Ascendis Pharma A/S (ASND) Q1 2019 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the First Quarter 2019 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] As a reminder, this call will be recorded. I would now like to introduce your host for today's conference, Mr. Scott Smith, Senior Vice President and Chief Financial Officer of Ascendis Pharma. You may begin.

Thank you, operator. Thank you everyone for joining our first quarter 2019 financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me on today's call is Jan Mikkelsen, President and Chief Executive Officer; and Dr. Jonathan Leff, Chief Medical Officer. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the Safe Harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, are 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 the planned 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 annual report on Form 20-F filed on April 3, 2019. Please note that our TransCon product candidates are investigational products candidates and not approved for commercial use. The safety and effectiveness of any TransCon product candidates has not yet been established. 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 first quarter 2019 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I'll now turn the call over to Jan Mikkelsen, our President and Chief Executive Officer. Jan?

Good afternoon, everyone, and thank you for joining us today. In my view 2019 has been the most transformative period in Ascendis history, as we validated our TransCon platform with clinical results from the Phase III heiGHt and fliGHt Trials for TransCon Growth Hormone. For TransCon Growth Hormone not only did the heiGHt Trial receive its primary objectives of non-inferiority compared with daily growth hormone in pediatric growth hormone deficiency, it also demonstrated superior efficacy with comparable safety and tolerability to our daily growth hormone therapy. The safety profile was further reinforced in the fliGHt Trial. In heiGHt, we also demonstrated a three full incident approved as part in the TransCon growth hormone versus daily growth hormone, which contribute to a higher observed annual growth velocity for the TransCon Growth Hormone. In addition, we initiated our global Phase II trial for TransCon PTH in adults, subject with hypoparathyroidism and assume the old enrolling patients with a goal of completing the trial and performing topline data in the fourth quarter of this year. And we are on track to initiate a global Phase II trial for TransCon CNP, our candidate for children with achondroplasia in the third quarter of this year. Our long-term dedication to our TransCon Growth Hormone program is an example of our commitment to patients’ enzymes. In the past, we have shared with you the importance of understanding that our quality of growth hormone on our conference call. I have been reflected recently on our journey. Two years ago, in March 2017, we shared our target product profile by saying: The goals is to achieve all the integrated effect of growth hormone treatment including catch-up and sustained growth velocity, improved body conversation, including fat mass and muscle, buildup bone health and improved quality of life. We believe maintaining the same mode of action and tissue distribution is critical to mimic all these effect of the negative growth hormone. We have the only long acting growth hormone product in clinical development that is based on the release of an unmodified human growth hormone, the same as in doses and daily growth hormone. Our TransCon Technology allows unmodified growth hormone to diffuse really into the tissues, maximizing its efficacy to clear out the same effect as in doses or daily growth hormone. Later that year at our November conference call, we discussed TransCon Growth Hormone is built on delivering the same active growth hormone as daily growth hormone at the same maximum concentration and overall exposure that physician had come to expect for over 30 years. We are developing our TransCon Growth Hormone to have comparable clinical benefit and the same optimal product feature as daily growth hormone with an easy driven easy [indiscernible] demonstration. We have applied many decades of learning regarding growth hormone product design in this program. We had now successfully developed TransCon Growth Hormone from the ideal phase to the positive phase 3 data and develop TransCon PTH and TransCon CNP from the ideal Phase to positive clinical stage. The driver for this success is our focus on the science one of our three core values; patients, science and passion. We believe we can offer a lower risk product development opportunity for each of all product candidates by applying our TransCon Technologies to validated targets and drugs combined with a high level of knowledge of well understood by quality for each product opportunity. In addition, we will only advance the program if the product candidate continues to demonstrate we can achieve the target product profile. In the case of growth hormone, we invested many years to study the biology related to the disease and to build up scientific understanding of the disease. We learned about the importance of both the direct and indirect effects of growth hormone. The importance of having the right balance between growth hormone and IGF 1 activity and the relevance of heat to all aspects of the child's growth and development not just height, but also all the parameters for the body composition cardiovascular effect. We also learned about growth hormone penetration into target issues, and develop an understanding of how changing the site and structure of the growth hormone molecule could limit this effect and ability to penetrate the growth rate and other tissues, including activation of a growth hormone receptor. We saw that other long-acting growth hormone product candidate in development did not always fit with our understanding of the priority and when these programs did not achieve the expected results, it strengthened our confidence in our approach. Our belief in learning and understanding that quality of the disease drove us to advance our product candidates and in this case to finally provide a potential once weekly long-acting growth hormone therapy that not only matched the current standard of care, but may in fact offer greater therapeutic benefit. For growth hormone, we believe our TransCon platform provides a perfect fit between the growth hormone quality and the unmet medical need. Importantly, it all starts with the patient. At the beginning of our actual reason for product innovation it is always the unmet patient need. When we consider this, we look deeply into the current therapeutic options. How they make or may not fully address what patient need? We look from the view of the patient. For growth hormone, we understood that the burden of daily therapy is heiGHt for families and patient, who may have to undergo thousands of injections over the course of the treatment. As a result of the burden of this injection, patients often missed doses and may achieve suboptimal treatment outcome. For hypoparathyroidism, we know that patients are highly concerned not only about the short-term symptoms that burden their daily lives, but also the long-term effect of uncontrolled urinary calcium limits. Those living with hypoparathyroidism have a full, full greater risk of kidney failure. Yet no treatment to date restores PTAs to physiological levels having to regularly serum and urinary calcium levels for the entire day. And for achondroplasia, there remain no approved medical therapy to-date. The core morbidities are significant for achondroplasia and for other related skeletal disorder FGFR we have signaling pathway. We look at areas that as a strong patient need were we can improve efficacy, safety and tolerability to potentially develop best-in-class products that disrupt the status quo and set a new treatment standard. We are enabling this concept in endocrinology rare diseases and we now pursuing the same goal in our next therapeutic area oncology. Importantly, it is the science and the patient that matter. One of the quotes, I really like is from Neil deGrasse Tyson. I just reflect all the way up thinking. The good thing about science is that it's true whether or not you believe in it. Thank you, then we turn the call over to Jonathan for clinical update.

Thanks Jan. 2019 is off to a busy start with all of our clinical programs advancing nicely. As Jan described the Phase 3 top line results for heiGHt have strengthened our confidence in the future of the TransCon pipeline. I'll now provide an update on our three endocrinology clinical programs and the key milestones we are working to achieve in 2019. In March, we reported positive top line results for the pivotal Phase 3 heiGHt Trial, which demonstrated the once-weekly TransCon Growth Hormone at comfortable, safety and tolerability of daily Genotropin with a significantly greater increase in annualized heiGHt velocity over the one-year study period in treatment naïve children with growth hormone deficiency. Recently we had the opportunity to discuss our top line results in detail with investigators, following presentation of the results at three relevant conferences, Endo 2019 the Pediatric Endocrine Society and the Pediatric Endocrine Nurses Society. Feedback continues to be positive and we see increasing enthusiasm about the potential of once weekly TransCon Growth Hormone as a potential safe and effective alternative to daily hGH therapy. In addition to height, we recently announced preliminary data from our fliGHt or switch trial evaluating safety and tolerability of TransCon Growth Hormone in subjects to our previously treated with various commercially available daily therapies. Importantly, the trial included some subjects under three years of age, who had not been previously treated with growth hormone therapy. Preliminary results from fliGHt show that TransCon Growth Hormone was safe and well-tolerated in both populations. The adverse event profile of TransCon Growth Hormone was similar to the published safety profile of daily growth hormone therapies with no drug-related discontinuations, or drug-related serious adverse events, no neutralizing antibodies, and a low-level of low titer non-neutralizing antibodies. At our upcoming R&D Day on June 26, we plan to review more detailed from the fliGHt Trial. Additionally, subjects from heiGHt and fliGHt have rolled into our long-term extension. The enliGHten Trial, which is now completed enrollment and will follow participants for several years. We are pleased at 96% of those in heiGHt and fliGHt have chosen to continue in enliGHten. We think this reflects significant interest in our once weekly growth hormone amongst subjects and their caregivers. We are also introducing the growth hormone auto-injector next month into the enliGHten Trial. Our devices designed to be patient-friendly delivering a single low volume injection it requires a small 31 gauge needle that is only 4 millimeters in length, which is comparable to needles used to administer daily growth hormone. To a patient convenience, the TransCon Growth Hormone cartridges can be stored at room temperatures. This is an important feature for both caregivers and patients, as all except one daily therapy requires refrigeration. The auto-injector also includes an empty all design to reduce waste and has an expected lifespan of four years. The auto-injector will be part of the BLA filing. The combined safety data from heiGHt, fliGHt and enliGHten forms the expected safety database to support our planned BLA filing, following input from regulatory authorities in Europe and the U.S. We now have a large safety database that includes approximately 300 subjects with pediatric GHD who are either treatment-naïve or previously treated. We are on track and working towards our U.S. BLA for submission in the first half of 2020. Our second pipeline program TransCon PTH is also making planned progress. The phase II trial called PaTH Forward evaluates TransCon PTH in adult subjects with hypoparathyroidism, with the goal of expanding our safety database and identifying an appropriate starting dose for phase 3. We plan to initiate approximately 20 sites worldwide. Trial site continue to come on board reflecting our global focus for conducting clinical trials. There is significant interest among the patient community in participating in the trial. To review, PaTH Forward is a global randomized double-blind placebo-controlled parallel group trial in approximately 40 adult subjects, who are currently receiving standard of care therapies, which are active vitamin D and calcium supplements. The trial is evaluating three fixed doses of TransCon PTH and the down titration regimen for the complete removal of standard of care. After four weeks of dosing, all subjects may enter an open-label extension that will evaluate the long-term safety and efficacy of TransCon PTH. During recent interaction with investigators and patients, we are learning more and more about the unmet need in hypoparathyroidism. Current standard of care does not fully control the disease either in the short or long-term. As a result, patients with hypoparathyroidism have an estimated fourfold greater risk of renal disease compared to healthy individuals. The burden of this illness remains significant and we're committed to improve its care. As you know, once daily TransCon PTH is designed to restore PTH to physiologic levels for 24 hours a day. By providing sustained levels of PTH, we help to control and maintain serum and urinary calcium levels in the normal range, and thereby prevent many of the short and long-term impacts of the disease. Finally, we are preparing to advance our third pipeline candidate TransCon CNP into a phase 2 trial with achondroplasia during the third quarter. TransCon CNP is a long acting prodrug of C-type natriuretic peptide in development for achondroplasia and potentially for other fibroblast growth factor receptor related skeletal disorders. We have designed to provide a continuous exposure to CNP at safe therapeutic levels in a single once-weekly subcutaneous dose. During the first quarter, we completed analysis of our phase 1 trial in healthy adult subjects. For which preliminary data will reported later last year. The results show that once-weekly TransCon CNP provided continuous exposure to CNP, where the PK profile designed to maximize efficacy with once weekly dosing. No serious AEs were reported TransCon CNP was generally well tolerated, it doses up to 150 micrograms per kilogram and the resting blood pressure and heart rate were unchanged from pre-dose at all time points in all cohorts. We plan to present these results at medical conferences this summer, which are attended by world experts and skeletal disorders. As a lead up to our phase 2 trial, we are also actively recruiting subjects for the achieve study. Our global natural history study designed to gain insight into the experience of pediatric subjects with achondroplasia. Through this effort we’re just spreading in the medical and patient communities about our program. We are very encouraged by the interests, a great indicator of the need for a treatment option for these patients. During the first quarter TransCon CNP also received Orphan Drug Designation from the U.S. FDA. We believe this is in part an acknowledgment of the great need a treatment for achondroplasia as there are no FDA-approved therapies for this rare condition. We have also been engaged in productive regulatory discussions in both the U.S. and EU, regarding our TransCon CNP development program. It is important to remember that achondroplasia is not just about short stature, individuals living with this condition often experience severe skeletal complications and core morbidities. We are extremely passionate about the potential for advancing a treatment option that could positively impact children living with achondroplasia. We are on track to initiate the Phase II trial in children with achondroplasia in the third quarter of 2019. For Ascendis 2019 is shaping up to be a truly momentous year. Moment has already revealed data to validate our TransCon Technology platform and seen the completion of both the heiGHt and fliGHt clinical trials. We are well in our way towards building a robust pipeline of significant products in rare endocrine diseases. Looking ahead we are focused on presenting data on all three of our programs throughout the year, preparing the BLA filing for TransCon Growth Hormone which is expected in the first half of 2020, executing the Phase II PaTH Forward trial for TransCon PTH with the goal of topline data in Q4 this year and initiating a Phase II trial for TransCon CNP in the third quarter. We are moving full steam ahead and it is an exciting time for Ascendis. But we didn't get here by ourselves. We are grateful for the many contributions of our investigators, study coordinators patients and caregivers and of course our employees. I'll now turn the call over to Scott for a financial update.

Thank you, Jonathan. Turning to our financial results for the three months ended March 31 2019 let me review some highlights. For the first quarter we reported a net loss of €53.6 million or €1.24 million per basic and diluted share compared to a net loss of €41.4 million or €1.07 per basic and diluted share during the same period in 2018. The first quarter 2019 net loss includes an unrealized noncash gain of €3.1 million compared to an unrealized noncash loss of €7 million in the 2018 quarter due to foreign currency exchange rate fluctuations. Research and development costs for the first quarter were €51.3 million compared to €30.5 million during the same period in 2018. Higher R&D costs during the 2019 quarter reflect increased personnel and infrastructure costs due to growth in headcount. For TransCon Growth Hormone costs were higher primarily due to ongoing preparation of validation batches which were partially offset by lower clinical trial costs related to our Phase III program. For TransCon PTH costs were higher primarily due to manufacturing of TransCon PTH for use in our clinical trials and preparation for validation batches. New and ongoing costs associated with our Phase II clinical trial which were partially offset by lower preclinical costs. For TransCon CNP costs were lower primarily due to lower manufacturing costs and preclinical costs which were partially offset by higher clinical trial costs. As a reminder our R&D expenses including manufacturing related expenses vary from quarter-to-quarter reflecting timing of ongoing development activity. General and administrative expenses for the first quarter of 2019 were €10.4 million compared to €4.7 million during the 2018 period. These higher costs primarily reflect an increase in personnel and site costs as well as costs of building out commercial capabilities. We ended the first quarter with cash and cash equivalents of €696.7 million and 46927115 million ordinary shares outstanding which includes a net proceeds from the following of financing completed in March 2019 of approximately $539.4 million or approximately €480.3 million. All of our milestones we laid out in January remain on track. Furthermore with the success of the TransCon platform in the heiGHt and fliGHt trial in our recent financing, we are well positioned and capitalized deliver in our Vision 3x3 strategic road map including initiating plans to expand our product candidates into other endocrinology rare disease indications, advancing our objective of achieving global reach based on ongoing regulatory activities and discussions not only in the U.S. and Europe, but also in Japan, South Korea and through Vision pharmaceuticals in China and planning to establish a global commercial presence for endocrinology rare disease portfolio. In addition we have several significant upcoming milestones expected in the remainder of this year including introduction of the growth hormone auto-injector into the enliGHten Trial, initiation of our Phase II clinical trial of TransCon CNP, top line data from the TransCon PTH Phase II clinical trial and release of further data from our endocrinology rare disease pipeline. We are very excited to be hosting our second R&D day in New York City on June 26 where we will provide a detailed update on our three endocrinology rare disease programs including detailed data on TransCon Growth Hormone from the heiGHt and fliGHt trials, updates on our TransCon PTH and TransCon CNP programs and introduction to our commercial organization and an introduction of our oncology Vision strategic goals, and product candidates. This will be one of the most important events for Ascendis this year for delivering on our vision for achieving sustainable growth and building a leading biopharma company. Operator, we are now ready to take questions.

Thank you. [Operator Instructions] And our first question comes from Tazeen Ahmad with Bank of America Merrill Lynch. Your line is open.

Hi guys. Good afternoon. Thanks for taking my questions. Scott maybe one for you. You provided some color on the R&D expense for the quarter already, but maybe just to give us a better sense of the rest of the year, what proportion of those expenses that you mentioned do you expect to continue throughout the rest of the year?

I think that in general the expenses will continue throughout the year I think when it comes to just annualizing the first quarter, there was a bolus of PPQ expenses in the quarter for about €10 million, so rather that have that be spread out throughout the year, we took an upfront -- we had an upfront payment for that amount.

Just directionally speaking just given the fact that you are going to be having more programs presumably in terms of the clinic, should we think about that run rate should increase as the quarter’s progress throughout the year?

I would think based on what we disclose today, I would expect even at most continued run rate if not trailing off as we roll off the TransCon Growth Hormone program, but you have to come to the R&D Day on June 26 to get a feel for our oncology pipeline programs as well and start modeling those out.

Okay. Thanks Scott.

Thank you, Tazeen.

Thank you. Our next question comes from Joseph Schwartz with SVB Leerink. Your line is open.

Hi, I'm Julie Park [ph] dialing in for Joseph Schwartz. Thanks for taking our question. I guess the first question that I have is on TransCon hGH program in particular the adult trial. So, I was wondering if you could provide an overview of your TransCon hGH trial for adults as you plan to initiate in 2020, how much of your trial site overlap is there between the heiGHt Trial and adult study? And can we expect enrollment and trial to go faster in adults due to your heiGHt and fliGHt trial experience?

Okay, this is Jonathan. We previously disclosed we are planning an adult growth hormone deficiency trial to initiate in 2020. We have not given any more specific timelines from that, although we are absolutely sticking to that timeline. It's firmly in our plans. These are a different set of investigators it would be very unusual for pediatric investigators to also see adult patients. So, a different group of investigators in that study. So, essentially zero overlap. We will present a little more detail at our R&D Day in later in June.

Okay great. And then if I could just have a follow-up -- if I can just a follow-up question. So, for your commercialization a little bit early, but for your two endocrinology programs behind TransCon PTH, I was wondering if there could be benefit from your commercialization infrastructure that you planned and implement with TransCon hGH and how are you strategizing our efforts to launch hGH? Thank you.

I think that what was really one of the core element of our vision in 2015 when we actually decided to focus on one single therapeutic area was to ensuring that we have certainty, the economy of scale really to move forward and develop commercial organization that can advance all three product opportunities under the same umbrella. So, we see lot of synergy in what we are doing. Many basic specified U.S. We have one single commercial organization and it basically can ensuring that we can get this three product opportunities out to the market. And not only that we are talking about the synergy and economy of scale, but we're also talking about potential treatment synergy with some product like both TransCon Growth Hormone and TransCon CNP, so one of the was actually to show that we don't believe in having a single product opportunity and develop an entire commercial organization for just one product and us why we want to do have three independent product opportunities that potentially could go up to more than nine different indication just being commercialized by one single organization. By doing that you are providing a situation where you will see the highest value being creating out from the product opportunities.

Great. Thank you very much.

Thank you.

Thank you. And our next question comes from Jessica Fye with JPMorgan. Your line is open.

Hey there, good afternoon. Thanks for taking my questions. When we think about oncology and where you may go with that therapeutic vertical. To the extent you are applying the TransCon Technology to somewhat de-risk target. I'm curious how you define a de-risk target, whether that has to be in an approved mechanism or approved molecule or if that could be something that's may be shown promise in the clinic, but has never gotten all the way to market. And then bigger picture can you may be set some more expectations about what we could learn at the R&D Day with respect to the oncology vertical and the kind of the levels detail we'll learn about? Thank you.

Thank you. It's one of the key questions we have working with and we actually started to think to move into next therapeutic area. And in -- for about 18 months, 24 months when we have all that discussion, we actually said we will do the same thing that we did in rare disease endocrinology, we will not have one single product opportunity. We believe in pipelines. We believe there’s a way you really get the synergy, economy of scale, but also believe in what I call building up a pipeline with different, kind of, you can say targets. So -- but one thing we have done in common in oncology is that we are not moving away what really makes a great success in rare disease endocrinology validated target, validated parent talks. So what you will see in our oncology is basically the same way of thinking, working on validated target, working on validated parental, and potentially I would like to come back to that, but we will really be focused on making highly differentiated product opportunities that no one else can make really addressing major unmet medical need. So what you will see under the table will be some kind of mimic what you saw in 2016 on our results day when we disclosed our pipeline in rare disease endocrinology. We actually were in a position that we will show you preclinical data that basic support why we are highly differentiated not only the data but also the science behind it and why we really addressing an major unmet medical need. So what we're doing in oncology is basically repeating the success what we have in rare disease endocrinology with the different aspect from a business model perspective have potential a quite different business model, because I choose different to moving to rare disease endocrinology and oncology where rare disease endocrinology had an basic and easy pathway out to commercializing directly to the patient with a few clinical trials. The complexity in going into the highly area like oncology will be that you present to see a different business model and also what you will see when we have our results day in late June.

Got it. Thank you.

Thank you. And our next question comes from Liana Moussatos with Wedbush. Your line is open.

Hi. This is Shweta [ph] for Liana. Thank you for taking our questions, and congrats on all the progress. Can you talk about the physician feedback you have received for the heiGHt and fliGHt trial data? And then also comment on the pricing strategy or TransCon Growth Hormone?

I think Jonathan will take the first part of it.

Sure, Jan, I can do the second it's pretty straightforward. The physician feedback has been amazing; not only from the physicians but patients, the patient advocacy groups have been almost exuberant after the results; I mean it was such a remarkable result. I think really striking is how unambiguous it was, it was a very clean data set in terms of both efficacy and safety. So everybody is thrilled. We are hearing more and more anecdotes about the experiences and the extension study enlighten, everyone is just really happy. It is very, very few dropouts in the trial, which I think is exemplary of that. And I think we won't comment on pricing, it's premature to consider a pricing strategy.

But I think what we are thinking as a company and with respect to our core values and taking the focus on the patient; we want to be assuring that we believe we really have a unique product opportunities that will provide in real world a much better outcome for the patient. And we believe this is our core value to ensuring as much as possible of the patient population can get assess to our product opportunity, not only in U.S. but also in a global perspective and that is what we want to implement and work on.

Thank you.

Thank you. And our next question comes from Michelle Gilson with Canaccord Genuity. Your line is open.

Good afternoon. Thank you guys for taking my question. I guess some high level, can you talk a little bit about how you see the hyperparathyroidism market evolving over time with the potential introduction of TransCon PTH? This is more specifically, maybe, which patients do you think have the highest unmet need in the population for a more physiologic replacement therapy? And maybe help us to understand the market beyond patients treated with net par on daily and twice-daily split dose regimen? And then, how do you build the market from there?

I actually think that this is a subject we are talking a lot for the time being and also because just in this stage we have one hyperparathyroidism day and one of the element, which really giving me the comfort that we have developed a product opportunities, really addressing and through major unmet medical need if we are not listening to the patients. When I listen to the patient and hear the story what kind of burden happen in a day-to-day and how basic effect of the long-term complications you have of this disease. And if you want, you can go to our website and see and listen to some of the patients. And I think that really influence me a lot. When we -- no doubt the patient needed when we heal them, we talk, we see the complication everything else, we also done a major research focused on the U.S. related to physician more than 100 physicians and really focus on, would you really prescribe the product that is too replacement therapy, product that really providing physiological PTH 24 hours same days, and more than half of them will do it in the U.S. and this is also why we have the global reach in our Phase 3 program were we have addressed more than 200,000 patients. And I think this is why I personally believe this is not only for the patient and all over in this area will really be a major benefit for hospitals with the high value product opportunities because we really addressing major unmet medical need and when you come to our research day, we actually will continue and we share some of this more in-depth research that we have done in the U.S. market about how the physician see a true replacement therapy.

Okay. And maybe a follow-up. Can you talk a little bit about what you're hoping to learn about the Phase 2 that will inform the Phase 3 other than starting dose will be maybe I guess, specifically from individualized optimization that's planned for the extension? And then can you also just remind us of how you're reducing the supplements in Phase 2 PATH as far as the chasing?

So we learned a variety of things from the Phase 2 study. So certainly we will confirm the proof-of-concept which we are highly confident in knowing what we know from Phase 1 where we are simply replacing the missing hormone 24 hours a day. So that's an easy one. We will confirm the starting dose for Phase 3, which we have a very good idea of even now but we will tweak that a little bit and then of course it's titrated. So that's not crucial, crucial. We'll expand our safety database which is always important. And then finally we will be testing out the algorithm for our titration regimen. Our down titration of calcium and vitamin D. We have a very good idea of how to do that. I think it's always good to get a little more experience in the real world out there during clinical trials and will refine that perhaps for Phase 3.

I think in addition the Phase 2 trial, it also gives us an opportunity to take at least 40 patients into long-term extension trial where we basic can follow them, look on long-term function competition like what you see with for example, a bone turnover so we can normalize and get the right bone turnover and also look upon some of the complications like what you put into can follow and avoiding that we have further damage for example, in kidney. And I think this is something that we think is a rather important that we building of not only addressing the short-term symptom but also looking on the long-term complication.

Yeah, long-term renal complications in particular.

Exactly.

Thank you.

Thank you. Our next question comes from Adam Walsh with Stifel. Your line is open.

Hi, guys. Thanks for taking my questions. My first one is on the auto-injector. You mentioned that that's going to be introduced into the enliGHten Trial next month and will obviously be part of the BLA filings you along side. Is there a minimum amount of data that the FDA has guided to in order to get the device approved along with the drug like a certain number of patients with the agency would like to see treated with this device prior to filing. I guess the underlying concern is whether the auto-injector could somehow slower delay the TransCon Growth Hormone filing? That's the first question. A - Jonathan Leff Okay. Thanks, Adam. So there is a requirement it's a really minimum requirement it's really just a couple of dozen patients for a couple of months we then want to make sure that the real life patients can actually use the device and it's working properly. Of course we have studied it in well over 100 subjects both -- patients as well as untrained people and it's worked really well and we have iterated the design and instructions over many years. But this is the first time in actual patients with growth hormone. So they just want to make sure that it's working well we will actually greatly exceed the requirements that have been placed on us by FDA. We will have many, many months of exposure in dozens and dozens of patients. Probably close to 100 actually.

Hey, that's helpful. In terms of the granularity that you will disclose on the fliGHt Trial at the upcoming R&D day. I know you have emphasized in the past to look at the fliGHt Trial as a primarily a safety trial and you have cautioned against making comparisons on say annual heiGHt velocity between the six months prior to entry in the six months on the TransCon Growth Hormone. I guess my question is beyond safety are there any things -- is there anything on the efficacy side that we really should be looking at when we see those granular data for fliGHt at the R&D day? Thanks. A – Jonathan Leff: Sure so as you stated clearly a safety trial and that's its main objective. However of course we are measuring heiGHt and we will report heiGHt. So it's important to understand the context so -- if someone is been a treatment naïve patient you're going to expect greater heiGHt velocity in the first year because of all the catch-up growth they get primarily in the first six months. So if someone has been on a growth hormone already for six months or for a year or even for two years or more you’re obviously going to expect less heiGHt. So typically in the second year you would expect about 15% to 20% less heiGHt velocity. So with all of those caveats, we will present some subgroup data to give you a flavor for the heiGHt that we are actually seeing. And put it in context of their prior exposure. So, we are very pleased. And I think you'll be interested in hearing more at the R&D day.

Also believe Adam that indicating the Delaware practice how willing to switch already is practice patient over to daily growth is really, really important, so the physician understand the algorithm. And understand how to try treatment. And we can show, real world practice how we get done. There is also a small new subgroup of patients whereas I have a strong, strong feeling for myself. And this is for children under three years that we actually treated with our product there, basically down to nearly the newborn. And I fell really, really thrilled to see that we actually have our product, also being applied in this really subgroup of patients whereas really, really have the high, high, high burden of injection and other things, because basic growth hormone deficient. And I'm really looking forward also to share this data video because I have a strong, strong feeling for what we really do, when we move down to basic newborn children.

Looking forward to that and then just one final one if I could, briefly. On enlighten, when and how often will we see updates from that? Thanks.

So, periodically probably at earnings call, we will give you updates there. There won't be a whole lot whereas following this cohort that's pretty large now over time. We see them typically every three months or so. But we can provide updates along the way.

Great, thanks so much.

Eventually our medical meetings we present the two-year data for example, that will be an important cut to as a milestone as well.

Thank you.

Thank you. [Operator Instructions] And our next question comes from Alethia Young with Cantor Fitzgerald. Your line is open.

Hey, guys, thanks for taking my question. So I just wanted to talk a little bit about the profile of TransCon hGH has versus what you guys are trying to construct with your PTH therapy? And also the second question is that, can you talk a little bit about maybe high-level commercial learning from the fliGHt study as well as?

I didn't really get the question in that product profile and how we compare?

Just as kind of …

Can you repeat?

Yeah. How you think what you're trying to construct versus what NATPARA I think is currently like your therapy versus there. And how you think because you are firstly there in the market is the first question? Can you hear me?

Yeah. Exactly but I think I'm not really never comparing us to NATPARA, because NATPARA is not providing the same target product profile. So it's not to expand out from NATPARA, because we have a complete different product profile were we really are providing the true replacement therapy, that really gives us benefit for the patient on all aspect of the disease. This is how we got this time. So, when I'm seeing NATPARA, yes, it can increase calcium, but because they increase calcium by taking a lot of calcium supplement and activated vitamin D. Sure you can spare some of them and still have the calcium. But you basically have no real positive impact on urinary calcium. Well illustrated to the FDA document. So there was exactly what we actually got there. We really got clarity about when we went to what I call the FDA briefing documents related to NATPARA. So from that perspective, we see a complete different product profile. We are more focused on the unmet medical need, both from the patient perspective but also talking with the physicians understanding. Yes, this is the solution they have been waiting for. This is the product opportunity that can be in a position, so we basically can normalize. This patient group's PTH levels, as one you actually develop basal insulin and certainly you have diabetes patient that could have basal level of insulin 24 hours, seven days a week.

And then your second question on commercial insights from flight. fliGHt it turns out with a very valuable experience, because it provided real practical insights in the real world and how subjects might switch coming in on a daily therapy. And we did that in almost all the patients they switched with few exceptions from daily therapies to TransCon. So, how do you switch. What do you switch to? And how do you monitor IGF1, it was very practically helpful in the switching dynamic. And will be very useful to our commercial colleagues.

Thank you everyone.

Thank you. That’s all the time we have for questions, we thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.