Good day, ladies and gentlemen, and welcome to the Q1 2017 Ascendis Pharma Earnings Conference Call. At this time, all participants are in a listen-only-mode. Later, we will conduct the question-and-answer session and instructions will follow at that time [Operator Instructions]. I would now like to turn the call over to Scott Smith, Vice President and Chief Financial Officer. Please go ahead.

Thank you, operator. Thank you everyone for joining our first quarter financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me on the call today as usual 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 that are not limited to are potential to be kind a meeting integrated rare disease company, our progress on our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plan, our goals regarding our clinical pipeline of rare disease endocrinology program, and statements regarding the plans for our Phase 3 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 filed on March 22, 2017. On today’s call, we will discuss our first quarter 2017 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 Jan Mikkelsen, our President and Chief Executive Officer.

Thank you, Scott, and welcome to everyone on our call today. In this quarter, we continue to advance all three of our pipeline product as planned, TransCon Growth Hormone, TransCon PTH and TransCon CNP, paving the way to establish Ascendis as a leading rate disease company, the continued enrollment according schedule in the Phase 3 heiGHt Trial for TransCon Growth Hormone in pediatric growth hormone deficiency. We have also enhanced the Phase 3 progress with the addition of our switch study and now progressing towards introducing our operating income in the extension study. For TransCon PTH, we are on track to submit filing this quarter in Australia and to initiate a Phase 1 trial during the third quarter. For TransCon CNP, we are on track to file an IND for similar filing during the fourth quarter of this year. We presented positive data supporting the potential best-in-class profile of all three programs at ENDO. All this development moved us forward to our Vision 2020 strategic goal and our plan to become a leading integrated rare disease company. To date, I have a few objections on our most advanced product candidates TransCon Growth Hormone. There have been many key learnings during the last 30 years regarding the winning strategies for commercially successful growth hormone product. These are informed by real world experience with the many available daily growth hormone products and efforts with long acting growth hormone. We have seen what works and what does not. We have learned with attributes physician and patient for [indiscernible] therapy. Let me share some of these observations as it relates to the development of the long acting growth hormone products. First, it’s not enough for a long acting growth hormone product to get approved. The path is most high for being a successful commercial…

Thank you, Jan. We continue to make excellent progress with all three of our rare disease endocrinology pipeline candidates. This included a strong showing of data on all three programs at the recent Endocrine Society Annual Meeting in Orlando, where we continued to build awareness of our company and pipeline within the endocrinology community. Our Phase 3 program for TransCon Growth Hormone continues to progress as planned, including enrollments in the global heiGHt trial as well as preparations for the extension phase of heiGHt and initiation of the switch study later this year. We continue to see enthusiasm for the heiGHt trial across our worldwide network of sites, and we recently held another investigator meeting to brief new site that are being initiated. We continue to see additional approvals and the initiation of sites in new geographies. The trial will ultimately be open for enrollment in close to 20 countries across Australia, Canada, Europe, Middle East, New Zealand and the U.S. With these efforts, we are gaining momentum and we remain on track to complete enrollment during the fourth quarter of 2017. As a reminder, the heiGHt trial is a randomized open-label active controlled Phase 3 trial, comparing children with growth hormone deficiency, receiving once weekly TransCon Growth Hormone to those receiving injections of daily growth hormone, each dosed at 0.24 milligram per kilogram per week. Using a similar design to our Phase 2 active control study, heiGHt is evaluating the safety, efficacy and tolerability of TransCon Growth Hormone in the non- inferiority design with the primary endpoint of heiGHt velocity at 12 months. The results of our randomized controlled Phase 2 trial give us confidence in the potential results of the heiGHt trial, given the dose response and demonstrated heiGHt velocity which appeared comparable to daily human growth hormone…

Thank you, Jonathan, and thank you everyone for participating in the call today. Turning to our financial results for the three months ended March 31, 2017, let me review some highlights. We ended the quarter with cash and cash equivalents of €157.6 million and approximately 32.5 million shares outstanding. We reported a net loss of €25.1 million or €0.78 per basic and diluted share compared to a net loss of €20.5 million or €0.82 per basic and diluted share during the same period in 2016. Research and development costs for the quarter were €20.6 million compared to €16.2 million during the 2016 quarter. Higher R&D costs in Q1 2017 reflect preclinical development and manufacturing costs for two new rare disease pipeline candidates TransCon PTH and TransCon CNP, partly offset by lower manufacturing costs for TransCon Growth Hormone in the first quarter of 2017 compared to the prior year's quarter. General and administrative expenses for the 2017 quarter were €3.3 million compared to €2.9 million during the 2016 quarter. The increase is primarily due to higher personnel costs partly offset by a decrease in professional fees. As a reminder we expect our R&D expenses to vary from quarter-to-quarter as we invest in and advance our wholly-owned internal pipeline programs primarily due to increase in clinical trial costs related to advancing and expanding our Phase 3 program and variable expenses related to clinical supply and validation of our commercial manufacturing process for TransCon Growth Hormone, increasing cost related to the initiation of a Phase 1 clinical trial and Phase 3 enabling chronic tox manufacturing and other activities for TransCon PTH, and ongoing preclinical development and manufacturing activities to support an IND or equivalent filing by year end for TransCon CNP. We are pleased with our execution this year advancing our rare disease pipeline. Operator, we are now ready to take questions.

Thank you. [Operator Instructions] Our first question is from Jessica Fye with JP Morgan. Your line is now open.

Hey, guys. Thanks for taking my questions. Couple of from me, first, is there anything more specific you could give us around the where we are enrollment for the heiGHt trial? Second, curious if there is any kind of detail you could provide on how to think about quarterly expense trends over the remainder of the year? And lastly, question I've been getting from investors is what's your view on to the extent long acting growth hormones were to show numerical interiority still within kind of non-interiority criteria. What do you think kind of max tolerable difference from physicians would be for uptake? Thank you.

Okay. Jess, I'll start your first question was on enrollment. And we've said and we continue to say that our enrollment is moving along as planned, we're very pleased. We planned to finish enrollment by the fourth quarter. And we still fully expect to meet that milestone.

On the quarterly expenses, we don't provide specific guidance, Jess, as you know, but in the past our expenses have been lumpy quarter-to-quarter. And you should expect that somewhat going forward.

So, Jess, I would take your last question Jan, here. I also think of accretion needs to be taking in a larger perspective because just taking one single element out from the entire integrity of the product portfolio need to fulfill. I think efficacy, safety and tolerability and also product these are need to be optimal. If you just go into one single element with needed to efficacy then you have a lot of different efficacy models. You have those children with growth hormone deficiency. You have what we called high velocity with are the primary outcome. If you go to adults with growth hormone deficiency, you have a complete different outcome with the typical one will be [indiscernible]. Going to narrow it down much more to attrition related to the pediatric growth hormone deficiency trial related to high velocity. You have actually dependent on the doses as you have and U.S. dose with a higher than the European dose. The European dose is around 0.21 milligram per kilo per week. The U.S. dose is much higher effective outcome 0.35. If we go down where we running our product today, I think at least you need to show at least the same scope velocity when you compare to the European dose. What we also believe that is not enough. We also need to show that you can move up to the U.S. relevant doses, so you also can show that not only on the 0.24 where we all compare in our daily optimal. You also need to show that you actually can get the expected growth velocity that you will expect to see out from a daily growth hormone that have been dosed up in the U.S. relevant dose of 0.35 milligram per kilo per week. So, that is actually a lot of different kind of paths that you need to pass to have the right efficacy.

Okay. Got it. Thank you.

And I’ll just add that. Sure, you need to achieve non-inferiority for your trial to succeed. So, we would say that the bars are a little higher than you in addition need to compare favorably to the comparator agents.

Our next question is from Joseph Schwartz with Leerink Partners. Your line is now open.

I was wondering also but the heiGHt trial first of all and whether you have any insight into how the baseline gross velocity for the patient sort of have been rolling a heiGHt compares to who went into your previous study and those are competitors? And how you think that might influence the magnitude of benefit that you’re likely to see?

Okay. Thanks. This is Jonathan, I’ll take that. We are collecting in all of our sites the baseline growth velocity. We have not actually collected clean and reviewed that data, but it tends to be fairly uniform most of these patients in most of these studies that are reported tend to grow and about 4 centimeters per year prior to entering the trials. What’s more important is what the baseline demographics end up being, and again they tend to be relatively standard between these various trials and conclusion criteria are very similar in all of these trials. Lastly, our inclusion criteria for our heiGHt Trial are very similar to the inclusion criteria of our Phase 2 study. So, we would expect our baseline demographics to be very close to what we saw in the Phase 2 trial.

Jan, here to add one thing comparison, we had tried to compare the demographic for all of Phase 2 trials. We have tried to compare to last U.S. trials out of [indiscernible] in North America. We had compared to around demographics for examples [indiscernible] demographic and we basic can only see where that’s more different that not have can give any kind of reason to explain the difference we have seen in growth velocity.

Okay. That’s very helpful. Thanks. And maybe a follow-up on the hypoparathyroidism program. What kind of biomarkers should we anticipate that you’ll be measuring and then another benchmarks for those that might be provide some interesting inside into activity in your Phase 1 study?

What with the biomarkers are really very straightforward and they tend to be the pharmacodynamic markers and those are serum calcium, which you should look for clearly serum phosphate. We should look for urinary calcium levels. And then importantly, we should look for the expected suppression of endogenous PTH 1 to 84. Since we’re giving 1 to 34, you can actually look for treatment effect by looking at suppression of PTH 1 to 84, which we intend to do.

Are there any bone markers or anything else that you’re going to be posting?

Of course, there is a whole panel of bone markers which will be following as well. I should have mentioned that. And we expect them to normalize from the abnormal state at baseline.

Our next question is from Alethia Young with Credit Suisse. Your line is now open.

Hi, guys thanks for taking my question, it's actually Derek for Alethia. Only one question for me, my question is around adult with growth hormone deficiency. So looking at TransCon Growth Hormone, I think it's more differentiated in terms of BMI which is more important in adults being deficient, so I'm wondering what's your thought around the timing of the adult Phase 3 trial if any and the market opportunity there? Thank you.

I'm sorry Derek, the timing of our Phase 3 trial. Can you just clarify your question?

Yes, the timing of the adult Phase 3 trial for TransCon Growth Hormone?

On adults, so we've not announced our plans for the adult trial, but it would be a natural trial for us to do in follow-up. We've said that it will not be part of the initial filing package, so that will be a follow-on study.

I think it's extremely irrelevant question you're coming up because it's not only enough to on what we call growth velocity, but also all others effects that you expect to get out from the growth hormone treatment. But what we've seen and why we're confident that we can get the same effect at endogenous and daily growth hormone is that we had compared the BMI development in our Phase 2 trial, and we actually are getting expressive the same results of the BMI development for six months in the treated children with exactly one change compared as you expect it to see with daily growth hormone treatment.

Our next question is from Liana Moussatos with Wedbush Securities. Your line is now open.

Can you comment on the status of potential partnerships this year?

So, with regard to partnerships, particularly the Sanofi partnership and the Roche Genentech partnership, we don't provide any guidance or insights. Those programs are completely in the hands of partners, and we received some sort of milestone that's material. We'll make an announcement as appropriate. With regards to additional partnerships, that may or may not come, we don't give specific guidance on those either, although as you highlight I think the continued progress of the pipeline is sort of revealing the power of the TransCon platform to others.

[Operator Instructions] Our next question is from Jim Birchenough with Wells Fargo. Your line is now open.

Just on the switch study just wondering, if you could speak to the goal of that study and maybe a little bit more about the design? I'm wondering if you're looking to enroll adults with suboptimal metabolic or body composition metrics and show improvement there and on the children if you're looking to show improvement in growth velocity in those with suboptimal growth velocity on existing therapies. And then I've got a follow-up.

So, the switch study is primarily a safety study. It was recommended by us to the agencies but very well embraced I would say because our initial program was relatively on the smaller side, it was only the heiGHt trial. So we start by enhancing our safety data dates and providing essentially 300 patients with at least six months of safety data that would compare favorably by any measure even to the ICH numbers, which do not of course apply to rare diseases. So, it's really to bolster our safety database and further provide confidence in the safety package as we approach the agencies. So FDA and EMA have both clearly embraced this. In terms of who is enrolled its patients who are currently taking growth hormone therapy, who will then switch because they would prefer to be on presumably a weekly therapy versus a daily therapy. And we'll follow all of the children in this trial for heiGHt velocity of course. Really, it will be a little more challenging to assess efficacy in this trial, although we will do efficacy assessments where we can imagine that patients will be on varying lengths of growth hormone using various products, various different devices. So, it's a bit of a heterogeneous population unlike the heiGHt trial, which is really the go to place for efficacy. Nonetheless, we will measure efficacy and we'll probably have something to say about efficacy from this trial as well.

And then maybe just a follow-up on TransCon PTH. Could you maybe walk us through the opportunity for more optimized product particularly one that has an effect on calciuria? And maybe start with current use of Natpara as you understand it and how you think you could broaden the opportunity with more effective product?

So, Natpara is off to a good start. It's being used as you might expect in more severe patients. But even where it is used, I think it's pretty clear at least from the trial data, that it controlled some aspects of the disease reasonably well like serum calcium, but it's not -- well I'll get back to that and does not control urinary calcium very well. But back to serum calcium, the spot values are often in the low normal to normal range. But what it does not do is affect the levels of hypercalcemia or hypocalcemia that we're seeing in the clinical trial. In fact, there was no difference from placebo. But basically, what you're seeing is there is an upward movement of serum calcium into or approaching the normal range that is tend to be very volatile either too high or too low. And that of course is problematic and there is no effect on urinary calcium. All of this according to FDA and we agree with this is very predictable because of the pharmacokinetics of Natpara, which provide coverage above or within the normal range for only about 12 to 15 hours of the day. But during the first 12 to 15 hours of any day, you have presumably good control of all of those parameters, but then you lose it for the back half of the day. And net-net is that you don't control hyper or hypocalcemia or urinary calcemia -- sorry hypercalciuria. And that leads us to the design of our product, which is an infusion-like property that replaces PTH 247 within the normal range. And that really is the goal of replacement therapy for a deficient hormone. So, that's why we have such confidence in what we'll see in Phase 1 and beyond.

But I guess in terms of the commercial opportunity what I'm getting at is, do you see this as we think about the opportunity, should we look at Natpara and say this is a better replacement therapy and it will take dominant share from Natpara or are the patients with hypoparathyroidism that aren’t being treated because of deficiencies in that product that could be addressed with TransCon PTH. Just trying to understand how we should think about the commercial opportunity?

I think from the commercial perspective, we see it’s quite different compared Natpara. We see that at the true replacement therapy for patient that is missing and having too small amount of PTH. And it’s a complete different way of treatment as Jonathan saying is because we addressed all the aspect of the disease meaning that when you look on the shortcut of Natpara related to not giving any impact on for examples the urinary calcium. It’s not having any effect on hypo and hypocalcemic some of that really the server part of disease. We actually see that in a complete different product, that is highly differentiated compared to Natpara because it’s actually are in a position where we really address the fundamentals of the disease and are in the position that we actually to normalize the PTH level of this patient group. And the only way you can do that today in current way is to take on infusion con you know from insulin area and give the PTH1-34. And this is where they have shown when patients are on infusion pump where we have to keep the PTH all in the physiological range. You actually can be in a position, you address all aspect of the diseases and this is where we see becoming. We coming in with an optimal way to treat this patient given the true replacement therapy so that all this can have a PTH deliver in the normal physiological range ensuring both efficacy and safety, both related to short-term effect. But I think we’ve seen important to the long-term effect, we need to the classification specific in treatment in all the patients in the body.

Thank you. And I’m showing no further questions. Ladies and gentlemen, thank you for participating in today’s conference. You may all disconnect. Everyone have a good day.