Ascendis Pharma - Earnings Call - Q3 2025

Transcript

Operator (participant)

Good day, and welcome to the third quarter 2025 Ascendis Pharma earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question, please press star 11. If your question has been answered and you'd like to remove yourself from the queue, press star 11 again. We ask that you limit yourself to one question and one follow-up. I would now like to turn the call over to Chad Fuger, Vice President of Investor Relations at Ascendis Pharma. Please go ahead.

Chad Fuger (VP of Investor Relations)

Thank you, Operator, and thank you, everyone, for joining our third quarter 2025 financial results conference call. I'm Chad Fuger, Vice President of Investor Relations at Ascendis Pharma. Joining me on the call today are Jan Mikkelsen, President and Chief Executive Officer, Scott Smith, Executive Vice President and Chief Financial Officer, Sherrie Glass, Chief Business Officer, Jay Wu, EVP and President, U.S. Market, and Aimee Shu, EVP and 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, as well as certain expectations regarding patient access and financial outcomes, our pipeline candidates, and 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 the result of regulatory decisions. These statements are based on information that is available to us as of today. Actual results may 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 these factors that could cause actual results to differ materially, please see our forward-looking statements section in today's press release and the risk factors 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 now approved in the U.S. by the FDA for the replacement of endogenous growth hormone in adults with growth hormone deficiency. In addition to the treatment of pediatric growth hormone deficiency, 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 U.S.

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 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 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 Mikkelsen (CEO)

Thanks, Chad. Good afternoon, everyone. In the third quarter of 2025, we accelerated our momentum towards fulfilling our Vision 2030 with key achievements in three areas. First, the global launch of Yorvipath continues to be strong, with a steady increase in new unique patient prescriptions and prescribers as seen in Q1 and Q2, along with expansion in new geographic markets. Second, we made great advancements towards leadership in growth disorders during the quarter. We saw the U.S. approval of SkyTrofa in adult growth hormone deficiency. And following our late cycle meeting with FDA, we are progressing toward expected approval of TransCon CNP in the U.S. Third, our strong operating fundamentals led to positive operating profit, signaling the beginning of sustained revenue and earnings growth for Ascendis. Now, I will provide some specific comments on our commercial and late-stage portfolio.

Starting with YORVIPATH, YORVIPATH continues its strong global launch with revenue of EUR 143 million in the third quarter. Nine months into the launch in the biggest markets, the U.S., patient demand continues growing quarter by quarter. From launch to the end of September, more than 4,250 patients have been prescribed YORVIPATH in the U.S. by over 2,000 unique healthcare providers, highlighting the strong, steady demand for YORVIPATH even during the summer months. In October, the positive trend continued with YORVIPATH being prescribed for more than 400 new patients in the U.S. alone. Positive physician and patient experience are driving a high rate of compliance, and we expect most patients will be on lifelong PTH therapy. We are expanding our physician reach each quarter within the endocrinology community, and we are also expanding to other physician groups who manage hypo parathyroid patients.

As an example, at last week's American Society of Nephrology meeting, we presented three years of kidney function data across our combined clinical trials, demonstrating sustained clinical meaningful improvement in kidney function in the Yorvipath treated patients. In addition, we continue working hard to expand patient access in the U.S. The overall insurance approval rate since the start of the launch is around 70% of total enrollment, and we believe this figure will continue to increase over time. We currently see approvals across all payer types, with a majority of approvals within eight weeks. We are pleased by the robust uptake of Yorvipath in our first three quarters of commercialization in the U.S. Today, less than 5% of U.S. patients are currently on Yorvipath treatment. We see significant room to grow, with around 80,000-90,000 patients already diagnosed with chronic hypoparathyroidism in the U.S.

3,000-4,000 new patients being diagnosed every year. Outside the U.S., Yorvipath is now available commercially as well as named patient programs in more than 30 countries. In Germany, Austria, and Spain, we have now full commercial reimbursement. In Japan, our partner Teijin launched Yorvipath commercially last week following approval in August. We are looking forward to the commercial launch of Yorvipath in additional countries in the coming years. With a broad label covering hypoparathyroidism for all causes, international treatment guidelines that recommend PTH replacement therapy, and Yorvipath positioned as first-in-class therapy, we expect sustained patient growth and revenue growth for years to come. As we're building this global market, we are expanding our offerings to patients with hypoparathyroidism. We are conducting the PaTHway 60 trial to support doses up to 60 micrograms of Yorvipath in the U.S.

We plan to begin a clinical trial for people under 18 this quarter, and we are advancing our new once-weekly TransCon PTH product candidate, which we believe will be an attractive option for patients on stable doses of Yorvipath. In the new year, we will share more on our plans to maximize Yorvipath's value and reach even more patients. Let us now turn to growth disorder, which today comprises our once-weekly Growth Hormone SKYTROFA approved for growth hormone deficiency and our once-weekly TransCon CNP currently under review by FDA in the U.S. and by EMA in the EU for children with achondroplasia. SKYTROFA is approved in the U.S. and EU for treatment of pediatric growth hormone deficiency. With this single indication, SKYTROFA is established as a high-value brand and treatment of choice for pediatric growth hormone deficiency. Q3 revenue for SKYTROFA was EUR 51 million.

In July, we received our first label expansion with FDA approval for adult growth hormone deficiency, the first of multiple planned label expansions. In Q3, we initiated our phase 3 basket trial of SKYTROFA with a range of established growth disorders, including ISS, SHOX deficiency, Turner syndrome, and SGA. Turning to TransCon CNP, we recently completed a late cycle meeting with the FDA and are in the final stage of the label discussion. TransCon CNP is under priority review in the U.S. with a due date of November 30 and is also under review in the EU, where our MAA filing was recently validated. TransCon CNP once-weekly is well positioned to become the leading treatment for children with achondroplasia, with the full degree of linear growth outcome that can be achieved with monotherapies addressing the overactive tyrosine kinase.

In addition, TransCon CNP achieved statistical improvement in leg bowing compared to placebo, increasing spinal canal dimension as safety and tolerability profile compared to placebo, with a very low rate of injection site reaction and no cases of symptomatic hypotension. We are confident in TransCon CNP's ability to be a leading therapy. While we believe TransCon CNP monotherapy is transformative by itself, we want to further enhance outcomes for people living with achondroplasia. Earlier this year, we presented a 26-week result from the phase 2 co-trial of TransCon CNP in combination with TransCon Growth Hormone, which showed around three times improved linear growth compared to what had been observed with monotherapies over the same time period. This resulted in healthy linear growth in children with achondroplasia, higher than that observed with an average stature of children, accompanied by improvement in body proportionality and without acceleration of bone age.

This data has been recognized by key opinion leaders as groundbreaking. Based on this data, we believe over time the standard of care in achondroplasia will include combination therapy as a treatment option, building on the potential role of TransCon CNP as the backbone therapy. Following our recent FDA end-of-phase 2 meeting related to our combination therapy, we plan to initiate a phase 3 trial this quarter. We anticipate disclosing 52-week data from the COAST trial in early 2026. With once-weekly Growth Hormone and once-weekly CNP, two highly differentiated medicines, both as monotherapy and in combination, we believe Ascendis is well positioned to become the global leader in many different growth disorders.

Our vision 2030 also includes creating value through partnership, and we see that being achieved through the rapid progress of Teijin in Japan, VISEN in China, Eyconis in ophthalmology, and Novo Nordisk in metabolic and cardiovascular diseases, where the once-monthly semaglutide program is making fast progress towards the clinic. Finally, the commercial success of Yorvipath and SKYTROFA has already transformed the financial profile of Ascendis. In the third quarter, we achieved positive operating income along with positive cash flow. For the near term, the building out of our commercial organization is largely completed in advance of future global launches. For the medium term, label expansion LCM activities have been initiated to maximize the value of our current products. At the same time, for long-term sustainability, our R&D organization continues to advance the TransCon technology platform to ensure a constant flow of new programs and potential new products.

In summary, with TransCon CNP nearing potential approval, Ascendis is well positioned to get approval of its third TransCon phased product in a row. This highlights the uniqueness of Ascendis, the continuous development of a highly differentiated product created by the TransCon technology platform and our unique low-risk drug development algorithm. Importantly, our current three rare disease endocrine products position us for durable future growth and give us confidence in our aspiration to achieve EUR 5 billion or more in annual profit revenue in 2030. I will now turn it over to Scott.

Scott Smith (EVP,CFO)

Thank you, Jan. I would like to reiterate Jan's comments that the positive operating income development seen in Q3 signals the transformation of our financial profile with sustained revenue and cash flow growth.

With that, I will touch on some key points surrounding our third quarter financial results and outlook, but for further details, please refer to our Form 6-K filed today. In Q3, our global revenue grew to EUR 143.1 million, up from EUR 103 million in Q2, with strong growth partially offset by a EUR 3.6 million foreign currency headwind compared to the previous quarter. In Q3 2025, SkyTrofa contributed EUR 50.7 million, with 3% growth in demand offset by a EUR 1.6 million foreign currency headwind compared to the previous quarter. Including EUR 20 million in collaboration revenue driven by a EUR 13 million milestone related to Yorvipath and increased partner activity, total Q3 2025 revenue amounted to EUR 214 million. Continuing on to expenses, R&D costs in Q3 were EUR 66.9 million, down from EUR 73.5 million in Q3 2024, primarily driven by completion of certain clinical trials and development activities.

SG&A expenses rose to EUR 113.4 million in Q3 2025 compared to EUR 69.8 million in the same period last year, reflecting continued impact of global commercial expansion. Total operating expenses for Q3 2025 were EUR 180 million, and operating profit for Q3 2025 was EUR 11 million. Net finance expense for the third quarter of 2025 was EUR 60.9 million, primarily driven by non-cash items, including non-cash remeasurement loss of financial liabilities of EUR 47.2 million. Net cash financial income over this period amounted to EUR 400,000. Note that in our 6K filed this evening, we provide more detail on the components of finance, income, and expenses. In future periods, we plan to introduce a non-IFRS EPS measure adjusting for the impact of certain non-cash non-operating items, including related to our convertible notes. This is intended to increase comparability of period-to-period results.

Finally, we ended the third quarter of 2025 with EUR 539 million in cash and cash equivalents, up from EUR 494 million at the end of Q2. Turning to our commercial outlook, primarily driven by the ongoing global launch of YORVIPATH, we expect continued revenue growth in the fourth quarter. For YORVIPATH specifically, we expect continued growth driven by new patients, stable pricing, payer mix, and contracting in Q4. Longer term, we expect YORVIPATH to be driven by continued growth in new patients on therapy, including expansion into additional markets. For SKYTROFA, we believe that sequential revenue growth should continue to track growth in prescriptions with stable pricing, payer mix, and no changes in contracting, with offsets potentially driven by currency, as we saw in Q3. Longer term, we expect growth for SKYTROFA to be driven by geographic and label expansion. With that, operator, we are now ready to take questions.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star 11. Our first question comes from Jess Fye with JPMorgan. Your line is open.

Jess Fye (Analyst)

Hey, guys. Good afternoon. Thanks so much for taking my question. I was hoping you could speak to your expectations for the rate of new patient enrollments on Yorvipath in the U.S. from here. I think you talked about more than 4,250 as of the end of 3Q, putting you at, what is that, about 1,150 adds or maybe a little more relative to June 30th. Can we think of that as kind of like a good number to work off of from here? Should it continue to kind of drift lower a little bit? Just hoping you can frame some expectations there. Thank you.

Jan Mikkelsen (CEO)

Thanks, Jess. First of all, we see a really stable number of prescriptions being written in the U.S.

When we somehow take away the bonus that we have from the EAP program about the 200-plus patients we have in the EAP program. When we think about Q3, I'm actually pretty surprised positively about Q3 because I was afraid that the prescriptions would not be written in the three weeks every physician typically takes out of their quarter in that time. And what I saw, we saw nearly the same number of prescriptions being written that we actually had seen in Q1 and Q2. And it's also following up with what we said in October. We saw more than 400 prescriptions being written in October, unique prescriptions being written in October. So when I look at it long-term, look at the U.S., I see a very, very stable long-term.

What we're also doing, we're building a foundation, like a strong, strong foundation because patients stay on lifelong treatment. Therefore, when you start a patient, it basically is continued quarter by quarter. So building on a house where you have a strong foundation, taking one brick around every quarter and the house getting taller and taller every, every quarter.

Jess Fye (Analyst)

Thank you.

Operator (participant)

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. Your line is open.

Tazeen Ahmad (analyst)

Hi, good evening, guys. Thanks for taking my questions. I just wanted to get a sense of how you're thinking about the rest of this quarter. Are you expecting to see impact from seasonality, I guess we can call it, just because of the upcoming holidays, Thanksgiving, Christmas, into New Year's?

And do you think that the script trends for December would be directionally lower, let's say, than what you're seeing, what you saw for October? And then if I could ask about the TransCon CNP review, you said you're in final labeling discussions, which is good to hear. Can you just confirm whether or not you've had any requests for any type of data from the agency in the review cycle? Thanks.

Jan Mikkelsen (CEO)

Actually, let me take the last question. Thanks, Tazeen, first. But let me take the last question first because it's the easy one because just no, just no, no, no, no. So it's really simple. So going to the next one, it's more of a Scott looking. He didn't read the FLS this time, checked the FLS this time. But when I'm looking forward in the future, yes, there are some holidays coming up.

But when I go look back, I was more worried about Q3 actually compared to the Q4 because I actually believe that there's a longer summer vacation than in Q3 compared to basic what you will see in Q4. So I see pretty positive on Q4. I see we actually increasing our prescription basis from physician writing prescription with more than 500 new prescribers, meaning that having a broader, broader boat where there's more and more that can come in rowing on the ship. And this is where I feel pretty confident about it. So no worry from my side, Tazeen. Okay.

Tazeen Ahmad (analyst)

Thanks, Jan.

Operator (participant)

Thank you. Our next question comes from Gavin Clark-Gartner with Evercore ISI. Your line is open.

Gavin Clark‑Gartner (analyst)

Hey, guys. Thanks for taking the questions. I wanted to focus in on the conversion rate for Yorvipath.

I'm wondering why it's only 70%, and you noted that you expect it to be higher over time. How much higher do you expect it to be, and when do you think it'll be higher? Just had a follow-up on this too.

Jan Mikkelsen (CEO)

Yeah. This is a question we had gotten multiple times every quarter. And what we have said in the previous quarter, we expect that it's going to be maturing over time, and it will go higher than that. And that is typical what we have seen in launches. And I actually had a long discussion with Jay about it today. And what is, when we see it mature brand, is that 85% or it's a 90% or what is really for the mature brand that you basically some way are ending up at that time.

I think from a modeling perspective is that we feel extremely well where we are today. We still have an NDC block taking into situation. We're getting the patients. We're getting not only the prescription done, we're also getting the approvals done, and we're getting it done in a speed. And as Scott also put emphasis on this, we don't expect anything changing in the contracting environment in Q4. So we some way expect the same GTN for this product that we have seen in both Q1, Q2, and here in Q3, and no changes to it. But Jay, you can also take a little bit of our discussion about the future, about what is really for a mature brand, is that where we are today. And also, we see a much higher number for SKYTROFA after it got matured. Yeah.

Scott Smith (EVP,CFO)

Thank you for the question.

As mentioned before, we're really encouraged about the 70% approval rate that we're seeing now. It's actually about what we expected or guessed at the beginning of the year, just based on what we know about the clinical value proposition of the drug, which again is incredibly positive and has been resonating with a lot of the payer accounts for which we are speaking with. To answer your question, Gavin, directly in terms of what that peak approval rate could be and at what time frame, that's really hard to say, right? When you look at some of the analogs for similar drugs, that could in some instances take multiple years, and the reality is, once you get to a certain high percentage, the remaining becomes a little bit more difficult simply just given the heterogeneous landscape of the payers, right? It becomes quite fragmented.

A lot of the government payers might review it on different timetables. So we are meeting a lot of those timetables where they're at. And again, we're continuing to talk about the incredible positive clinical value proposition that we're seeing. And that alone is resonating with a lot of them, which is why we continue to see that approval rate go up over time.

Gavin Clark‑Gartner (analyst)

That is super helpful. If I could just ask a specific follow-up on that, for the 4,250 forms reported through the end of this quarter, are you guys basically saying you expect the conversion on this to be 70% and then trending higher per everything you just laid out after that?

Jan Mikkelsen (CEO)

No, that's not what we're saying, Gavin, because if we go back and look on the early cohort, meaning it's cohort from March, April, it's much, much higher than the 70%.

So this is what you see. The longer the time it takes, the more and more getting approved. And that is basically the element. And this is the question we have. Can we really take this tail and shorten down the tail? So we're basically getting the higher percentage that we see from the cohort we had in the beginning of the year, which are much higher than the 70%. Can we get that in a shorter time frame?

Gavin Clark‑Gartner (analyst)

Okay. The point I'm trying to get at is for a lot of the starters, let's take the 3,100 you had through to June. Maybe you've had close to 70% conversion, but the rest of the 30% is not really lost at this point. Some more still may come through as conversion. It's just a matter of time.

Jan Mikkelsen (CEO)

Exactly.

So if you take, for example, going to the cohort from March, April, much higher. If you take the earlier stage cohort now on that is near this month we have, it's lower than that. So this is how you see it. It's only a question about time.

Gavin Clark‑Gartner (analyst)

Very helpful. Thanks so much.

Operator (participant)

Thank you. Our next question comes from Joe Schwartz with Leerink Partners. Your line is open.

Joe Schwartz (analyst)

Great. Thanks very much. A question on Yorvipath and then on TransCon CNP. Can you give us your latest views on how Yorvipath has been penetrating the different segments of the hypopara market as you see it? Where is it beginning the most traction, and where could it do better? And then you previously emphasized the desire to do more than enhance linear growth and achondroplasia.

So I'm wondering, to what extent do you think you can obtain differentiated label claims on the TransCon CNP label? Thank you.

Jan Mikkelsen (CEO)

Let me take the last question. As I said in the prepared remark, we are in the late stage discussion about the labeling. And I cannot really comment about what will really be in the final labeling in this perspective. What is really the key element for me in my discussion with patients, my discussion with physicians, Aimee Shu's discussion, our medical affairs discussion with the teams, is really to explain the benefit they see behind linear growth. And it's clear, unique effect in leg bone, unique effect in changing body proportionality. And we will have peer-reviewed publication really supporting all this claim that will come out, really give us an opportunity to take and talk with the patient, talk with the physician about this benefit in it.

I think this is the key thing for me. I saw an element once with hypopara where basically it was impossible to get into the labeling, our element of patient benefit related to cognitive function, other quality of life, and everything like that, and everyone recognized it. Everyone sees it. And it sees that it's the best thing. I think the key thing from our labeling discussion is have no restrictions, have a really safe product, really show our efficacy and safety in the best possible manner in this way. Jay, will you take the first part of the question in this way to Joe?

Jay Wu (EVP, President, U.S. Market)

Yeah. Could we repeat the first part of that question?

Joe Schwartz (analyst)

Yeah, sure. I was just wondering, you've outlined the different segments of the market based on how controlled the patients are. So I was wondering, how are you making inroads into those segments lately?

Where are you getting the most traction, and where could you do better?

Jay Wu (EVP, President, U.S. Market)

Yeah. So when you think about the 80,000, 90,000 patients that Jan had referenced earlier in the call, I think there's probably a group that we would describe as highly symptomatic. Patients are well aware of their symptoms, articulating those symptoms to a physician. And within those, I would say we're doing quite well, particularly since the patients themselves are likely the ones that are in the offices most frequently and are keeping the appointments on the books to be able to essentially get some of that information and also be on their way to actually get prescribed the product.

I think where we're continuing to work on are some of the patients for which maybe they're not either self-identifying some of their symptoms as being related to the underlying condition, and/or perhaps they've gotten used to some elements of it and therefore haven't been as motivated to establish care and retain established care with a specialist, and I think that's why, as we think about how we can continue to transform this market, there will be an element of patient activation as well, simply because there is going to be a certain level of disease education required, particularly for a space like this where it is about redefining what's possible and kind of the status quo for how to manage this type of condition.

Jan Mikkelsen (CEO)

Yeah. If I can add something, Jay, I see it from two different perspectives.

How often you come into the endo is one way, and also how we target it and define something that is not defined on medical terms, but only on how often you see an endo related to being controlled, partly controlled. And what I also am trying to look at, I try to look on where are they coming? Are they coming from the post-surgical? Are they coming from the genetic part? Are they coming from the immunological part? And I see them coming from everywhere. So for example.

Operator (participant)

Ladies and gentlemen, please stand by. Again, please stand by. The conference call will begin to resume momentarily. Please continue.

Jay Wu (EVP, President, U.S. Market)

Where did you last hear us at?

Chad Fuger (VP of Investor Relations)

I think this was Joe, your question about the.

Joe Schwartz (analyst)

Yeah. Hi. Welcome back.

I guess I was wondering about your progress within the different levels of control and where you can do better and just how you've been able to penetrate patients in each of these segments.

Jan Mikkelsen (CEO)

Yeah. I think, Jay, at least I heard Jay's response to it. And my additional comments was that when we did the targeting of our physician, we mapped it out from the claims database where we defined three groups: controlled, partly controlled, and uncontrolled. It's nothing to do with medical terms, but basically it's a situation how we basically are looking at the patients from the physician's end. So what I'm also looking at is, do we see all patient groups in our patient base coming on Yorvipath treatment? And when I see that, it's pretty clear that we are in a position we see the obvious post-surgical.

But when we look at different elements of genetic, genetic, or immunological, we also see all different groups of patients, even patients from the ADH1, which really, really are less than 1% in the claim database. We already have about 15 patients on treatment with this syndrome, which really gives us hope that we basically will see the same penetration everywhere in all different parts of the hypopara patients in this way.

Joe Schwartz (analyst)

Thank you.

Operator (participant)

Thank you. Our next question comes from Li Watsek with Cantor. Your line is open.

Li Watsek (analyst)

Hi, guys. Thanks for taking our questions. I guess just on Yorvipath, can you maybe just give us a little bit of color on PBMs and potential contracting, not just in Q4, but also in 2026? And should we sort of expect still minimal contracting and sort of stable gross-to-net for the next few quarters?

Jan Mikkelsen (CEO)

I think it's got more or less addressed. It is a prepared remark. There would be no changes into Q4. If we look forward, will there be potential more contracting that we have seen now? And Jay can comment on, we are in a position where contracting will not in any way change dramatically our GTN in any kind of financial modeling in this perspective. And we see Yorvipath really have all the characteristics of a product. It's a first-class. There's only one treatment option. And we see it actually not only being prescribed, but also being reimbursed to the level that we have hoped for. Jay, you have further comment to the long-term perspective of contracting?

Jay Wu (EVP, President, U.S. Market)

Yeah. I would just reaffirm what you shared. Consistent contracting strategy in Q4 is previously discussed.

Given the first and only nature of what we have and the fact that the clinical value proposition speaks for itself, we don't anticipate any major contracting that's going to deviate above and beyond what we've shared before, which is more minor contracting around ensuring a frictionless patient experience, so again, nothing substantial or anything meaningful above and beyond what we've discussed today. Any changes will be minor,

Jan Mikkelsen (CEO)

and when we look at the competitive landscape, we don't believe any of what we see in the competitive landscape will really make us to move into a much more highly contracted product as we see it really with the best-in-class properties compared to everything what we see.

Li Watsek (analyst)

And then just curious about the TransCon CNP and the phase two meeting.

In terms of the phase three trial design, should we assume that FDA would require a one-year data on annualized growth velocity and anything that you can share on the powering assumptions?

Jan Mikkelsen (CEO)

Yeah. That is an interesting question because I basically have never seen anything longer than one-year clinical trial in any growth disorder. I've seen a lot of precedent about something that could be taken as two years, but I've never seen any regulatory precedent that had more than one-year controlled treatment in this. We have already what we call long-term data that will be generated from our phase two trial. So I think that is basically the element of what I never have seen in this way. Aimee Shu went to the FDA meeting, so she can basically just give you the view about what she basically got of feedback from that perspective.

Li Watsek (analyst)

Yeah.

So we're happy to say that we found our reviewers at FDA to be appropriately open-minded about, appropriately clinically open-minded about duration here. But there's obviously a regulatory pathway, and that's usually one year of data.

Operator (participant)

Thank you. Our next question comes from Yaron Werber with TD Cowen. Your line is open.

Yaron Werber (analyst)

Great. Thanks so much. Maybe, Jan, maybe a couple of questions. Number one, just on gross-to-net. When we're kind of, we were at around just over 4,200, and we had like a 65% approval, but we were getting to higher numbers for the quarter. So I'm wondering whether, and we had 18% gross-to-net. Is it possible the gross-to-net discounts are higher than that? That wouldn't make any sense. I guess the question kind of like, what am I missing?

And then maybe secondly, it sounds like you may be very subtly intimating to expect some impact from the holidays in Q4. Are we reading it correctly? Because you didn't see much seasonality in Q3. And then finally, U.S. versus European sales for Yorvipath in the quarter, was it like around EUR 4 million or so in Europe this quarter as well? Thank you.

Jan Mikkelsen (CEO)

Yeah. There were three questions. The element of what I will take, what we said in the beginning of the year is still what we really have seen. We said we will expect ex-U.S. to be around EUR 4 million-EUR 5 million increase every quarter because we have not really expanded it more to fully commercial countries, which we did now here in Q3, but we first see the effect on that perspective in this way.

Related to the seasonality on it, I don't expect to see any seasonality in Q4. That is pretty clear. I expected to potentially have seen it in Q3 because I expected the physician to be gone for three weeks, and when we weren't really seeing a major impact in Q3, I don't expect to see any impact in Q4. Scott, he's really the guy with the numbers and everything like that. So he really is good at that. So Scott, can you take the first question?

Scott Smith (EVP,CFO)

Yeah, so I think your question was the 70% approvals and the tying to revenue. We could probably follow up offline on how you're thinking about things, but just remember also when there's an approval, this isn't the exact same thing as patient on drug, right? They get approved, and then sometimes it's soon, sometimes it takes a while.

But that's probably the only thing to keep in mind, Yaron.

Operator (participant)

Thank you. Our next question comes from Martin Auster with Raymond James. Your line is open.

Martin Auster (analyst)

Hey, guys. Thanks for taking the question. I'll try not to be too greedy and just keep it to a couple. First, on Yorvipath, I was wondering if you could comment if you've got any sense of early data on what patient retention looks like from folks who've started up on drug this year. And then second, on TransCon CNP, I guess from a commercial perspective, when we look at this market, it looks a little underpenetrated for a rare disease market compared to some other comps.

I'm curious if you guys have a sense as to sort of why that's the case and if you think TransCon CNP is sort of coming to market and improve upon that and improve overall penetration rates of treated folks with achondroplasia? Thanks.

Jan Mikkelsen (CEO)

Thanks, Martin, for the question. The first one is really, really, it spent a lot of time on it, spent a lot on the analytical, and we are losing very, very, very, very few patients when they have initiated treatment. Very few percentages. And if we lose them, it's basic in the first four-to-six weeks. Meaning is that we are now trying to go back, how can we potentially help them in the titration phase?

And I think that is always the element where you start on a system where you are on conventional therapy, you start to do it, you need to take it off. And I believe if there is a good interaction between both the physician, the place where we get calcium monitoring and everything like that, it is a more difficult period for the time. This is why the titration. This is why we started always one daily product because we know we could never get this titration to function with a once-weekly product. So that is where we see. When we see after four to six weeks when we're starting to be stable, exactly as I said here, we expect nearly all patients to be on lifelong treatment. This is like building the foundation stronger and stronger. And Martin, I agree with you.

If you have a look on the SHOX type, it's doing really poorly in the U.S. They're saying they're doing really good outside the U.S. I think they're doing really poorly in the U.S. That should be much, much higher, and I believe that because they're not really addressing what we really should address, the comorbidities, and I believe this is where we come in with a differentiated product. This is why when I talk with the different patient organization group, and really they ask me a simple question, "Jan, will you have taken the primary endpoint to be linear growth if you were the first product?" and I said, "No, we will never have done that.

We will really have addressed how we really addressing the comorbidities because we believe that is really why patients should take that treatment, help them to the comorbidities, really help them in this way." And this is where I believe we have an extremely positive dialogue with all the patients and the patients related to that topic.

Martin Auster (analyst)

Thanks, Jan. Looking forward to November 30th.

Operator (participant)

Thank you. As a reminder, please limit yourself to one question and a follow-up. Our next question comes from Paul Choi with Goldman Sachs. Your line is open.

Paul Choi (analyst)

Hi. Good afternoon. Thanks for taking the question. I also want to stay on TransCon CNP and maybe ask on the commercial strategy as you launch it, and particularly for next year.

Are you primarily going to target the de novo patients, or are you expecting a good portion of the revenue mix to be from GH daily injection experience patients? And if you are expecting a decent-sized contribution from the latter, can you maybe speak to what your market research suggests the appetite is on potential switch strategies and just sort of what percentage of the existing treated patient base you might think ultimately convert? Thanks for taking the question.

Jan Mikkelsen (CEO)

Thanks so much for the question. Yes. We expect there to be a lot of switches. We enrolled patients in the places where GH was already commercially available free for the patient. We enrolled it where there were other treatment alternatives, if you call them treatment alternatives. We were in a position that they preferred it.

From their perspective is that not only the once-weekly profile, but the lack of injection site reaction. Really to be in a position, you don't need to worry about any risk of hypertension and anything like that. That was really one of the key developments. And also at that time, we not even have really the clarity of beyond linear growth, the benefit beyond linear growth. So when I look today, it was going to be a large portion on switch patients when you have therapy being implemented to a high level, which it is in some European countries. In some European countries, 60%-70% of all patients will be treated today, and there will be switches. They're just waiting for it. We know they're waiting for it because they ask for it all the time when it will be approved in Europe.

If you go to U.S. because of not high penetration, oh, there will be many more new patients coming in because there's not so many to switch off. So this is what we see and how we would build up the commercial strategy.

Paul Choi (analyst)

Okay. Great. Thank you.

Operator (participant)

Thank you. Our next question comes from Yun Zhong with Wedbush. Your line is open.

Yun Zhong (analyst)

Hi. Good afternoon. Thank you very much for taking the questions. So the first question on the label extension to the higher dose, I assume the pricing is going to be the same. So would you expect any direct impact on maybe the number of patients on treatment and reported revenue, please?

Jan Mikkelsen (CEO)

First of all, when we look on treatment in a dose larger than the 30 dose, it's only restricted to the U.S.

Currently, when we see in many countries, there is few percentages of patients that really need it in a commercial setting. We accept some patients that really need it, and they're in many cases already on treatment in the U.S. By having this trial, the patient that basically will need more than 30 in the U.S. will now have availability because they can join us in the clinical trial. The clinical trial, as Aimee can explain, is a very, very simple single-arm study. You can explain how many patients we have. It's basically a safety trial.

Aimee Shu (EVP and Chief Medical Officer)

Yeah. So single-arm, that would be 18 subjects who will be titrated as they need based on serum calcium using the higher doses.

Jan Mikkelsen (CEO)

So it's basically an 18-patient, six-month trial for safety perspective, and that will be the triggering point to also in the U.S. have it.

I don't think it will have a material impact in any way on our revenue.

Yun Zhong (analyst)

I see. Thank you for the clarification. Then a follow-up question on the payer discussion. I believe that initially you said roughly it takes about eight weeks to get payer approval. Then I think last quarter you said three months, and then this quarter just now you probably said a month. Was that just a random maybe fluctuation, or was there any meaningful change in terms of how long it takes for payers to approve coverage? Please. Thank you very much.

Jan Mikkelsen (CEO)

We see an improvement month by month. And when we look at the data today, with about the 50% and the eight weeks, that is the data we see today.

Yun Zhong (analyst)

Okay. Great. Thank you.

Operator (participant)

Thank you. Our next question comes from Alex Thompson with Stifel. Your line is open. Hi.

This is Charles on for Alex Thompson. Maybe a bit of a different question, but in terms of the sort of adolescent buckets of hypoparathyroid patients you're looking at, I guess what kind of patient sizes is represented in the U.S., and what kind of growth do you expect to see from here, assuming there's successful label expansion? Thank you.

Jan Mikkelsen (CEO)

This patient group is a quite different patient group to compare to the pool of the patients we talked today in U.S. and other countries. Many of these young children are coming from more the genetic and immunological part and not so much from head and neck operations. Still, there can be post-surgical patients at that stage too.

These patients are in a severe case because if you have hypoparathyroidism in such a young age, a lot of developmental part is really affected not to have the right calcium homeostasis, phosphorus homeostasis, and bone homeostasis in the body today. So I see it as really as high level of severity of disease to have it also in this extremely young age. I even have seen young people that have it from young that already have kidney transplantation in the 20s because of the high burden of the treatment that has been available today with conventional therapy. And when we look on the number, it will not be a number that ever can come up to the level that you see in the adult population, but it's not changing the severity of really making a treatment available for this patient group.

Operator (participant)

Thank you.

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

Luca Issi (analyst)

Oh, great. Thanks so much for taking my question. Maybe on the unique patient enrollment, is that a metric that you're committed to report going forward, or are you planning to sunset that metric at some point? And if it is the latter, can you talk about whether that could be Q4, or would that be later than that? And then maybe if I can ask about Novo Nordisk, can you just talk about how that collaboration is going? Obviously, lots going on at Novo, given again, new leadership in place, and obviously, just lost the deal on Metsera. I'm wondering if you're seeing any disruption with that collaboration with them, or maybe the opposite, actually an acceleration of that collaboration. So again, any thoughts there? Much appreciated. Thanks so much.

Jan Mikkelsen (CEO)

Yeah.

Let me take the last question first about our collaboration, and when I look on the collaboration and we look on the once-monthly semaglutide, which I believe have a unique profile because of the slowly release from the product system to a level where the Tmax is very late, and therefore you don't have a high slope. So likely the tolerability, as we have seen in animal model, really can also be established in the clinical trials in humans in this way. As we are responsible for last element of the collaboration, there has definitely not been any disruption, and there has definitely not been any lack of interest in this program, and this is not one single program. It's a, as I said in our press release, it's a series of programs that we are working on.

So we definitely have not seen any kind of lack of interest, and it's progressing with the speed which we can do it too in this really positive collaboration as fast as we can do. We believe that when they come to the late stage, sure, the muscle of a company like Novo Nordisk to make a large phase three trial in multiple ways is really unique because they really have the capacity and unique level of expertise to do it. Sadly now, I forgot the first question. Enrollment as a metric. Yeah. The enrollment as a metric is a question that we discuss a lot, and we want comments on it.

When you're feeling that we are in a position that revenue that we are reporting now really are coming to a level where you're feeling that it's really coming to a stage where the addition of new patients really are not changing so much of the overall. As I said, we're building a strong foundation quarter by quarter. The strong foundation is building a really tall house, and we're now taking brick by brick quarter by quarter, and we're building this revenue base up more and more, and you can really from just a mathematical modeling think about it. When we are much more further in the long run, the addition of new patients just are not giving the same impact on the overall actual revenue at that stage, and therefore, I believe at one time, the number of new prescriptions is not really meaningful for you.

You will just see a quarterly revenue growth that basically are just reflecting at the addition of new patients.

Operator (participant)

Thank you. Our next question comes from Maxwell Skor with Morgan Stanley. Your line is open.

Maxwell Skor (analyst)

Great. Thank you for taking my questions. I was just wondering when we can expect preclinical data supporting Yorvipath potential for weekly dosing. And also, could you share your outlook on Yorvipath trajectory in Europe? How should we think about a potential ramp next year? Thank you.

Jan Mikkelsen (CEO)

Yeah. Typically, what we're doing is that we would like in the beginning of the year, there is a conference, and likely there we typically will come up with data and status on our new product opportunities, and we expect to repeat the same element year by year. So a good time to expect to see data will be at the beginning of this year. Just a second.

Oh, if he's talking the guidance on ex-US, what we said for this year here is a EUR 4-5 million increase quarter by quarter. What we said, this will further be accelerated when we come into 2026 because we will have an addition of more and more countries. When we come into January, we will give you the perspective of what countries we expect to add into being fully commercial in 2026 and 2027.

Operator (participant)

Thank you. And we'll take our last question from Clara Dong with Jefferies. Your line is open.

Clara Dong (analyst)

Hi. Thanks for taking our question. And just to follow up on the previous question, and apologize if you've mentioned already, but it would be great if you can confirm the US and ex-US revenue split for Yorvipath.

Then in terms of the ex-US launch momentum, is there any specific timeline for any upcoming reimbursement decision in any market and any pricing dynamic we should keep in mind as you expand internationally? Thank you.

Jan Mikkelsen (CEO)

Okay. We gave you a basic algorithm in the beginning of the year. We said that when you look at Q4 2024, there was about $14 million in net revenue. All this net revenue was ex-US. We expected to add $4-5 million net revenue in 2025 every quarter. You can nearly add 14 plus 5 plus 5 plus 5 plus 5, and then you have the Q4. What we saw here in 2025, we got Spain full commercial. We are in a situation where we not compromise the value because we have a durable product that basically will be here for 20 years.

So for us, it's more important to really have the value being created in the right manner. And what we will give you here in the beginning of the year, the perspective of what and how many new countries we expect to add on in 2026.

Operator (participant)

Thank you. And that's all the time we have. Thank you for joining. You may now disconnect. Good day.

Chad Fuger (VP of Investor Relations)

Thanks a lot.