Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 Ascendis Pharma Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Scott Smith, Senior Vice President and Chief Financial Officer at Ascendis Pharma. Please go ahead, sir.

Thank you, operator. Thank you, everyone for joining our third quarter 2020 financial results conference call today. I’m Scott Smith, Chief Financial Officer of Ascendis. Joining me on today’s call are Jan Mikkelsen, President and Chief Executive Officer; Dr. Mark Bach, Head of Clinical Development and Medical Affairs for Endocrinology Rare Diseases; Jesper Høiland, Global Chief Commercial Officer; Dr. Dana Pizzuti, Head of Development Operations; and Dr. Juha Punnonen, Head of Oncology. Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the Safe Harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, our progress on our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline, statements regarding the market potential of our pipeline candidates and statements regarding our regulatory filings. These statements are based on information that is available to us today. Actual results or events could differ materially from those in the forward-looking statements, and we may not achieve our goals, carry out our plans or intentions or meet the expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see the forward-looking statements section in today’s press release and the Risk Factors section of our prospective supplement filed on July 9, 2020. Please note that our TransCon product candidates are investigational product candidates and are not approved for commercial use. As investigational products, the safety and effectiveness of the TransCon product candidates has not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our TransCon product candidates shall be viewed as promotional. On today’s call, we will discuss our second quarter 2020 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Jan Mikkelsen, our President and Chief Executive Officer.

Thanks, Scott and good afternoon, everyone. We are now almost to 2020, which has been again, a very transformative and successful year for Ascendis. Now, 11 months into 2020, we have met or exceeded all our cohort goals to date. We have advanced our clinical programs, bringing them closer to addressing major unmet needs for patients and we have built out our first two product opportunities in oncology that had the potential to represent a new paradigm shift in treatment patients with cancer. Why are we able to excuse – execute in this manner day-in and day-out. It is because we are company as accommodated doing by the following fundamentals: Ascendis’ three core values; the patients, science and passion. The power of TransCon technology. A clear vision, the long-term strategic mindset on how to build a sustainable dealing biopharma company. People ask me, how do you motivate Ascendis’ employees to take our meeting with the colleagues at 6:00 AM in the morning, or stay up on so midnight to speak with our patient group? My answer is that is not me, that motivates our people. It is the core values of Ascendis. We put the patient first to drive our decision-making. Everything we do is to develop product opportunities that address unmet medical needs for patients as fast as possible. We are dedicated to using science and biological understanding built by the scientific community over many decades to guide our patient focus and decision. And finally, we are passionated about realizing our shared vision and goals. We trust these other strengths and when we are facing challenge, we remain optimistic and commit to work together as one team to achieve extraordinary results. What enables Ascendis to develop a continuous flow of diversified highly-differentiated product opportunity with a high probability of…

Thank you, Jan. Turning to our financial results for the quarter ended September 30, 2020, we reported a net loss of €121.7 million or €2.31 per basic and diluted share compared to a net loss of €25.1 million or €0.53 per basic and diluted share during the same period in 2019. Now, let me run through some of the key components of these results. research and development costs for the third quarter were €64.1 million compared to €46.3 million during the same period in 2019. The increase in R&D costs reflect continued advancement of our pipeline with the primary drivers, including an overall increase in personnel and R&D infrastructure costs and for TransCon hGH or lonapegsomatropin, costs were higher due to manufacturing of product supply as well as increased clinical trial activities. As a reminder, we currently expense manufacturing costs of lonapegsomatropin as R&D in advance of our anticipated product launch. at the time of product approval, a portion of these R&D costs may be reversed and capitalized as inventory, which will result in a one-time benefit to R&D costs. for both TransCon PTH and TransCon CNP, costs were higher primarily due to increase manufacturing, device development and clinical trial costs. And finally, costs were higher due to the continued build-out of our oncology therapeutic area. Selling, general and administrative expenses for the third quarter were €17.5 million compared to €10.0 million during the same period in 2019. As higher costs primarily reflect an increase in personnel related IT and other infrastructure costs as well as associated with the continued build out of our commercial capabilities. Financial income and expenses include an unrealized loss of €39.6 million, compared to an unrealized gain of €27.4 million during the same period in 2019, due to foreign currency exchange rate fluctuations, primarily on…

Thank you. [Operator Instructions] Our first question comes from Jessica Fye with JPMorgan. You may proceed with your question.

Hey guys. Good afternoon. Thanks for taking my questions. As we approach the launch for TransCon Growth Hormone. Can you share a little more about how you’re thinking about the commercial strategy? Do you anticipate being able to launch immediately post-approval, or should we think about any lag for whatever reason and how should we think about the timeframe, within which you’ll be able to get on commercial plans?

Thank you. It’s always great to hear you. And first of all, I’m really pleased to have Jesper here in the room. So, he can take away some of the questions, but I think what we have said currently, and this is what we are executing on now, and this is what we have shared for you, is our plan for the U.S. So, when Jesper talks, he will mainly be focused on the U.S. and we will, on later stage, come out with how we really are going to executing also in the upcoming hopeful expected European approval, which we actually are – some way are seeing also coming near now. So Jesper, will you tell about the overall strategic plan related to the U.S. market? Jesper Høiland: Absolutely, thanks for the question, Jessica. I have spent more than 30 years in the area of endocrinology and growth hormone. And I can only say I’m super-excited about the lonapegsomatropin opportunity that we’re having in the U.S. I certainly think it could be transformational going from once-daily to once-weekly is what all patients and parents can take us well look forward to. We are in process of hiring in the people to be ready to launch shortly after the PDUFA date, which is 25 of June next year, as you know. So shortly thereafter, we will hopefully be up and running with the entire team. The level of management under me is in place, and we are recruiting in according to the plan, and we will certainly be completely ready and full of energy when we come on to the market. You know about the commercial strategy. Commercial is the commercial market that’s what is all about in this segment and that’s where we will be focusing. And of course, pricing, which I already guessed – also guessed that someone will talk to is that we will make that decision at the point of time of having the approval of the product before the launch.

Adding one comment to Jesper is from the manufacturing perspective, yes, we are ready to launch exactly after we getting our approval. We have the capacity. We are producing the drug. We are there. So, we are not having a lack period, where we need to go out and start manufacturing for it is already established.

Great. Thank you.

Thank you. Our next question comes from Michelle Gilson with Canaccord Genuity. You may proceed with your question.

Hi. Thanks for taking my question. Could you maybe talk a little bit about the CNP trial and the overall program. The current ACcomplisH Trial is enrolling patients two years to 10 years old. Do you have plans to bring TransCon CNP into younger patients? And I guess how young would you anticipate you need to go to addressing more debilitating comorbidities associated with achondroplasia. And then could you remind us why CNP is the right approach in achondroplasia versus FGFR inhibition?

Thanks. Let me basically start from your last question. CNP has been known for 20 years or more. There has been extensive research on CNP. There have been extensive knowledge about how CNP basic in a bare, bare self-specific manner can make an inhibition of the hyperactivation signaling you have in the FGFR3 receptor in achondroplasia. It has proven that if you have extensive concentration of CNP, because there is in the world, patient that go forward either with a continuous activation of NPR-B [ph] receptor or having a high concentration of CNP. Just looking on all the knowledge we have from the scientific literature and what we have seen in our preclinical finding, basically, the CNP molecule is an extremely safe molecule. And the main effect on CNP is basic to provide in growth disorder, a possibility to overcall the hypersignaling pathway of the FGFR3 pathway in a safe manner. You can basically say also from cardiovascular perspective, everyone knows that CNP is basically, also preventing and protecting cardiovascular diseases. So, it’s basically – it’s a multiple hormone that have a lot of benefit. Then you can say, why is tyrosine 3 kinase inhibitor have not even been successful? Why have they not even been successful in oncology? It’s because – it’s possible to make them specific enough? So, out from that perspective is that it’s really hard for me to matching a compound and developing a tyrosine kinase, which have been broadly tried in oncology and have already and always shown high levels of toxicity compared to the benefit risk, how it will be possible to apply that basic into a setting of achondroplasia, where you don’t want to have a general inhibition of FGFR1, FGFR2 and FGFR3, because that is what you get with tyrosine kinases inhibitor.…

So, have you – since you are initiating the phase 2 trial in China, have you chosen the doses that you were planning to expand?

We still dose – doing dose escalation, and we are learning and we want to be quite sure we do it right. And that is basic what we’re doing now. We basically ant to ensuring that we see the right growth velocity, we see the right safety before we really go out to what I call broadly a cohort expansion. So, we are in a position that we’re following this trial basic month-by-month to be sure and also potentially, we would still enroll more cohorts to ensuring that we basically, have the optimal dose for treating this patient group.

Okay. Thank you so much for taking my questions.

Thanks, Michelle.

Thank you. Our next question comes from Joseph Schwartz with SVB Leerink. You may proceed with your question.

Hi, Andrew dialing in for Joe. Thanks for taking our question. My first one is on CNP – TransCon CNP. I was wondering what your thoughts are on the FDA possibly wanting two-year data in different age groups for achondroplasia based on the competitor’s filing and assuming the FDA runs through your data, I was just wondering does this impact your strategy for TransCon CNP?

This is a great question, what I believe also in the data and the data saying is, if you have a small marginal effect, where you have one centimeter potential, it’s someway hard to see and believe that your basic will like that continue two years, because your basic had a product that could do the same thing, which approved in Japan. You can use growth hormone. And your basic will get one centimeter more in growth velocity in basic in an achondroplasia patient group and what it has been very, very hard to prove that continues over time. And I think this is one of the reasons why you potentially will have the kind of scientific question, because that already had been established clinical trials and applying growth hormone into achondroplasia. compared to our situation, Dana, you can comment about how you see that and how it could potentially impact us.

Sure. I think that the FDA guidance and reviewing the output of that advisory committee was a recommendation that two years is a good interval to assess safety, as well as the continuation of efficacy. I think that the way that you come up with the two years may be somewhat flexible. I believe that they don’t articulate for specific two years of placebo-controlled trials, because there was concerns in that advisory committee that were expressed about keeping these kids on placebo or that long of a time. So – but I think that there’ll be a way within the context of our current program for us to be able to accumulate a certain number of patients at two years, so that it wouldn’t really impact our potential plan for filing.

Does that answer your question?

Yes. That’s very helpful. Thank you. And then, for TransCon hGH, based on your market research for your launch just in the approval, how do you anticipate patients switching to TransCon hGH from daily growth hormone? Should we expect – are you expecting a gradual ramp from – for – when patients switch over? Or are you detecting a lot of demand from patients ready to switch and it could be more aggressive?

I think to step one step back before Jesper goes in. That was a good reason why we made two Phase 3 trials. One Phase 3 trial that was naive patients, the high trial for some basic what we call a major part of our regulatory filing related to efficacy and also safety, but we also made a switch trial with the same number of patients, because we wanted to prove that we basic have a safe algorithm for also switching patient that is coming from an established daily growth hormone. And we did that because we saw there was an investment to ensuring that the physician will have the sufficient knowledge, sufficient understanding and see the benefit of what they couldn’t achieve by both taking the new patient and also switching patients. But you also need to remember that should because patient – the base majority of idiopathic growth hormone deficiency, and they’re currently only in a treatment about three years to four years before the basic out of treatment and then your basic recycle, the entire patient population in less than three years to four years. But Jesper, you can comment about how much we expect to focus also on the switch patients. Jesper Høiland: Absolutely. First and foremost, it will be a push and pull strategy from our side. Patients that are newly diagnosed is of course, the first ones that we would hopefully be putting on lonapegsomatropin. And then, of course, we will also see switches. Switches very much also have to do with a very, very important point of market access and we anticipate to get a gradual market access, as we come into the market on the basis of the negotiations that we have with the PBMs and health plans, but we certainly believe that for new patients is really a great start. For patients that are currently well-established on growth hormone less likely, unless we really get that sort of market access that we are aiming for, and I believe that we will get with a new really innovative way of treating patients going forward. As said, I spent more than 30 years in this area and the colleagues that we have attracted also have a very, very strong background in not only growth hormone, but also in endocrinology. From market access to sales and marketing, everyone is in place operation. So, we will be up and running in a not-too-distant future. And I cannot wait to present end of next year.

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. You may proceed with your question.

Hi. Thanks so much for taking my questions. Good afternoon, guys. Wanted to get your thoughts on how you’re thinking in general about receptivity to pricing. So, for growth hormone, you’ve obviously demonstrated in clinical – with clinical data that you are superior to daily treatment. And with that in mind, I guess, I would ask why wouldn’t you want to price at a premium to daily growth hormone? And then, I have a follow-up.

I think that question is so clear that Jesper will take it. Jesper Høiland: I mean, of course, pricing is what it boils down too, but it’s not the whack price, meaning the list price that we are going to aim for. It’s the net price that is of true interest here. And that’s of course, boils down to the negotiations that we are going to have with the PBMs and health plans. But as you are pointing out, we are having a superior product. And of course, there, you will anticipate through demand superior price. I mean, I have never seen Apple introducing a new phone that was cheaper than the previous phone that they put on the market.

Okay. So with that in mind, how long do you think it will take for the switch patients to convert to your product? I would assume that for new patients, doctors would prescribe TransCon right away. But for the current market, can you talk to us about what you think the potential dynamics would be for anybody, who might be comfortable with daily treatments, whether be the parents or the referring physicians, how should we be thinking about that? Thanks.

First of all, in – the patient dynamic is that you switch basic all patients through a cycle in three years to four years. So, if you talk about switch and the impact on switching pacing, it’s basic for all the modeling. Jesper have done everything what I’ve seen for Jesper’s organization, basic have only an impact on the first two – two and a half years, because this is where your basic can switch some patients over, because after three years, four years, it’s basic, [indiscernible] you’re talking about. And this is where you also need to see that from the modeling perspective is that switch patient is something that impact the first one to two years, but after three years, four years, is only it takes. Jesper Høiland: I would also like to add, one has to just take the parent perspective and child perspective. For many of these patients, it’s a daily challenge to inject their growth hormone. And therefore, to be given the opportunity to get it once-weekly is really what the market has been craving for very, very long time. As long as I have been in this industry, which is over 30 years in endocrinology since I sold my first growth hormone, I firmly believe that a once-weekly is what you truly, truly want. I used to refer to the patient as Little John and Little John will certainly appreciate only to go through that hassle once a week. If you think about it, when I started in growth hormone in the 80s, we always said you treat with six times and then you take Sunday off. And that was truly because of that the sort of relaxation. often in those days, it was intramuscular injections that you ended up getting and so on so forth. And in this instance, Little John would really appreciate getting it once weekly, also because when the children get to an age, where they used to stay over with friends when they’re going to grandmothers, grandfathers what have you, they will appreciate not having to go through that sort of injection. So from my point of view, we have best-in-class product and we will be first to market in the pediatric segment. So, I cannot see ourselves not doing a real good job. It boils down to market access. There will be some NDC blocks from certain plants, but that will also overcome. Again, that’s the push pull strategy that I’m thinking of in this respect.

Thank you. Our next question comes from David Lebovitz with Morgan Stanley. You may proceed with your question.

Thank you very much for taking my questions. Given that there are other long-actings out there for growth hormone, they did not achieve superiority, but how is the communications ongoing right now with the community on those products, I guess, how viable are they as a competitor in your mind? And also with respect to the growth hormone, clearly, that the adult data is coming up at a subsequent point, but is there some level of inquiry on that and potential for off-label use in that population ahead of data in adults?

I think you need to separate the two different indications as growth hormone deficiency and adult growth hormone deficiency. First of all, the doses you’re using is complete different, four to five difference higher in the pediatric indication. The demographic and the course of the disease is quite different. We have a pediatric growth hormone deficiency. The vast majority is idiopathic growth hormone deficiency, while idiopathic as we always call it, if we don’t know exactly because, we call it idiopathic because it sounds better for the patient. If you go over to the adult coming from complete different way, should we – it could be coming from trauma, it could be coming from the oncology setting and other things like that. In the pediatric, there is a complete different kind of doses. There is different way that you need to have safety aspect. So, having one product approved in the adult which are the small, small segment of this year, this is under 10% today. Under 10% is the adult market today in the growth hormone market. It will be highly, highly unlikely than anyone can prescribe that into the pediatric segment. So, let me then go to the competitive landscape. So, Jesper said it in the right good manner. We are not only first to market. We also what we know have seen best-in-class in the pediatric segment. And that is the – pediatric growth market is 90% of the entire market. So, if you look on our product to only one other product that is coming behind us, the one that’s coming behind us in years is the Opko/Pfizer. And we have to state at least I have not seen any filing of the PLA yet, I expect it’s coming because people are saying they will be…

Thank you. Our next question comes from Jim Birchenough with Wells Fargo. You may proceed with your question.

Yes. Hi guys. Congrats on all the progress. I guess a couple from me, or maybe a two-part. Just on manufacturing, could you maybe just give us some comfort on your level of confidence in the manufacturing? We’ve seen in other areas. Manufacturing be something that comes up late in the review cycle. And so, what can you share with investors to give confidence that, that’s not going to be an issue here? And then just on the commercial launch, what’s the frequency that patients typically see their physicians? And do you have some benchmark for expected switch rates? Are there other products that have had similar differentiation that you could benchmark off to say we expect 50% switch like enhanced products in Europe, or 90% switch like Darzalex subcu? What’s the benchmark for you guys? That will be the second part.

Jim, you’re right. When you see the stream of CMC problem, you often see in the end of the filing, we actually took some of the precaution. And I think the most important precaution you ever, ever can do when you talk about a biological compound, is that you are trying the same manufacturing site, the same process, the same scale between Phase 3 and launch. By doing that, you can basic proving that the patient got exposed to exactly the same compound that you will basic have in your launch. So, there is no change between the Phase 3 material and the launch. By doing that, you basically avoid all – I will say, 90% of the discussion you have and you’re getting issue a bit later on. The last 10% is reflecting is the plan that we producing is basic living up to the manufacturing capabilities, systems, quality system, everything that your basic will expect for a product that is biological. And to our best knowledge and what we know is the place that has been already FDA pre-approval inspected and other elements like that. So, we believe that the way we basic – is the case by not having the risk of any kind of manufacturing change between Phase 3 and the launch was basic to minimize any risk that we couldn’t have by running into an CMC manufacturing issue truing the regulatory approval. Going back to the switch thing, I think we – as we discussed before, it’s basic is something that will have an impact on the first three years, four years revenue because the entire patient population in the U.S. will be switched from new initiation in the treatment in less than three years to four years. And I believe that – Jesper you…

Thank you. Our next question comes from Alethia Young with Cantor. You pay proceed with your question.

Hey guys. Thanks for taking my question. I just wanted to talk a little bit about the PTH kind of feedback that you’ve been hearing from experts and KOLs as you kind of have the information disseminate? And then, what do you think are some of the challenges from an educational basis and kind of educating the population?

I think that the feedback we’re getting is basic first time in the life where I feel this kind of assessment for really helping patients. Patients where we believed that had – and situation where even really because of symptoms, short-term symptoms where the quality of life was extremely low. I’m not talking on long-term risk. I’m not talking about other things like that where a patient basic coming back and the physician telling us, this is one of the most positive trial that ever been part of because the physicians basically are getting the life back. And those what we got indicated in a statistic meaningful manner to our SF-36 where you basically can see just where the start, the start in a way where you basic see the quality of life is down in level of what you see in chronic heart diseases or other things like that, that perhaps is more well known, but it’s mean and indicate why 40% of the patient cannot work. 40% are basic on part-time and you’re seeing them getting a normal [Technical Difficulty]. The explanation of that is that only because we stabilize the calcium or it’s the combination of the direct CNS effect, we believe potentially is a combination of both of them that basically give them lack. And then you can say on top of them, the basic will be in a position that the long-term complication everything for cardiovascular because of classification of soft tissue and other places, cataract on other thing, basal ganglia and also the kidney and other things like that is providing them a life where your basic are providing a hormone-replacement that is restoring the normal physiological level of PTH. I believe it’s a game-changing as when we basic got of what I call basal insulin, that basically provided to patients with diabetes in a situation Type 1 diabetes at basis insulin level nearly during 24 hours a day.

Yes, definitely. And for the IND amendment with the FDA for the PaTHway Phase 3 clinical trial, you guys talked about kind of what the details are around the amendment?

Well, we actually submitted it to FDA, and we’re waiting for them to give us their feedback. Even though it was based upon the communications we’ve had with them, but I think there is still a few details that they just need to get back to us on, but I don’t think that there is anything substantial in terms of what we committed.

Okay, great. Thanks

Thank you our next question comes from Leland Gershell with Oppenheimer. You may proceed with your question.

Hey, thanks for taking my question. Wanted to ask with the IND filing in achondroplasia in China, wanted to ask what the accessible market opportunity you see is or perhaps what VISEN sees for the Chinese market for the CNP? Thanks.

Yes, I do believe there is dual reason for what we’re doing. And I’m sure the primary reason is that we also want to ensuring the benefit of the patient population in China with achondroplasia – achondroplasia that can get access to treatment. But the other point for us is that it’s a way where we basically can accelerating the program because we have access to a large centralized patient population where we basically can extremely fast recruit a lot of patients into our second Phase 2 trial on an optimal dose. So from that perspective you can see, this is why we took the strategic decision to be part of VISEN Pharmaceuticals not only to give us a reason to basic commercializing all our endocrinology product opportunities, growth hormone, PTH, CNP in Greater China, the second largest pharmaceutical market in the world, but also give us unique opportunity as a company specific in the rare disease setting to conduct clinical trials in a speed and quality because we are really integrated into everything from quality to databases and other things like that. We basically can conduct clinical trials, which are very difficult for any other company that they don’t have this kind of set up to conduct in Greater China.

Thank you. And that’s helpful. And another China question with the Phase 3 on the growth hormone side of their running – running their for the better part of a year at this point, just wondering if you could provide us on any updates on the progress of that Phase 3 in the growth hormone one deficiency, right?

This is going exactly as planned and it was as basic a copy of our high trial with 150 patient in the same randomization, same endpoint, basic it’s a total copy of what we did in our high trial. And currently there are recruiting and I believe to my best knowledge is more than half of the patients of the entire trial has now been recruited.

All right. Great. Thank you very much for taking the questions, and congrats on the great progress.

Thanks.

Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.