Ascendis Pharma A/S (ASND) Q2 2021 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to Ascendis Pharma Q2 Earnings and SKYTROFA Approval Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [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.

Thank you, operator. Thank you everyone for joining our conference call today. I am Scott Smith, Chief Financial Officer of Ascendis. Joining me on today’s call are Jan Mikkelsen, President and Chief Executive Officer; Jesper Hoiland, Global Chief Commercial Officer; Dr. Dana Pizzuti, Head of Development Operations and Chief Medical Officer; 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 commercialization and continued development of SKYTROFA, 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 SKYTROFA; and our pipeline product 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, carryout our plans or intentions or meet the expectations or projections disclosed in our forward-looking statements and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any 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 most recent Annual Report on Form 20-F. SKYTROFA was approved by the FDA today for the treatment of pediatric patients one-year and older, who weigh at least 11.5 kilograms and have growth failure due to inadequate depletion of endogenous growth hormone. Otherwise, please note that our product candidates are investigational product candidates and have not been approved for commercial use, as investigational products, the safety and effectiveness of the product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding SKYTROFA and our product candidates shall be viewed as promotional. On today's call, we will walk through available on our website to discuss the FDA approval of SKYTROFA. We'll discuss our second quarter of 2021 financial results and provide further business updates. 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. Sometime when you wake up in the morning, you someway think about what day will bring. But I have to say today was one of the days where you someway had an agenda. You adapt to it like a dominant I must say. You need to adapt this the best way of survival. And I think we are in a great, great place today. And I have to say, if I couldn't see you, you will see a very, very happy Jan, that basic so happy what we have achieved today. But never forget, at Ascendis the key element in our core values is to make a meaningful improvement in patients' life. We feel strongly that with all focus on science and data, we can use our innovative TransCon technologies to develop new and potential best-in-class products that address major unmet medical needs. With the approval in the U.S. our TransCon Growth Hormone or SKYTROFA for pediatric growth hormone deficiency today, we have one step near to fulfill our vision 3x3 to become a leading biopharma company. Before I provide a general business update related to our advancing broad pipeline of now more and more product opportunities, I would like to give a short update related to the approval of SKYTROFA. As Scott said, the slides can be found on our website. And I would like to refer you to the slides. Going to slide number three. SKYTROFA, our first product developed with the TransCon technology is now approved in the U.S. The TransCon technology is a technology we have taken basic from the design to preclinical to clinical, and now the approval in the U.S. At the same time, it's the first approval of the TransCon technology, but it's also the first FDA approved once-weekly product for pediatric growth hormone deficiency. And we really proud about it. When we go to the next slide, and I think you can see the labeled different pieces. Your basically will see what we have seen out from the label is basic what we basic could hopeful. And it's basic with flexing that science, the clinical data we have seen with it. Today because of time, I will not go to the entire labeling discussion, but I hope you will have the opportunity to look at because it -- everything start with a mode of action where basic are describing how we were releasing and so much repeat the same as data growth hormone is going to the right efficiency, it go to the right safety and we’re feeling really, really confident with the approval and the labeling we have, we have a strong fundament to build up SKYTROFA TransCon Growth Hormone to be the leading brand. But it has not been an easy journey for the patients. If you go to slide five. I have often have given you this discussion. It have been possible to develop a long acting product that basic providing and addressing the unmet medical need specific you have in a pediatric population about a daily injection. And despite 30 years clinical development try developing by different kinds of concepts currently today in the U.S., in Europe, in Japan, or patient will go to more deficiency is treated with the same agency that execute into the market in the 80s. There has been advancement in pen devices. There has been advancement that one single product opportunity also could make room temp to stability. What we see with SKYTROFA on the approval to date, this is the first once-weekly opportunity that basic are providing what we call the same entity that we see in daily growth hormone. But we also have loved what we call optimal element for the patient, like an Auto-Injector, which facilitate that you have room temp to induce stability. When I talk about our clinical programs that support the approval on SKYTROFA, it's built on basic the heiGHt Trial, the FliGHt Trial, and the enliGHten Trial. The heiGHt Trial, just to sum up is where we really had clinical trials with new patients. We also had a switch trial in the FliGHt Trial and we continue in the enliGHten Trial to generate long-term data how the benefit of our product are really developing on long-term basis, both related to efficacy and safety. That is our commitment really to ensure that we building up the most compressive clinical program as support of this approval. The heiGHt Trial, as you recall, was a direct comparison to a daily growth hormone at the same dose. And we randomized the patient for two to one, and it's basic the main element in the approval related to efficacy. Slide eight, you can see the result rate. And we saw and analyzed high velocity at 52-week illustrated from the statistic perspective on that competence into that. Going to the safety. And when you talk about pediatric treatment, safety is extremely important, as in all treatment. But when you think about that you have established and safety from a daily growth hormone, there hard to believe that you can compromise that. And when we saw in the summary of adverse event and everything what we look for, we basic had a similar profile like daily growth hormone, included immunogenic profile. Now we are coming to the next space. We don't want to develop TransCon Growth Hormone to a product addressing one single geographic region. We want to develop TransCon Growth Hormone up from a global commercial strategy. We are already established how we really want to address the two largest commercial market, the U.S., where we are building up our own commercial organization, we do it because we have a pipeline. We have a pipeline of rare disease, endocrinology product, matchable product in the same therapeutic era. We are in a position that we are ready there. And in the next few slides, the basic we'll have and presentation from Jesper that we'll go in and go more in detail. But before he start, I would like you to give you a perspective of the growth hormone market. You see the growth hormone market in a global setting of around more than $4 billion. The U.S. market is around $1.3 billion. We are the pediatric growth hormone estimated is about $700 million. But you've also seen that as a market that had been highly fragmented with multiple products with basic the same product. And this is where we believe the market is really prime for disruption, prime for innovation that has been lacking for 30 years. And that is what we come with. And this is why we believe we have and possibility not only to improve the treatment, but we also have a possibility to improve and expand the market segment. Jesper, will you go over and talk more dedicated related to the U.S. commercial effort.

Absolutely. This is the moment of truth for me. I have to say that I've been waiting for more than 30 years to this very moment. So, it was a very emotional. I sold my first growth hormone back in 1988. And even at that point of time, everyone was saying, why can we not have a once weekly growth hormone for little John, for the patients? Now it's done. With SKYTROFA, we truly can shape the market and change the market. For me myself were spent my entire career in the independent space, I can only say this is truly the first commercial launch that we'll make with Ascendis and with SKYTROFA and it will pave the way for the success that we have been waiting for. And you can ask me then what are your ambition? And I can only say to drive for market leadership. Market leadership is the absolute term, because then you determine what the market should look like. And there are some pillars as a part of that, that is pointed out at the slide that you'll hopefully see in front of you, on slide 12. First you build credibility. You hire the right people who can do the job. That's done. And you realize market access. We are in process of working to get the market access that we need for SKYTROFA. Then we also need to motivate the caregivers because at the end of the day, you can have the world's best drug. If you do not have the patients and the caregivers engaged into it, you will not make any strong strives. We are working on that and we are in process of doing that. And then, of course, all the healthcare providers we are working on. One of the first efforts, if you go to slide 13, is that we have been working on, is building the educational efforts to truly believe what does outgrowth, GHD stands for. We launched that back in February. And as we are working on it right now, we have more than a 100,000 unique visitors to our site, that would take as a sign of a huge interest that is for SKYTROFA and for lonapegsomatropin. We strongly believe that we're coming out to the markets and we can make the difference. We also very fortunate in a way, because the U.S. market and now I'm talking, on speaking to slide 13, we addressing the pediatric endocrinologist segment, which is relatively small. It's holding about 1,400 prescribers in total. And it's a very concentrated market. About 80% of all prescriptions come from about 20% of the physicians. And we are certainly going to address that market. I am absolutely certain that we are going and doing the right steps going forward for us to be in the right place. So, for me, with a team that we have built with my colleagues, we are absolutely ready from this moment on to move forward. We have been waiting for it and now is the moment of truth as I said. One of the key components for us, it's going to be the Ascendis Signature Access Program, ASAP. And it has different elements to it. All the colleagues that I'm working with has a long, long tenure in the area of endocrinology, in the area that we are going to work in, but certainly also in the area of the pharmaceutical industry. So we know what it takes to build the true access to the market. It takes patient enrollment, we are working on that part. It also takes motivation and access. And all these components we have put together in the program of ASAP of the Ascendis Signature Access Program for SKYTROFA And I really, really feel comfortable where we are right now. And I cannot wait or to meet all of you going forward and do the work that has to be done from now on. We have staggered the engagement with the colleagues. So we took on the first and foremost important ones, and now we're going to hire the rest of the team on board. So we have also financial being very student to what we are doing. And I do believe that we are in the absolute spot where we want to be. And with that in mind, Jan, I would like to pass it over back to you for you to expand on all the things we have been doing, even outside of the U.S. and with SKYTROFA and all the preparation that has happened. But thanks a lot for everyone to listen. I cannot wait to see you in the not too distant future at actual conferences.

Thank you, Jesper. A key part of our vision 3x3 is our global clinical read and label expansion. In Europe, we expect a decision from the EMEA Commission for on our M&A for TransCon Growth Hormone for the treatment of pediatric growth hormone in the fourth quarter of this year. In Japan, we continue to enroll patients in the foresiGHt Phase III riGHt trial for pediatric growth hormone deficiency. And in China, VISEN Pharmaceuticals completed enrollment of these Phase III clinical trials of TransCon Growth Hormone in children with growth hormone deficiency in March this year. We also have the global Phase III foresiGHt Trial underway for adult growth hormone deficiency to support our planned label expansion for TransCon Growth Hormone. Looking past the foresiGHt Trial, we expect additional studies to support our effort to expand the label beyond pediatric and teen growth hormone deficiency. Going to the last slide, and it's going back to where I started with a vision about the patient. And this is why growth hormone, this is why we are living in Ascendis, is the stories from the patient, our interaction with patients, not only in the era of growth hormone, also in the era of HP and other diseases we are working with. And we find the change we can do for the patient, one of the most important part of our journey as at Ascendis. I will move to that our pipeline update. We start first with TransCon PTH. TransCon PTH, which has the potential to be the first hormone replacement for the treatment in adult HP. In the U.S., Europe, Japan, South Korea and China, there are around 400,000 patients just in these five regions. And we are dedicated to get TransCon PTH available towards many of these patients, as fast as possible. From our Phase II study, and now that 58-week open label extension data, we are seeing exactly what we expected and hopeful. All the benefits of physiological PTH labels were realized, including normalization of serum calcium, serum phosphate, urinary calcium, or turnover and quality of life. We have achieved this promising result by essential eliminating standard-of-care treatment for these patients. The 58-week results demonstrate the doable response and tolerated safety profile that we hope with TransCon PTH in adult HP patient. What is really exciting is that 58 patients continue to remain in the open label extension. I really believe this shows the positive impact TransCon PTH is having on these patients short- term symptoms. We are hearing from patient and provider that patients’ life are improving, that patient can now become active again, can turn to the daily activities, including work. With our Phase II PaTH Forward data, we have seen how adult HP patient may benefit independent of back on treatment and cost. They experience with TransCon PTH mainly to better understanding of the unmet medical needs. Later this year in the fourth quarter, we expect to have 84 weeks top line early data from PaTH Forward. In our Phase III trial, 82 adult subject have been randomized and dosed in North America and Europe. The enrollment include leading influential clinical site in both demographics. The demographics are similar to do in our Phase II trial, and includes a broad representation of non-surgeon HP subjects, such as primary hypoparathyroidism [indiscernible] syndrome and ADH1. We expect to announce top line result for the Phase III trial in the first quarter of 2022. And if successful, expect to submit an NDA in mid 2022. In Japan, we announced the acceptance of the clinical trial notification and the indication of the PaTHway Japan trial, a single-arm Phase III trial of TransCon PTH in a minimum of 12 adult Japanese subject with HP. In greater China VISEN has initiated the Phase III PaTHway China trial of TransCon PTH in patient with the HP. The design of the PaTHway China trial mirrors the design of the PaTHway trial. As you can see, we are taking a global clinical approach with TransCon PTH. Given the data being generated is driven by the signs in establishing TransCon PTH active replacement therapy with the potential to be first-line therapy for all forms of adult hypoparathyroidism. Turning to TransCon CNP. We are trying to provide an update on our clinical program in the third quarter of this year. As you know, two randomized, double blind placebo controlled Phase II trials in children eight to 10 years old are ongoing. The first ACcomplisH Trial is a dose escalation of 12 to 15 subjects and these cohort conducted mainly in North America, Australia, and Europe. The second won by VISEN Pharmaceuticals is the ACcomplisH China Trial, which is a cohort expensive trial of at least 60 subject conducted in China. We are planning to keep the data blind for one year for each core. Once completed we would have robust clinical data from two independent randomized double-blinded placebo control trials. For achondroplasia patients, our top priority is to develop and commercialize highly differentiated safe and effective treatment option that address the comorbidities of the disease and not just height. Switching to oncology. We continue to make progress on both programs. Our TransCon TLR7/8 Agonist is designed for intratumoral delivery, allowing for long-term sustained local release for potential superior efficacy with minimal systemic adverse events. Filing IND last year was a major achievement for the company. It was first IND levering the TransCon hydrogen technology for sustained localized delivery. Just a few comments on our hydrogen technology. What we are developing at Ascendis is not just the traditional intratumoral delivery based on injection and normal to contain this formulation into the tumor where the active compound would disappear in a few hours from injection site. The TransCon intratumoral delivery technology is designed to release an unmodified drug over weeks and months inside the tumor at the site of injection. This highly sustained local concentration with in the tumor is intended to kick-start the immune system without sustaining toxicity by activating the immune system locally in the tumor and draining them with aim not only to kill the injected tumor, but to drive a systemic immune response, that will also kill non-injected tumor. This is the potential we want to achieve with a true intratumoral delivery technology. We have been dosing subjects with TransCon TLR7/8 Agonist in the monotherapy and we recently initiated dose escalation in the combination arm with a checkpoint inhibitor. We expect to have initials results for monotherapy dose escalation for TransCon TLR7/8 Agonist in the fourth quarter. For our second oncology program, we are planning to submit an IND for TransCon IL-2 ß/y in the third quarter of this year. Our understanding of the biology has guided us in designing a compound with independently optimized receptor bias potency pharmacokinetic to create a potential best-in-class IL-2 product. By solving the different elements related to efficacy and safety independently, we believe it will be possible to realize the full potential of IL-2 pathway. To summarize, we have now our first approved product schedule. We are focused on deliver a successful launch for SKYTROFA and we remain committed to improve patients life. We are confident in the way we are strategic thinking about all programs, both clinically and commercially as we address large rare disease market with our product opportunity. We estimate the global daily growth hormone market to be around $4 billion. We'd opt to 200,000 patients in North America, Europe, and Japan. We believe that TransCon PTH address a market opportunity greater than US$5 billion. We are committed to be the market leader in each of these endocrinology rare disease market segments. With the approval of SKYTROFA, we believe that is a great validation of the TransCon technology and give us hope that we can address major unmet medical needs with high success rate. Our vision has never changed. And I will repeat again, again, we want to establish Ascendis as a fully integrated leading global biopharmaceutical company with a portfolio of multiple independent market leading product within different therapeutic areas. Now, let me to the call over to Scott to a financial review before we open for questions.

Thank you, Jan. Turning to our financial results for the quarter ended June 30th, 2021. We reported a net loss of €134.4 million or €2.5 per basic and diluted share compared to a net loss of €94.9 million or €1.97 per basic and diluted share during the same period in 2020. Let me now run through some key components of these results. Research and development costs for the second quarter were €83.3 million compared to €63.6 million during the same period in 2020. The increase in R&D costs reflect continued advancement of our pipeline, with the primary drivers, including an overall increase in personnel related costs. For TransCon growth hormone or lonapegsomatropin, costs were higher due to build up a pre-launch inventories, investments to expand our future manufacturing capacity, as well as increased clinical trial related activities. As a reminder, we currently expense manufacturing activities of lonapegsomatropin as R&D costs in advance of approval. At the time of product approval, portion of these R&D costs may be reversed and capitalized to inventory as raw materials, work in progress and finished goods, which will result in the one-time benefits R&D costs. As of today, this would have been approximately €50 million. For TransCon PTH or palopegteriparatide, costs were higher, primarily due to increase clinical trial related manufacturing and device development costs. For TransCon CNP, costs were higher primarily due to increased manufacturing and clinical trial related costs. And finally, for our oncology therapeutic area, costs were higher due to increase manufacturing and preclinical costs for TransCon IL-2 ß/y and for TransCon TLR7/8 Agonist higher clinical related costs were partially offset by lower manufacturing and preclinical costs. Selling, general and administrative expenses for the second quarter were €35.3 million compared to €20.8 million during the same period in 2020. These higher expenses primarily reflect an increase in personnel related IT and other infrastructure costs as we prepare for the launch of SKYTROFA. Financial income and expenses in the second quarter included the foreign exchange rate loss of €11.3 million compared to a foreign exchange rate loss of €9.9 million in the second quarter of 2020, primarily related to translation of our U.S. dollar holdings of cash and marketable securities to euros. We ended the second quarter with cash, cash equivalents and marketable securities totaling €641.3 million. As of June 30th, 2021, the company had 53,900,990 ordinary shares outstanding. Turning to the remainder of 2021. We expect our reported operating expenses for the rest of the year to reflect the first half run rate with some quarter-to-quarter variability, with key drivers, including the anticipated launch of SKYTROFA, advancing our endocrinology rare disease pipeline, expanding our activities in oncology and investing in the TransCon technology platform, including for lonapegsomatropin, build up a commercial inventory ahead of launch, execution of commercial launch activities, investment in expanding commercial manufacturing capacity to support anticipated future demand, continued execution of the foresiGHt Trial, a global Phase III randomized controlled clinical trial in adults with GHD and continued execution of the riGHt Trial, a Phase III randomized controlled clinical trial in children with GHD in Japan. For palopegteriparatide, continued execution of the Phase II PaTH Forward Trial, which continues to retain 58 subjects in the open-label extension, along with continued execution of the PaTHway trial, a North American and European Phase III randomized controlled clinical trial in adults with hypoparathyroidism and ongoing manufacturing of PPQ batches. For TransCon CNP, execution of the clinical program, which includes two randomized controlled Phase II clinical trials in achondroplasia, the ongoing ACcomplisH trial and the ACcomplisH China trial, which is being conducted through our strategic investment in VISEN Pharmaceuticals. And lastly, in our oncology therapeutic area, execution of the transcendIT-101 clinical trial for our TransCon TLR7/8 Agonist, and advancing the TransCon IL-2 ß/y program into clinical development. We expect other SG&A expenses, including SKYTROFA commercial activities will include lonapeg pre-launch activities and continued investments in personnel, systems and infrastructure to support a rapidly progressing portfolio and growing organization. Let me now provide an update on our upcoming clinical milestones. For lonapegsomatropin, today we have received FDA approval for SKYTROFA for the treatment of pediatric GHD in the United States. We continue to anticipate European Commission approval for pediatric GHD in the fourth quarter of this year. For palopegteriparatide, as discussed, we exceeded the target enrollment in the PaTHway trial, and now expect to report top line results in the first quarter of 2020. For TransCon CNP, we expect to provide a clinical program update in the fourth quarter this year. For TransCon TLR7/8 Agonist we have initiated the dose escalation arm in combination with the checkpoint inhibitor and we plan to report initial monotherapy dose escalation data for transcendIT-101 in the fourth quarter of this year. And finally for TransCon IL-2 ß/y, we plan to submit an IND later this quarter. Before we open up the call for questions, I want to reiterate a few points about our anticipated commercial activities for SKYTROFA in 2021. With the FDA approval of SKYTROFA today, we expect to have product available shortly. Once product is available, we anticipate beginning to provide access to SKYTROFA for pediatric GHD patients through our dedicated patient support program. Our medical affairs, our U.S. commercial team and the entire Ascendis organization are currently ready and prepared to execute launch activities. And again, finally, during Q4, we anticipate European Commission marketing approval for pediatric GHD. With that operator, we are now ready to take questions.

[Operator Instructions] First question comes from the line of Jessica Fye from JP Morgan. Your line is now open.

Hey, guys. Good afternoon. Congrats on the approval and thanks for taking our questions. A couple for me. First, can you please explain which part of the data investors should look to in the label that reflects the superiority of SKYTROFA efficacy over Genotropin? Is it the lower bound of the 95% confidence interval in table four of the clinical study section? Second …

Exactly.

Okay. How does this timing of approval impact your payer conversations if at all? Is it possible you can catch the late summer window for coverage for the session and what's the list price per milligram going to be?

Let me at least start with your first question, Jess. And a different way, you can describe how you achieve an higher analyzed velocity. From my perspective is the best one is to -- for that competent into that because it's basic describe what is the interval where you are improved with a 95% competent. So when I see what paragraph or heard what paragraph you are, somebody's pointing to, I will give you a 100%, right? This is where I see and where I get my comfort that you achieve the higher analyzed velocity in the 95% competent into that. That was one question. About that payer system, you sure, that is something we start working on, but it's something we have worked for -- in the last two years where we basic have intense discussion with payer, mainly reflecting our discussion on how we basic Ascendis is providing a pipeline of product opportunity and building up a long-term relationship with the payer system, not only in the U.S., but also how we want to address the conversation the rest of the work. Related to the U.S., I think, Jesper, you potentially have a short comment about it, even if they limit what we can say now and what we can say from a public statement, because that is discussion that basic can materialize now with the approval.

Yeah. Basically, Jan and Jessica, I would say that, of course, things has been -- Ascendis, we started out this a long time ago. We have a super good team in place and we are totally prepared for what we are entering into. And we all know we are in it for the long run. So, it's not just about getting access. It's also getting access under the right circumstances. And that's certainly what we are working on as we speaking almost -- at least in the days and weeks to come. So, truly welcome where we are right now.

Great. Thank you.

If I connect a little bit to you, Jess, about it. As you know, we have a commercial strategy and the commercial strategy is basic to be in a position that we basic, although looking on maximizing the long-term value of our best-in-class growth hormone. But also at the same time, as Jesper said, laying the foundation for future product launch in the endocrinology piece. So this is why we building a leading market share based on overall value proposition, but not only for one single element, but both of the patient caregivers, healthcare provider. And this is why we basic of developing a strategy for that, because we want to be a leading biopharma company. And this is why we building our strategy on maximizing long term value and have our best-in-class growth hormone. So this is our focus and this is one. And you talked about pricing, yes, we call it premium responsible pricing. And then you say, what is premium responsible pricing? This is because we look on healthcare economic outcome service, because this is where coming from the European setting is that this is where we look at it. And we see it. We see that is a basic fundamental good reason, basic to have premium responsible pricing. And everyone will bill, all stakeholders, patient caregivers, physicians including payers. And this is what we have proven in our pharmacoeconomic data. And that is why we are some way are clearly saying we are going from a premium responsible pricing. Jess, answer your last part of the question.

Next one on the queue is Tazeen Ahmad from Bank of America. Your line is open.

Good afternoon and congratulations from me as well on the approval, good hard work. Jan, can I just clarify one point as it relates to pricing, is it the plan to announce pricing before you launch or would we know the price -- let's say on the day that the actual product becomes available? And then, Jesper, I'm hoping you can walk me through how patients will initially be able to get access to the drug before it ends up on formulary. I think there is a process that doctors will have to go through, have you sorted what that process is and can you share those steps with us? Thank you.

Yeah. Absolutely. The first part, I can just show this thing and it's more or less reflecting in what we call premium responsible privacy. We have a clear view where you want to be in pricing. And this is basic part of our current negotiation and we become out shortly with a discussion about what the best price would it. And I think in the slide deck from Jesper potentially you can refer back to that Jesper where the basic are going to sup up the steps where we basic are talking about our systemize, actually I think there was, what I thought we'd call it ASAP, Ascendis Signature Access Program. And it's basic in the slide deck 15.

Yes. I mean, Jan points out ASAP is basically our Signature Program from Ascendis for SKYTROFA. And what's going to happen in actual terms is, I mean, price is many things, as we all know, it's rack price and is net price. And what we will do is basically if you're going to sell it through the -- you could say the traditional without being on formula route, which is what I heard you asked for, then you will be paying rack price, and then the physician will have to request a prior means that it would go to the health plan, then it will be evaluated and then often rejected and then come back and then the physician would have to requalify why this patient is best suitable for once weekly lonapeg SKYTROFA. And that will happen under certain circumstances, is not happening very frequently in comparison if you're not on the formula. So, that's why we was thought out. And then, of course, as we go by, we will negotiate ourselves into the contracting and into the PBMs and get access by doing that. So, all in all, we will come to the market with an approach of being price sensitive, being priced premium. I think we can also say, -- but we also do it in a way where it makes sense for us to make sure that we get optimized profitability. I would say at the end of the day, that's what the job is all about from our side. So that's what we will be shooting for.

Thanks a lot, Jesper.

Yeah. Thanks. Can I just ask a follow-up? So from the time a doctor writes a script, do you have any sense of how long it'll take before the patient could actually receive the treatments? So if you are launching in the fourth quarter, should we really expect to see patients be put on drugs in large numbers because of the dynamics that you just mentioned in the early part of the launch?

It can take from two weeks to six weeks to eight weeks before patients get put on, but what we will do in the meantime with our fast doc program is basically our ASAP program, a nickname, fast doc programs, when all the companies are doing it, of course, we call it the Ascendis Signature Access Program. There, we will provide the drug upfront and the auto injector to the patients. And then as the patients get the approval for the drug, they will be transferred into the health plans and thereby getting access and being paid for. So you will not see any fast uptake, but you certainly will -- sorry -- I've got something in the wrong product, but you will see it as we move forward. And as things progress, we do believe that the ASAP program, Ascendis program will certainly put us in a very strong position for the time to come to a drive our market leadership. Again, remember that we are first in the pediatric segment coming to the market and that first mover advantage, we will certainly also enjoy in the time to come.

Okay. Thank you so much for the color.

Thanks a lot for the question.

Next one on the line is Michelle Gilson from Canaccord Genuity. Your line is now open.

Hi, congratulations. I'm also a very happy Michelle. I noticed the label. It looks very, very similar to daily growth hormone. I guess just with this in mind, do you think physicians will see SKYTROFA as interchangeable with daily growth hormone in the way that the label's run and do you anticipate there will be any pull through demand beyond the initial indication into the other growth hormone approved indications?

I believe when I look on the labeling, when we talk with physician, when we discuss the entire concept of SKYTROFA. And I think as you said, Michelle, that is actually illustrated in the labeling, we are released as somewhat to molecule the same as daily growth hormone. I believe all the spec from the -- what we see from the signs reflected into the labeling indicate that we basic have the same active entity as daily growth hormone. And also believe all the clinical data we have generated are supporting the same thing when we look from switching from daily growth hormone patient over to SKYTROFA, we look for starting native patient in that. And I feel that the confident we have in our data, we can also communicate to publication, medical affairs and really illustrate the benefit of the compound. Currently, we have approval in pediatric growth hormone deficiency. We are extensive working on label expansion. As you know, we have initiated an adult growth hormone deficiency trial, we will potential proceed one or two other indication. To your knowledge, and when we see the growth hormone market, none of the daily growth hormone having basic the approval of all the different indication today. So, it's an element where we are building out the scientific clinical evidence on the compound.

And if I can also add a follow-up, how do you plan to communicate SKYTROFA differentiation from other long acting hormones, if they are approved in the future. I know you mentioned the immunogenic profile in your prepared remarks.

What I mentioned was that we had a similar immunogenic readout that you see with daily growth hormone with that really, really a safe treatment. I actually believe in data. And I actually think when people start to compare different Phase III trials, then I think the differentiation are really clear, but Michelle, I think it comes back to the mode of action in the beginning, because you basic -- if you don't have the right molecule, you don't have the right distribution to all the tissues, you will never -- somebody can achieve the same thing that you will achieve with a daily. So, so small P molecule. And I think this is why after 30 years still all patients in Europe, U.S. depend some of the major markets are still being treated with basic, per se, the old daily growth hormone that got invented in the eighties.

Okay. Thank you so much for taking my questions and congratulations again.

And we happy that you happy Michelle.

Next one on the queue is Josh Schimmer from Evercore ISI. Your line is now open.

Thanks for taking the questions. So to sticking on SKYTROFA, maybe we can talk about how long do you think it'll take to gain widespread formulary adoption? Is that likely to be the key gating step for uptake, or is it likely to be physician hesitancy? And then, it looks like consensus for SKYTROFA for next year has been $110 million in sales. Is that in the general ballpark of what you think is reasonable, considering some of the lunch headwinds you'll have to push through? Thanks so much.

Thanks, Josh, for your creations. If I can just start with the last question. We have not provided any kind of guidance to our expected sales for 2022. We feel our strategy is really to create the long-term value about the product opportunity. And addressing little bit your first question, I believe when you think about the view from a physicians, the physician can see and know if I have a ones weekly therapy that basic are in a position we know that only 20% -- less than 20% of the patient today in this market segment. When we look in the U.S. basic our compliance. Meaning is that they take or pick up 80% of the prescription. So out from that perspective, we know, and the physician know, they can get a better outcome with giving a once weekly product. Going to the patient that is sitting with the caregiver in front and having to take a choice, you can take a daily growth hormone, seven injection, or you can potentially go down to five injection a week with many, many, many do, and then you get welcome. Or you can take a once weekly and likely the daily need to be in a cool shade all the time, so basic the patient comfort. What do you want if the child is traveling, going to the grandparents, they need to be sure that is cool back all the time and other things like that. So this, I believe when all the notice from the patient and other things, the caregiver it’s market choice if you can provide the same efficacy and we believe we can do that and have the same safety and tolerability. Going to your question about the reimbursement, I think if you have the efficacy right, the safety right, and the tolerability, then you'll come back to how fast can we go into the different reimbursement system. And this is where we building up what I call premium responsible pricing, because we believe we deserve premium pricing, but we also want to build on what we really call the optimum view from Ascendis building up a company of long-term value of this product opportunities. So we are not in a volume game, we are in a value game. And that is how we build up our commercial strategy.

Okay. Thanks very much.

Yeah. I can just add, to date, day one and I can tell you, we have done a lot of preparedness for this. We have worked for this for the last couple of years to get ready for this moment and all the things in place for doing a very successful launch and become the company we want to be going forward, not only with SKYTROFA, but certainly also to build the platform for future. Jan was also talking about in his introduction.

Thanks, Jesper.

Next question comes from the line of Alethia Young from Cantor. Your line is now open.

Hey guys. Thanks for taking my questions and congrats on the approval. It's been a wonderful road to watch. I guess a couple and I actually am going to ask one. That's not related to SKYTROFA. But the first one is SKYTROFA, can you just talk a little bit about how to think about the Medicare/Medicaid mix, like the governmental mix, if there's any versus like commercial. My second question is, you noted that $2.8 billion rest of world, can you kind of either break that out by patient numbers or how to think about it either on a revenue basis like Europe versus like Asia? And then my last question is, just going back to the TLR7/8 program, should we expect that you're going to be at doses at the end of the year that might show some efficacy. And then how do we kind of think about what you're kind of expecting for the combination study that probably we'll have some data hopefully next year. Thanks.

Thanks a lot. It was actually nice to get a question outside growth hormone. Let us move back to some of your growth hormone question. Let me take the question when the breakdown reflecting the growth hormone market. And U.S. is the single largest market, but then we basic have two, you can say Asian market that basic are competing or being number two or three. Currently, Japan is the second largest single target. China is basic -- in basic we expect that it will pass Japan this year, moving up to more than $800 million as a single, but really have major, major advancement every year. Then you have Europe. That's just little bit under this market. Japan is very interesting because it's also built on a little bit on local producer because it's been easy for local producer to enter the market because there has been innovation for trial for 30 years, and this is where our strategy come in. We have now U.S. commercial strategy. Yes, we have that, we have our VISEN Pharmaceutical greater China. We now running the clinical development from Japan. Meaning is the basic have a global clinical reach when we have that. Doing that, we also will have a global commercial strategy building on one single thing, pipeline deals, not single product deal, few places where we don't want to do it ourselves. We would go in to a place where the basic have that infrastructure to support us, to build it up as a leading brand, also in this era. But we still will be part of what we call the value creation. And it would still be run on a global umbrella, both related to marketing measures, medical affairs, because we believe in global market, we don't believe in local market more. This is a global society, and this is how we building up our global strategy. And this is where we have a global aspect for everything what we doing here. Related to -- the specific question related to commercial life or commercial patient or not commercial patient. I think we have a clear view wherever you want to be. Jesper, you can clearly say shortly where our focus will be, and I can move back to the last question.

Absolutely. That's -- I mean, key focus is, of course, in the commercial space. Again, keep in mind that this is pediatric. CMS is not really playing that Medicare/Medicaid space to any large extent. So our focus is the -- on the 185 million patients that are to be found in the commercial space. So key focus there. And just to add onto what Jan is saying, keep in mind that if you hit China and the top seven markets in the world, meaning Japan, U.S., and Europe, you're hitting more than 75% of the world pharma markets. And that's, of course, where our focus is going to be going forward.

And related to oncology, what we have said and what we basic are speaking to, end of the year, we will give an update. One thing I can say we're really thrilled with this product opportunity for first time is what I call a true intratumoral delivery technology and we thrilled with that aspect.

All right. Next one on the queue is David Lebovitz from Morgan Stanley. Your line is now open.

Hi. This is [indiscernible] on for David today. A couple more questions for us on the access side. Firstly, what percent of major payers have already been engaged? Secondly, can you quantify what premium responsible pricing looks like? And finally, how would you see a step therapy requirement through a cheaper alternative impacting adoption? Thank you.

So, the first thing I had think we and Jesper had really provided somewhat insight we can provide. And I think it's hard for us to provide more because we are not disclosing our long strategy, how we moving forward. We are disclosing exactly the overall picture of the long strategy, how we basic our position of the product opportunity, what has been our strategy, what we have done. And I think we have done that in a pretty detailed manner. Premium pricing is what we discussed before and we call it premium responsible pricing because we believe that our product is served at premier pricing. And because we believe it provides an pharmacoeconomic benefit for everyone for the patient, for the physician, for all the stakeholders, including the payer system. So the last question, I do not know, Jesper, if you have a few comments to that.

No. I think, I mean, for pricing, of course, very close to hot negotiations is ongoing with a different PBMs and health plans. I really don't have anything much call it to add. I think strategy is in place and we're moving forward. And I can only say I look really, really forward to make the announcements as they become public information in negotiations. Also bear in mind that when you're talking PBMs, you had a very tight spot right now due to the way that the system is set up, where basically announcements are coming out in August, very early September for the PBMs for next year. And we are working on being there.

Thanks a lot Jesper.

Next question comes from the line of Yanan Zhu from Wells Fargo Securities. Please stay with yourself to one question. Your line is now open.

Hi. Thanks for taking my question and congrats the approval. So I'll just limit myself to one question on the adoption of SKYTROFA. So it's our understanding that in a real world setting, physicians often prescribe daily growth hormone above the labeled 0.24 mg/kg/week. So for those physicians who -- I guess, first of all, how prevalent is that? And for those physicians, how do you think they interpret the label and then proceeded to use SKYTROFA? And do you need additional studies at higher dose or including a higher dose in your open label study, that's ongoing to convince those physicians for a greater adoption. Thank you.

So what is in the labeling is dosing of 0.24 mg/kg/week. And this basic is reflecting what we did in both new patients and what we did in our switch trial wherever we took patient from different daily growth hormone concentration, and all of them got switched over initially to 0.24 milligram. What we observed in this trial was also that physician basic titrated different patient to different levels dependent on clinical outcome and other important parameter that observed for the patient. So what is important in this case is that you have a compound that can be titrated in -- for a product, because that is very important for that physician, that you can titrate it in a manner that is predictable. And that is what we have observed. What we had done previous is to make what be called in a Phase II trial, where the basic has a classical dose escalation. We can definitely see a clear effect on the different doses, which indicating that we have a compound that could be titrated up and down and we -- as we expected response.

Got it. Thank you. Very helpful.

Next question comes from the line of Joseph Schwartz from SVB Leerink. Your line is now open.

Hi. [Indiscernible] for Joe. Thank you for taking our question. I'm actually going to ask you on TransCon PTH, the data that we're expecting in the 4Q. So ahead of the kidney function data, I was just wondering if you could give us insight into how you're thinking about interpreting the kidney results, considering everyone will be on drug in the study. So, what would be a good result for those patients who have different degrees of calcification over the years? What could be considered a small or big effect, and how do you interpret the results with everyone on drug? Thank you very much.

Yeah. I actually think we already got what I -- from my perspective is, when you look on 24 hour urinary calcium, which basic are the most validated way to look on reabsorption capacity in the kidney. And what we saw in the 58 weeks was that we basic saw a continuation of what we observed at six months, we saw a doable response and we hope that we will receive a same doable response at 84 weeks. The interesting part is that we did a lot of subanalysis because we basic have patient that basic had already real impact. And we wanted, for example, to analyze, do this subgroup with already established impact had poor prognosis of achieving what we call it normalization of 24 hour urinary calcium. And it was not really the case. We saw the same positive effect, independent on what we call the background demographic related to reabsorption establishing again from that perspective. And we saw it was extremely, extremely positive results. We hope we can continue to see the same positive trend when we will have the 84 weeks data here in the end of the year.

Next question comes from the line of Rene Wouters from Kempen. Your line is now open.

Yes. Hi, good evening. And thanks for taking my question. First of all, congratulations also from my end.

Thanks.

I wanted to ask how does approval impacts your plans with regards to further label extension looking beyond adult growth hormone deficiency. So, are there indications where growth hormone is impacted?

I actually say it just make us -- I have no belief that we will not -- I had a strong belief we would get the approval because we had such a strong packet to probate. When we imitated all what we call label expansion activity, we did it actually a long time before the approval like adult growth hormone deficiency activities. And we already have been planning additional label expansion to other indication. So what I saying that that is that the approval is just the element that we needed to continue this activities, what all this activity were indicated for a long time before.

That’s super helpful. Thank you very much.

Next question comes from the line of Trevor Allred from Oppenheimer. Your line is now open.

Hey guys. Thanks for taking the question and my congrats as well. Just wanted to ask about the upcoming CMP update in 4Q, have you determined what you're going to be sharing? Will we see any initial -- anyone growth velocity? Thanks.

We currently analyzing what we going to show at that dataset, and we are definitely in a position that we will give you an update related to this program. Our overall perspective is that we want to make this product as fast as possible accessible for the patient. So, we are compromising two things to give information and at the same time to keep that price blinded. And that is a balance where we basic are going back and forward. What is the information we can share without galvanize the blankness of these clinical trials? And therefore, I cannot completely say what can we share? What can we not share? Because that is a continued development and I'm quite sure Dana and her team will really be strong to support to find out how we can find the best balance between these two things.

Next question comes from the line of Anita Dushyanth from Berenberg Capital Markets. Your line is now open.

Hi, good afternoon. Congratulations on the approval and thanks for taking my question. So, Jesper maybe you could help me understand this a bit. I know you mentioned earlier that it's going to take some time for the vet to get on the formulary. So, are you kind of providing some kind of support to actually the prior authorizations to provide tax rated patient access? And then, I just wanted to know regarding your application in the European region, are we still expecting approval in Q4?

So, I think, Jesper explained about our ASAP program and spacing providing the drug to the patient in the period, it seem that you -- change the process compared to the basic getting the reimbursement. So, Jesper has -- that is in basic in the slide deck, basic talked about the [indiscernible] this product. Our European strategy is an integrated pipeline strategy, and we working to find out how we basic have what I call and enrollment out of our pipeline in Europe, that it's balanced with two different elements, which is cash conversation, expansion of the market in the most important regions. Europe is still a very diverse region. Some countries takes up to 18 to 24 months for basic getting reimbursement, either one, almost flatter. This is why you should, because have that space process, but we will keep you updated when you have more clarification about the European strategy.

There are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you. Bye-bye.