone structure.

Jesper, will you talk about how we are addressing and ensuring we have the optimal place for our market access?

Absolutely. And Michelle, thank you very much. Basically, for lonapegsomatropin, our key focus is market access for the commercial market. The commercial market represents roughly 180 million Americans, and it represented also mainly 75% of the market is via the 3 big PBMs. And that's the way that you negotiate with the PBMs for market access is basically they send out their requests during the summer months. And then the final call, you could say, for addressing the market access for 2022 basically comes in, in the last week of August, beginning of September.

So we have a golden opportunity to be first on the market with lonapegsomatropin as we are anticipating the PDUFA date on the 25th of June. And therefore, we will be negotiating with the 3 big PBMs market access for 2022, and we do believe that we will have a good market access for 2022 on the basis of that we would be the first in the long-acting segment potentially with lonapegsomatropin. I hope that answers your question.

And your next question comes from the line of Jessica Fye from JPMorgan.

This one might be for Dana. Can you tell us whether the necessary pre-approval inspections have taken place yet for TransCon Growth Hormone? And your expectations for those being completed prior to the PDUFA given any COVID travel issues? I know you said multiple times on the call that you guys expect approval in 2Q. So it sounds like maybe things are on track there, but that's the first question.

And then second, kind of building on the last question, thinking ahead to the 12-month open-label extension data for the PTH Phase II trial coming up in 2Q. Can you talk about what you would expect to see on BMD at the 12-month time point and what that means for the product? I guess, more specifically, at what point do you expect to have clinical data that will demonstrate that the normalization that you're seeing in BMD early on does not overshoot and lead to below normal BMD?

So Dana, would you take the first question?

Yes. As far as the inspections go, we're finally starting to see a bit of movement from the FDA in terms of their activity. In fact, we've recently had a GCP inspection at a site for our #1 enroller of growth hormone. So that was completed last week.

As far as the manufacturing inspection goes, we are still in communication with the FDA about when that would be scheduled. And there are a couple of opportunities in terms of alternate approaches that are available. So we still feel that we sort of can address these issues before it has any impact on the PDUFA date. So -- but we're also noticing that FDA is doing more manufacturing inspections outside the U.S. as COVID is somewhat subsiding in certain places. Okay.

I think, Jess, going back to your second question, and I think we need to take it into the perspective at my initial comments to Michelle because there, we basically lay out that what we're seeing now is just a normalization of the bone structure that you expect to do when you actually are coming into a replacement therapy and observing that you're providing PTH in physiological level.

And you can also see the differentiation between trabecular or cortical bone. If you look at the data, you can see where we expect to see the biggest remodeling is on trabecular bone, and we're also seeing the right structure coming in of the bone. So from my perspective is that I cannot see any worry about that because that is not normal biology, and we have children that have been 10 years on infusion pump growing up with normal bone structure on infusion pumps. We have adult that's sitting 5 to 6 years on an infusion pump and observing all the same thing. And I think everyone that just have a clear understanding about an infusion pump and insulin and other things like that will acknowledge there's a total flat curve you provide with infusion pump. So I really are lost in the logic where it's coming in because what we're just seeing is normal biology, which we see on a lot of other elements. We see the same thing with urinary calcium, we see the loss of soft tissue classification, we see expecting all the normal physiology.

I cannot change physiology. If you want to have a home replacement therapy, then you need to expect to see the outcome of being a normal human being. And We just follow the science. And that is what we're doing. I cannot change science. I can follow and adapt to science.

And your next question comes from the line of Alethia Young from Cantor.

Congrats on all the progress. I just wanted to flip maybe 2 questions. One, just clarifying on the formulary, maybe I missed it. Do you think that you'll have like kind of a broad formulary that could include adults and some of the other growth hormones?

And then the second one is just in oncology. As you continue to kind of do work there, do you feel like there's one target between IL-2 or TLR7 that has kind of a greater target risk? Or do you kind of feel like it's somewhat equal and you have a fair amount of confidence in both?

Jesper, I actually think that what you are now addressing is part of our important long strategy. And for every product, one step is to getting approved, and we have seen actually being long-active product being approved now in the U.S. without being launched because there is not what I call an associated launch strategy where the product access is meaningful to launch. So what you're addressing is the key element in our entire long strategy, and this is where we have a huge comfort in what we're doing because we're not only feeling that we are providing a best-in-class product opportunity, but we're also providing into the first-in-class growth hormone deficiency market for the pediatric children.

So Jesper, do you have anything further to add?

Yes. Of course, just to add that in the initial phase, we anticipate to get the pediatric indication, which is the vast, vast majority of the market, whereas the adult indication only represents 10% to 12% of the market. So we will enter into the lion's share of the market and with the pediatric indication.

And going back to oncology, you saw we built up a pipeline of 3 independent product opportunity, endocrinology, rare disease. We will continue to build up our pipeline in oncology. What we have with our 2 hopeful clinical programs now in 3 to 4 months from now, we really have a paradigm shift how to treat tumor. And what we really want to do with a tumor is make a kickstart. We want to kickstart the hemogenic response into a solid tumor. This is how we think. And at the same time, we come with what we believe can be a next generation of how to do hemological stimulation.

We have seen the success of checkpoint inhibitor, but we're also seeing the limitation. When we see how potent our TransCon IL-2 beta/gamma is really unique compound. And this is why we see and build on the entire hemological understanding from Juha and his entire group is to build more product opportunity. So we basically are fully integrated oncology company with all the aspect of the hemological immune cycle, where we have addressed all pathway. And this is our vision, how we want to be a major player in that segment, too.

Juha, do you have other comments?

Jan, I think just to add to that, I think we believe that they both have very unique properties, and we'll have a unique opportunity in the treatment of cancer. They obviously are very different product profiles, one being intratumoral administration, one being systemic. We expect them to also work very effectively together. Hard to compare with each other, but I think our point really is that they both have their unique spot in the treatment of cancer and will also work additively when treating these patients.

So I think the vision and thinking we have and why we believe we wanted to be a player in oncology, even if we would think that is so different environment compared to rare disease endocrinology. We believe of the power of the TransCon technology that give us such a major enhancement to make highly differentiated product opportunity basically no one else can make. And by doing that and build on our algorithm on basic validated, target validated parent drug, we also believe we can be in the same successful way in our development. And when we go to the third product opportunity, we basically will build on what we have done in TransCon IL-2 beta/gamma, TransCon TLR7/8. That will be a strong synergy what we're doing in the third one. This is how we want to think how we want to make a paradigm shift.

And your next question comes from the line of Joseph Schwartz from SVB Leerink.

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CNP in your opening remarks, but I was just wondering if you could just elaborate a little bit more on the program. How did you choose your ACcomplisH study doses and how have you designed your ACcomplisH China study in order to leverage your findings in the ACcomplisH study in the U.S. and EU trial? And how should we interpret these 2 results when they emerge later in 4Q?

We just lost the beginning of it, but I believe that what you're referring to is our TransCon CNP program.

Yes, that's correct, TransCon CNP.

Yes. I think that is what you're referring to. And I actually believe that we're having a major effort now to understand this, I think, important disease. We know how CNP has functioned, we have known that for 50, 20 years. We know the biology and the science behind it, and that is what have directed our 2 program with TransCon CNP. We are now in a position that we have a unique product opportunity with TransCon CNP, which can provide a continuous exposure for up to 1 week with one single dose. And we know we can do it in an extremely safe manner. And we do it now in 2 independent product -- you can say, 2 independent clinical trials.

But what we really want to do is not only look at one single parameter. We are aiming to go down to the newborn children as fast as possible. We were, because of our unique safety profile, managed to start already in age 2, and we are dedicated to move it down as early as possible, as fast as possible down to newborn children. Because we know if we want to address comorbidity, some of them are irreversible happening in a very, very early stage, and that is really what we want to do.

Mark is leading a major effort in Ascendis how really to expand the program, involving a lot of different comorbidities. And I do not know, Mark, if you can say a few words how you also use our -- use national history study now and try to integrate the development in comorbidities and try to develop them in a unique clinical development plan so we potentially can address not only height but also the other comorbidities.

Sure. I can say a few words. Thanks, Jan. So we have an ongoing natural history study, which is providing us very valuable information. And one of the things we find when we talk with individuals with achondroplasia is their -- the height is not the biggest issue that they want us to look at, but rather a lot of the comorbidities, issues with frame and magnum, issues with otitis media, issues with airway. And so for us, it's been very important not just to be prepared to look at height but to really understand the comorbidities better. And we are using the natural history study to try to gain information about the comorbidities frequency, time of occurrence and to give us enough information to successfully study them in a clinical trial. So I think that's what Jan is alluding to, and it's actually providing us even early on what we think will be useful information. Thanks, Jan.

So what Mark is designing is that we can integrate that knowledge into our clinical development now.

Right.

Okay. Great. And then my next question is on TransCon PTH. Based on our conversations with endocrinologists, some docs prefer to see T-scores over Z-scores in adults. And our question is, do you have plans to present this? And how does that compare to T-scores?

T-score and Z-score are completely different independent benchmark measuring. Z-score is to a normal population, and this is also what we're using in growth hormone deficiency when we talk about height. You typically use a Z-score because that is the most relevant one. When you talk about osteoporosis compound, you often use a T-score because this is where you basically are trying to compare what was optimal for the person.

And -- but I think that is not really the aim of this year. We also can look on the T-score. It's basic are providing the same guidance and the same thing that we see with the S-score. But as we have a hormone replacement therapy, it's typical what you want to do, you want to do a normalization of all different elements of the body to be as a normal human being. This is the definition of hormone replacement.

If you go to osteoporosis, you want to redo, reset what we call a national decline in some of the bone structure. And this is why you're, in some way, referring into a T-score. But this is coming from a demographic that is not building on a patient population that has a complete different dense bone structure than what you see in other places because there's a dense structure that is happening to what we call a nonnational process where you're basically just building up a dense bone structure because you have no turnover. That is not the same thing to have a healthy bone structure. No one is ever claiming that the bone structure you have in HP patient is healthy, even it's more dense because it's old bone structures. So I think it's not meaningful to compare to a T-score. Sure, we have the data. We have looked at it. What is meaningful for hormone replacement therapy is compared to a Z-score.

And your next question comes from the line of Anita Dushyanth from Berenberg Capital.

Just a couple here. Could you please remind us the sort of time line in terms of the pediatric Phase III trial that would commence in Japan? So I know you have applied for the CTN, so when -- is it sort of likely to -- so you're going to get the green signal to go ahead?

And then in terms of the HP Phase III trial, would there be any change to the trial design itself in terms of inclusion or exclusion criteria of patients based on your 6 month data?

I think the first question is reflecting our pediatric growth hormone deficiency trial, our riGHt trial. Mark, could you give us the status of our riGHt trials? You have extensive experience in Japan.

Yes, absolutely. I actually spent -- I spent 10 years of my career living and working and doing clinical research in Japan. And similar to the U.S., when you file -- once you file a CTN, unless they object, then 2 to 4 weeks later, you can start your study. And so that's usually not rate limiting. The approval is usually not rate limiting. But in any case, that study is actually going ahead and is in the screening phase. So I think it's -- there's no roadblocks to continuing the development in Japan.

I think from a company perspective, we will be in a unique position because it looks like all our product opportunity in 3 different indications, pediatric growth hormone deficiency, adult growth hormone deficiency and HP will nearly be aligned for approval nearly in the same time period. With accessing is a unique situation for us to find an optimal way to make a commercial effort in this region would typically involve Japan, South Korea and other major country outside Greater China in that region.

Okay. And then as far as the Phase III HP trial, would there be any changes in the trial design based on the 6 month data?

Related to the 6 months data we have disclosed in our open-label extension, we will basically have the same patient population coming into the trial as we saw in our Phase II trial. That will not be -- I have to think this. Mark, you can correct me. I think it's a little bit broader this time because there is a patient population as HD H1 patients that we also have included it because that was hugely a benefit to have a normal physiological level of PTH like a post-surgical one. So this kind of patient population also being opened up in the Phase III trial. And we also believe that it's important that they have an opportunity to get an optimal PTH treatment with a physiological PTH level 24 hours.

And from that perspective is we actually are having the other change is basic in the -- where we looked about what was really difficult in the Phase II trial and what -- why we -- you always look on screening failure. Why do we have screening failure? What is the driver of the screening failure? And we actually realized it was really, really difficult for an HP patient just to have a normal serum calcium of 8.3. It was hard just by standard of care, taking activated vitamin D, taking calcium supplement to make them up to 8.3. The normal calcium is typically in the 9. In the trial here, we have been seeing 8.3 and 10.3. But we are in a position that we basically lower the interim criteria, so you can go down to 7.8 to be part of the trial. And it was basically to be ensure that all this patient group, which was impossible basically to be in position to titrate up to that.

Mark, do you have other element or a thing I have forgotten?

Yes. I mean, there's a few other subtle differences between phase, we are basically relying on what we learned in Phase II in going to Phase III. So in Phase II, again, for the first efficacy trial, the dose was fixed for the first 4 weeks and then allowed to titrate in Phase III or allowed to titrate from the beginning, which makes clinical sense. And in Phase II, the upper dose limit was lower than what we're allowing Phase III based on what we've learned in Phase II. So there's a few small things.

And then the other is that in Phase II, we validated disease-specific quality of life instrument that will then be used in Phase III, so -- as an outcome measure. So I think those are the primary differences between the 2 trials.

And your next question comes from the line of [René Wotus] from [Camden].

I guess 2 from my side. So first one on TransCon Growth Hormone. Now that you have the 2 years data, can you remind us how long you're planning to continue following up these patients? And what will you do with this data? And do you anticipate to submit these data to the regulators as well?

And the second question is on TransCon PTH. Great to see that still almost all patients are on therapy in the open-label extension part. Maybe moving -- jumping a few steps ahead towards commercialization, what are the lessons you learned from NATPARA? Why do you think TransCon PTH will be commercially more successful?

Yes. Thanks a lot. Thanks a lot for the question. The first one is basically addressing what do we do in the fliGHt in the trial that we continue on in our Phase III, where we have an open-label extension for both from the fliGHt and the heiGHt trial, which continue on it. And currently, we see patients coming to acceleration that they basically are reaching final height.

We are in a position we will continue this open-label extension trial. So we basically can continue to collect unique information about how we basically are providing a treatment where every child have an opportunity to achieve their expected height -- not only height, but also other elements like body composition and other things like that, that we're measuring. And we think that is a really important thing. We are running our trial in multiple countries, and we hope and expect still to continue in most of this country.

But Mark, you're sitting with all the past commitment now here, and perhaps you can give a short update about what we expect to continue to execute. But in summary, we like to continue to give you data for this important trial.

Sure. Do you want me to add a couple of comments, Jan?

Yes.

Yes. Okay. So as you know, the enliGHten trial, which is the combined ongoing study from fliGHt and heiGHt, is continuing. And as Jan said, we're getting very nice data on it. Some of the patients are indeed getting towards their near adult height. Others have some room to go. I think, at least for the time being, the study is continuing, and I would expect both clinicians and regulators may have some interest in having some longer-term data. And so at this point, I think it's premature to make a commitment on how long it will continue, but it is certainly continuing for now and delivering valuable data. I think over the next month, we'll have a better idea about what longer-term data we want or would need to collect. But certainly, it's ongoing now and really still giving very useful information.

So I think addressing your question. What is the learning from NATPARA. Even if you develop a product like adjunct to standard per care, there is still a huge need for such a product, and then you can nearly imagine what is the need would be when you have a hormone replacement therapy and not just an adjunct therapy. That is the differentiation. We are competing in 2 different segments, one is an adjunct therapy. We are positioning TransCon PTH as a hormone replacement therapy, addressing all aspects of the disease, both short-term symptoms, long-term complications. That is the main difference between the 2 product. It is like an apple and an orange in my view.

And last question comes from the line of [Jahan Zhu] from Wells Fargo Securities.

So a couple on the CNP program and a couple on the PTH program. So for the CNP program, to identify a dose to move forward into the ACcomplisH China trial, do you need to wait until all 4 blinded dose cohorts in the U.S., EU accomplished trial to be completed? Or could you unblind each dose cohort as you go? And then any plan to open a U.S., EU dose expansion trial for the CNP program?

Great question. I think we are in a position that we are aiming not to unblind it. We think it's really, really, really important to not to unblind it. But we also believe that it's possible on a blinded basis to be in a position to have some good guidance that we potential are in acceleration that we have an active dose. We have a lot of primary outcome we're looking in. We also have a series of biomarkers that we are addressing and other elements that could give us a guidance about where we are.

And this is where Mark and his team is really developing how really to look on all this data and be convinced that we have something that is meaningful to move forward in a dose escalation and dose expansion on it. And that is the task of Mark and his people to be quite sure that we're confident that we see something on a blinded basis. So we don't want to unblind the trial before everything is done.

The second one, this is up to the situation. Yes, potentially, we will do that depending on that. We are in a unique position to VISEN Pharmaceuticals and the experience for the team and (inaudible) to conduct this trial that we have so fast access to patients in Greater China. But we're also seeing that is -- we're also seeing the same thing in Europe and U.S., in Australia and other places. Certainly, there's interest for our trial, that will not be limited to any kind of limitation in how many patients we want to take in.

So I do not know, Mark, about our plans to potentially open up an European, U.S. arm in the dose expansion. I don't think it's something we really have decided on yet.

No, we had not discussed it for now. Things are going well, both in the global trial and the China trial. So it's not something we talked about so far. But certainly, should it be necessary, we could talk about it, but not on the agenda right now.

Got it. And on the PTH program, what kind of interest are you seeing in the PaTHway Phase III trial? Are there enthusiasm due to the data you reported from the Phase II open label extension? And then is the safety database from 76 patients considered sufficient for the regulators?

That's 2 questions. The first question is how high is the understanding about what we can provide with TransCon PTH throughout the HP patient society and physicians. I have never seen anything like that before. When we see the arm assessment how people get their life back again. And sure, it is helping us to go out and make a broader indication about it like in the conference, but we already see a huge enthusiasm everywhere, so to be part of this trial. So I believe that when I see how TransCon PTH is a game changer. We are addressing the life of more than 200,000 patients just in Europe, U.S. and Japan. And what we have seen basic by having 58 out of 58 basic continue on it, everyone has a huge, huge benefit of this treatment.

And related to the safety database, I think, Dana, you can explain how we're building our combined safety database, both from our Phase II trial and also what we will see in our Phase III trial.

Yes. For the sort of approval, as we discussed with the agency, too, in our -- and the Phase II meeting, the combination of the information from the Phase II and the Phase III will satisfy the criteria for the safety thresholds for the applications. So does that answer your question?

Yes, very helpful.

And ladies and gentlemen, this concludes today's conference call. Thank you all for your participation, and have a wonderful day. You may all disconnect.

Thanks a lot.

Thanks.