Scott Smith - CFO Jan Mikkelsen - President and CEO Jonathan Leff - Chief Medical Officer.

Joseph Schwartz - Leerink Partners.

Good day ladies and gentlemen, and welcome to the First Quarter 2018, Ascendis Pharma Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I'd now like to introduce your host for today's conference, Mr. Scott Smith, Chief Financial Officer. Sir you may begin..

Thank you, operator. Thank you everyone for joining our first quarter 2018 financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me on today's call are Jan Mikkelsen, President and Chief Executive Officer, and Dr. Jonathan Leff, Chief Medical Officer.

Before we begin, I would like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the Safe Harbor provided by the Private Securities Litigation Reform Act.

Examples of such statements may include but are not limited to our progress on our pipeline candidates and our expectations with respect to their continued progress.

Statements regarding our strategic plans, our goals regarding our clinical pipeline of rare disease endocrinology programs, statements regarding the market potential of our pipeline candidates and statements regarding the planned regulatory filings. These statements are based on information that is available to us today.

Actual results or events could differ materially from those in the forward-looking statements and we may not achieve our goals to carry out our plans or intentions or meet the expectations or projections disclosed in our forward-looking statements and you should not place undue reliance on these statements.

Our forward-looking statements do not reflect the potential impact of any licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. We assume no obligation to update these statements as circumstances change except as required by law.

For additional information concerning the factors that could cause actual results to differ materially, please see the forward-looking statements section in today's press release in the Risk Factors section of our annual report on Form 20-F filed on March 28, 2018.

On today's call, we will discuss our first quarter 2018 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Jan Mikkelsen, our President and Chief Executive Officer.

Jan?.

Thanks Scott and good afternoon. My introduction today will summarize the excellent progress we are making across our rare disease endocrinology pipeline. And then, I will discuss some reflection related to why TransCon PTH has the potential to be the first true PTH replacement therapy.

We have now three product candidates in clinical development, all of which will have significant clinical milestones in the next 12 months. For our most advanced candidate, TransCon Growth Hormone, the Phase 3 program continues with three trials ongoing and top-line results expected for the pivotal heiGHt trial in the first quarter of 2019.

Our next program, TransCon PTH has highlighted again that we can translate positive preclinical results into successful clinical data reinforcing the target product profile. Supported by this positive Phase 1 data, TransCon PTH is proceeding towards a planned Phase 3 in this agent in Q1 2019 pending discussion with regulatory agencies.

Also, we recently began dosing subject for our third endocrinology candidate TransCon CNP with a goal of top-line Phase 1 results in the fourth quarter of this year.

For this program, we plan to repeat what we observed in preclinical studies and show that TransCon CNP can deliver an effective therapy through continuous CNP exposure without dose limiting cardiovascular side effects and with a once weekly demonstration. With these three candidates, we have built a diversified rare disease endocrinology pipeline.

We intent to further expand this franchise by label expansion beyond the three initial indications. On this call, I would like to reflect on why Ascendis is positioned to create the first true PTH replacement therapy, one that could offer patients a treatment to more fully address all aspects of the disease.

Our development process start by identifying the unmet medical need. In this case, there are around 200,000 [ph] patients worldwide with hypoparathyroidism, around 80,000 are in the United States. Patients suffer diverse range of both short and long-term symptoms. The short-term symptoms can include muscle cramps, seizure, and altered mental state.

Despite currently available therapies, the majority of patients still experience these severe symptoms and reduced quality of life. Over the long-term, patients have additional complications such as tissue calcification and abnormal bone turnover. Of specific concerns are the four-fold increased risk of renal disease compared to healthy controls.

Again, this is despite currently available treatments. The economic burden of hypoparathyroidism is also high. Studies of patients in the U.S. show 79% of patients require hospital stays or ER visits. 85% are unable to perform household duties, 20% have disease-related change in employment.

Clinical research conducted by NIH and other group has demonstrated the benefit of giving PTH 1-34 as subcutaneous infusion by insulin pump in patients with hypoparathyroidism. This PTH 1-34 infusion provided the closest approach to a physiological replacement therapy to-date.

The underlying product concept of TransCon PTH is to reproduce basic biology. The goal is simply replace the missing hormone, provide the right concentration of the hormone in the blood 24 hours a day. By fulfilling these two elements, we believe we can restore normal biological function.

We know the strategy of replacement therapy works with high success when treatments are based on the replacement of the identical compound such as daily growth hormone and insulin. To realize our TransCon PTH product candidate, we looked in our extensive library of TransCon linkers and carriers.

We selected a combination that can deliver sustained level of PTH 1-34 over 24 hours a day with a flat, steady state exposure within the normal physiological trends. Another question we often asked is can others match our TransCon PTH target product profile.

Without the TransCon platform, we believe it would be extremely difficult to develop a product, providing the same physiological PTH replacement therapy. For TransCon PTH, we have established a simple and clear scientific rationale and product design.

With each profile, we believe it can become a new standard of care for patients with hypoparathyroidism. Finally, we believe our TransCon PTH is supported by an established regulatory pathway where extensive experience with PTH 1-34 and PTH 1-84 should enable their management from Phase 1 to Phase 3.

We are planning to initiate a Phase 3 program in the first quarter of 2019. We are executing on all fronts according to our goals and timelines. The Phase 1 trial is now completed. The preclinical safety program to support Phase 3 indication is being finalized and Phase 3 manufacturing at commercial scale is in place.

We have also developed a simple and easy to use pen device for use in the Phase 3 program. We continue to believe that there remains a significant unmet medical need and opportunity for us with a differentiated PTH replacement therapy. Our approach for product development reflects our core values a cornerstone with the science.

Finally, our platform and product development and commitment provide long-term sustainability by supporting a steady stream of product candidate across multiple therapeutic areas. Finally, I would also like to welcome Tom Larson, who joined Ascendis as Chief Commercial Officer in April.

Tom has a broad commercial background and he is heading us and leading us towards commercialization, our internal strategic goals. Now Jonathan will review our clinical progress..

Thanks Jan. The first quarter has been highly productive for our pipeline and we now have three rare disease endocrinology candidates in clinical trials. We are on track with all of our clinical milestones. Let me summarize our progress starting with TransCon growth hormone.

Early in the first quarter, we wrapped up recruitment of the heiGHt trial exceeding our target enrollment with final randomization of 161 subjects. The expanded enrollment further strengthens the statistical power of the trial to demonstrate non-inferiority of TransCon growth hormone to a daily growth hormone.

As noted in today's press release, the observed aggregate data from the heiGHt trial continued to demonstrate a safety profile consistent with the reported safety profile of the active comparator, Genotropin. In other words, there have been no unusual safety findings to-date and our trial continues as planned.

Our fliGHt trial is actively enrolling subjects and has been picking up steam.

You'll recall that fliGHt evaluates TransCon growth hormone in subjects who switch from daily growth hormone providing more data on the safety and tolerability of TransCon growth hormone administered weekly as well as providing physicians real-world evidence on how to switch existing patients onto long acting growth hormone therapy.

We currently have around 25 sites mainly in the U.S. nearly all of whom participated in our heiGHt trial. We are pleased with the response to fliGHt indicating interest on the part of patients and investigators to switch from daily to weekly growth hormone. fliGHt also enlarges our safety package with TransCon growth hormone.

We are on track with our goal to complete enrollment of 150 subjects during the third quarter of this year. Additionally, we have been successfully rolling over the initial group of subjects from heiGHt sites to the enliGHten trial, our long-term extension study.

This trial is designed to add insights on the long-term efficacy and safety of TransCon growth hormone further enhancing the safety and efficacy package to support our future BLA filing. We continue to be pleased with the clinical progress of our Phase 3 program for TransCon growth hormone.

Our TransCon PTH program has also made exciting progress this year. We are pleased to have now completed the Phase 1 trial in healthy adults. We recently reported results of the final multiple ascending dose cohorts that the European Congress of Endocrinology.

These results continue to support our target product profile and indicate the pharmacokinetic and pharmacodynamic effects of TransCon PTH, which are consistent with our modeling and preclinical data. As a recap, we conducted seven single ascending dose and six multiple ascending dose cohorts in the Phase 1 trial.

Data from the final cohorts continue to show those dependent increases in serum calcium and effects on endogenous PTH 1-84, an indicator of biological activity. As we reported, these serum calcium effect show low intersubject variability suggesting the ability to titrate patients with hypoparathyroidism into the normal calcium range.

With the recent MAD data, we will be able to determine the clinical starting dose and the range of clinical doses in our Phase 3 program. The adverse effects leading to the maximum tolerated dose reflect known PTH pharmacology and TransCon PTH was generally well tolerated across the likely clinical does range.

Combined with a flat steady state PK profile within the physiological normal range, our results support the potential of this candidate as a true replacement therapy one that can restore PTH to physiological levels for 24 hours a day and more fully address all aspects of the disease than current therapies do.

One example of these broader effects is the potential for TransCon PTH to control urinary calcium supported by data from the SAD cohorts that suggested normal renal calcium handling and reabsorption.

Over the coming weeks, we will complete the full bio-analytical analysis of data from the Phase 1 trial including bone marker data and analysis of secondary measures such as phosphate levels and immunogenicity.

We plan to present a detailed data package to the medical community at the American Society of Bone and Mineral Research Conference in September. This is a leading U.S. conference for physicians who manage patients with hypoparathyroidism.

Separately we are working diligently on preparations to move into a Phase 3 program together with an easy to use pen device in the first quarter of 2019. We recently held an advisory board of experts who provided helpful input on the product development path with their feedback in mind.

We are preparing to discuss the program in our proposed Phase 3 plan with regulatory agencies. Now that we have shown our preclinical data translated well into clinical results and the clinical profile has fulfilled expectations, we remain confident in this goal and our planned next steps.

Turning to the CNP program, another exciting recent development was initiation of dosing for the TransCon CNP Phase 1 trial. TransCon CNP is our third endocrinology pipeline candidate in the clinic undervaluation as a potential therapeutic option for achondroplasia and related skeletal disorders.

The Phase 1 trial will evaluate safety, tolerability and pharmacokinetics with top-line data anticipated by the fourth quarter of 2018. We believe our TransCon technology can enable continuous exposure to CNP at levels that optimize efficacy without adverse cardiovascular effects with a convenient once weekly dose.

Our preclinical results and model CMAX strongly support this profile. Now we look forward to the data from our Phase 1 trial to confirm this profile in healthy volunteers so that we can proceed into an efficacy study in achondroplasia subjects plan to begin next year.

We recently listened with interest to the FDA Advisory Committee meeting that discussed drug development for the treatment of children with achondroplasia. The discussion of clinically meaningful endpoints was in line with our internal views and it will help further inform planning for our TransCon CNP program.

With no FDA approved treatments available achondroplasia remains a significant unmet need. Our pipeline of product candidates for rare endocrine diseases is advancing toward important milestones each step moving them closer to patients. It's an exciting and dynamic time at Ascendis Pharma. Now Scott will provide a financial update..

Thanks Jonathan. Turning to our financial results for the three months ended March 31, 2018, let me review some highlights. For the first quarter, we reported a net loss of €41.4 million or €1.07 per basic and diluted share compared to a net loss of €25.1 million or €0.78 per basic and diluted share during the same period in 2017.

The first quarter 2018 net loss included an unrealized €7 million finance expense due to foreign currency exchange rate fluctuations of our cash holdings. Research and Development costs for the first quarter were €30.5 million compared to €20.6 million during the 2017 quarter.

The higher costs were primarily attributable to, for TransCon growth hormone, continued execution and expansion of our Phase 3 clinical program including the heiGHt, fliGHt and enliGHten trials in the ongoing development of the auto-injector and cost associated with our Phase 3 program clinical supply and initiation of the manufacturing of TransCon PTH validation batches.

These batches are required as part of the regulatory approval process and will be recognized as R&D cost when incurred. However, they go into inventory and may be used for either clinical trial supply or upon approval for commercial sale.

For TransCon PTH costs related to the Phase 1 clinical trial and activities related to Phase 3 initiation including manufacturing and device development. And for TransCon CNP costs associated with preparation of the Phase 1 trial an ongoing Phase 2 enabling activities.

General and administrative expenses for the first quarter of 2018 were €4.7 million compared to €3.3 million during the first quarter of 2017. We ended the first quarter with cash and cash equivalents of €348.4 million and 41,523,765 ordinary shares outstanding, which includes the February 2018 public offering.

We expected the increase in R&D cost to continue throughout the remainder of 2018 as we advance our wholly-owned internal pipeline programs and invest in the TransCon technology platform.

R&D will include the TransCon growth hormone, cost associated with our Phase 3 program in manufacturing our validation batches as well as development and manufacturing of the auto-injector. For TransCon PTH, Phase 3 enabling activities including non-clinical tox, manufacturing regulatory and device development activities.

And finally, for TransCon CNP, cost associated with the ongoing Phase 1 trial and Phase 2 enabling activities including non-clinical toxin manufacturing. We believe Ascendis is very well positioned with three wholly-owned rare disease endocrinology products in clinical development each representing a market opportunity greater than $1 billion.

We plan to continue to create opportunities as we apply our innovative TransCon technology and algorithm across other therapeutic areas. Operator, we are now ready to take questions..

Thank you. [Operator Instructions] Our first question comes from Jessica Fye with JPMorgan. Your line is now open..

Hi. This is [Hugo] [ph] on the call for Jessica. Thank you for taking our questions.

For TransCon CNP, do you think we could get insight into whether TransCon CNP would have lower rates of hypotension with the top-line data in 4Q? And then, also as we think about the potential for TransCon to expand into new therapeutic verticals, were there disease areas that lend themselves more or less to the long-acting approach?.

Hi, Hugo. It's Jonathan. Thanks for the questions. Yes. I think we can very clearly establish the lack of hypotension in the Phase 1 volunteer study. We will push to relatively high doses. Notably, we've been unable to cause hypotension in our preclinical models and we fully expect that we will reproduce that finding in the Phase 1 study.

So we should pretty clearly be able to demonstrate that. As far as other therapeutic indications, hypochondroplasia comes to mind but there's a whole host of other FGFR3 and R2 related disorders any one of which would lend themselves to a once-weekly therapy over a daily therapy, so scientifically there's a lot of rationale for multiple diseases..

Thank you..

Thank you. [Operator Instructions] Our next question comes from Joseph Schwartz with Leerink Partners. Your line is now open..

Great. Thanks very much. Congrats on the progress. I was wondering if you could talk a little bit more about your takeaways from the Adcom on achondroplasia. I think the panelists were asked to vote on things like the evidence required to establish a dose response, study design, and duration, and the like endpoints and things like that.

I was just wondering if you could talk a little bit about those things and how they might impact your strategy, if at all..

Thanks Joe. It's Jonathan here. So we were very interested obviously in the advisory committee. I don't think there were any terrific surprises.

We were really pleased that they like us are very focused on what are the clinically meaningful endpoints in this population whereas there was a lot of support for heiGHt as an endpoint that's validated and easy to measure. We certainly can do that.

But we are far more interested in other meaningful endpoints such as proportionality and others maybe even radiographic endpoints. And I think there was a general interest from the panel in all of those things and it really aligns with what our thinking has been all along.

It's not about just heiGHt, it's obviously about the comorbidities and making a clinically important impact in this disease and intervening as young as you possibly can because the benefits are going to accrue much, much higher, the earlier you intervene. And I think there was general support for that approach..

Okay. Great, thanks.

And then, on TransCon PTH, do you think there's any way that you can improve the dosing schedule to once weekly, so that it could have a more patient friendly administration than once daily subcutaneous injections like Natpara?.

Joe, this is a great question and it's something we've had a lot of thought about when we made the initial target product profile.

But what we actually considered at that time was that we will prefer that daily dosing profile because at that way we can have the most optimal way to titrate each single patient to the optimal dose in the fastest possible way.

We see the once weekly dosing profile as a potential way where we can go into lifecycle management and patient that now is stabilized on the right PTH concentration, potentially we would see it as a way to transfer them over to a once weekly dosing profile.

But what we are addressing in this product opportunity is really what I call having a highly effective compound that really can give a true replacement therapy in this patient population, really, really addressing what I call all aspects of the disease specific element like [Technical Difficulty]..

And dose ranging for Natpara was pretty challenging because there were episodes of hypoparathyroidism and hyperparathyroidism. How do you expect that to compare for TransCon PTH given the longer half-life.

Is it [Technical Difficulty]?.

I think Joe, the fundamental is when we see this product opportunity, it goes to back what we thought two techniques to be fulfilled in what I call in a true replacement therapy. Point one is that you need to give back to the patient the right product they're missing, which are reflecting the natural counterpart in the body.

But what is also extremely important is that you give it in the right PK profile, and you only can have the right and optimal placement therapy when both of these are fulfilled.

So, if for example, not enough just to give back PTH 1-84 as Natpara, you also need to ensure it's been giving back in the right PK profile that they are providing PKs always in the physiological level 24 hours a day. And therefore, I’ll say you need to combine the true element to having a true replacement therapy..

Thanks for taking my questions..

Thank you. I'm not showing any further questions at this time..

Thanks everyone for joining us on the call today. See you, bye-bye..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone have a great day..