Ascendis Pharma - Earnings Call - Q1 2025

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by and welcome to Ascendis Pharma First Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Scott Smith, Vice President and Chief Financial Officer. Please go ahead, sir.

Scott Smith (VP and CFO)

Thank you so much, Operator. Thank you, everyone, for joining our First Quarter 2025 financial results conference call. I'm Scott Smith, Chief Financial Officer at Ascendis Pharma. Joining me on the call today are Jan Mikkelsen, President and Chief Executive Officer; Sherrie Glass, Chief Business Officer; Jay Wu, Executive Vice President and President Ascendis US; and Aimee Shu, 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, statements regarding our commercialization and continued development of Skytrofa and Yorvipath for the US, European, and other markets, as well as certain financial expectations, our pipeline candidates, and our expectations with respect to their continued progress and potential commercialization.

Our strategic plans, partnerships, and investments, our goals regarding our clinical pipeline, including the timing of clinical results and trials, our ongoing and planned regulatory filings, and our expectations regarding the timing and results of regulatory decisions, expected market developments, and our exploration of market opportunities in therapeutic areas outside of endocrinology rare disease. These statements are based on information that is available to us as of today. Actual results may differ, could differ materially from those in our forward-looking statements, and you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the facts that actual results differ materially, please see our forward-looking statement section in today's press release and the risk factor section of our most recent annual report on Form 20-F filed with the SEC on February 12, 2025.

TransCon Growth Hormone, or TransCon hGH, is approved in the US by the FDA and in the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency. TransCon PTH is approved in the US by the FDA for the treatment of hypoparathyroidism in adults, and the European Commission and the United Kingdom's Medicines and Healthcare Products Regulatory Agency have granted marketing authorization for TransCon PTH as a replacement therapy indicated for the treatment of adults with chronic hypoparathyroidism. Otherwise, please note that our product candidates are investigational and not approved for commercial use. As investigational products, the safety and effectiveness of product candidates has not been reviewed or approved by any regulatory agency. None of the statements during this conference call regarding our product candidates shall be viewed as promotional.

On the call today, we'll discuss our first quarter 2025 financial results and will provide further business updates. Following some prepared remarks, we'll then open up the call for questions. With that, let me turn it over to Jan.

Jan Mikkelsen (President and CEO)

Thanks, Scott. Good afternoon, everyone. In the first quarter of 2025, Ascendis continued the strong start of our global Yorvipath launch, as well as key development and regulatory progress supporting our long-term growth strategy to be a leading biopharma company. The strong US launch of our Yorvipath positions 2025 to be an inflection point for Ascendis, with a growing revenue base and a clear path to become cash flow positive. As of March 31, Yorvipath was prescribed in the US by more than 1,000 unique prescribers for more than 1,750 patients. This represents our first full quarter for the US launch. Yorvipath, first and only FDA-approved treatment for hypoparathyroidism in adults, is addressing the underlying cause of the disease by providing active PTH within the physiological range for 24 hours per day.

Skytrofa, our long-acting growth hormone, is firmly established as a high-value brand and the preferred treatment for patients, physicians, and caregivers. Skytrofa is well-positioned as daily treatment continues to exit the US market, and a Skytrofa label has the potential to expand beyond its single indication. Skytrofa is a key pillar in our strategy to become a global leader in the treatment of growth disorder. TransCon CNP, the first long-acting therapy in development for the treatment of achondroplasia, is set to become the second pillar in our growth disorder strategy. We believe that TransCon CNP has treatment benefits in addition to linear growth that addresses multiple aspects of the condition that are fundamentally important to patients. We submitted an NDA to FDA in March and expect to file an MAA with the European Commission in Q3 this year.

Data from three randomized double-blind placebo-controlled clinical trials show that TransCon CNP has the potential to transform the lives of people with achondroplasia. In my remarks, I will discuss each of these products in detail and comment on other recent developments within our business. Beginning with Yorvipath, first quarter total global Yorvipath revenue grew to EUR 45 million compared to EUR 14 million in the fourth quarter of last year. Following commercial availability in the US in December of last year, we are seeing strong US demand, reflecting both the deep unmet medical need in the market as well as the large patient population. As of March 31, more than 1,750 patients, including the 200 patients from our ERP and clinical program, have been prescribed Yorvipath in the US by over 1,000 unique healthcare providers. Enrollment of patients new to Yorvipath continued at a similar weekly rate in April.

The majority of patients who have received insurance approval for their Yorvipath prescription received that approval in four to eight weeks, and we are pleased with the approval rate we have seen. We are beginning to see favorable payer plans put into place and continue to see approvals across both commercial and government plans. The strong launch performance of Yorvipath in the US supports our view of its excellent product profile and the major unmet need in the market, and we expect Yorvipath to contribute significantly to our revenue in 2025. Outside of the US, we see steady Yorvipath revenue growth in both the Europe direct and international markets, and we expect additional acceleration of the revenue growth when Yorvipath reimbursement becomes available in additional Europe direct countries in the second half of the year.

The continued rapid uptake, together with high rates of patient adherence, gives us confidence that Yorvipath is well-positioned to uniquely address the unmet medical need of this patient population, and we are regularly reviewing input and data from patients to evaluate if there are additional ways to improve the treatment profile even more. We estimate there are over 400,000 patients globally and around 70,000-90,000 patients in the US alone living with chronic hypoparathyroidism. Our claims analysis demonstrates that 10,000-15,000 of these US patients are uncontrolled and 30,000-35,000 are partly controlled. Based on the latest clinical practice guidelines, nearly all these patients are candidates for treatment with Yorvipath. Our strong global launch gives us high conviction that we can continue to build and lead this market, and Yorvipath can be a durable multi-billion EUR drug device product with a patent lifespan extending into the 2040s.

Turning to Skytrofa, Q1 revenues for Skytrofa were EUR 51 million. With continued patient growth and global expansion offset by the typical first quarter revenue dynamic in the U.S., we have around 7% market share of the total growth hormone market in the U.S. and around 43% of the total U.S. long-acting growth hormone market based on third-party prescription data. The pediatric growth deficiency indication represents about half of the total growth hormone market. With our premium pricing and Skytrofa's leading position in pediatric growth hormone deficiency, we believe we are well-positioned to expand the opportunity for Skytrofa in multiple ways. A key near-term milestone is our first potential label expansion in the established growth hormone indications from our supplement BLA for the potential U.S. approval in adult growth hormone deficiency, where we have a PDUFA goal date of July 27, 2025.

We are also on track to start a basket trial for Skytrofa in a range of indications, including idiopathic short stature, shock deficiencies, Turner syndrome, and SGA. We are planning to discuss this trial with the FDA in an end-of-phase two meeting this quarter. Importantly, we are also investigating TransCon Growth Hormone outside the established growth hormone indication, such as in a potential combination therapy with TransCon CNP for treatment of achondroplasia and other growth disorders, which I will address in a moment. Moving to TransCon CNP, TransCon CNP is the third key product in our endocrinology rare disease product portfolio. The genetic variant that causes achondroplasia changes the way receptors work in multiple tissues throughout the body, not just in the growth plate and in bones, resulting in a wide range of serious medical complications in childhood and lasting throughout adulthood.

Because TransCon CNP provides sustained tertiary levels of CNP throughout the body, it has demonstrated a unique product profile, giving it the potential to bring growth benefits and important new benefits beyond linear growth, as well as reduce the risk of hypertension and injection site reaction. In our pivotal approach trial, TransCon CNP demonstrated significant improvement in the primary endpoint of linear growth compared to placebo, as well as significant improvement in other clinical endpoints meaningful to the achondroplasia community, including leg bowing, muscle functionality, body proportionality, and health-related quality of life. Leg bowing is a common complication in achondroplasia that can result in chronic pain and impaired physical function, driving many to undergo complex, painful corrective surgeries. I have been in meetings with patient organizations in Europe and the US who have confirmed the importance of addressing the complications of achondroplasia beyond linear growth.

Just as important to the achondroplasia community, TransCon CNP has shown a safety and durability profile compared to placebo, with low frequency of injection site reactions, all of which were mild and no evidence of symptomatic hypertension. After positive interaction with the FDA relating to the content of our NDA submission, we are pleased to have submitted TransCon CNP for their review in March. In the EU, we plan to submit an MAA during the third quarter of this year. Additionally, during the fourth quarter of 2025, we plan to submit an IND or similar to investigate TransCon CNP or in combination with TransCon Growth Hormone for the treatment of hypoparathyroidism. Shifting to TransCon CNP and TransCon Growth Hormone combination therapy, we are committed to continue to drive even better outcomes for people living with achondroplasia.

This is why we are conducting the co-trial, being the first phase two study combining CNP and growth hormone in achondroplasia, each of which stimulates different signaling pathways in the growth plate and other tissues in the body. We look forward to sharing top-line week 26 results from the co-trial data this quarter and see great potential to further raise the bar for clinical outcomes. With TransCon CNP as the potential future backbone therapy, we believe we can achieve even greater growth while also addressing medical complications of achondroplasia. Fundamental to the development of each of our three medicines, Yorvipath, Skytrofa, and TransCon CNP, is Ascendis Pharma's proprietary TransCon technology platform. With the TransCon technology and our deep understanding of disease biology, it is possible to create medicine with highly differentiated treatment benefits not possible with other technologies. At Ascendis Pharma, our commitment has always been to the patient.

It is one of the company's core values. I believe we have demonstrated multiple times over the history of Ascendis Pharma our resilience and our ability to adapt and find solutions to attain this goal. We remain as dedicated as ever to ensure that all our medicines become available to patients. Through our collaboration with Novo Nordisk for the development and commercialization of TransCon technology-based products in metabolic and cardiovascular disease, and our collaboration partners Vism, Iconis, and Tydin, we continue to work to execute our Vision 2030 to create value in large tertiary areas and through an innovative business model. In summary, 2025 is a transformative year for Ascendis Pharma as we grow our global revenues from Yorvipath, Skytrofa, and seek to obtain key regulatory approvals, deliver robust clinical data, and advance drugs with blockbuster potential to drive growth for many years to come. I will now turn to Scott.

Scott Smith (VP and CFO)

Thank you so much, Jan. I will touch on some key points surrounding our first quarter financial results, but for further details, please refer to our 6K filed today. Yorvipath’s first quarter revenue increased significantly to EUR 44.7 million, up from EUR 13.6 million in the fourth quarter of 2024. Steady sequential revenue growth outside the US was augmented by the strong US launch. As Jan discussed, the trends we saw for Yorvipath in Q1 continue in Q2, both outside and inside the US, and we anticipate that Yorvipath will have a substantial impact on our financial profile in 2025. Turning to Skytrofa, revenue for this quarter was EUR 51.3 million. Sequentially, pricing and market share remained stable, but revenue in the US was negatively impacted by seasonal items, including reduction in channel inventory and higher copay assistance. Those seasonal headwinds should reverse beginning in Q2.

We also continue to watch the EUR/USD exchange rate for any potential impact related to reported revenue. Total revenue for the first quarter was EUR 101 million, which includes nonproduct revenue from our collaboration partners. Turning to expenses, for the first quarter, R&D costs totaled EUR 86.6 million compared to EUR 70.7 million during the first quarter of 2024. The first quarter of 2024 included a favorable EUR 10.6 million reversal of prior period write-downs of TransCon PTH pre-launch inventories. SG&A expenses in the first quarter of 2025 totaled EUR 101 million compared to EUR 66.8 million during the first quarter of 2024. The EUR 34 million increase was primarily driven by global commercial expansion. Total operating expenses were EUR 188 million for the first quarter of 2025.

As a result of the Vism IPO, we recognized a non-cash gain of EUR 33.6 million as part of share of profit loss of associates, and we retained 39% ownership of Vism. Net finance expenses for the first quarter of 2025 were EUR 15.9 million, driven primarily by non-cash items. Net cash financial income for the first quarter of 2025 was EUR 3.3 million. We ended the first quarter of 2025 with cash and cash equivalents totaling EUR 518 million compared to EUR 560 million as of December 31, 2024. Turning to the remainder of 2025, we expect substantial revenue growth driven by the global launch of Yorvipath with a continued solid contribution from Skytrofa. We are not providing revenue guidance for Skytrofa or Yorvipath at this time.

For Skytrofa, we believe that growth in prescriptions visible in third-party data will track sequential revenue growth for 2025 with expected stability in mix and pricing, including normal seasonality. For Yorvipath outside the U.S., we continued steady revenue growth, while inside the U.S., our launch is progressing exceptionally well. We will continue to look to help investors understand uptake and reimbursement dynamics as the year progresses. With that, operator, we are now ready to take questions.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press one one again. We do ask that you please limit to one question and one follow-up to allow time for everyone to ask a question. Our first question today will come from Jessica Fye with JPMorgan. Your line is open.

Jessica Fye (Managing Director and Equity Research Analyst)

Hey, guys. Good afternoon. Congrats on the strong results with Yorvipath. It seems like the number reflects very good execution on reimbursement. Can you talk about your latest expectation for the proportion of patients with a script who you think will ultimately get reimbursed once Yorvipath is, say, at steady state? The follow-up would just be, was there any initial channel fill reflected in the Q1 revenue number? If so, can you quantify that? Thank you.

Jan Mikkelsen (President and CEO)

Thanks, Jess, for the questions. Scott, will take the easy one, the last one. Yeah, Jess, channel inventory has averaged about one to two weeks at any one time. We ship once a week, so it's hard to get less than one week of channel. The second one, Jess, why it's a little bit more complicated because there's somebody looking in the future.

What we can see, we see a very, very, very positive trend. We see the adaption of the different PPMs, the different payer forms. If somebody should come with my own guess about it, and this is more a guess because we do not know exactly, there will never be 100% approval of all the patients. I believe if we really are successful, and I hope we won, and I believe we are going to be successful, I believe 17%-18% will get reimbursed. I think, Jay, if you have another comment to it this way.

Jay Wu (EVP and President)

Yeah, happy to chime in on that. I think, as Jan mentioned, we are still early in the launch, right? From that perspective, we are still seeing policies be set into place. It is a bit early to be able to anticipate what that steady state will be.

I do think a few examples that give us a lot of confidence that we are headed in the right direction is a couple. One, you're seeing policies, favorable policies be put into place both from a commercial standpoint as well as government. We are seeing that start to take hold. Two, even absent of a formal policy in place, we do see patients get approved across the board, again, agnostic of whether it is a commercial plan or government plan. It just sometimes may take a few more steps, whether it is through a medical exception and in some rare cases, even through appeal and/or peer-to-peer. Largely, we are seeing many patients get through. You will expect a long tail just given that every payer plan is different, given the heterogeneity in the US. Overall, we have a lot to be encouraged about.

I think more importantly, it just really emphasizes the clinical value proposition of this product and the fact that payers, providers, and patients are all responding to it.

Jan Mikkelsen (President and CEO)

I think, yes, I think someway when I talk about my feeling, my feeling is that I believe every patient that someway have a desire to go on treatment should come on treatment because I have seen or heard mid-patient the benefit that is on the treatment in it. I also accept reality in this way here. I also believe we are in a unique position. We are addressing a major unmet medical need. We have really a product that really is providing the benefit to the patient. We are in a position that patients are diagnosed with the disease at the same time there is clear guideline that's saying there should be a treatment. Can you find a better case for any patient really not to get the ultimate goal? If you get an order to be on treatment, you should be on treatment.

Operator (participant)

Our next question comes from Tazeen Ahmad with Bank of America Securities. Your line's open.

Tazeen Ahmad (Senior Equity Analyst)

Hi, good afternoon. Thanks for taking my question. Jan, can you give us a little bit of color on the split between US and ex-US revenue for the quarter for Yorvipath? Can you give us a sense because it seems like you do have some patients receiving drug in the US? What the length of time is? I know it's early, but what is the length of time that you're seeing between when a script is written to when the patient is receiving therapy? Thanks.

Jan Mikkelsen (President and CEO)

Yeah. Let me first address the question between the split between Europe and US. As you have seen, we are not really describing that in our numbers. I also believe that we give you good guidance how to potentially calculate it. As we said, when we look on the ex-US, we see a steady growth, a steady acceleration. We first expect in the second half of this year to see an acceleration of the acceleration when we get more countries basically into the situation that will be fully reimbursed. When I look on the difference between Q3 and Q4 last year, it's something around the element of an increase of around EUR 4 million-EUR 5 million in for one quarter to the next quarter. When you think about that, we increased our basic revenue from about EUR 14 million to EUR 45 million, then you can take basic the difference and then subtract about EUR 4 million, EUR 5 million.

I think you would get a number around EUR 26 million, which are someway reflecting the algorithm I would use if I should look at it.

Operator (participant)

Our next question will come from Gavin Clark-Gartner with Evercore. Your line is open.

Gavin Clark-Gartner (Managing Director and Biotechnology Equity Research Analyst)

Hey, guys. Congrats on the very strong launch progress. First, just to follow up on the payer point and the favorable access, have you finished negotiations with the majority of commercial payers at this point? Do you expect the remaining to-be-published policies to look similar to the ones that are already published? Has the rebating fallen in line with your expectations with those conversations?

Jan Mikkelsen (President and CEO)

Yeah, it's a question. I will take the global perspective. As you heard about ex-U.S., we are basically fully reimbursed now in Germany. There is a final list price you can find. We also have that for Austria. In France, we have an AP2 program. We can also have a different program in Greece. Ex-US, we are working on really getting all country by country fully reimbursed. It takes time. It is something that someway both will happen here in 2025, but also in 2026 when we come into the end of 2026, we believe we will have the vast majority of the important country being fully reimbursed. If you come to the US, which there is a strong focus on, do not forget the more than 300,000 patients outside the US. I think Jay can give you more color about his discussion with the different plans in the US.

Jay Wu (EVP and President)

Thanks, Jan. Thanks, Gavin, for the question. Yes, to answer your question, the conversations with payers have been going very well. We have multiple commercial policies in place with our national accounts.

While we do not comment on policy by policy, that gives you a sense that we are gaining a lot of good traction there. The policies that are put in place are favorable and consistent with label. While we do not comment on the gross to net arrangements that we have with each, what I will say is that it is commensurate with what we said before. This is a first and only approved product in a rare disease setting with clinical value benefit that we strongly believe in and we feel we have been able to convey with payers. From that lens, it is commensurate with the incredible clinical value proposition that we bring. We certainly lead with that and expect it to reflect that.

Gavin Clark-Gartner (Managing Director and Biotechnology Equity Research Analyst)

Okay, great. Quick follow-up. For the new prescriptions that are coming in, what proportion are Natpara or PTH naive versus experienced? Thank you.

Jan Mikkelsen (President and CEO)

I don't think we really have the full insight exactly how many that's coming from the Natpara. Sherrie, you can potentially correct me if we have got more insight in that. There was some question we discussed last week. We know that the vast majority of patients are coming from conventional therapy. Perhaps, Sherrie, you can discuss exactly how many Natpara patients that we believe have been transferred over.

Sherrie Glass (Chief Business Officer)

Yes. Thanks for the question, Gavin. Yes, Jan's right. The data is not entirely definitive on this point, but we know that we have the vast majority of our patients overall are coming from conventional therapy. That is very clear. We do have something like 10%-15% of patients that have been on some sort of PTH in the past. A subset of those were more recently on Natpara. The bottom line is overwhelmingly coming from conventional therapy.

Jan Mikkelsen (President and CEO)

Yeah. From that perspective, we believe that in Q2 and Q3, we will see the majority of the rest of the Natpara patients coming over because you're sitting with the patients. You can explain that there is a letter coming out explaining that you are in a position that they're stopping. Right. As far as we know, there's still some supply. They still may be on it. We know it will exhaust soon. Yeah. When we look on the patient that's coming over, the 1,750, this is not Natpara patients. This is basically patients that's coming from conventional therapy. There are 35,000 patients we are addressing now. There is a lot of deepness to go in this way.

Gavin Clark-Gartner (Managing Director and Biotechnology Equity Research Analyst)

Great. Congrats on the progress.

Operator (participant)

Our next question comes from Derek Archila with Wells Fargo. Your line is open.

Derek Archila (Managing Director and Senior Biotechnology Analyst)

Yeah, it's congrats on the quarter. Thanks for taking the question. Maybe just first on, can you comment on the depth of prescribing and the number of docs that are really prescribing maybe two, three, four patients with Yorvipath? Just to follow up to the last set of questions, are you seeing patients that are newly diagnosed or well-controlled on conventional therapies move over to Yorvipath? Thanks.

Jan Mikkelsen (President and CEO)

Yeah. If I just could answer all your questions, I will be a happy person. I'm still a happy person. When I someway, and Sherrie, you can also someway add in, we cannot really know if they are well-controlled, partly controlled, or not controlled. That is not really anything we can see. We do not believe that it's really part of the reimbursement system.

I actually think why we call them uncontrolled, we likely will see more of them because we had an algorithm that basically are saying the 10,000-15,000 of the patients we did find as uncontrolled is because we're seeing an endo in a very, very, very high frequency. There was why we know that we just went to this physician that will automatically have all these patients coming in. When they're coming and controlled patients that see the endo on much, much less frequent, are they getting on Natpara? I hope so, but I cannot really know. We know we really addressed the patients that see the endo in high frequency. I believe that is basically the, I would call it the genius part of our commercial organization really working on not getting patients into the endos. It takes too long time.

If I want to go into Aimee's practice on Stanford, I need to wait three months to get an appointment with her. I think we cannot wait for patients for that. That was why we, I think they made a really, really genius move in the commercial organization to go to the places where we know patients come in very, very, very far. My expectation is that I believe we have a high percent of uncontrolled, partly controlled, but it is mainly only built on the algorithm because we are seeing the endo much more often than the other ones. Sherrie, do you have anything to add?

Sherrie Glass (Chief Business Officer)

I think you covered it well. I would maybe just say one of the things we are really excited about is we know there are quite a good healthy number of those uncontrolled and partially controlled patients. Something like 10,000-15,000 uncontrolled and another 30,000 or so partially controlled. As Jan said, the uncontrolled patients are seeing their endos four times or more a year. We know to Jan's point that they're getting in and therefore that we expect to see a steady flow of patients coming in and having the option to get on drug over the course of the year.

Jan Mikkelsen (President and CEO)

One of the reasons why we do not know it is because it is not part of being reimbursed or not. If it was a part of the reimbursement system to have this uncontrolled, partly controlled, or controlled, we would know much more on it, but it is not a decision in the reimbursement system.

Operator (participant)

The next question comes from Yaron Werber with TD Cowen. Your line is open. Yoran, your line is now open. Our next question will be from Joe Schwartz with Leerink Partners. Your line is open.

Joe Schwartz (Senior Research Analyst)

Thank you. And congrats on the very strong quarter. I was wondering if you have a sense of how many of your target endos in the US have adequate resources at their center in order to be able to go back and forth with payers who might not approve reimbursement of Yorvipath right away. Just given there are so many patients in the US and a finite number of physician offices who treat them, could their ability to navigate this process represent a cap on Yorvipath revenue growth at some point?

Jan Mikkelsen (President and CEO)

Joe, it is something that Jay and the commercial organization have really a lot of thoughtful thinking about it. How can we ensure the journey for the patient, the physician, the office that's dealing with it is really going to be the most soft journey we ever could think about? I think we have so much experience in this area, mainly out from our Skytrofa, the 10,000 patients we took. Big portion of them to medical exceptions. I think there was the learning we got. There was the system we're building on. I think this is why we are potentially one of the best-equipped companies really to deal with medical exceptions from all the elements we learned from the Skytrofa. Jay, you can go much more into how we are helping them.

Jay Wu (EVP and President)

Yeah. Just to add on and to reinforce what Jan said, our hub is a well-oiled machine at this point, right? Incredibly experienced, as we all know, the growth hormone deficiency space is a heavily managed space. Not only is our hub infrastructure equipped both from a volume and speed perspective, we also have a strong field reimbursement manager footprint that is constantly supporting these offices along the way as well. We feel good about our ability to resource and support our customer needs as needed. To your question directly, of course, there is going to be some offices, particularly the ones where perhaps it is lower volume, they may see fewer cases. That is not, I would say, unique to many other specialties that experience the same type of office burden. Again, going back to what Jan was sharing earlier, we are well-equipped and have the capabilities to ensure that we are allowing that to not be the bottleneck as to why patients will get on therapy.

Joe Schwartz (Senior Research Analyst)

Thanks for the color. To follow up, could I just ask what you hope to see in terms of clinical benefit from the combination of TransCon CNP and HGH and the COACH trial?

Jan Mikkelsen (President and CEO)

Yeah. Joe, now you're asking about the future again. This is good. I'm covered by Scott's statement, even if it went a little bit fast for me to understand what he said. I actually saw an interesting research. Why it was interesting for me? Because they tried to take, which was actually something I never thought about myself, and this is potentially why I thought it was really interesting. They looked on achondroplasia and hypochondroplasia. Achondroplasia, as you can see, the more severe form for achondroplasia. Hypochondroplasia, a little bit more, you can say, easy form for achondroplasia, less severe, less brake because what FGFR3 superactivation is, is really putting a brake on the system.

When you took on achondroplasia, you have the brake pulled down, hypochondroplasia partly down. They looked at what is the difference between growth hormone treatment over years with the two different therapeutic areas, achondroplasia and hypochondroplasia. I actually think that it was very well done. You can basically, I can give you the numbers. When you go to achondroplasia, you basically get 5 cm-6 cm, which are typical what we have seen. When you go up to hypochondroplasia, you are on the 8 cm. I actually think that it was really smart research because in some way, what we're doing with CNP, we take an achondroplasia patient and remove the brake.

I don't know the results, Joe, but I thought that it gave me some strong belief that we're going to make a new standard for treatment, not only for height, but also other places in the body where we really want to see a benefit in it.

Joe Schwartz (Senior Research Analyst)

Thanks for the insight.

Operator (participant)

The next question will come from Paul Choi with Goldman Sachs. Your line is open.

Paul Choi (Biotechnology Analyst)

Hi. Thanks. Good afternoon. Congratulations on the commercial progress. On Yorvipath, I wanted to ask if you have any color from the field as to what patient types it might be being utilized in. Is it almost primarily post-surgical patients, or are you seeing other causes of disease like genetic or other patients utilizing it too? My second question on TransCon CNP is just any updated thoughts or plans for development in the youngest patient population, those shortly after birth through, let's say, three years old, just kind of what your thinking is there in terms of potentially expanding into that population.

Jan Mikkelsen (President and CEO)

Yeah. Let's keep first up in the demographic on the US because if you look on the demographic in the US, it's that we have about 20% coming from, we can call the genetic, immunological, everything else, and then about 80% coming from the post-surgical. That was very much reflected in our clinical trials. In our clinical trials, we even have ADX1 patients. We actually had two, even though they are extremely hard to find because there are so few of them that have hypochondroplasia. We actually managed to get them in. Out from that perspective, our clinical trial basically reflected the numbers. I don't know, Aimee, if you have any comments. You can come with all the different genetic variants we have there.

Aimee Shu (Chief Medical Officer)

Yeah. We had GATA3 mutation. We had autoimmune polyglandular syndrome type 1 and DiGeorge syndrome. These were all seen in the trial. We know that we were seeing them in the expanded access program. We don't always get that information on the commercial. From what we hear from our clinicians with whom we speak, they're applying this to everybody.

Jan Mikkelsen (President and CEO)

Yes. Basically, a hypochondroplasia patient is a hypochondroplasia patient. This is how they define it. I don't think there is any kind of selection from the background demographic because in our clinical trial, we have all the broad background demographic. If you look on the labeling, independent of background, it's not restricted for not treating any kind of background. We believe what we see in our commercial patient population really just reflects the mirror of what we see in the US.

Operator (participant)

The next question comes from Li Watsek with Cantor Fitzgerald. Your line is open.

Li Watsek (Research Analyst)

Hey, guys. Wanted to add our congrats as well on the strong launch. Maybe just first on Yorvipath in terms of unicorn tracking in the future. I know you're still in the process. Any guidance that you can provide on sort of the trend for growth to net for the rest of the year relative to Q1? I have a follow-up.

Jan Mikkelsen (President and CEO)

Scott or Jay, who will take that?

Scott Smith (VP and CFO)

I'll just say some preliminary comments. On growth to net, you can't get out of the mandatory government rebates. The biggest driver is likely to be mandatory government rebates that you see in the Medicare and Medicaid channel, which probably average very low, 20%. Commercial will depend on contracting, of which Jay can comment.

Jan Mikkelsen (President and CEO)

Yeah. Jay?

Jay Wu (EVP and President)

Yep. Just as I echoed before, the contracting should be fairly minimal, again, reflecting the clinical value proposition that we have. If there's a change, it won't be materially different just relative to some of the other markets we've been in.

Li Watsek (Research Analyst)

Okay. Just follow up on the phase two COACH trial. I know you have a starting dose for Skytrofa. Is there sort of a titration scheme here that we should think about and what the top dose that you can go to?

Jan Mikkelsen (President and CEO)

No. It's basically that we have a starting dose for the TransCon Growth Hormone in the combination with CNP. They're also missing IGF1, as they do in all trials. If there's any possibility that the physician decides to go up in dose or down in dose, they have the opportunity to do it. Aimee, you know the protocol better than I do.

Aimee Shu (Chief Medical Officer)

May I hear from Li which condition was she asking for?

Jan Mikkelsen (President and CEO)

The combination.

Aimee Shu (Chief Medical Officer)

The combination. There will be a starting dose that is informed both based on the phase two trial that we're currently doing in the combination trial and also from the many conditions we're studying where there's short stature, but a sufficient growth hormone access, right? This will give us information. Based on what we're seeing so far, there can be a very good and safe universal starting dose typically.

Li Watsek (Research Analyst)

Thank you.

Operator (participant)

Our next question will come from Eliana Merle with UBS. Your line is open.

Eliana Merle (Biotech Equity Research Analyst)

Okay, guys. Thanks for taking the question. Curious just the feedback from the early patient starts, how the titration process has gone on Yorvipath. Just logistically, kind of any color anecdotes on how that's been going for physicians and patients. Any color so far on what you're seeing from the refill rate. I know it's early on, but curious any trends that you're seeing there. Thank you.

Jan Mikkelsen (President and CEO)

What I'm typically looking on is numbers. One of the numbers I look a lot is two things. Adherence. Second number I'm looking on is how many patients are dropping out. I think it's two good numbers to look if you have a successful, meaningful treatment of the patient with really addressing a major unmet medical need and really do that. When I look on the adherence, it's exactly as high as we saw it in the clinical trials, which was really unique. Dropout, we have given you the German numbers under 1%, and we see the same thing everywhere. If you start on Yorvipath, you stay on Yorvipath. That is a chronic treatment rest of your life.

Operator (participant)

The next question comes from Kelly Shi with Jefferies. Your line is open.

Hi, good afternoon. This is Jose for Kelly. Congrats on the strong quarter, and thanks for taking our question. I have a question in terms of payer dynamics. What are the major reimbursement pushbacks? Based on these dynamics, what percent do you estimate you can capture in the mild, moderate, and severe segments? Also, on the clinical value proposition of Yorvipath, would you consider running a clinical utility trial to facilitate uptake in milder patients? Thank you.

Jan Mikkelsen (President and CEO)

Related to your first question, as the part we discussed before, being uncontrolled, partly controlled, or controlled is not part of the reimbursement system. We cannot really see that. We do not know exactly where they are coming from, a different group. We believe many of them, the majority, is coming from the uncontrolled because they see the physician much more often. That is not any part of the reimbursement discussion. The second question, I need to understand a little bit more about what exactly was you wanted us to address.

On the value proposition of Yorvipath, the potential for preventing renal damage, would you consider running a clinical utility trial to perhaps facilitate uptake in milder patients who are controlled on SOC standard of care? I do not think really this is the key element for going on the treatment. I actually think the key element to go on the treatment is the benefit you get as a person. You are getting normal again. The long-term risk, it is basically what we call a health economic discussion when we talk about the benefit of the treatment for the society. We are evaluating exactly how we can do that in the best possible manner to really show the financial benefit it is really to be on a Yorvipath treatment, not only for the patient, not only for the physician, but basically for the entire society.

All right. Thank you.

Aimee Shu (Chief Medical Officer)

We have some literature data already out there that we may be able to leverage showing that some of the conventional therapy itself is toxic to the kidney, right? And that when that is able to be lowered in whatever way, right, that the kidney function gets better. There may not we'll see what the need is for demonstrating this yet again.

Very helpful. Thank you so much.

Operator (participant)

The next question comes from Luca Issi with RBC. Your line is open.

Luca Issi (Senior Biotechnology Analyst)

Great. Thanks so much for taking my question and congrats on the launch here. Maybe a quick one on competition. BridgeBio presented their data for their molecule early this week, and I believe MBX will do the same next quarter. Wondering what's the latest thinking on both molecules and how competitive you think they can be versus Yorvipath. Maybe Scott, super quickly, how should we think about the SG&A for the remainder of the year given the meaningful jump this quarter versus last quarter? Any thoughts there? Much appreciated. Thanks so much.

Jan Mikkelsen (President and CEO)

Yeah. You mentioned two compounds. One is the calcilytic, which are being positioned into a phase three trial of ADH1. Currently, ADH1 is being treated with Yorvipath, and they're coming on treatment today. It has been hard for us to find ADH1 patients. And Sherrie, you went into the claim database, and how many patients were you finding with ADH1?

Sherrie Glass (Chief Business Officer)

Yeah. There were something like 350 patients who'd had a claim associated with ADH1 in the past four or five years and even fewer than that within the last year. It was a very tiny number. This was from a large national claims database with hundreds of millions of lives.

Jan Mikkelsen (President and CEO)

It's not going to change anything for us because we are addressing the position of calcilytic into the era of, for example, what we call chronic hypochondroplasia patients that is not ADX1. I read a lot of science. I don't understand the science there. You're trying to position into a place of a patient that does not have endogenous PDAs. How can you increase the level of endogenous PDAs when they're not producing it? They're already producing on max. There is actually a very nice post-op that basically is showing that they are taking calcilytic into four patients for three days or six or something like that. It's really showing that you cannot increase the secretion of PDAs. It's not something I don't understand from a scientific perspective, rational, but all the data I've seen is also indicating exactly the same thing.

Scott was saying there were five patients. Okay. That is one thing. The MBX, this is the once-weekly one. And we have the possibility to develop once-weekly products for a long time. Now we're talking of the concept of once-weekly first. We someway stalled it a little bit because we couldn't see the unmet medical need and also because of the desire on different ways of living with a hypochondroplasia patient where you sometimes need more or less. It can be done on exercise, seasonal activities, other things that change in your life. Out from that, we looked on patients, how stable are them? How often do they titrate up and down? We see only a small part of the patient being stable.

If we wanted to develop a once-weekly product, we would develop it as a baseline like basal insulin, and then we still will have a daily product to really be sure they can adjust them up and down. The technology platform they're utilizing in the, I always get it wrong, MBX or BMX, I cannot remember what is that bike. I always get it wrong. The element of that is basically a technology which is basic as an active entity, is an isolated PDAs that stay 99.9% associated to basically the element of albumin. I do not know how they ever can activate the phosphate receptor, how they can get into the brain and really restore normal inductious PDAs level in the normal distribution you have out through the body. I'm also lost in the science there.

Operator (participant)

Our next question comes from David Lebowitz with Citi. Your line is open.

David Lebowitz (Senior Research Analyst)

Thank you very much for taking my question. First of all, if you look at the Natpara patients that were left from its withdrawal, how long do you think it takes until that whole population gets worked through? Further, looking back at Natpara and looking at what you've seen during your first quarter of launch, how would you, aside from the fact that the data is just superior, how would you characterize the difference in what patients are showing interest in this therapy?

Jan Mikkelsen (President and CEO)

First of all, you cannot compare the clinical benefit between Natpara and Yorvipath. Natpara had a labeling as an adjunct therapy. Take a little bit of your daily calcium supplement away. Take a little bit of your active vitamin away, and then you take Natpara. You have no positive impact on kidney function. You have no positive quantitative manner on quality of life. I see this as two different products, and we can never compare these two together. First question related to when the Natpara patient will be switched. We addressed it a little bit in the beginning of here, the discussion here, where we know that there was a letter from Takeda indicating that they're getting their last shipment now. I think as to our knowledge, the shipment is three months. We expect that the last series of Natpara patients will come over in either end of Q2 or Q3. That is our expectations.

Operator (participant)

Our next question comes from Leland Gershell with Oppenheimer. Your line is open.

Leland Gershell (Managing Director and Senior Biotechnology Analyst)

Thanks. Great to see the strong execution on US Yorvipath. A couple of questions from us. Just apologies if this has been asked before, but with respect to potential benefits on renal, I know Jan, you had said that you do not see that as a key kind of driver for Yorvipath uptake. Nonetheless, are you able to comment in the early days of the US launch, are you seeing a more difficult or easier time to gain reimbursement or access to the drug for those patients who may have less or more renal impairment along with whatever needs they have in terms of conventional therapy? That is second question. Thank you.

Jan Mikkelsen (President and CEO)

It is not a part of the reimbursement process. We do not see that it is the element that decides if it is reimbursement or not reimbursement. It is like the same thing as we discussed on control, partly controlled. Control is not part of the reimbursement process either. It's basic when you look on the labeling, most plans have adapted the way that we basically have in our labeling, and it's not defined any way or that. First, one correction. Aimee, we didn't study it in what we call severe renal impairment patients, and that is not part of our labeling. I think it's stage four.

Aimee Shu (Chief Medical Officer)

That's right. CFR lower than 16 or 30.

Jan Mikkelsen (President and CEO)

Yeah. Which are a very, very low number, which are stage four where we never studied the drop.

Leland Gershell (Managing Director and Senior Biotechnology Analyst)

Got it. Okay. That's helpful. Just looking forward to the coach data, is there sort of a bar that you have in mind for linear growth, or is this something that you could see being driven forward principally on secondary benefits, say, body composition or other? How are you thinking about kind of the mix of efficacy with the combination? Thank you.

Jan Mikkelsen (President and CEO)

When we think about acronym patients, the key element for us is to address complications, but we cannot avoid also to address linear growth. When we measure linear growth, which got established from another company that is established as the primary endpoint, I will personally have selected another endpoint if I could ever select that. We will, because we are forced to do it, because it is the established clinical endpoint, look on linear growth, and there will be part of the data we basically will report when we come up with the analyzed height velocity, height SDS, and other things for that. As I said before, I have great expectation. I have a strong belief that we can reset the bar for what you see in acronym patient treatment, and it is not only related to linear growth, but also the associated complications.

Leland Gershell (Managing Director and Senior Biotechnology Analyst)

All right. Thanks very much.

Operator (participant)

This is all the time that we do have for questions. This concludes today's conference call, and thank you for participating. You may now disconnect.