Good day, ladies and gentlemen, and welcome to the Ascendis Pharma Third Quarter 2016 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I'd now like to introduce your host for today's conference, Mr. Scott Smith, Chief Financial Officer. Sir, please go ahead.

Thank you, operator, and thank you everyone for joining our call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me on 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 leading integrated rare disease company, our goal to produce multiple potential best-in-class pipeline opportunities, statements regarding our strategic plans, 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's 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, carryout 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 factor section of our Report on Form 6-K that was filed with the Securities and Exchange Commission on October 18, 2016. On today's call, we will discuss our third 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. In the third quarter, we made key advancement in our pipeline. For the TransCon Growth Hormone program, we have enrolled the third patient in the Phase III heiGHt Trial. We have also disclosed 2 new product candidates, TransCon PTH and TransCon CNP. So these 2 new rare disease endocrinology programs represented preclinical data for the first time on September 30, 2016, at the R&D Day in New York supporting their potential best-in-class product profiles. During the quarter, we outlined the strategic road map, known as Vision 20/20, which describe how we aim to establish Ascendis as a leading integrated rare disease company. We believe we can do that in a lower risk manner, while addressing significant unmet medical needs in high-value rare disease areas. A key component of our Vision 20/20 is to focus on rare diseases, where we can apply our TransCon technology to clinically validated parent drugs and create clearly differentiated product that address large markets. We plan to build out a pipeline of at least 3 product candidates in this therapeutic area of focus. We recently announced that our first rare disease pipeline will be in the endocrinology space. We believe that the Ascendis approach to R&D creates a pipeline a lower risk, higher-value product candidates. We believe it also allows us to create synergies across a single therapeutic area, a strategy that has been demonstrated to drive efficiency throughout the drug development process from R&D to commercialization. We believe that first focus may be the single most important factor to build and sustain a true long-term competitive advantage. As you know, the ultimate goal of Vision 20/20 is to build a commercial integrated company, primarily focused in the U.S. Our current rare disease endocrinology pipeline, our 3 product candidates, present multiple options for building this commercial focus. If our product candidates are approved, we believe that they will be able to [indiscernible] a single specialized sales force to efficiently commercializing our products in the U.S. Furthermore, by leveraging strategic collaboration, as we have in place today with Genentech Roche and Sanofi, we have more opportunity to extend the reach and impact of our TransCon technology platform in vast disease area. We are proud of the strategic expanses we have developed in rare diseases endocrinology as a progress we have made this quarter on all fronts. We have [indiscernible] sides and enrolled the first patients in the heiGHt Trial. We're also advancing 2 preclinical candidates for expected findings of R&D equivalent for TransCon PTH in Q2 2017 and TransCon CNP in Q4 2017. We have also successfully completed an equity offering, a net proceeds of around $120 million, providing us with additional capital to advance our [indiscernible] wholly-owned pipeline towards multiple value-creating milestones. Now let me turn the call over to Jonathan, Chief Medical Officer, for a more detailed review of our pipeline.

Thanks, Jan. This past quarter has been an exciting and productive time for our company, as we have advanced our pipeline and made key hires in our clinical developments and regulatory groups to add depth and expertise in endocrinology. Many of you may have attended our R&D update in September, where we reviewed 3 of our internal pipeline programs, TransCon Growth Hormone, TransCon PTH and TransCon CNP. Today, I'll briefly review each program starting with the important progress we've made with our Phase III TransCon Growth Hormone program. We are pleased to announce that the first patients have recently been enrolled in the U.S. in the global heiGHt Trial, our Phase III trial of TransCon Growth Hormone in children with growth hormone deficiency or GHD. Similar in design to our Phase II trial in pediatric GHD patients, the heiGHt Trial was a randomized, open-label, active control Phase III trial. The heiGHt Trial will compare outcomes in newly diagnosed children with GHD, receiving once weekly TransCon Growth Hormone to those receiving injections of daily growth hormone therapy. The primary endpoint is height velocity at 12 months. And patients will have the option to enroll in an open-label extension to collect long-term safety and efficacy data. Following the positive interactions with the FDA and EMA, earlier this year, we have continued to complete international regulatory submissions. Our recent focus has been on site initiation and activation. We have secured numerous institutional review board approvals and are conducting site initiation visits on an ongoing basis. We also recently held an investigator meeting with physicians and clinical trials staff from sites including Australia, New Zealand and the U.S. At this meeting, enthusiasm for the heiGHt Trial, the TransCon Growth Hormone program and our endocrinology pipeline, in general, was high. We expect to have more…

Thank you, Jonathan, and thank you, everyone, for participating in the call today. Turning to our third quarter financial results for the period ending September 30, 2016, let me review some highlights. For the third quarter, we reported a net loss of EUR 18.3 million or EUR 0.72 per basic and diluted share compared to a net loss of EUR 7.3 million or EUR 0.30 per basic and diluted share during the same period in 2015. Research and development cost for the third quarter were EUR 16.5 million compared to EUR 8 million in the same period in 2015. Higher R&D costs in 2016 were primarily due to manufacturing and other costs related to the initiation of the Phase III heiGHt Trial as well as cost to support our 2 preclinical product candidates, TransCon PTH and TransCon CNP. General and administrative expenses for the third quarter were EUR 2.6 million compared to EUR 1.4 million in the same period in 2015. This increase in G&A is primarily due to additional personnel to support the increasing requirements of a publicly traded company. We ended the quarter with a reported cash balance of EUR 74.5 million as of September 30, compared to EUR 90.8 million as of June 30. Subsequent to the quarter end, we received net proceeds of approximately USD 127 million from the recent sale of ADSs in a follow-on offering. We are pleased to have successfully completed this offering, which welcomes a number of new investors and provides additional funds to support the clinical development of TransCon Growth Hormone, TransCon PTH and TransCon CNP. Proceeds from the offering will also be used for working capital, general corporate purposes and to expand our TransCon technology franchise, which we continue to view as attractive for future strategic collaborations. Now let me turn the call back over to Jan.

We have made important progress during 2016 towards our goal of becoming a leading rare disease company. We presented a clear long-term strategy with Vision 20/20, announced our focus in rare disease endocrinology, advancing TransCon Growth Hormone into Phase III and expanded our pipeline with 2 additional candidates in a single area of therapeutic focus. Looking towards 2017, we have important milestones, including an expected update on heiGHt Trial enrollment and advancing both TransCon PTH and TransCon CNP to clinical development. We're looking forward to seeing many of you at investor conference in 2017, starting with the JP Morgan Healthcare Conference in January. With that operator, will you please open the call for Q&A.

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

On the heiGHt Trial, could you maybe remind us how many sites you're planning to enroll? How many sites are enrolled already? And if you have some sense, when you look at these sites, how many new patients in aggregate do they treat with growth hormone deficiency? And I have a follow-up.

Thanks, Jim. This is Jonathan here. We previously said that we want to be very aggressive. We know this is a difficult area to recruit. We know there's competition in this space. And we know these patients are, as of yet, undiagnosed even. So it's not like you stockpile patients in sites. So we typically thrown around numbers like 80 to 100 sites, but we're finalizing our feasibility. So we don't have a final number. It will probably be in that range, which is a big number, it's an aggressive number in order to recruit the study in a timely fashion. We have many sites that are onboard already that are being initiated on a weekly basis. I don't think we should provide numbers every week or we'll have to give monthly updates on that. But we are in the early phases of actively initiating a bunch of sites around the world. We're a little bit ahead of pace on the U.S. side, Australia, New Zealand. Europe, as you probably know, takes much longer for the regulatory submissions. And in terms of new patients, it really varies. I think during the feasibility assessments, there are sites who will say that they see 1 to 5 patients every month, maybe 6 per year. Some are less than that, some are more than that. But, of course, it's all up for chance. These are undiagnosed patients, and it depends on established referral patterns.

And then just on the other program on CNP and PTH programs. What are the gating -- are there any major gating items for either of those programs to file the INDs? And I'm assuming preclinical tox [ph[ is following on. Could you maybe just give us some sense of what's gating items might be to filing the INDs, so we have an assessment on how concrete those timelines are?

Sure. So it’s really just the usual stuff. So it's the toxicology programs that are underway, on target and waiting for the final reports on those programs. It's the CMC changes and tweaks that you routinely make at this stage of a product. And all that work is being conducted and will be finalized shortly. So everything is on track is the short answer, in the usual areas that requires support from IND or equivalent. We may, in fact, choose to conduct the study outside the U.S. where there is some favorable regulatory and budgetary time lines. So we retain that option and we'll deploy that if it looks to be to our advantage.

Our next question comes from the line of Joseph Schwartz with Leerink Partners.

This is Brett Larson dialing in for Joe. Congratulations on the initiation of enrollment and dosing. It's great to hear. I had a question on the safety monitoring front for this study. And curious if you could speak a bit about how frequently patients will be monitored, if there is any additional monitoring between the outline site visits? And are there hard cutoffs in place for the IGF levels or the duration of elevation that would lead to a dose discontinuation for a patient? And how that's being managed in the study?

Sure. So the patients are seen a little more frequently upfront on a monthly basis and then eventually it goes to q.3 [ph] months, which is typically how you treat these patients in standard of care. Nothing unusual for that in terms of frequency. There are limits on IGF levels, so we'll be monitoring any IGF excursions. There are dose adjustment rules. Should the excursions exceed 2 or 3 on a continued basis, so there might be just transient elevations in a given patient. You see that with daily marketed growth hormone therapies. Usually docs don't act on that. But if it’s persistent and elevated, then there might be dose adjustments, and there are combinations for that in the protocol.

So then if a patient comes in, let's say, a week 13 visit, and isn't scheduled itself to come until again week 26 and she demonstrates a point estimate of an elevated IGF, does anything change in terms of your monitoring over the coming days or additional visits? Or does that patient stay on schedule and return on q.3 months?

It depends how high it is. So if it's elevated, it will often just get repeated. And then often by the time it's repeated, it will likely come down, if it's elevated to begin with. We expect very few excursions actually of the doses that we're using in the study as guided by our Phase II results, where we saw very infrequent excursions above 2 or 3, and the few that we saw were really at the 0.3 milligrams per kilogram for week dose, which is not being used in this study.

Okay. Great. That's very helpful. And lastly, can you speak a bit to any work that you’re doing at this point with patient advocacy or support groups in preparation for broad trial enrollments? I know that you said that in most cases these will be patients that have yet to be diagnosed, but curious to hear of any activities in that space?

Yes. So this -- unlike other orphan diseases, it's not a space where advocacy plays a big role in recruitment. It often does. But here as you say the patients have not even been diagnosed, and there is already treatment options that are readily available. So usually, advocacy does not play a big role. After patient is diagnosed, they typically go on therapy within weeks, and it is pretty straightforward which therapy you go on. There is only one, there's many choices, but it's all the same. So at the appropriate time, we'll begin to engage advocacy groups, but we don't think it will have a big role in the recruitment.

[Operator Instructions] Our next question comes from the line of Liana Moussatos with Wedbush Securities.

The first one is for height you mentioned that there are lot of patients that aren't diagnosed yet. Are you putting in -- starting some programs in order to diagnose patients? And then my second question, you were talking about mechanism for the TransCon CNP program and you mentioned that in animal models, you did not see hypotension. Are there any other benefits to having a 7-day dosing beside convenience and the blood pressure, theoretically, any other kind of benefits that you see?

Okay. This is Jonathan, and I will turn it over to Jan for the second question. We do not have programs in place to diagnose patients. That would be extraordinarily difficult. I mean, these patients are sporadically diagnosed in any and all places. It’s really hard to predict. What we do do is, we go to large practices that tends to have a big catchment area, where they are naturally funneled in from where ever they are diagnosed. That works well in the U.S., especially well outside the U.S., notably in Eastern Europe, where there is many, many fewer centers that actually diagnose and treat these patients. So we don't feel that we need to. And it would be extraordinarily challenging I think to try to support the diagnosis. And then some of them might even go to other studies. So we would be doing the work for our competitors. So I hope they do that work, that helps us out. Jan can answer the second question.

Going back to our CNC (sic) [ CNP ] project. I think when we started to develop the CNP project, we were looking on the peptide, and we saw that it was an extremely interesting peptide how we couldn't address diseases through the FDA arm to leave us [indiscernible] potential FGR2 receptor. And what we saw with the CNP peptide is a very, very short half life of about 20 minutes if you administrate that to humans. So what we wanted to do is that at the same time we also saw a limitation. If you have 2 high peak level of CNP, you are actually getting hypotension. So you can say you have the worst case of a dilemma. You have a very, very short half life peptide. And when you really giving high peak dose, you actually get a side effect with hypotension. So therefore, you have to limit exactly the dosing profile, how long time you actually can get pharmaceutical relevant cohorts during a 24-hour cycle. So what we did with the TransCon technology, when Ascendis developed that product, where we actually can get exactly the kind of cohorts, exactly the same kind of exposure, not only for 24 hours but only with a single injection for 1-week without any kind of risk of hypotension. And therefore, we are in a position that we can optimize this treatment, so we can hopefully see a better efficacy with the TransCon treatment compared to what we have seen currently with the CNP treatment today without any kind of limitation compared to dosing. This is the target product profile given and treatment for patients in -- I think our target initial indication will be achondroplasia with a treatment that can give optimal efficacy without limitation related to side effect for extended hypotension, and then at the same time, having an optimal convenience dosing profile with once weekly.

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