Good day, ladies and gentlemen, and welcome to the Ascendis Pharma Second Quarter 2016 Financial Results Conference Call. [Operator Instructions] As a reminder, today's conference may be recorded. I would now like to introduce your host for today's conference, Mr. Scott Smith, Senior Vice President and Chief Financial Officer at Ascendis Pharma. Sir, please go ahead.

Thank you, operator. Thank you, everyone, for joining our call today. My name is Scott Smith, Chief Financial Officer of Ascendis. Joining me with the call today are Jan Mikkelsen, President and Chief Executive Officer; and Dr. Jonathan Leff, Chief Medical Officer. Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, our potential to become a fully integrated biopharmaceutical company focused on rare diseases, our goal to produce multiple potential best-in-class pipeline opportunities, statements regarding our strategic plan, our goals regarding our clinical pipeline of rare disease endocrinology programs and statements regarding the plans for our Phase III heiGHt Trial of TransCon Growth Hormone. These statements are based on information that is available to us today. Actual results or events could differ materially from those in the forward-looking statements, and we may not achieve our goals, carry out our plans or intentions or meet the expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any in-licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see the forward-looking statements section in today's press release, and the risk factors section of our annual report on Form 20-F that was filed with the Securities and Exchange Commission on April 15, 2016. On today's call, we will discuss our second quarter results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Jan Mikkelsen, our President and Chief Executive Officer.

Thank you, Scott. And thanks, everyone, for joining our call. I'm delighted that we are hosting this call today. This is our first quarterly conference call in some time and it reflects our company's progress. We recently initiated the Phase III heiGHt Trial for TransCon Growth Hormone, and we have broadened our pipeline with the introduction of 2 new product candidates. We continue to put in place the building blocks for Ascendis to be a leading integrated rare disease company. I'm also pleased to have the opportunity to introduce the latest 2 new members of our management team. Jonathan Leff, our Chief Medical Officer, who joined earlier this year from InterMune; and Scott Smith, our Chief Financial Officer, who recently joined from Wedbush. Jonathan and Scott bring new skills and experience to Ascendis, will be highly relevant during our next phase of growth. After our IPO in the beginning of 2015, we developed a strategic outlook for Ascendis known as Vision 20/20, which outlines our plan for establishing Ascendis as a leading rare disease company. Today, I will be reviewing the elements of our Vision 20/20. As part of that vision, we are pleased to discuss for the first time our 2 new pipeline candidate, TransCon PTH and TransCon CNP. Jonathan will provide a brief overview of both of these candidates on the call. We will then review the data and market opportunity for each program during our R&D Update in New York in late September. Now let me spend a few minutes reviewing the elements of our Vision 20/20, how we intend to build an integrated commercial company with a broad pipeline of internally developed best-in-class rare disease products. For best-in-class, we believe we had established a very high bar for selecting our internal pipeline opportunities. Our product candidates…

Thanks, Jan. Let me start with a brief introduction, as I joined the company earlier this year and may not have met many of you on the call. I've been in the pharmaceutical and biotechnology industry for over 22 years now. I started at Merck developing SINGULAIR. I continued at Amgen, where I worked on Enbrel and Prolia, and eventually lead North American Medical Affairs. I then joined Roche, overseeing the development of ACTEMRA in rheumatoid arthritis, followed by 2 smaller biotech companies as Chief Medical Officer. Most recently, I was the Executive Vice President and Head of R&D at InterMune, where I oversaw the development of pirfenidone for idiopathic pulmonary fibrosis. I'm really pleased to be here to advance our exciting pipeline, work with the talented staff and develop a portfolio of TransCon-derived products that will improve patients' lives. Let me continue with a review of our Phase III TransCon Growth Hormone program, and then I'll briefly introduce our 2 new pipeline candidates, TransCon PTH and TransCon CNP. Our once-weekly TransCon Growth Hormone program recently entered Phase III with the initiation of the heiGHt Trial in children with growth hormone deficiency or GHD. This important milestone follows successful end of Phase II discussions with the FDA and discussions with other regulatory agencies. We're very pleased to advance TransCon Growth Hormone into this next phase, bringing it one step closer to patients. To briefly review the trial design, the heiGHt Trial is a randomized open-label, active-controlled Phase III study that is designed to enroll approximately 150 treatment-naive children with GHD. The trial will compare patients receiving once-weekly TransCon Growth Hormone to those receiving injections of a daily growth hormone therapy. We will be using Genotropin as the comparator in our study. The dose we're using in the Phase III heiGHt…

Thank you, Jonathan. I am very pleased to be here today, having joined earlier this month as Chief Financial Officer. For those of you who don't know me, I have over 15 years of investment banking experience starting in 1995, most recently as Head of Healthcare at Wedbush and previously with Merrill Lynch. I have also had various management roles, including at startups and a Fortune Global 500 company. I'm thrilled to join a company with such a unique technology and significant opportunity for its pipeline. I have also been very impressed by the company's focus on patient needs and the quality of the team that has been assembled at Ascendis to advance this rare disease pipeline. Turning now to our second quarter financial results for the period ending June 30, 2016, let me review some highlights. For the second quarter, Ascendis Pharma reported a net loss of EUR 13.3 million or EUR 0.53 per basic and diluted share compared to a net loss of EUR 15.0 million or EUR 0.63 per basic and diluted share during the same period in 2015. Research and development costs for the second quarter were EUR 13.3 million compared to EUR 12.6 million in the same period in 2015. I will point out that R&D during both the 2016 and 2015 periods was primarily related to our ongoing investments in the Phase III TransCon Growth Hormone program, including both clinical and manufacturing costs. General and administrative expenses for the second quarter were EUR 2.7 million compared to EUR 2.1 million in the same period in 2015. This increase in G&A is primarily due to the additional personnel required to support the increasing needs of a publicly traded company. Our cash balance as of June 30, 2016, was approximately EUR 90.8 million compared to EUR 101.9 million as of March 31, 2016. I would also like to mention another component of our vision. We will continue to leverage outside collaborations in parallel to our development activities when we consider the product opportunities to be outside the scope of our Vision 20/20 strategic plan. We have already formed multi-product strategic collaborations with Sanofi in diabetes and Genentech in ophthalmology, both of which are focused on developing leading products in large markets. While our focus remains on advancing our internal wholly owned pipeline, we believe collaborations can help monetize the potential of our TransCon platform. We hope you'll be able to join us in New York City on September 30, or listen to the R&D Update via webcast, in order to get some more in-depth review of what the team is working on here at Ascendis. The update will feature presentations by outside experts as well as our internal R&D team, providing additional details on the opportunity and development plans for our pipeline. Now let me turn the call back over to the operator for a question-and-answer session.

[Operator Instructions] Our first question comes from the line of Jim Birchenough with Wells Fargo.

I have a question on the TransCon PTH, maybe 2. I guess the first thing is, the bone-building effects of PTH really come from the pulsatile nature of delivery. So if you go to more of a chronic delivery, what effects would you expect to have on bone health? And then to the extent the advantage here may be addressing the unmet need where you saw the urinary calcium increase with Natpara, what do you think you have to show FDA to support approval for a next-generation or best-in-class PTH replacement?

Thanks, Jim, for the question. This is Jonathan. I'll take that. So I did not cover this, but actually you're obviously well aware that in hypoparathyroidism, those patients suffer from decreased bone turnover. And by correcting to the physiological levels of PTH, we theoretically should normalize bone turnover and create healthy bone. And that will have beneficial effects downstream. But of note, if you only correct to physiologic levels of PTH, you should not be anabolic, like you are with the high-pulsatile nature of a FORTEO therapy, for example. And that also is a big advantage since you don't have the downstream negative effects of anabolic effects such as oncology disorders and sarcoma, in particular. So we think we may be able to avoid that, but we will explore that more in September in New York.

Jim, I would just add a few comments. One comment I would like to add is that there has been extensive studies, clinical data being generated with a continuous infusion where you really make up that curve. And by doing that, you actually have observed that you can actually normalize the bone marker. So it's actually been really well clinically validated by intense clinical trial by taking PTH134 and concluding in a continuous manner in the right patient group that you actually are gaining the benefit that we want to achieve with our TransCon PTH product.

Then maybe one -- oh, go ahead.

Hypocalciuria question or hypercalciuria question. So the control of hypercalciuria is pretty good with Natpara in the first 12 hours of the day, but then you start losing control, and FDA is very, very keenly aware of this. They made a big point of this at the advisory committee meeting, as you know. And by having a 24-hour control of physiologic PTH levels, we should be able to control more completely urinary calcium levels, and we think that will be very well received by the agency who has mentioned it as a remaining unmet need.

Our next question comes from the line of Tazeen Ahmad, Bank of America Merrill Lynch.

This is Peter Stapor on for Tazeen today. And just a couple of questions. First, on the R&D for treprostinil discontinuing. How quickly will that R&D reduction hit the income statement? And also secondly, on the top line, any changes with the royalty stream from your partnerships? Where will the run rate continue?

So this is Scott, Peter. So the question of R&D dropping off on treprostinil. We currently don't spend -- we don't recognize any R&D expense on our P&L from treprostinil. It's all -- it's been previously expensed and very low, historically very low.

Okay. Great.

I missed the second part of the question, sorry.

Right. The revenue stream from partnerships with Genentech and Sanofi. Will that top line revenue change at all or is that going to continue on the run rate math, just -- yes, that's it.

It's a good question, and we are extremely satisfied with the collaboration we have with both Genentech in ophthalmology and Sanofi in diabetes. They're really pursuing the product opportunities with high speed and really dedicated. What we can't do is that we cannot really come out with a forward statement related to when we're receiving milestones because it's totally in our partner's destiny, who is funding the project 100% and also controlling the news flow from our partnerships.

[Operator Instructions] We have a follow-up question from the line of Jim Birchenough, Wells Fargo.

Just -- so I guess 2 on -- and that's -- this may be hard to answer. But do you have any sense of whether there will be some data flow coming from your partners either in diabetes or from Genentech in ophthalmology next year at a high level? Do you expect some dataflow there?

We have no comments.

Okay. And then maybe back to the TransCon PTH. I guess the other attributes that one might want to differentiate on, if you look preclinically, there was some angst around PTH replacement on osteosarcoma risk and -- is it your sense that, that was also related to very high levels pulsed quickly and there might be some lower safety liability from a preclinical standpoint? Any comments on that?

Yes, so thanks. So the risk of osteosarcoma with the current product is thought to be very closely tied to its anabolic profile. So if you don't have anabolic profile, you should not have the osteosarcoma risk. And the way we are dosing, not with the high spiking pulsatile levels, we do not expect to be anabolic, and we think that will be a -- just one of many advantages to our product.

And that concludes today's question-and-answer session. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone have a great day.