Ascendis Pharma - Q3 2024

Transcript

Speaker 0

Good day, and thank you for standing by. Welcome to the Ascendis Pharma third quarter earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Scott Smith, Chief Financial Officer. Please go ahead.

Speaker 1

Thanks so much, Operator, and thank you, everyone, for joining our third quarter 2024 financial results conference call. I'm Scott Smith, Executive Vice President and Chief Financial Officer at Ascendis Pharma. I'm joined today by Jan Mikkelsen, President and Chief Executive Officer. Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include but are not limited to statements regarding our commercialization and continued development of SkyTrofa and YorvaPath for the U.S.

and European 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 and partnerships, 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 the results of regulatory decisions, expected market developments, and our exploration of market opportunities in the therapeutic areas 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 factors that could cause actual results to differ materially, please see our forward-looking statements section, today's press release, and the risk factor section of our prospectus supplement filed on September 20, 2024, and our most recent annual report, Form 20-F, filed with the SEC on February 7, 2024. TransCon Growth Hormone, or TransCon hGH, is approved in the U.S. by the FDA. In the EU, it has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency. TransCon PTH is approved in the U.S. by the FDA for the treatment of hypoparathyroidism in adults, and the European Commission and the UK'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 these product candidates have 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 third quarter 2024 financial results and will provide further business updates. Following some prepared remarks, we'll then open it up for questions. With that, let me turn it over to Jan.

Speaker 2

Thank you so much, Scott. 2024 has been another transformative year for Ascendis. Three out of three of our rare endocrinology programs have delivered clinical differentiated pivotal data. Each product or program is demonstrating its potential to address major unmet medical needs and achieve blockbuster status, positioning us to be the market leader in each disease area. Our first approved product, SkyTrofa, is a best-in-class once-weekly growth hormone and has achieved a leading position in a highly competitive U.S. market with a single indication. SkyTrofa's performance is a testament to its differentiated profile and the team's excellent execution against competition from multiple big pharma companies. We expect additional growth opportunities for SkyTrofa ahead. We are very excited about the upcoming launch of YorvaPath in the U.S. YorvaPath is the first and only product to be FDA-approved for the treatment of hypoparathyroidism in adults.

There are 70-90,000 adults with hypoparathyroidism in the U.S. who would potentially benefit from this treatment. The highly positive pivotal data in AchondroPhase that we announced in September for our third product candidate, TransCon CNP, further strengthens our belief that it could, if approved, become the treatment of choice in this multi-billion-dollar market opportunity. Our new partnership with Novo Nordisk highlights our ability to extend the success of our TransCon platform into large, high-volume therapeutic areas. By staying focused on our values of patient science and passion, we believe we are creating extraordinary value for patients and stakeholders. I will now provide more detailed comments on each of these products and other key areas of progress. Starting with SkyTrofa, the fundamentals for SkyTrofa are strong.

Demand volume in the third quarter increased more than 60% year-over-year as physicians, caregivers, and patients continue to recognize the benefit that SKYTROFA provides. We have achieved broader market access for SKYTROFA but have not compromised on its value, maintaining a net value per patient of around three times that of daily growth hormone. Over time, we see an opportunity to drive SKYTROFA growth beyond pediatric growth hormone deficiency with a number of label expansions. In September, we submitted a supplemental BLA for adult growth hormone deficiency. Next month, we expect top-line data from our phase 2 trial in Turner Syndrome. Next year, we expect to initiate a SKYTROFA basket trial in established growth hormone indications such as idiopathic short stature, small for gestational age, and the genetic condition SHOX deficiency, which include Turner Syndrome.

Importantly, the daily growth hormone market is going through a consolidation, with players such as Lilly and Genentech announcing plans to exit the market. Today, we repeatedly see that when given the choice, SkyTrofa is the preferred product. As the market converts to once-weekly treatment, we therefore believe SkyTrofa is well positioned to compete for the 85% of prescriptions still being written for daily growth hormone. We are dedicated to making SkyTrofa into a blockbuster in the U.S. alone. Our focus will stay on growing its market share with new patients, both treatment-naive and those switching from daily growth hormone, increasing treatment adherence and duration, and through label expansion, supported by pricing that recognizes the value of long-acting therapy. Now moving to YorvaPath, we are preparing for the imminent launch of YorvaPath in the U.S.

Next month, in December, we plan to begin accepting prescriptions and start the reimbursement process for the around 200 patients already being treated with Yorvipath in preparation for commercial product availability in mid-January 2025. From January 1st, we expect to begin accepting prescriptions for all adults with chronic hypoparathyroidism. To support a strong and successful U.S. launch, we have invested to expand our commercial infrastructure, including building a field organization for Yorvipath that is three times the number that covers SkyTrofa. Since approval, our expanded U.S. field team has focused on engaging endocrinologists who treat adults, including key opinion leaders and healthcare providers who are actively involved in the treatment of hypoparathyroid patients. This market is driven by endocrinologists, a relatively concentrated specialty, and we estimate around 1,200 physicians have around 30,000 chronic hypoparathyroid patients in their care, or an average of about 25 patients each.

We expect the initial uptake of YorvaPath in the U.S. to come from four segments. There are around 200 patients already on YorvaPath, the 350 to 400 patients in the NAPAR special use program that is ending soon, the large population of 4,000 to 5,000 PTH-experienced patients, and the around 75,000 broader PTH treatment-naive population. Outside the U.S., uptake of YorvaPath continues to be robust. As of today, there are now around 600 patients on commercial therapy in Germany and Austria, where the commercial launch began this year in January, and across named patient programs in multiple other countries. We believe YorvaPath is a truly unique product. We have designed it to have the same mode of action and distribution in the body as endogenous PTH and to provide active PTH within physiological levels for 24 hours, seven days a week.

We don't see any other compounds in the development that share these key attributes. We believe that Yorvipath will become the therapy for the majority of adults with hypoparathyroidism, which is aligned with the recently established guidelines for the treatment of hypoparathyroidism in adults. I will now provide some commentary on TransCon CNP. Our value proposition for TransCon CNP is simple: it is to establish a treatment for patients of all ages with achondroplasia. Our pivotal trial results showed that TransCon CNP not only exceeded benchmark for growth that have been established in other randomized clinical trials, but also impacted other endpoints that are important for individuals with achondroplasia. We believe TransCon CNP has a best-in-class efficacy profile with safety and tolerability similar to placebo, including an excellent injection site tolerability and once-weekly dosing. This set the stage for its leadership in the achondroplasia market.

We expect to submit an NDA to the FDA for TransCon CNP for the treatment of children with achondroplasia during the first quarter of 2025 and an MAA to the EMA during the third quarter of 2025. The two once-weekly growth-promoting products in our portfolio, SKYTROFA and TransCon CNP, we believe Ascendis is positioned to become the leader in treatment of growth disorder. We expect top-line week 26 data from COGS, our first combination trial of TransCon Growth Hormone and TransCon CNP in children with achondroplasia, ages 2 to 11 years, in the second quarter of 2025. Now moving to our recently announced Novo Nordisk collaboration. We believe this agreement is a strong validation of our ability to drive innovation, benefit patients, and expand the TransCon technology platform to larger therapeutic areas as described in our vision 2030.

The lead program in the collaboration is a once-monthly GLP-1 that will initially target obesity and type 2 diabetes. The global market for GLP-1s like semaglutide is expected to exceed more than $50 billion this year and to double or triple in the next 10 years. Once-monthly GLP-1 could become the treatment of choice in this future market, and we are pleased to be working with Novo Nordisk, a world leader with the manufacturing capacity and commercial infrastructure, to realize the value of this opportunity. Financially, upon closing, we will receive an upfront payment of $100 million and escalating tiered mid-single-digit royalties on global net sales of TransCon products, along with development, regulatory, and sales milestones. I will close with an update on our oncology programs.

In September, we presented first results from the Platinum-Resistant Ovarian Cancer cohort of the phase 1/2 PLASMA trial of TransCon IL-2 beta/gamma at ESMO, showing that anti-tumor clinical response was observed in 29% of efficacy-evaluated patients treated with TransCon IL-2 beta in combination with chemotherapy. This was the second indication-specific cohort showing meaningful signs of anti-tumor activity in heavily pretreated patients. Given these results, recently we closed enrollment to dose expansion cohort in the TransCon IT-101 trial of TransCon TLR7/8 agonists to highly prioritize our effort on TransCon IL-2 beta/gamma. In summary, our progress and position are strong, and we believe the expected product revenue and strength of our balance sheet give us the ability to invest in global launches, label expansion, and lifecycle management for all of our three rare endocrinology programs to support each of them to reach blockbuster status.

At the same time, we will continue to invest in new product candidates created by our TransCon technology platform to build sustainable growth and profitability. I will now turn it over to Scott for a financial update. Thanks, Jan. In tandem with the progress we have made this year with our three endocrinology rare disease programs and the success of extending the application of our TransCon platform into obesity and type 2 diabetes, Ascendis also became much stronger financially in 2024. Product revenues have grown significantly. We raised capital in the third quarter. We are securing additional non-dilutive capital through the Novo Nordisk collaboration, and we remain disciplined with our spend.

We head towards next year with ample financial capability to execute on our key 2025 strategic priorities, expand the label for SKYTROFA to adult growth hormone deficiency, and build on its leadership position as a best-in-class growth hormone product, successfully launch YORVIPATH in the U.S. and in multiple countries in our Europe Direct and international markets, and submit TransCon CNP for approval in the U.S. and EU, and initiate preparations for launch in achondroplasia. I will touch on some key points surrounding our third-quarter financial results, but for further details, please refer to our 6K filed today. SKYTROFA volume increased more than 60% in the third quarter of 2024 compared to the third quarter last year, while reported revenue was EUR 47.2 million compared to EUR 47 million reported in the third quarter of 2023.

The increase in volume was offset primarily by higher sales deductions compared to the prior year as a result of broader market access. SKYTROFA revenue in the third quarter of 2024 related to channel inventory was approximately EUR 3.5 million lower compared to the third quarter last year. SKYTROFA revenue in the third quarter of 2024 was also negatively impacted by adjustments related to prior period sales deductions of EUR 2.5 million. SKYTROFA revenue for the first nine months of 2024 totaled EUR 138.5 million, a 21% increase year over year compared to EUR 114.4 million during the same period in 2023. For the first nine months of 2024, SKYTROFA volume more than doubled but was partially offset by higher sales deductions, including an accrual true-up of EUR 9.3 million related to periods prior to January 1, 2024.

Overall, despite the accrual true-ups in Q2 and Q3, with more claims in hand, we can see that realized pricing has been stable since the beginning of the year. With stable pricing, a few extra shipping days, and increasing demand, we expect Q4 revenue to increase sequentially and expect full-year 2024 SkyTrofa revenue, excluding sales deductions related to prior years, to be EUR 200 million-EUR 220 million. We estimate by the end of Q3 2024, based on third-party data, SkyTrofa penetration in the overall treated growth hormone market was approximately 6% with our single indication for pediatric GHD. In addition, we estimate, based on third-party data, that sales of daily growth hormone products represent about 85% of total U.S. prescriptions, leaving lots of room for further growth for SkyTrofa and market expansion. Shifting to TransCon PTH, third-quarter YorvaPath revenue outside the U.S.

increased more than 60% to EUR 8.5 million, driven by growing patient and physician demand, partially offset by accruals reflecting the end of the pre-pricing period in the third quarter. Final pricing in Germany is expected to be completed next year. Closing out the top line, total revenue for the third quarter was EUR 57.8 million, including EUR 2.1 million tied to rendering of services and license revenue. Turning to expenses, R&D costs in the third quarter of 2024 totaled EUR 73.5 million compared to EUR 111.4 million during the third quarter of 2023. The 34% decline was largely due to lower external development costs for TransCon hGH, TransCon PTH, and TransCon CNP, as well as the Eyconis transaction. SG&A expenses in the quarter totaled EUR 69.8 million compared to EUR 63.6 million during the third quarter of 2023.

The EUR 6 million increase was primarily due to higher employee costs, including the impact from global commercial expansion. Total operating expenses were EUR 143.4 million for the third quarter of 2024, an 18% decrease compared to EUR 175.1 million during the third quarter of 2023. Total operating expenses for the first nine months of 2024 were EUR 439 million. Net finance income in the quarter was EUR 2.9 million compared to finance expenses of EUR 20.4 million in the third quarter of last year. As a reminder, the net finance line can fluctuate quarter to quarter, driven in part by non-cash items related to our outstanding convertible notes. Finally, we ended the third quarter with cash, cash equivalents, and marketable securities totaling EUR 626 million compared to EUR 399 million as of December 31, 2023.

To be clear, total cash does not include the expected $100 million upfront payment from Novo Nordisk, which is due following closing of the transaction. For the full year 2024, based on current plans, we expect product revenue from SkyTrofa and YorvaPath XUS to continue to grow. Specifically, we expect SkyTrofa revenue, excluding sales deductions related to prior years, to be EUR 200 million-EUR 220 million euro, and total operating expenses, SG&A and R&D, to be approximately EUR 600 million euro, which includes expenses related to launching YorvaPath in the U.S. We are ready and well-capitalized to deliver a successful launch of YorvaPath in the U.S. with product availability expected in mid-January. With that, operator, we are now ready to take questions. Thank you. As a reminder, if you would like to ask a question, please press star 11 on your telephone.

We also ask that you limit yourself to one question and one follow-up. Please wait for your name and company to be announced before you proceed with your question. And our first question for the day comes from Jessica Fye of J.P. Morgan. Your line is open. Hey, guys. Good afternoon. Thanks for taking my questions. You laid out a case for a strong initial U.S. launch for YORVIPATH, and we're clearly seeing that ex-US already. Can you talk about why you have confidence that you'll be able to keep the patients that you pick up in light of various competitors potentially entering the market? And my second one or follow-up is just, in the past, you've talked about an expectation to reach operating cash flow break-even by the end of 2025. Is that still your expectation? Thanks, Jess.

I would take the first question, and then I would delegate it to Scott to take the second question. And I think, Jess, we basically somehow reflected that in our initial remarks because what we described, what is really a true replacement therapy? Because we're talking about a patient that does not have sufficient endogenous hormone to really have a normal functional life like a type 1 diabetes. And when we look at the characteristics, which have been proven in multiple, multiple publications, specifically from NIH, where they used infusion pumps taking PTH into short-acting PTH, but they can keep up the physiological concentration 24 hours, seven days a week. So when we think about what needs to be taken as what we call a true replacement therapy, it's that you need to have the same mode of action like you have in the endogenous hormone.

And basically, you need it because there are so many multiple organs that need some way to get the right receptor activation, signal pathway activation to have the normal physiological function. The second thing is that you need also to have the right distribution because it needs to hit both, for example, just an organ and kidney, both in the blood and the urine side, need to go to the brain, it needs to go everything else too. And the last thing is basically, the PK profile. You need to have the right concentration 24 hours, seven days a week. And whatever I do, when I look on the clinical programs that I used, I cannot find anyone that's just living up to the level of what I call a replacement therapy. That was the first question. I think Scott will take the second one.

With regard to our goal to be cash flow break-even, that still remains the goal, and we believe we can achieve that with the cash and cash equivalents that we have on hand. Thanks. Thank you. One moment for the next question. And our next question will be coming from the line of Tazeen Ahmad of Bank of America Securities. Your line is open. Hi, guys. Good evening. Thanks for taking my question. Mine's on CNP. Can you just give us an update on where you are in preparing for your meeting with FDA and/or your application? What are the open items that need to be completed before you can guide us to whether or not the data that you have is indeed going to be sufficient for application?

Also, could there be potentially a pathway where you start your submission and provide data on a rolling basis if the agency is looking for extended data? Thanks. Thanks a lot for the question. To our knowledge, and that is after interaction with both regulatory agencies in Europe and U.S., we have the integrated data packet that needs to be part of the submission. So we basically have no missing data that we actually need to be generating basically to finalize the application here, for example, with FDA. We were doing that, and we're getting ready to the filing. What will happen in Q1 is pretty near now. When I look on the packet, we really are providing a packet that not only providing the best-in-class growth of the children, but we also, for the first time, can address comorbidities.

I think that's something we will continue to share with you, how we really are providing a treatment of achondroplasia instead of just providing linear growth. If you just wanted to have linear growth, I would just give them growth hormone. It's the best hormone to provide linear growth. And I think this is why we are in a unique position because we have the opportunity really to address the comorbidities, and we will continue to give you data how really that is really coming from the data packet we are submitting to the regulatory agencies. Thank you. One moment for the next question. And our next question will be coming from Derek Archila of Wells Fargo. Derek, your line is open. Sorry. Hi. This is Simona for Derek. Thanks for taking our questions. So for SkyTrofa's approval, have you made any progress with the payers?

Do you have any updates on if it's on formulary or if there's any new blocks for market entry? Just one on YorvaPath, will this launch require a medical exception for access to the drug? The first part of SkyTrofa, I think we have been pretty clear how we are improving our market access situation, which has happened a lot in this year, was really impacting our Q1 results in this way. We are still in a situation where we are getting medical exception in the areas, but we definitely are in a completely different market access situation now. I believe what we see here, and I think you need to go back and see how we really want to balance SkyTrofa into the growth hormone market. We believe SkyTrofa, because of its best-in-class nature, can be positioned as a high-value product opportunity.

We believe this is responsible to have a price that on net value is 3x higher than daily growth hormone because of all the benefit we're providing. I think this is the key element in our commercial strategy on how to make SKYTROFA a blockbuster just in the U.S. alone is to keep value. What is also helping us is the consolidation. We saw first that one of the big pharma left it, and now we see another big pharma leaving it. I believe if you're sitting with a daily growth hormone and you don't have any kind of once-weekly product in one way or the other way, you actually are going to leave this market. So the consolidation is happening. Potentially a little bit slower than we have predicted, but it's happening.

And we will be there to really, really utilize this opportunity every time they come. We also have a strong reputation. We are a company that never has been on a shortlist. We are a company that has the most supply chain that really has not been disrupted by any kind of delivery. Related to Yorvipath, it's an interesting comment out from the team because when you look on a product being launched specific in the rare diseases and to the group of product we belong to, there's two things that are a key element for uptake. One is that you're basically on label for the majority of the patients, and I can guarantee we are that. Second point, do you really have guidelines that basically promote that you are inside the guidelines for the majority of patients?

And please read the guidelines that just got issued a few years ago around hypopar patients here in the U.S. for adult treatment. And I think we are in such a unique position. We're both on label. We are also in a position. We are inside the guidelines. So we feel that we basically are providing the benefit to the patient. And just don't forget, we are the only product out there. No other products there. So when you see the three-element, your single product, no one else's choices, you are on label, and you're inside the guidelines. I actually believe you have a very, very, very, very strong position to get the journey from a prescription out to be fully reimbursed in the U.S. in the most easier way. Thank you. One moment for the next question.

The next question will be coming from the line of Yaron Werber of TD Cowen. Your line is open. Yeah. Hi. Great. Thanks for taking my question. Yaron, maybe just a couple on Yorvipath. I think in the past, we were sort of expecting that the Natpara will get pulled off the market by Takeda by the end of this year. Can you give us a little bit of a sense? How is this going to work? Is it driven by a hard date, like December 31, or is it just driven by when they run out of supply? And then also in Europe, I know you're waiting for the Natpar inventory to run out before Yorvipath really takes off. Can you give us a little bit of an update on timing, your expectations? Thank you. Yes.

You're asking me a question that is outside my control because I cannot control when the product is running out of stock. We know they're short everywhere. There are delays in the production, and they're running out of batches. We know now we are in a position in the U.S. I believe they will try to get out of the U.S. market as fast as possible because they're basically providing free drug to each single patient in the U.S. In Europe, we have seen an interesting pattern for them where they're trying to come out with every inventory they're doing as fast as possible in using all different means to do that. And to our best estimate, it will be sometime in next year. You will see the big transition happening. But at the same time, we saw two different patterns in two different countries.

In Germany, they switched the Natpar patient because they said there was an improved treatment. Now in Germany, they are over and taking a new patient now because the pool of Natpar patients is running out. Austria, different. They said they'll keep the Natpar patient on Natpar as long as possible and then take new patients. So what is going to happen in the U.S. when I see these two countries, two different patterns? I believe from the four groups we talked about, all of them will be switched. Thank you. One moment for the next question. Our next question will be coming from the line of Gavin Clark-Gartner of Evercore ISI. Your line is open. Hey, guys. Congrats on all the progress. So I just wanted to ask about the 4,000-5,000 PTH experienced patients in the U.S. that you've noted.

Are all these patients actively managed in the healthcare system? And I guess more specifically, how long do you believe it could take to get the majority of these patients onto YorvaPath? Could it be within the first year, two years? Any estimate would be helpful. Thank you. Thanks for the question. I believe this PTH experienced group, they're used to do the daily administration. If you're coming from, for example, Forteo, some patients are doing injection four times a day. But Forteo and other short-acting, many of them have a limited timeframe for only two years because of the super physiological PTH level they're providing. So when I look on the 4,000-5,000, the majority is Natpar patients that couldn't come into the program that basically got started when they have the recall.

When the Natpar special use program, to our best estimate, only could take one out of 10 patients. They were suddenly sitting without any kind of PTH treatment option. I believe this patient group will try to be coming into an endocrinologist as fast as possible. This is why we're talking with the patient organization. We're talking now that here in the middle of January, you basically will have product availability here in the U.S. and really go in and start to get the prescription. We have our hub, the ASOP program, really a unique element that will help the patient in the journey from the prescription to basically to be in a position they are fully reimbursed and be on drug. We have the infrastructure to it. We know how to get it done.

We believe there are so many patients that are just waiting for this opportunity to get a treatment. Thank you. One moment for the next question. The next question is coming from the line of Li Watsek of Cantor Fitzgerald. Your line is open. Hey, guys. Thank you for taking my questions. I guess relative to the pediatric growth hormone market, how should we think about the revenue contribution from the adult market as well as the Turner Syndrome? And it sounds like you're initiating a basket trial. Maybe just comment on the market opportunity there relative to the growth hormone market. Thanks. Yeah. When we look on the growth hormone market, on label, we only have access to the market segment that is covered by Pediatric Growth Hormone Deficiency. We have now filed the Adult Growth Hormone Deficiency, which opened up for a completely interesting segment.

Currently, it's only established at 10% of the growth hormone market, but it's a highly, highly under-penetrated treatment population in the U.S. Best estimate we have is about 5%-8% is being treated with adult growth hormone deficiency. So it's really to develop a market that can be nearly the same size as the pediatric market. We focused on being quite sure we are SKYTROFA should be the choice in all indications where we have the growth hormone market. And this is why we're making the basket trial where we're taking the ISS, SGA, and SHOX, which include Turner. By having this label expansion, we will be in a position that we nearly cover the entire growth hormone market. And this is our vision to build SKYTROFA to the blockbuster it should be.

Going to PTH, going to hypoparathyroidism, it's quite different because the adult segment is basically the majority of the market. Patients are coming with pediatric, what we call hypoparathyroidism. The majority were not coming from post-surgery, but more coming from immunological genetic diseases. So it's a quite different segment in this way, and it's much, much smaller than the adult segment. We are initiating a trial in the pediatric segment. It will be just in the planning now. And it's a part of also our obligation to the European authorities also to make it available in the pediatric segment. Thank you. One moment for the next question. And our next question will be coming from the line of Joe Schwartz of Leerink Partners. Your line is open. Great. Thanks so much. First question is on Yorvipath.

I was just wondering, how do you expect the launch of YORVIPATH in the U.S. to compare to Europe in general? And then is the monthly serum calcium monitoring requirement in the U.S. likely to be a significant deterrent for patients, which impacts the launch curve at all in your view? Let me start on the last question, Joe. What I've seen, I've seen the criteria for some of the places, and I have never seen that being installed as any kind of criteria. So I don't think this is really the case. I know the patient often will have this kind of measuring. So it's not like it will be a burden to have it, but I'm not seeing it in the criteria from anyone. Related to the U.S. market, it's quite different than the German, Austrian market. Penetration curves from Germany, Austria, compared to U.S.

have quite different slopes. So from that perspective, it's such a unified market segment in the U.S. I think it goes faster in the U.S. There is much more open-mindedness to try new treatment. What we're seeing now in Germany, everyone tried with one or two patients. Now it's going up. So the average patient per physician was between one and two. Now we're first coming to the states where they're going to be two and three for the physician. And this is some kind of what I call your first penetration, then you broaden it. But what we expect to see in the U.S. is a much, much larger and faster uptake. Okay. Thank you very much. And then on SkyTrofa, is today's adjustment to the 2024 revenue guidance due to lower volume, price, or both?

Can you help us understand why the additional adjustment is necessary beyond what we saw previously and whether these dynamics have any potential to carry over into 2025? I think Scott will take that. I think in Q3, volume was a little bit lower than expected, but we also had fewer selling days. We're off to a pretty good start here in Q4, but we want to be a little bit more cautious until we see more data. So given we had the call today, we came in with the number that you saw. Some dependencies that could increase the number for Q4 would be things like channel buying that we haven't seen in previous periods or higher refill rates with prescriptions, but we just don't have enough experience to say that that's something to expect in Q4 yet. Okay. Thank you. Thank you. One moment for the next question.

The next question will be coming from the line of Vikram Purohit of Morgan Stanley. Your line is open. Hi. Good afternoon. Thank you for taking our questions. We had one on the recently announced Novo Nordisk collaboration. We were just curious, as that moves forward, what the next public disclosures there could be, what we can expect to learn from yourself and/or Novo Nordisk. Then secondly, for the oncology pipeline, we were curious what the next milestones there might be and how you're thinking about progressing the oncology efforts you have in place with potential partnerships and what partnership economics or a good partner for those efforts might look like in the future. Thank you. Thanks for the questions.

Related to the first question, we have seen extremely powerful TransCon technology making three out of three endocrinology products from idea stage until basic pivotal data, and two of them are approved now. This is the TransCon technology with our algorithm for product innovation. Novo Nordisk took that up too. We basically are in a position when I see what we can provide with our TransCon technology in obesity, in metabolic diseases like diabetes: we can take a peptide, well-known properties, already proven safety, proven efficacy, and do exactly the same thing. At the same time, we can make it to a once monthly, but potentially also improve tolerability to potential efficacy in the same time. We're really proud to have a partner like Novo Nordisk.

There's only two companies in the world, in my view, that have the manufacturability capacity really to make and commercial infrastructure to really to make this in a billion, billion, billion dollar product. And these two companies, we actually have a unique great collaboration with, and they're not only using it for one of the products, they will continue to apply multiple, multiple products on it. Related to specific progress, related to specific update about progress on how they're utilizing the TransCon Technology, I believe the best one to answer that will be Novo Nordisk in this case. Going back to oncology, we have been extremely encouraged by the effect we have seen in platinum-resistant ovarian cancer. In late-stage patients, they basically have no hope. We actually see meaningful clinical benefit in this.

And this is what we're really trying to focus on and really pursuing in the fastest and best possible manner to really help these patients. As we said, we are open in the way we will create value out of oncology pipeline in all different structures. And we will pursue the structure that focuses on getting out to as many patients as possible, as fast as possible, but also creating most value for our stakeholders. Thank you. One moment for the next question. And our next question will be coming from the line of Kelly Shi of Jefferies. Your line is open. Kelly, your line is open. Thank you. Thank you for taking my question. So I just want to confirm several numbers in the press release.

It was mentioned that the first three quarters of 2024 totaled EUR 138.5 million, and the full year guidance at EUR 200-220 million. So that gives Q4 sales need to be EUR 61.5 million to reach the lower bound. And is this sales without adjustment? And secondly, for the TransCon CNP and the submission, just curious, have you talked to regulatory agencies that 12-month data is enough for the submission? Thank you. I think I will dedicate the first part of the question to Scott, and he just wrote down all your numbers and double-checking them now. Yes. The updated guidance of EUR 200-220 million of revenue excludes the impact of prior period sales deductions or sales deductions related to periods prior to January 1, 2024. Related to your second question, it's clear we have not got any request that delivers more than the 12-month data related to efficacy.

During filing, you always have what we call safety data update, and you have cut-off of different safety that always be given during the period where you have the regulatory evaluation. Thank you. One moment for the next question. Our next question will be coming from the line of David Lebowitz of Citi. Your line is open. Thank you very much for taking my question. I got two for you. First, on a long-acting GLP-1 agonist, given that GLP-1s are titrated as part of normal treatment, what type of challenges does a long-acting present in this regard? And the second question will be on SkyTrofa. Could you, I guess, give us perspective on how the net or average price has evolved as you've added new payers and to give us perspective just for modeling purpose and how we should view this going forward? Okay. Thanks a lot.

When you talk about the long-acting GLP-1, I would like to refer back to the basic biology of the GLP-1 because what is really driving the tolerability issue in it. And to our knowledge, it's basically when you go from the trough level, this is called the lowest level, or up the peak level, and how fast you really are doing that. This is where you see the tolerability issue in it. So therefore, you see when patients stopping treatment have problems with the treatment is because they're going fast up from a trough to a peak. This is why you have titration, where you start on a lower dose, go up to the next dose, just to be sure you're acclimating that you deal with this tolerability.

When you think on our profile that you saw in our J.P. Morgan deck or also other places, you can see one of the uniqueness with our TransCon technology is that we have an extremely long Tmax. And what does that mean? It means that it takes extremely long, basically, for being a physician that you go from a trough to a peak level. And therefore, which we also have seen in our own data in animal studies, that you basically have a much better tolerability profile than you have in more short-acting, where you go very, very, very fast up to the level of the max dose. I see. The pricing, it's pretty clear. We had a clear statement in our prepared remarks that if you take the level of daily growth hormone and take it to 1x, SkyTrofa has still 3x value. Thank you.

One moment for the next question, and our next question will be coming from the line of Paul Choi of Goldman Sachs. Your line is open. Hi. Good afternoon, and thank you for taking our questions. I also want to ask under a recent Novo licensing deal, and given that GLP-1s are validated, it would seem like the 505(b)(2) development pathway is open to a potential monthly GLP-1 agonist. And so development times might be shorter than a full clinical development program for a monthly GLP-1. Do you agree with this? And if that's the case, do you have any sense of what timelines might be for development here when you might start to recognize royalty revenue from your partners? Any comment there would be super helpful. Thank you. Thank you, and I can only agree 100% with your comments.

It's exactly how many cases you will take a development pathway, and it will be shorter than a normal development pathway. And also, you have the potential opportunity to get a broad labeling for the beginning with only one indication. That is the benefit of using a 505(b)(2). Related to specific timeline, we need to refer to Novo Nordisk for this discussion. Okay. Great. Thank you. Thank you. One moment for the next question. And our next question will be coming from the line of Leland Gershell of Oppenheimer. Your line is open. Oh, hey. Thanks for squeezing me in and for taking the questions. Just one from us. I think, Jan, you'd mentioned that commercialization in France might be starting by the end of this year. Not sure if I missed in your prepared comments. Is that on track?

And I was also wondering, as you further pursue European commercialization, if you have any further clarity on the cadence of rollout in various countries through 2025. Thanks. Yeah. You are right. What we have established as what we call full commercial area is only Germany and Austria. In France, we got elected to a special program called AP2. This is a program that basically is non-promotional, but we can give them commercial reimbursed drug. And it's got established for about three, four weeks since in France. And the number we have seen coming in where physicians really say, "I believe, I believe," because it needs to be physician-driven. We cannot commercialize. It's really unique. Going forward, we will have fully commercial countries where we call in Europe direct, where there will be full commercial countries.

It will be the majority of the countries in Europe, EU, that will be basically full commercial next year in different quarters, a lot of them coming into Q2, Q3 next year. What you saw of our success in Australia and Germany, we basically are repeating that in about 8-10 other European direct countries. In our international market, we see a lot of named patient program, but we also will in the international market where we now have countries covered by distribution agreement, about 30-35 countries. They are currently giving patients through named patient program. Also next year, we will start to see more and more of these countries also going into full-blown commercialization. It's dependent on what we are spending a lot of resources on now.

It's basically getting filing, which we have done in many, many countries, but also getting approval in all of these countries. And we're getting approval already beginning this year. And the meaning is that we know we will be full commercial next years. Great. Thanks so much for the clarity. Thank you. And one moment for the next question. Our next question will be coming from the line of Alex Thompson of Stifel. Your line is open. Hey, great. Thanks for taking our questions. I guess for Yorvipath, can you talk a little bit about your commercial supply readiness for the mid-January launch? I think you mentioned that you're going to take scripts from current Yorvipath patients in December. Could you open that up to all, or are there supply constraints or some other constraints?

And then on CNP, do you still have an appetite for running a broader basket study of additional indications, or are you now focused on SkyTrofa there? Thanks. Yes, we have unlimited supply. We can take all patients that we want. There is no limitation in manufacturing. We already have laid out the entire year's manufacturing batches, locked every time point we want to have to be sure that we're building up the same robust supply chains that we have done with SkyTrofa, which has been unique even if we suddenly got major more demand suddenly. So the same thing is happening for YORVIPATH, and we are really on top to be sure no patient ever should go in and not can get the prescription fulfilled of YORVIPATH. Going to CNP, I actually you're right.

We think some indication is best treated with SkyTrofa, but definitely, there is also indication that's best treated with CNP, and some of them are best treated with the combination of both of them, either on a constant basis or only on a short duration. We are planning to go into what we call CNP-related diseases, meaning that this is diseases where the growth disorder or what we call other element of missing CNP only can be functional back to what we will see in a normal physiology by providing CNP back. Besides planning a trial in hypochondroplasia, which will be initiated next year, we are also planning for a basket trial. We think that it's an easy way where we can take multiple indications of CNP-related diseases into one single trial that we also are in the planning for doing now.

So we are not restricting us just to SKYTROFA label expansion. We dedicate it to be leader in growth disorder. We have plus 20 diseases to go through. And some of them, we will take SKYTROFA. Some of them, we will take TransCon CNP. And some of them, we will see the optimal treatment happening with a combination of both of them, either on a constant base or on shorter duration, one or the other. Thank you so much for your questions and answers today. That is all the time that we have for the session. We thank you so much for joining the conference call today. You all may disconnect and have a great rest of your day. Thanks. See you.