Scott Smith - Chief Financial Officer Jan Mikkelsen - President and Chief Executive Officer Jonathan Leff - Chief Medical Officer.

Jessica Fye - JPMorgan Michelle Gilson - Canaccord Genuity Neil Carnahan - Stifel Nick Abbott - Wells Fargo Securities.

Good day ladies and gentlemen, and welcome to the Ascendis Pharma Second Quarter 2018 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, Scott Smith, Chief Financial Officer. Sir you may begin..

Thank you, operator. Thank you everyone for joining our second 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 second 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. In this quarter, we continued to execute on our strategic goals advancing towards our vision to build a fully integrated biopharma company. For TransCon Growth Hormone, we are completing enrollment in the fliGHt trial. And our heiGHt trial is progressing as planned towards top-line Phase 3 results expected in Q1 2019.

For TransCon PTH, we have completed the Phase 1 study and recently outlined a change in the development program. This involves a Phase 2 trial with a planned long-term extension and an expansion of the Phase 3 program to a global pivotal trial, incorporating trial site in Japan and possible other Asian countries.

Our updated plan is based on an analysis of how to strengthen the product profile. Initial feedback from FDA, how to reduce development risk and the [relation][ph] of the market potential for TransCon PTH in Asia.

In the Phase 2 trial, we plan to measure not only PK and PD of different fixed doses of TransCon PTH in adult patient with hypoparathyroidism. But also add titration schedule, designed to completely discontinue activated vitamin D and calcium supplements.

We believe that TransCon PTH also has the potential to address a large market in the Asian countries. In Japan alone, our research indicates that they are more than 30,000 patients with hypoparathyroidism, therefore, we plan to conduct a global Phase 3 trial incorporating sites in Japan and possible other Asian countries.

We believe this new approach will accelerate the regulatory findings in the Asian market by several years thereby broadened [indiscernible] market potential while only moving back our U.S. filing by less than 1.

We believe our new plan also reduce development risk for the TransCon PTH development program by testing the proposed of titration protocol before Phase 3 mutation and providing additional guidance for our Phase 3 power calculation.

With this updated development strategy, we believe we have strengthened the commercial product, we can collect and learn from long-term extension data, potential to improve the label, decrease development risk and potential to broaden the commercial opportunity via geographic expansion.

For our last product opportunity, for TransCon CNP, we are moving through the Phase 1 study, which we plan to complete as planned in the fourth quarter of this year. Now, I would like to focus on our growth strategy and reflect on how Ascendis plan to create sustainable growth as our company matures.

Our vision is to create a biopharma company with several therapeutic areas each containing multiple independent products created by our technology platform and not to establish Ascendis as a one trick pony with a single product. We have a built a pipeline of three independent product opportunities in endocrinology rare disease.

All three of these wholly-owned product candidates have the opportunity to provide sustainable growth through label expansion. We are also planning to create further growth by building new therapeutic areas outside of endocrinology rare disease. Each of these new therapeutic areas will contain multiple independent product opportunities.

Why do we believe we have a strong fundamental for sustainable growth? We have a unique technology platform, which can continue to deliver innovation and thus not currently face significant competition. We continue to advance the TransCon technology and also to expand the platform to new areas such as localized delivery.

Over the last several years, our platform has evolved from systemic delivery of an unmodified parent drug such as with TransCon Growth Hormone, TransCon PTH and TransCon CNP to also include localized delivery of an unmodified parent drug tailor-made for specific unmet medical need.

Our TransCon platform localized delivery capabilities have been developed through both internal research efforts and our Roche Genentech ophthalmology collaboration, and believe our localized delivery platform has now reached a stage where it can be applied across different therapeutic areas and we are investigating these as we continue expanding our pipeline.

In addition, we have a strong culture of innovation one that values science and drives our product development efforts. We have already applied this mindset and expertise to build our pipeline of three independent product candidates in endocrinology rare disease.

By combining these essential fundamentals, our unique technology platform and culture of innovation, we expect to grow through a consistent stream of high value differentiated product opportunity as our company matures as a leading biopharma company.

Another driver of sustainable growth and value creation at Ascendis is our plan to be -- to become fully integrated. It is logical that before integrating endocrinology rare disease as a commercial company because we can realize strong synergies by having multiple products in a single therapeutic area.

We are already making important progress towards this objective by the strategy of initial commercial team led by Tom Larson.

They are undertaking important projects to get a deep understanding of the market dynamics for each of our product candidate including physician, patient and market access results that will help refine future product positioning. Our goal is to build multiple independent therapeutic areas each with a diversified pipeline.

We have built our first pipeline in endocrinology rare disease, a pipeline that is diverse and present multiple potential label expansion opportunity to support further growth. Now, we intend to put in place an additional source of growth with a pipeline in a new therapeutic area.

We expect to disclose this next therapeutic area at the beginning of next year. We believe this approach with our technology platform and a culture of innovation at the core can successfully create sustainable long-term growth. Now, Jonathan will review our clinical products..

Thanks Jan. I'm pleased to provide an update today on recent pipeline developments starting with TransCon growth hormone. We are completing enrollment in our fliGHt or switch trial in the coming weeks. As a reminder fliGHt is enrolling subjects who switch from daily growth hormone to weekly TransCon growth hormone with a follow-up of six months.

Results from the trial will strength our safety data base and provide guidance for switching from daily to weekly growth hormone. Subjects are then provided the opportunity to roll into enliGHten our long-term extension trial. In fliGHt, we have enrolled some subjects below three years of age.

This will provide information on utilization of TransCon growth hormone in patients younger then those enrolled in the heiGHt trial. In parallel, our ongoing Phase 3 heiGHt trial continues as planned. To-date all subjects completing the 12-month heiGHt trial have chosen to enter the enliGHten long-term extension.

We now have many dozens of subjects in enliGHten, data from which we be a key component of our filing package. Finally, we continue to work towards building awareness of our program among the pediatric endocrine community. Next month we are participating in two medical conferences.

We are a proud supporter of the growth hormone research society conference, the gathering of top opinion leaders and scientists in the field. And we plan to present two abstracts on our program at the European Society of Pediatric Endocrinology meeting.

We are happy with progress of our TransCon growth hormone program and increasingly excited about the prospects of a once weekly product that importantly can provide the same efficacy, safety and tolerability as daily growth hormone. Turning now to TransCon PTH, we are making progress on both the clinical and regulatory fronts.

We have recently provided an update on the PTH development program following our ongoing review of the clinical commercial and regulatory landscape. We now plan to conduct a randomized placebo controlled Phase 2 trial to be initiated in the first quarter of 2019. The trial will follow subjects for approximately four weeks of treatments.

We will evaluate pharmacokinetics as well as serum and urinary calcium levels in subjects with hypoparathyroidism treated with different fixed dosing regimens of TransCon PTH. We will also assess the ability to down titrate calcium and active vitamin D supplementation. Following the trial, subjects may then enter into a long-term extension trial.

We will also investigate patient reported outcomes with a goal to incorporate those measures into our pivotal trial. We expect top-line data from the Phase 2 trial in early 2020.

With this updated development strategy, we believe we are strengthening the clinical program and paving the way for a broader commercial opportunity and potential benefit to more patients with hypoparathyroidism. Finally, we continue to communicate the potential of TransCon PTH through our ongoing communications to the medical community.

We intend to present data at the American Society of Bone and Mineral Research conference in late September. This will include a poster presentation on the final results of the Phase 1 trial, summarizing data from the full set of MDA cohorts as well as a second poster on bone turnover markers from the Phase 1 trial.

Our TransCon CNP program is also progressing and recruiting continues for the ongoing Phase 1 trial. We are now dosing the second to last cohort and we are on target with our plan to complete the trial during the fourth quarter of 2018.

As a reminder, this trial is evaluating safety, tolerability and pharmacokinetics of TransCon CNP in healthy volunteers. Our goal is to demonstrate that we can achieve continuous exposure to CNP at levels designed to optimize efficacy without adverse cardiovascular effects with a convenient once weekly dose.

In particular, we are looking to evaluate the cardiovascular risk profile. Our planning for initiation of a natural history study in achondroplasia is also well underway with the goal of trial initiation this year. We believe this trial which will take place both in the U.S.

and Europe, could help to enhance enrollment of future proof of concept studies in subjects with achondroplasia.

We are excited about all three of our wholly-owned product candidates for rare endocrine diseases, each one continues to advance as we move forward with our clinical programs paving the way to offer patients and physicians new and differentiated therapies. Now, Scott will provide a financial update..

Thank you, Jonathan. Turning to our financial results for the three months ended June 30, 2018, let me review some highlights. For the second quarter, we reported a net loss of €22.8 million or €0.55 per basic and diluted share compared to a net loss of €30.7 million or €0.94 per basic and diluted share during the same period in 2017.

The second quarter 2018 results reflect financial income of €22.6 million due to foreign currency exchange rate fluctuations of our cash holdings. Research and development cost for the second quarter were €40.2 million compared to €21.9 million during the 2017 quarter.

The higher cost were primarily attributable to or TransCon growth hormone continued execution and expansion of our Phase 3 clinical program including the heiGHt, fliGHt and enliGHten trials and the ongoing developments of the auto injector; cost associated with our Phase 3 program clinical supplies, and ongoing preparation of the manufacturing of TransCon growth hormone 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 maybe used for either clinical trial supply or upon approval for commercial sale.

For TransCon PTH, cost related to the Phase 1 clinical trial and Phase 3 enabling activities including manufacturing and device development and for TransCon CNP, cost associated with the execution of the Phase 1 trial and ongoing Phase 2 enabling activities.

General and administrative expenses for the second quarter of 2018 were €5.2 million compared to €3.2 million during the second quarter of 2017. We ended the second quarter with cash and cash equivalents of €352.6 million and 41,841,590 ordinary shares outstanding.

We expect the increase in R&D cost to continue through out the remainder of 2018 as we advance our wholly-owned internal pipeline program and invest in the TransCon technology platforms.

R&D is expected to include our TransCon Growth Hormone, cost associated with our Phase 3 program and manufacturing of validation batches as well as development and manufacturing of the auto injector will be used for administration.

For TransCon PTH, ongoing IND enabling activities including non-clinical tox, manufacturing of clinical supply and validation batches regulatory and device development activities as well as preparation for the initiation of our Phase 2 clinical trial.

And finally, for TransCon CNP, cost associated with the ongoing Phase 1 trial and Phase 2 enabling activities including non-clinical toxin manufacturing.

Our pipeline continues to advance with three wholly-owned independent rare disease endocrinology product candidates in clinical development, each are presenting a potential worldwide market opportunity greater than $1 billion.

We plan to continue to create long-term sustainable growth as we apply our innovative TransCon technology and product development algorithm in other therapeutic areas. Operator, we are now ready to take questions..

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

Hey, guys. Good afternoon. And thanks for taking my questions. Couple for me, first, with respect to the new therapeutic area that will be disclosed at the beginning of next year.

Can you provide a bit of a framework about what that disclosure might look like and how many preclinical programs we might hear about with that initial disclosure? I'm also wondering if you could elaborate on your comments around leveraging the TransCon platform for localized delivery.

And lastly, can you talk about the status of completing the manufacturing of validation batches for TransCon GH?.

Thanks, Jess. Some really good questions. I hope I can answer most of them. One of the questions has been how do we really select a new therapeutic area? And one of the element of Ascendis Pharma always to have a strong focus on the patient. So we start by really looking on where do we have a major unmet medical need as for the fundamentals.

Then we see, how can we build up a pipeline of multiple product opportunities where we can balance the risk profile, high risk, low risk meaning that we also like to use parent drugs already with its status proven efficacy and safety.

Then, we integrate this element together and see we can make a highly differentiated product opportunity, which are basic and really impossible for anyone else to develop.

And what is the uniqueness we have now is that you have seen how we have enabled the soluble products, this is what we call product like TransCon Growth Hormone, TransCon PTH and CNP and now I'll be adding one more arm of our technology platform where we can make localized delivery of protein, peptides and small molecule and we actually have now starting to set the stage up to even more than a half year where we can see with these profiles of active drugs.

And by doing that, we actually have been through a lot of different therapeutic areas and we have now selected one where we’re starting to execute and making what I call proof of concept of the entire use of the TransCon technology to this specific area and what we would like to disclose at this time when we come to the early part of next year, the rationale for why we select this area, how we see a huge opportunity to address major unmet medical need and how we at Ascendis can really develop a pipeline of highly differentiated product opportunities will be nearly impossible for anyone else to develop.

That is the data we would like to show you from the beginning. That was one question. The other question you asked me was related to the validation batches from growth hormone.

And the validation batches from growth hormone is progressing according to our plans, nothing is basic more to say that it's an activity that we initiated for -- 18 months ago now. So we really just progressing to the entire supply chain of really doing the right in each single step for every process control.

Did I miss any questions?.

Thanks Jan.

So just to clarify -- are the -- is the new therapeutic area that you'll disclose going to be using this localized delivery approach or are those two kind of distinct priorities?.

I think they will be likely that you building up a pipeline where we apply the two arms of our TransCon technology potential synergy, but also in a position that this will give us an unique opportunity, so only to apply and develop completely from profiles of product opportunities that we didn't have an opportunity before..

Okay.

So is that to say that for some products within the new therapeutic vertical they might use the local delivery and some may use systemic delivery?.

Yes. That would be potentially the case..

Okay. Thank you..

Thank you. And our next question comes from the line of Michelle Gilson with Canaccord Genuity. Your line is now open..

Hi. Thanks for taking my question. I have a few on the data that we're going to see in fourth quarter for TransCon CNP. Can you talk a little bit about the biomarker data that you'll be reporting in fourth quarter and specifically on cGMP, should we expect a dose response.

And then, what data are you looking for that would help you select the next dosage for the next study in achondroplasia patients? And is there like a cut-off for CNP or cGMP that you're looking for?.

Okay. Thanks. This is Jonathan. Thanks for the question Michelle. So in order -- the CNP Phase 1 trial will tell us a lot. Remember this is in healthy volunteers. So first and foremost, it will evaluate the safety of the drug, which we assume is going to be very safe.

And to-date it's been very safe, but in particular we're going to evaluate the cardiovascular risk profile.

So paying attention to hypotension, tachycardia since a major tenet of the target product profile is that we can give a once weekly drug that is safe that has elevated levels of CNP throughout the dosing interval for the possibility of enhanced efficacy. So it all begins with the cardiovascular risk profile which we're carefully evaluating.

Secondly, we're evaluating whether the PK profile in fact supports the once weekly dosing that we anticipate that it will and that it has in animals and I will remind you that our animal data has always been exquisitely predictive of human data. And then, finally, we'll evaluate the free CNP levels.

So not just the pro-drug, but how much CNP the active moiety is actually available free during 24 hours at levels that we think can lead to appropriate efficacy. So that's the main deliverables for the Phase 1 study. We will be looking at some other biomarkers cyclic GMP and but those are not really the critical factors.

Since these are healthy volunteers, we of course do not expect to see any growth in these subjects and its short-term single dosing. And in terms of the dose, we will – and they are adults so they’ve finished growing.

The dose ranges that we are evaluating will be very broad and which will provide enough support for us to choose our initial dose selection for our Phase 2 proof of concept study..

And then, could you talk about maybe some of your hypotheses for resistance mechanisms in achondroplasia patients to CNP therapy? And how an increased therapeutic window and ability to dose higher with TransCon CNP might overcome some of those challenges?.

Sure. So we don't believe in the hypothesis of resistance and we believe that the scientific data that's been generated in preclinical models argue strongly against that. So you can take mice for example that are replete in CNP and give them more CNP and cause growth. And the more CNP you give them, the more growth that you see.

So we think that you can overcome that there is no evidence of resistance actually that remains purely a theoretical concern..

And if you attribute these in what we -- how we treating diabetic people specific Type 2 diabetes people saying you have insulin resistant there. But basic that main therapy for Type 2 diabetes is still insulin. And I think it's well known you have some kind of low level of persistence you can get that is what people have talked about.

But the basic treatment regime is to overcome this system with a higher level. And while you have a level of diabetic resistant it is because that organism in some way trying to response with a lack of efficacy. And this is why you suddenly or compensate the risk and therefore you just give more and you'll get the right effect..

Okay. Thank you..

Thank you. And our next question comes from the line of Adam Walsh with Stifel. Your line is now open..

Hi guys. This is Neil Carnahan on for Adam. On TransCon PTH, can you share some of the feedback from the post Phase 1 meeting with the FDA. What's changed? And then, can you discuss the rationale behind running a Phase 2 study now instead of going from Phase 1 directly into Phase 3..

I think that if you go back to what we explained before we actually came from the consideration that we integrated a lot of different elements in our change of the development plan. And this is a change of the development plan.

And we make this change of development plan because we feel that we can get a much stronger product; we can be in a position; we can really ensuring that this product would come up to many more patients. So it's done off from the assumption that the growing for something to something that is much better. This is a reason for our change.

The feedback from FDA was what I call extremely positive feedback and Jonathan can comment further on that. We came into an position, we have a basic -- have no to comments to our preclinical safety to all CMC packet or device development.

And they also gave us some kind of opportunities potential to have possibility to strengthen the product profile with potential beta label. And this is some of the things we are now exploring and we're feeling really, really strongly supported by FDA.

And you can also just go back to see FDAs understanding of this disease there, which are really, really high from the NEPA advisory report where the -- some -- one of the first thing really came with an proposed beta product profile to really treat patients with hypoparathyroidism.

And I think they recognize that we have a profile that really potential can fulfill this [indiscernible] from an optimal target profile for a product for this patient group. So we're feeling pretty confident what we're doing is really for the benefit of the product opportunities.

And we're feeling that we will have a much, much stronger product opportunity now with this -- our current development plan that we had before..

Okay. Then, I have just one follow-up on the same topic. Just on study design any details on how many patients you plan to enroll whether it would be a global study? You said, I understand it may be a placebo controlled study with the control arm be supplemented with calcium and vitamin D? Thanks..

So we will evaluate patients with hypopara who are on calcium and vitamin D, essentially all of them are. It will be placebo. There will probably be three different arms of fixed dosing and not a large study. I mean probably in the 40 range. Is your question Phase 2 or Phase 3? My response is about Phase 2..

Yes. The Phase 2..

Yes. So probably in the 40 to 50 size range.

Did that answer your question?.

Yes. Thank you, guys..

Sure..

Thank you. [Operator Instructions] And our next question comes from the line of Jim Birchenough with Wells Fargo Securities. Your line is now open..

Good afternoon. It's Nick on for Jim this afternoon. Thanks for taking our questions. First, couple on the growth hormone program. Wondering if you have patient recorded outcomes or quality of life tools in the heiGHt and fliGHt studies.

If there is a validated tool and you also mentioned a pro for hypoparathyroidism, so similar question there in terms of what's available and how they validate it?.

Sure. So in heiGHt, we do not, but in fliGHt we do. So we have some preference and satisfaction questionnaires in the fliGHt trial specifically comparing their experience to the daily growth hormone, they're coming off of to the new weekly TransCon growth hormones they are going on to..

Thank you. And then, as a follow-up from that.

So if you see improved compliance and persistence driven by this increased level of satisfaction, how much bigger do you think growth hormone market can become?.

Well, just any increase in compliance rates even one percentage point is increasing the market. So it's proportional to the amount of increase that we'll see. So we won't know what their previous compliance was going into the fliGHt trial. We'll of course know what it is in the fliGHt trial. But you also asked about the PTH trial.

So we are developing our own patient reported outcome symptom score for the PTH program and having the Phase 2 trial now to test that and will allow us to hopefully validate that in the Phase 2 trial and utilize it in its full form in the Phase 3 program which could of course potentially lead to inclusion in the label theoretically..

And thank you.

That's a good segue for my second question which is -- so is there a recognized strategy for down titration of calcium and vitamin D that's acceptable to regulators that could also result in a label claim?.

So there's some experience from the recent trials that have gone on and I don't think anyone really cares specifically how you do it how fast you do it. What matters is that you do it safely and where they end up. So if you end up off calcium and vitamin D maybe you could talk about that.

And we'll be guided by previous experience in this area, but no one is really too picky about exactly how you do it as long as it's done safely and you lower the treatment burden..

And do you think you need to be off calcium and vitamin D for three months, six months, what do you think is the timeline without taking the supplements..

So there's no -- for numbers of patients being off, it will be what it is at the end. We feel that a large proportion of patients will ultimately be free of calcium and vitamin D because the PTH will appropriately manage them. But what exactly that number is will determine in the Phase 3 trial..

Yes. We have a strong belief that potentially most of the patient can't get up, because if you look to the continuous infusion studies that has been conducted both in the pediatric and adult patient population.

You are eliminating all sorts of supplement meaning activated vitamin D and calcium supplement in this patient group, when you start the infusion from studies.

So from that perspective it makes sense that we should end in the same situation where it should be possible to basic eliminate the activated vitamin D and calcium supplement compared to a stand-up population at that state..

Okay. Thank you. And then, on the Phase 3 with the -- do you think that would need to be an active controlled study i.e., with no power for example..

Background calcium and vitamin D..

Okay..

The standard of care control..

And then, just on to the -- I know if you are going to wait until next year to elaborate on the new therapeutic area.

But it seems that you have the possibility of no localized delivery which might be good for maintenance therapy systemic delivery might be very good for acute therapy is oncology something that might fit the bill?.

I think, I know you are extremely excited. We really excited ourselves but you need to wait until we disclose it..

Fair enough. Thanks for taking the questions..

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

Thanks everybody. Have a great day. 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 wonderful day..