Good day, and thank you for joining us. Welcome to the Ascendis Pharma Full Year 2022 Financial Results Conference Call. At this moment, all participants are in listen-only mode. Following the presentation, we will have a question-and-answer session. Please note that today's conference is being recorded. I will now hand the call over to Tim Lee, Senior Director of Investor Relations. Please proceed, the floor is yours.

Thank you, operator, and thank you everyone for joining our full year 2022 financial results conference call. I'm Tim Lee, Senior Director of Investor Relations at Ascendis Pharma. Joining me on the call today is Jan Mikkelsen, President and Chief Executive Officer; Scott Smith, Executive Vice President and Chief Financial Officer; Dr. Stina Singel, Executive Vice President, Head of Clinical Development Oncology; and Joe Kelly, Senior Vice President, Head of U.S. Commercial Endocrinology. Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, our US commercialization and continued development of SKYTROFA for the US market, the commercialization of TransCon hGH for the EU market, statements regarding the expected timing of approval and launch of TransCon PTH in the US market next year, statements regarding expected timing of approval of TransCon PTH in Europe, statements regarding the potential market size of TransCon PTH, our progress and our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline, including the timing of clinical results, statements regarding our pipeline product candidates, statements regarding planned regulatory filings, our expansion into new therapeutic areas and statements regarding the ability to create a sustainable leading global biopharma company. These statements are based on information that is available to us today. Actual results and events could differ materially from those in the forward-looking statements. And we may not be able to achieve our goals, carry out our plans, our intentions, our expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any licensing agreements, acquisitions, mergers, dispositions, joint ventures, or investments that we may enter into or terminate. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see our forward-looking statements section in today's press release and the risk factor sections of our most recent annual report on form 20-F, which is being filed today, February 16, 2023. TransCon Human Growth Hormone or TransCon hGH is approved by the FDA in the US under the brand name SKYTROFA for the treatment of pediatric patients one year older weighing at least 11.5 kilograms and have growth failure due to inadequate secretion of endogenous growth hormone. In addition, the European Commission has granted a marketing authorization for SKYTROFA to Ascendis Pharma developed under the name TransCon hGH as a once weekly subcutaneous injection for the treatment of children and adolescents aged three to 18 years with growth failure due to insufficient secretion of endogenous growth hormone. In general, we refer to this product as TransCon growth hormone, and unless we are referring to the product in the context of a particular jurisdiction such as the United States or the European Union, otherwise, please note that our product candidates are investigational and are not approved for commercial use. As investigational products, the safety and effectiveness of the product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our product candidates shall be viewed as promotional. On the call today, we'll discuss our full year 2022 financial results and we'll provide further business updates. Following some prepared remarks, we will then open up the call for questions. I'll now turn the call over to Jan Mikkelsen, President and Chief Executive Officer. Jan?

Thank you so much. Ascendis is built on the unique TransCon technology platform, which enables development of highly differentiated product candidates across multiple therapeutic areas. Combining the TransCon technology with our product innovation has enabled us to create and develop product candidates with a higher likelihood of success than seen with conventional drug development. One of our key product selection criteria is to fulfill best-in-class potential on each of the four key pillars of drug development: safety, efficacy, tolerability, and convenience. In addition, each product candidate must have the potential to achieve $1 billion or greater revenue in a single therapeutic indication. With this approach and guided by our values of patients, science, and passion, we have demonstrated our ability to continuously build out a robust pipeline while taking product candidates from concept through approval and launch. With expected regulatory approvals of a new product or additional indication every one to two years, we are fulfilling our Vision 3x3 goal of building a sustainable, profitable, leading biopharma company and creating long-term value for all stakeholders. This past year, we have advanced our pipelines as planned, entering 2023 with an April 30th PDUFA date and expected US launch of TransCon PTH for adult patients with hyperparathyroidism by the end of Q2, along with an expected European Commission decision during Q4 as well. TransCon PTH is our second endocrinology rare disease product opportunity, representing a potential global opportunity greater than $5 billion. Turning to TransCon CNP. Last November, we reported 12 months of data from our first-ever randomized, double-blind, placebo-controlled Phase 2 trial in children diagnosed with achondroplasia. These results give me confidence that this third endocrinology rare disease product candidate may have its first approval by 2025, as targeted in our Vision 3x3. Another component of Vision 3x3 is label and geographic expansion. We continue to build the value of our existing programs through additional clinical studies for label expansion and global commercial readiness. Starting with our newly expanded European organization, which is preparing for the launch of SKYTROFA in Germany this year and, if approved, TransCon PTH next year. With this great momentum across our pipeline, I would like to review additional details from our major programs. Turning to growth hormone. During the fourth quarter of this year, we plan to report the top-line results from our global Phase 3 foresiGHt trial in adult growth hormone deficiency, our potential second indication for TransCon growth hormone. Adult growth hormone deficiency is a serious endocrine rare disease characterized by abnormal body composition, dyslipidemia, insulin resistance, and impaired quality of life. Analysis has shown the consequences of adult growth hormone deficiency result in mean analyzed healthcare costs more than four times that of a non-growth hormone deficient population. Because TransCon growth hormone is the only once-weekly growth hormone product releasing unmodified somatropin, we expect it to be the first adult growth hormone treatment to meet or exceed the safety, efficacy, and tolerability of daily growth hormone. Meanwhile, in the US, SKYTROFA is experiencing the commercial success it deserves because of its unique product strengths. As we pre-announced during JPMorgan, fourth quarter 2022 US SKYTROFA revenue growth to €17.1 million, providing a strong foundation for growth in 2023 and beyond. With our progress towards label expansion and planned commercial launch in markets outside the US, we believe we can be on track to build SKYTROFA into the leading growth hormone product in value by increasing the total market size. As we have predicted, we are seeing the consolidation of the daily growth hormone market as other manufacturers begin to exit the US market. Turning to TransCon PTH. Excitement continues to build among stakeholders around this potential treatment for adult patients with hypoparathyroidism ahead of the upcoming PDUFA date of April 13th. Our expanded teams are hired, trained, and working to deepen physician and payer awareness of this serious health and quality of life issue that hypoparathyroidism causes. We have already made more than 2,000 calls to physicians related to disease awareness, and we are encouraged by their interest in learning more about the multi-organ impact of this disease and its negative effect on patients' quality of life. Our commercial team, medical affairs, premium reimbursement, and our manufacturing teams are ready to launch TransCon PTH in the US market as soon as possible after approval. Importantly, we are launching TransCon PTH, our second endocrinology rare disease product with the same commercial infrastructure that has proven its success with SKYTROFA. Coming back to CNP, as we did with TransCon Growth Hormone and TransCon PTH, we ran a robust Phase 2 trial to confirm TransCon CNP’s target profile across all four key pillars: safety, efficacy, tolerability, and convenience, and derisk it at the Phase 2 level. This can only be done with a robust randomized placebo-controlled trial that does mimic the pivotal trial. We saw clear success in the ACcomplisH trial with TransCon CNP, demonstrating superiority over placebo at the 12-month primary endpoint in children aged two to ten. In addition, we saw clear dose response. All 57 patients who started this trial remain in the open label extension today. To extend and confirm these results, including positive treatment effects observed on achondroplasia-related comorbidities, we are running our Phase 2b ApproaCH trial. As an investigator, I am aware of the Phase 2 results and have experienced very high interest in our ApproaCH trial, and we expect to complete target enrollment of around 80 patients in the next quarter. During our upcoming end of Phase 2 meeting with the FDA, we expect to collaborate on how to best achieve a broad treatment label rather than a linear labeling alone. Shifting to oncology, we are progressing with the development of our two novel immuno-oncology programs, TransCon TLR7/8 agonist and TransCon IL-2 β/γ. With these two clinical programs, we are positioned this year to start iterations of clinical efficacy in seven specific tumor types, nine different indications, including four different combination therapies, such as by combining our two TransCon oncology product candidates with each other. Clinical proof of concept Phase 2 top-line results are expected starting in 2024. In addition, this year we would initiate the randomized Phase 2 trial βelieγe 201 using TransCon IL-2 β/γ and TLR7 agonist combination therapy in head and neck cancer. As we successfully demonstrated with our endocrinology programs, we are building a solid Phase 2 clinical proof of concept for our oncology products in multiple tumor types over the next one to two years. As you can see, we have and will always focus on delivering the best-in-class product profile to benefit patients on the four key pillars of safety, efficacy, tolerability, and convenience, areas in which we will not compromise. This development approach, including extremely robust clinical trial design, has positioned Ascendis to potentially launch a new product or indication every one to two years, building sustainability and long-term value for all stakeholders. This successful clinical trial further confirms the power of the TransCon technology platform and our product innovation and increases our confidence and likelihood of successful future product candidates. To build on expanded pipeline and commercial successes, Ascendis remains on track to meet or exceed our goals outlined in our Vision 3x3. I will now turn the call over to Scott for a financial review before we open up for questions.

To follow on Jan’s comments, we are excited to see the realization of Vision 3x3 with a continued flow of new products and additional indications every one to two years. For example, as Jan noted, we expect to launch TransCon PTH in the US and SKYTROFA in Germany this year, followed by the first European country launch of TransCon PTH in early 2024. With results for SKYTROFA in adult growth hormone deficiency and TransCon CNP in achondroplasia on the horizon, we expect this cadence of approvals and launches to continue beyond 2024. In this way, we are creating sustainable long-term value for Ascendis and our stakeholders through our proven R&D development capabilities. I will quickly touch on a few points. For further details on our full year 2022 financial results, please refer to our Form 20-F, which is being filed today. As we previously announced in early January, SKYTROFA US revenue for the fourth quarter of 2022 grew to €17.1 million. These results exceeded the expectations that Jan laid out last May, which projected €16 million. For the full year 2022, total revenue was €51.2 million, including SKYTROFA revenue of €35.7 million, as well as licensed clinical supply and services provided to third parties, primarily VISEN Pharmaceuticals. With profitable growth of SKYTROFA, our overall operating loss grew about 2% sequentially to €147.4 million for the fourth quarter from €144.5 million in the third quarter of 2022. Finally, we ended 2022 with cash, cash equivalents, and marketable securities totaling €743 million. Looking forward, as Jan described at the JPMorgan conference, annualizing fourth quarter SKYTROFA revenue of €17.1 million provides a foundation for 2023. In addition, we expect to add at least as many reimbursed patients this year as we did in 2022, which would provide even greater growth. As a result, at this time, we believe we are on track to exceed the current Ascendis compiled consensus estimate for 2023 SKYTROFA revenue of €96 million. Switching to TransCon PTH, our PDUFA date is April 30th this year. If approved, we expect to begin shipping product by the end of the second quarter. A quick reminder on selected key 2023 corporate milestones: For TransCon Growth Hormone, as mentioned, we plan to launch SKYTROFA in Europe, starting with Germany in Q3. We also expect to report top-line data from the global Phase 3 foresiGHt trial in adult growth hormone deficiency, our second indication in Q4. For TransCon PTH, we are planning for FDA approval by the PDUFA date of April 30 and launch in the US by the end of Q2, and we expect the European Commission decision in Q4. For TransCon CNP, we are on track to complete enrollment of the Phase 2b ApproaCH trial in achondroplasia in Q2. Within our oncology therapeutic area, we expect to report top-line results and declare the recommended Phase 2 dose for monotherapy dose escalation cohorts for TransCon IL-2 β/γ later this quarter, and to declare the recommended Phase 2 dose from TransCon IL-2 β/γ combo therapy with a checkpoint inhibitor in Q3. Finally, as you see with our reporting to date, continued optimization of finance systems and processes have enabled us to accelerate our year-end reporting. With that, operator, we are now ready to take questions.

Thank you. Our first question for today will be coming from Jessica Fye of JPMorgan.

Thanks for the comments on how to think about SKYTROFA sales this year. Can you comment on your comfort level with consensus estimates for TransCon PTH this year? And actually while we're at it, where is that consensus figure based on your latest compilation of the analyst numbers?

Jess, are you referring to SKYTROFA or TransCon PTH?

For PTH.

I actually have not looked at the consensus number for PTH. I don't think we have collected that information. So I don't think we can really address that. We can mainly address the places where we feel confident to give an estimate that can reflect our expectation as we have done for SKYTROFA.

Okay, I'm going to ask something else then. Can you tell us how many cumulative new patient prescriptions there were for SKYTROFA as of your end? I think you were previously giving that quarter by quarter. And can you also tell us when we should look for the next update from the Phase 2 extension for TransCon CNP?

Let's just go back to how we basically are forecasting related to the revenue of SKYTROFA in the US in 2023. What we have seen in '22 is that month by month, we have increased the number of new patients that got reimbursed, and we have continued to see this trend also in 2022. This is why it was important to look at the fourth quarter, because we have also seen very strong retention. When you start on SKYTROFA, you stay on SKYTROFA. When we take the €17.5 million and multiply that by 4, Scott is calculating, it’s about €70 million. And we actually expect to see more patients per month of new reimbursed patients than we actually saw in '22. We're feeling really confident that we will exceed the consensus number that is out on the street today related to SKYTROFA. The element that is providing our increase in the number of monthly new reimbursed patients is that the physician is starting really to understand the product strengths of SKYTROFA. It's not something you experience in one month; you need to see six months, 12 months of data. And this is what we're starting to see; so we are really seeing how we have a highly differentiated product compared to daily growth hormone. The other point is that we see the consolidation of the daily growth hormone market that started for about three years ago where we saw, after our Phase 2 data, that the consolidation of the daily growth hormone market is really kicking in now. So that is a major, major switch away from some of the six daily growth hormone players, which all have the same product. So this is why we feel that confident about how we will grow SKYTROFA into the most valued product in the growth hormone market in the near future. Related to CNP, you had a question related to CNP. Jess, you can specify exactly what you wanted to know, though.

Well, I think in the past, you talked about the high velocity for a proportion of patients that had been on up to a certain time point, and I think we're going to maybe update that when all the patients got out to that time point. Is there kind of a plan to update that data and when should we expect that?

Yes, we are planning to give you this data, and we think it's extremely, extremely important to give you this data where we see the continuous effect of Ascendis Pharma’s TransCon CNP, because I’m still in this extremely struggling manner. And this is what we have really got a lot out of analyzing all the data for our ACcomplisH trial to find out why they're staying 100% on this treatment, and we are starting to get a much, much better understanding of that. And this is why we now are discussing with the regulatory agencies how we can have other secondary endpoints that really reflect how we are addressing the comorbidities and not just linear growth. Linear growth is not really the biggest issue for this patient group; they seek the comorbidities and other effects of the disease. And this is why we believe TransCon CNP is a unique product because it has continuous exposure to the CNP molecule and therefore changes things that are not only related to linear growth.

Our next question will be coming from Tazeen Ahmad of Bank of America.

As it relates to HPT, can you just give us an update, if you haven't already, on how many patients you've enrolled in the Early Access Program so far? And do you have a sense of how many patients will be enrolled in that program by the time of the PDUFA and then following with the launch?

We are very pleased with the progress of the program and our interactions with regulators. We have also received approval to begin an Early Access Program, allowing us to start treatment for patients before the expected approval. We are actively working on this initiative. When we reach the approval process, we will provide details about the number of patients involved in the trial and our plans for continuing with patients.

Maybe just a follow-up then. Would you expect that to be an early source of patients to convert to commercial?

I believe we are focusing on an important aspect of the EAP program. We are targeting patients who are already familiar with a short-acting PTH treatment regime. This may include similar treatments, but that is precisely what we are addressing. The majority of patients we recruited for our Phase 2 and Phase 3 programs come from a group that has not previously been exposed to PTH treatment. Therefore, I don't see a significant differentiation between these two patient groups. Both groups share a significant unmet medical need and can benefit from PTH treatment. I don't perceive any differences related to their status as early adopters in our programs.

Our next question will be coming from David Lebowitz of Citi.

As the PDUFA date is approaching, could you give us any insight into what the label might ultimately look like? I know that NATPARA was considered an adjunct, you seek to be going more as a hormone replacement, and NATPARA has the presence of a black box for osteosarcoma, but you didn't really have an osteosarcoma experience. So could that black box be removed? Just be curious to hear your thoughts.

I think when we look at the biology and the product design of TransCon PTH, we are providing a stable physiological level of PTH 24 hours a day, seven days a week. We are not providing any hyperphysiological concentration of PTH that can provide to the anabolic effect that, in animal models, have been associated with the osteosarcoma specific to rat models. And from that perspective, we have also received a waiver to not conduct a carcinogenic trial or animal trial. We will not expect and we have not seen any indication in our labels discussion that we will be in the same group of short-acting PTH that basically got the same class labeling, because we are providing a completely different product profile than the short-acting PTHs. So to our best knowledge today and in our discussions, we don't expect any REMS program or any black box warning. So that was your first question. And you're quite right. How we designed TransCon PTH was really to prove a product profile that was reflecting hormone replacement instead of an adjunct. That’s why to be successful in the clinical trial you need to stop 100% from active vitamin D, and you also only need to take calcium supplements that really just reflects a normal multivitamin.

And our next question is coming from Li Watsek of Cantor.

I guess for TransCon PTH, just wondering if you can share some of the latest feedback that your sales team may have received from payors and physicians. And then maybe talk about your latest thoughts on how you might approach pricing and market access?

When I think about the patients and the physicians, the measures have not been different for the latest. Everyone recognizes that hypoparathyroidism is a serious disease, and everyone understands the benefit of replacing a missing hormone with a physiological level 24 hours a day, seven days a week. How it both addresses short-term symptoms, like quality of life, urinary calcium but also the long-term risks. And what we’re seeing is that the awareness of that is being built up much more, along with the awareness of the disease. I believe this is where we come in with our indication, first telling about the disease awareness, which is a big part of what is happening today with all our established infrastructure here in the US. After an approval, we can go out and explain how we can benefit this kind of disease both in the short term and long term. So I really, really feel that we are right. What we did with SKYTROFA is the guidance we always follow with our product. We develop best-in-class products that address real unmet medical needs. And we take a responsible pricing position where we believe if you really develop a product that addresses a real unmet medical need with a real product, that is enough for both the patient, the physician, society, and the payor to share the benefits, because then everyone is a winner, and no one is a loser. And this is where we want to be with each of our products. We need to have them so highly differentiated and addressing a real unmet medical need, and everyone believes it's a win for everyone, and we can see that with TransCon PTH.

Our next question is coming from Paul Choi of Goldman.

I want to ask, given that you're using the same infrastructure to market PTH in the US that you're currently using for SKYTROFA. Are there any learnings that you might share from the launch of SKYTROFA that you think would be applicable, or what changes would you make, I guess, in terms of your thoughts on approaching your payer access and/or contracting compared to SKYTROFA? And then I have a pipeline question as a follow-up.

We are utilizing the same infrastructure. Sure, we have dedicated sales force, we have dedicated people for the two different products. But you know there's a huge difference between being the first product to go out and launch, where you establish all the infrastructure, IT systems, all the different necessary teams that are needed to really launch a commercial product. We have less risk now. We are coming from a stage where we launch and form an already successful status, commercial infrastructure built from Joe and the other people in Princeton here in the US. So what we’re doing is that we are placing what I call TransCon PTH into an infrastructure that already has proven its capability with a product that I believe really addresses a huge unmet medical need where no alternative treatment exists. I think this is a fundamental and huge success.

And then as a follow-up, just in terms of the pipeline. Do you plan to publish the baseline patient characteristics for the 80 children that are being enrolled in the ApproaCH trial? And could you also specify in terms of your oncology program, the head and neck population that you're planning to pursue? Is it just HPV positive or is it post PD-1 and post Erbitux? If you can maybe add a little color on that, that'd be great. Thank you for taking our questions.

I think Stina will take number two, or you can take number one on the question. Let me take number one; it’s a very, very interesting question, because I do not know if the question is really addressing, because I actually think we have published all the demographic data from our patient population that has been into the ACcomplisH trial, the 57 that are still in it. So I am somewhat puzzled with that question, because all data is out. Then you can say, hey, why did you not come in with the analyzed high velocity pre-screening? Because it’s totally irrelevant for the clinical efficacy; you cannot use and analyze high velocity that was collected before they go into the trial, because we have 40% of the channel between two and five, which you look and place nearly normal analyze high velocity. In the first four years, you have a heavily deceleration of analyze high velocity. So if you take and analyze high velocity just collected up to 12 months before they go into a trial, it's not reflecting any meaningful value that go in and compare to the analyze high velocity you compare in this patient group, because they start on the treatment already at two. This is why you do what is standard in drug development; you make a placebo group. This is why you have a placebo group, and I think that's the key element to do, look at our dosing from 6 to 100, and then you can take six like also placebo group and then you can take the six and or the placebo movement into the achondroplasia-specific high efficiency of a matching. They're matching 100%. But comparing this is scientifically nonsensical and only misleading and has not reflective of any kind of solid scientific value in interpolating the data.

In oncology, we are evaluating for proof of concept efficacy in seven different tumor types. You're right, we do have one of our priority areas is head and neck cancer. We are evaluating in first or second line metastatic head and neck cancer as a dose expansion cohort single arm in the IL-βelieγe study, and those patients will have had no more than one line of chemotherapy containing regimen in the advanced metastatic setting. The randomized Phase 2 study, βelieγe-IT-201 study will be in the neoadjuvant setting. So these are patients in a non-metastatic setting before they get surgery; they will get systemic treatment before surgery, and we're looking at the pathologic response as our primary endpoint to look for evidence of proof of concept efficacy.

Our next question is coming from Derek Archila of Wells Fargo.

So just two really quick ones from us. Jan, I just wanted to confirm, I thought I caught you saying that you were in labeling discussions for TransCon PTH. So I just wanted to confirm that. And then also, I guess, when should we expect additional updates from ACcomplisH? Is that something we should see again, first half of this year, second half of this year?

When you go through an approval process, I think for me, it's a sort of planned process, four months before an expected approval date, three months before an expected approval this needs to happen. If anyone has ever been through an approval process, and I think we have 10 weeks before the PDUFA date now. If you haven't started at label discussion, the risk of not getting approval is high. Therefore, I believe this is a way of tracking how we are progressing through the approval process; are we really on track with everything that needs to happen in that expected time? If that’s not happening, I will be extremely worried and find out what is going on. Yes, we are in a labeling discussion because you should be that at least three months before an expected approval. This is why I feel that I have not seen anything that doesn't give me a belief that TransCon PTH isn’t a product that is approved. I believe—I cannot really remember all our corporate milestones now. Sorry for that, because that's a little bit too many of them. But I believe that is in Q4 we will give you an update again related to that 57 patients that will come out from the ACcomplisH trial. So it will be in the second half of this year.

The next question is coming from Josh Schimmer of Evercore.

First on SKYTROFA. Could you elaborate a little further on what you're seeing in terms of daily growth hormone options being withdrawn from the market? I know there have been some reported shortages, but it didn't realize that reflected the outfall withdrawals. So who have you seen withdrawing and do you expect others to follow? And then how do you anticipate the impact of Novo Nordisk potentially launching a once a week growth hormone option as well in the market later this year?

Let me start first on the daily growth hormone, because I believe that is a textbook example. The daily growth hormone market was the first I got a biosimilar, where Sandoz and Teva entered with their bioequivalent version on it. Sandoz had six players in this daily market segment, all of them providing exactly the same entity, the same treatment. So you could change this back and forth between the product depending on rebate and other things like that that were different in formulation and devices and other things like that. What we saw for about three or four years when they came out with our Phase 2 data, we saw already that some of the big players were starting to reconsider how to really play it when a superior treatment entered this segment. And that was after our Phase 2 data. At that time, we already saw three of the companies basically removing their sales forces; this is step one, as I call it. You remove the sales force. The second step is that you go to the next stage, you remove the product, and then you stop manufacturing, which I think three or four of them have done now. What happens in setting up for the patient now is that it looks like a normal audience when patients have shown multiple products and multiple presentations of their growth hormone. Because that consolidation of the daily growth hormone is happening, I believe none of the other ones could take over. You see a shortage of growth hormone treatment in the US. And sure, I need to accept that the benefit of that is a great thing for us, because it's both accelerating at the same time where people really see the benefits and get clinical experience of how we differentiate ourselves, having patients for one year or something on treatment. So they really, really see this benefit. I think this is a great thing for us, and we’re really hopeful we can help as many patients as possible to avoid going into a shortage of the treatment effect. Your second question?

Actually, I was going to ask whether, given your view of the differentiation of TransCon CNP, if you’d considered filing for breakthrough designation?

Yes. First of all, Josh, you also have the question reflecting about the potential entrants of Novo Nordisk's long-acting product. When I look at the paradigm shift, I call it a paradigm shift because it comes from the time where all the daily growth hormone were identical, the same treatment, the same mode of action. When you go over to the long-acting, all of them are providing completely different clinical profiles. They're the only ones that really match an improved version of the daily growth hormone where you gain all the endocrine benefits, both related to changing not only linear growth in the periodic setting but also the other associated endocrine benefits like body composition, metabolic profile, lipid levels, cognitive effects, and everything that you see, because we have the same unmodified somatropin molecule. So this is why it's also important for us to look at our Phase 3 in adult growth hormone deficiency, because the two other potential long-acting products, we believe there’s potential for one less of them now, but they basic showed not any improvement on body composition in their phase 3 trial. Novo Nordisk showed they can only get half of the stake with their daily growth hormone. We believe that with our unmodified somatropin potential, we will be at least as good as daily growth hormone. So we believe that our product profile is so highly differentiated from both daily growth hormone and other long-acting growth hormone that we will always provide a clinical benefit compared to all other treatment regimes.

Our next question is coming from Leland Gershell of Oppenheimer.

Two from me. Jan, I know you had responded earlier that you don't expect a REMS or black box warning on the PTH label. But could you comment on any potential for monitoring requirements with patients on the product?

That is a question where you will say will be provide a beta stability for this patient group than they have in the current setup, where they are basically being monitored for calcium really, really, really often. I believe you will see it in different stages. I believe when you transition over from what we call the conventional part of therapy over to TransCon PTH, I think that will be at least the same kind of monitoring because you want to be quite sure you stabilize the patient in the right manner. When they are stable, which we see after one to two years on a PTH dose, we see more and more stability coming in because calcium metabolic system or calcium hemostasis is starting to be stabilized. I will pretend to see from a patient perspective that you potentially will need less monitoring. I think this is where I believe that elements like serum calcium are not typically something you will analyze for any patient group in this way. What we have seen in our clinical study where patients are now for over three, four years, we are basically seeing that we normalize more and more every parameter, and that includes both bone density and bone markers. So I will not expect that it will be part of standard monitoring.

And second question from me is with respect to achondroplasia. Obviously, the primary endpoint for regulatory purposes is about height velocity. But as you had mentioned earlier, there are many other benefits that a replacement CNP could provide. Could you just inform us as to which of the other benefits that may not be captured by primary endpoint data but would be very important, seen as most important by the achondroplasia community?

Yes, I think this is why we are developing TransCon CNP. We really are developing it to provide a treatment that sure addresses linear growth, but we can combine it with SKYTROFA, and then I can—from a clinical concept, I will expect nearly you can decide what kind of linear growth you will have. But what we really want to ensure is that we are addressing the underlying comorbidities of the patient. How we are measuring them is to have specific achondroplasia-specific comorbidities. These are comorbidities that come and are reported with high frequency from patients with achondroplasia. We see massive changes in how they function, their ability to balance, do normal work, and other aspects of daily life. This is all those elements we will try to capture. At the same time, we will capture the specific expectations from the patient with achondroplasia.

Our next question is coming from Andreas Argyrides from Wedbush.

When considering the launch opportunity for PTH, how do you view it in comparison to the NATPARA launch? Additionally, can you share how NATPARA's exit from the market at the end of 2023 shapes your expectations for this launch? I also have a follow-up question.

I'm not comparing TransCon PTH in any way to NATPARA. It will have a completely different labeling, have completely different clinical outcomes, and have a completely different clinical benefit. So I'm not using that as a benchmark for anything. I'm not comparing that. It was a product that came out with labeling as an adjunct; this is not what we’re addressing. It was a product that came out not seeing benefit on quality of life, and it was a product that came out not showing any benefit on 24-hour urinary calcium, nor really addressing the underlying disease. So I don't use that as a benchmark; it's completely meaningless for me.

I guess maybe the opportunity that there's no approved product on the market, there were some patients, mostly in Europe as well, that were still on it or they had access to it no longer. Are those going to be early adopters?

Yes, I think actually—this is exactly as somebody addressed before. Yes, those are patients that have been exposed to short-acting PTH treatment. They are used to daily injections and other elements like that. But where we see the huge benefit is independent of the background of the patients. I don't believe there is a less need for a patient to get on TransCon PTH treatment if you come from the group that has been on short-acting PTH or have never seen short-acting PTH. The patients that have been on short-acting PTH may have a more common understanding of the daily injection, but I don't believe that it’s a big barrier for any of the groups.

And then just a quick one on SKYTROFA, and maybe you can elaborate—I don't know if you've covered this already, sorry if you did and I missed it—but if you can elaborate on the launch dynamics that are driving growth. Are you seeing higher switch rates from daily growth hormone? And that's it for me. Thanks, guys.

We see not only a higher switch rate from daily growth hormone, but we’re also seeing an increased number of new patients coming on the treatment. But the overall number goes up everywhere. So it's not likely that one is getting less, both of them are improving to a really, really new height all the time.

And our next question is coming from Yaron Werber of Cowen.

Jan, I have two interrelated questions on more coverage. With PTH coming soon, there isn't really a competitor. Do you need to contract or will you contract with PBMs to get on formulary? Maybe kind of talk about your thoughts there; obviously, the discounting shouldn't be very high at that point. And then secondly, now that you'll have a second program, second product approved, sort of within the endocrine bag, does it give you more leverage to negotiate better for placement for SKYTROFA?

We know really comments about how our market access strategy is and will be, and how we are really addressing the reimbursement system in the US. But for your information, when we always look at a product, because you can do the same thing, I can give you names of products in the US that are in a position to generate multibillion in revenue in the US without providing high rebates. I think we will follow this pathway, because we are providing such a benefit to the patient, the physician, and the society that we feel this is a way we will continue our market access strategy. Compared to SKYTROFA, we are actually pretty satisfied with our coverage. We believe the strength of the product and the differentiation don't really lead us to provide a highly rebated product. I think that is the strength of having a highly differentiated product.

Thank you. That’s all the time that we have for today. Thank you for joining the conference call. You all have a good evening.

Thank you.

Thank you so much. See you.