Hello. Thank you for standing by. Welcome to Ascendis Pharma's Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

[Operator instructions] I would now like to turn the call over to Tim Lee, Senior Director of Investor Relations at Ascendis Pharma. Sir, you may begin..

Thank you, operator, and thank you, everyone, for joining our second quarter 2024 financial results conference call. We apologize for the delay due to some technical issues that we had here. I'm Tim Lee, Senior Director, Investor Relations at Ascendis Pharma.

Joining me on the call today are Jan Mikkelsen, President and Chief Executive Officer; Scott Smith, Executive Vice President and Chief Financial Officer; Dr.

Stina Singel, Executive Vice President and Head of Clinical Development Oncology; Camilla Harder Hartvig, Executive Vice President and Global Chief Commercial Officer; and Joe Kelly, US General Manager.

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

Examples of such statement may include, but are not limited to statements regarding our commercialization and continued development of SKYTROFA and YORVIPATH, the US and European markets, as well as certain financial expectations, our pipeline candidates and our expectations with respect to their continued progress and potential commercialization, our strategic plans, our goals regarding our clinical pipeline, including the timing of clinical results, our ongoing and planned regulatory filings for expectations regarding the timing and the results of regulatory decisions and our exploration of market opportunities in therapeutic areas outside of endocrinology rare disease.

These statements are based on information that is available to us as of today. Actual results may differ and could differ -- actual results may differ and could differ materially from those in our forward-looking statements and should not place undue reliance on these statements.

We assume no obligation to update these statements as circumstances change, except as required by law.

For additional information concerning the factors that can cause actual results to differ materially, please see our forward-looking statements section in today's press release in the Risk Factors section of our most recent annual report on Form 20-F filed with the SEC on February 7th, 2024.

TransCon Growth Hormone or TransCon hGH is approved in the US by FDA and the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency.

TransCon PTH is approved in the US by the FDA for the treatment of hypoparathyroidism in adults and the European Commission and the United Kingdom's Medicines and Healthcare Products Regulatory Agency have granted marketing authorization for TransCon PTH as a replacement therapy indicated for the treatment of adults with chronic hypoparathyroidism.

Otherwise, please note that our product candidates are investigational and not approved for commercial use. As investigational products, the safety and effectiveness of product candidates have not been reviewed or approved by any regulatory agency.

None of the statements during this conference call regarding our product candidates shall be viewed as promotional. On the call today, we'll discuss our second quarter 2024 financial results and we're -- and we'll provide further business updates. Following some prepared remarks, we will then open up the call for questions.

With that, let me turn it over to Jan..

Thanks, Tim. Good afternoon, everyone. With the recent US approval of YORVIPATH as the first and the only FDA approved treatment of hypoparathyroidism in adults, Ascendis has successfully obtained approval for two out of three endocrinology rare disease product candidates in two major markets, the US and EU.

And with pivotal data from our third product candidate TransCon CNP in achondroplasia expected in the coming weeks, we are nearing our vision to achieve approval of all three product candidates by the end of 2025.

Our algorithm for product innovation, combined with our TransCon technology have enabled us to bring new highly-differentiated product candidates through the clinical development of [indiscernible] and with a higher success rate compared to traditional drug development.

We attempt to continue to develop new product candidates in endocrine rare disease. And larger therapeutic areas such as oncology, obesity, metabolic disease and cardiovascular with best-in-class potential to make a meaningful difference for patients across the globe based on our strong scientific focus. Let us begin with YORVIPATH.

In the US alone, an estimated 70,000 to 90,000 patients are living with hypoparathyroidism. For those who haven't seen it, please take time to watch the patient arranged FDA hearing on the hypoparathyroidism associated website, providing an in-depth understanding of the serious consequence of having this disease.

With the FDA approval of YORVIPATH, physician and adult patients in United States can now look forward to having a treatment option for treatment of hypoparathyroidism. We are preparing for YORVIPATH's lungs in the US, levering our established commercial infrastructure and expertise.

We are expanding our dedicated team of sales reps and field medical personnel who will engage with around 6,000 physicians who treat 80,000 -- 80% of patients with hypoparathyroidism in the US. Other key launch initiatives are underway, including the rollout of our patient support programs designed to support access to YORVIPATH.

For example, [eligible] (ph) patient on commercial insurance will pay as little as $5 a month for the YORVIPATH prescription. In addition, following our goal to take care of all patients with this disease, we will also introduce a patient assistance program. We have also started engaging US payers [indiscernible].

We expect product availability in the US in the first quarter of 2025 or sooner if it's possible. Consistent with premium responsible pricing, we will launch with a best price corresponding to 285,000 annual per patient, reflecting the value of YORVIPATH to the US healthcare system.

In the US, there are around 140 patients currently active in the expanded HHS program and about 50 more patients in the open-label extension of our clinical studies. Physician will begin transferring these patients over to commercial product as soon as is available.

In Europe, the number of patient and prescribing physicians indicating YORVIPATH continues to increase, and we see a good mix of [PK’s](ph) experienced and new menu patients. This was the first full quarter of commercial launch in Germany and Austria, where sales momentum continues to build.

We now have more than 250 patients on treatment and an estimated 125 prescribers in these two markets. YORVIPATH patient with change in rate is extremely strong and currently around 98%.

As physicians gain more experience at YORVIPATH, we expect them to bring more patients on therapy, including those finishing the remaining supplies of [indiscernible]. The interest for serving patients under name patient programs prior to full commercial launch is increasing.

We now have patients in these programs in more than 10 countries and expect more by the end of the year. Moving to SKYTROFA, we are proud to have more than 11,000 patients prescribed SKYTROFA in the first three years since launch and to have achieved market value leadership while expanding the overall growth hormone market.

Key component of our strategy to make SKYTROFA a blockbuster product in the US include simplifying broaden market access for both treatment naive or switch patients as well as expanding our label. In the first half of the year, the reset to broader market access for SKYTROFA was largely completed.

While this broader access to SKYTROFA will support long-term demand, in the short term, it negatively impacted our first half net revenue. Scott will share more details. With our market access transition largely completed, SKYTROFA is now positioned as a premium product with a net value per patient of around 3 times compared to daily growth hormone.

We are now focused on using our new market access coverage to drive further demand, continue to expand the overall growth hormone market and are aiming to reach blockbuster data for SKYTROFA in the US alone.

Finally, to build on our market leadership position, we plan to submit and supplement BLA in adult growth hormone deficiency to the FDA in the third quarter of this year, our first SKYTROFA label expansion. We also expect top line data from our Phase 2 trial in Turner syndrome in the fourth quarter of 2024. Switching to TransCon CNP.

I have always been extremely excited about our program in achondroplasia, and much more now as we are approaching the result from our pivotal trial in the coming weeks.

We have consistently in our messaging over the past eight years since we announced our product candidate that our aim is to develop a treatment that address both linear growth and the comorbidities that affect health and quality of life for people living with achondroplasia.

Earlier this year, you saw a comprehensive result for our Phase 2 ACcomplisH trial, demonstrating that our once-weekly TransCon CNP increased annualized growth velocity similar to [indiscernible] about 5.6 centimeter after 12 months of treatment.

In addition, for first time [indiscernible] product in the setting of achondroplasia, we also demonstrated that compared to placebo, TransCon CNP improved quality of life associated with the physical function of wellbeing in children with achondroplasia with a favorable side effect and tolerability profile.

Now, we hope that we can replicate these results with more patients in our pivotal ApproaCH trial, and we are expecting top line data in the next few weeks, one quarter earlier than guided. This trial enrolled 84 children aged two to 11 with achondroplasia. The mean age was 5.7 years, similar to our Phase 2 trial.

We also continued to enrolling a Phase 2 trial of TransCon CNP in combination with TransCon growth hormone SKYTROFA designed to show that adding SKYTROFA to TransCon CNP could provide cash-up growth for patients who start CNP treatment late.

We expect to complete enrollment in this combination trial during the first -- fourth quarter of 2024 with top line 2026 data expected in the second quarter of 2025. Turning now to oncology.

We continue advancing three Phase 2 trials with multiple indication-specific cohort to study the best-in-class potential of our two product candidates, TransCon IL-2 beta/gamma and TransCon TLR7/8 Agonist in different combination scenarios.

We plan to present initial results from our TransCon IL-2 beta/gamma in combination with chemotherapy in platinum-resistant ovarian cancer from the -- I believe trial later this month at the ESMO conference in Barcelona. I'm pleased how these programs are progressing. In closing, for Ascendis, it's all about the patients.

Patients tell us the US approval of YORVIPATH is transformative for them. We hear from parents that SKYTROVA has changed the life for children and parents, both. With data expected in the next weeks for TransCon CNP, it is our goal that we are able to show that we also can transform the life of people living in achondroplasia.

With our ongoing progress in our oncology program and exploration of other areas of innovation in large market opportunities such as obesity, we continue to precision Ascendis for sustainable growth with an expanded pipeline and transformal -- transformative Transcon product candidate. I'll now turn it over to Scott for an financial update..

Thanks, Jan. SKYTROFA volume more than doubled in the second quarter of 2024 compared to the second quarter last year, while reported revenue was EUR26.2 million compared to EUR35.9 million reported in the second quarter of 2023, a decrease of 27% year-over-year.

An increase in SKYTROFA volume was offset by higher sales deductions for Q2 and an adjustment to Q1 2024 sales deduction accruals as well as for periods in 2023. These adjustments reflect the reset of broader market access to support continued growth of SKYTROFA as the market value leader and a potential blockbuster in the US alone.

In total, Q2 2024 reported revenue was reduced by a true-up of EUR27.1 million, of which EUR19.5 million was attributable to the first quarter 2024 sales and EUR7.6 million to sales prior to January 1, 2024.

SKYTROFA revenue for the first half of 2024 totaled EUR91.2 million, a 35% year-over-year increase compared to EUR67.4 million during the same-period in 2023. First half 2024 SKYTROFA volume more than doubled, but was partially offset by an accrual true-up of EUR7.6 million, which was attributable to periods prior to January 1, 2024.

With the advent of broader market access, we believe the overall growth hormone market will continue to grow the number of patients treated.

We estimate that by the end of Q2 2024, SKYTROFA penetration in the US pediatric growth hormone deficiency treated patient population was 18% or a little under 10% of the overall treated growth hormone market, still with our single indication for pediatric GHD, leaving lots of room for further growth in market expansion.

Based on year-to-date results and current trends, we now expect full year 2024 SKYTROFA revenue to be in the range of EUR220 million to EUR240 million.

Shifting to TransCon PTH, second quarter YORVIPATH revenue of EUR5.2 million reflected the first full quarter of commercial revenue in Germany and Austria as well as initial revenue in other markets with YORVIPATH revenue continuing to increase from the EUR1.5 million in Q1, driven by growing patient and physician demand.

Closing out the top line, total revenue for the second quarter was EUR36 million, including EUR4.6 million tied to rendering of services and license revenue. Turning to expenses, R&D costs in the second quarter of 2024 totaled 38 -- sorry, EUR83.5 million compared to EUR105 million during the second quarter of 2023.

The 21% decline was largely tied to lower external development costs for TransCon TLR7/8 Agonist and lower costs for TransCon PTH as well as Eyconis spin-off. SG&A expenses in the quarter totaled EUR74.3 million compared to EUR70.3 million during the second quarter of 2023.

The increase was primarily due to higher employee costs, including the impact from global commercial expansion. Total operating expenses were EUR157.8 million for the second quarter, a 10% decrease compared to the EUR175.3 million during the second quarter of 2023. Total operating expenses for the first half of 2024 were EUR295 million.

Net finance income in the quarter was EUR29.4 million compared to EUR26.4 million in the second quarter of last year. As a reminder, the net finance line can fluctuate quarter-to-quarter, driven in part by non-cash items related to our outstanding convertible notes.

We ended the second quarter with cash, cash equivalents and marketable securities totaling EUR259 million compared to EUR399 million as of December 31, 2023.

Finally, earlier today and subsequent to June 30, 2024, therefore, not included in the reported cash balance, we announced that we have entered into a new capped synthetic royalty funding agreement with Royalty Pharma for $150 million in exchange for a 3% royalty on net sales of YORVIPATH within the United States.

The royalty payments are capped at 1.65 times the purchase price, if fully paid prior to December 31, 2029, or two times thereafter. Further details are disclosed in a separate 6-K, also filed today. Looking ahead for the full-year 2024, based on current plans, we expect SKYTROFA revenue to be in the range of EUR220 million to EUR240 million.

Total operating expenses, which include SG&A and R&D, to be approximately EUR600 million, including YORVIPATH-related launch activities in the US. And pending launch timing of YORVIPATH in the US, we currently expect to achieve operating cash flow breakeven on a quarterly basis in 2024 or 2025.

Before we turn it over to the operator for Q&A, I want to reiterate with database lock and the top-line results for our pivotal approach trial expected in the coming weeks, we plan to institute a quiet period starting Thursday and unfortunately, we will not be able to participate in upcoming investor conferences.

With that, operator, we are now ready to take questions..

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

Hey, guys. Good afternoon. Thanks for taking my question. I want to better understand how you project getting SKYTROFA to a blockbuster in the US alone based on the kind of reset of net price and what you said about where you are in terms of penetration in GHD and the broader treated growth hormone market.

Can you walk through that a little bit? Thank you..

Thanks, Jess. I will start and I have my two commercial colleagues with me here today. And so, that can also some way give you more details if that is desired. Currently, we see the market is about $1.4 billion, the entire growth market in the US.

And as I stated in my prepared remarks, when we look on a net value per patient, we basic with SKYTROFA have about three times the net value on a yearly treatment. When we see our effort, when we look about when we are developing the long-acting segment, we see SKYTROFA as really the preferred brand.

Even in places where we just are in the same level of market access, clearly, clearly, clearly, SKYTROFA is the preferred product. Even in places where we don't have market access, we really see SKYTROFA coming in because it's really up avoiding a unique improvement compared to the products' potential.

So when we see our label expansion effort, we basic in the coming year, will be possible for us not only to address the pediatric growth hormone deficiency market. We -- in this next weeks, we are filing for adult growth hormone deficiency.

We have Turner data coming in for Phase 2 later this year, we will initiate trials very fast and we can do it in a basket manner, so we basic can get to the full cohort for all the different growth hormone indications. That gives you the high-level how we see we can develop SKYTROFA to a blockbuster in the US.

And with the reset of what we call the market access, we will can keep that value as we have today and expand from there. I do not know, Joe or Camilla, you have further comments or you have and want to get more in-depth knowledge about specific comments from my side. Thanks..

Thank you. [Operator Instructions] Our next question comes from the line of Tazeen Ahmad with Bank of America Securities. Your line is open..

Hi, guys. Good afternoon. Thanks for taking my question.

With regards to this new net price that you have for SKYTROFA, can you talk to us about the competitive dynamics? Namely, are the daily injector manufacturers offering deeper discounts? And can you also talk about the level of impact that you're seeing from the recent -- relatively recent launch of the Novo competing product? Thanks..

Thanks for the question. I think it's in their line with some of the same question that got asked as the first question. Yes, today, there is two other long-acting product in the US market.

We basically see one of them in Geneza [ph] (ph) because of the obvious effect everyone can observe just going to the databases that describe tolerability and other things like that, we see, we are always doing extremely well to -- in general, we see the same thing with SKYTROFA.

SKYTROFA have and preferred position on some of the big and we have other places. But what I'm generally seeing is there is no doubt we always said that SKYTROFA had a best-in-class potential, but what we also see in the market that is really realizing as the best-in-class product opportunity.

And that is the strength we want to continue to build on, not only in pediatric growth hormone deficiency, but also in all the different label expansion when we coming into first-generation when we also get them.

So for example, you should also look on what happening with, for example, the largest volume supplier of growth hormone in the second quarter that basically have a revenue down on 73%. So clearly, there was an reset of the entire market that potentially come a little bit more unexpected to many of us that it was so fast adapted into a system..

Thank you. [Operator Instructions] Thank you. Our next question comes from the line of Derek Archila with Wells Fargo. Your line is open..

Hi, there. Thanks for taking the questions. Just wanted to know what payer feedback you might have received thus far on the proposed YORVIPATH pricing in the US? And then I have a follow-up..

We are coming up with a responsible pricing. We're coming with a pricing where we basically can support the statement we want to go every patient that have hypoparathyroidism, we aim to support that can be treated.

In that entire mathematic algorithm to achieve that, we came to this responsible pricing on back and we have not got any feedback against that. That is not totally acceptable..

Got it. Very helpful. And then second question, just in terms of the patients that you've talked about on YORVIPATH in Germany and Austria, I think you commented about 250 patients on the approval call for the US.

I guess, how do you think about that penetration relative to the overall market size in Germany? And how do you believe you're tracking thus far in the launch? Is it ahead of where you expected or less than you expected? Thanks..

I can come with some initial comments, and you can get some further comments from Camilla. Our initial aim and how we look at how we expected the penetration profile would be that we will see typical one to two patient per physician in the beginning, there was what we expected to see.

Before each single physician really see the benefit of really what YORVIPATH can give to the patients, when they observe that, we expect later in this year that each patient or each physician will start to prescribe more and more patients from the number of patients each of them.

So when we look on the number of physicians that already have prescribed in Germany and Austria, around 125 prescriber have really prescribed it. We are extremely proud about this penetration through physicians. But I think what does really are the most impressive thing for me in these [indiscernible] is basic retention.

When you think about rehab and retention, when you start to take patient in and really test them, are they really providing a benefit for the patient and then they have a retention of 98%. I have never seen that for any product before. That is really, really unique.

But it's really described the benefit that is really are giving to the patient and the stay on the treatment exactly as we have observed in our clinical trials.

I do not know, Camilla, you have further comments to the [indiscernible] in specific in Germany and Austria?.

Jan, I think you said it very, very well. We are very pleased with the uptake of the YORVIPATH in Germany. We are benchmarking all the rare disease launches and we are doing very well compared to them.

And so, the team is working hard on both breadth and depth and that's working well and also creating the mix between the PTH naive patients and the ones that have been on net power and the switch that we are making from that path to YORVIPATH is going very, very fast.

So all in all, we are very pleased with how it's going and where it will go in the future..

Yes. What we have seen in different European countries that YORVIPATH basic because of its stop of manufacturing, there is a tendency to keep the patient on that path until all the, you can say, accumulated drug are being utilized in the specific regions.

And we also see now that it's starting to change a lot where we see much, much more small we see much taking up from net we see much patients coming in now. But one thing, we have now been launched in Germany and Austria.

In our Europe direct strategy, we go to France and then here, hopeful in this year and then in 2025, we will have the next six, seven, eight European countries being added in. Really are rolling out in the way we generate revenue from this region in a much faster speed..

Thank you. [Operator Instructions] Our next question comes from the line of Li Watsek with Cantor. Your line is open..

Hey, guys. Thanks for taking my questions. Maybe just a follow-up on SKYTROFA. Maybe help us understand what went into the assumptions for the lower guidance for SKYTROFA this year. I'm just looking for more details on what's driving that EUR100 million reduction.

Maybe talk a little bit about the dynamics between broader market access and pricing? And I have a follow-up..

I can come with some overall statement first related to how we did the forecasting because what we basic did that we saw a growth in volume between Q1 and Q2. And if we utilize that growth basically to predict rest of the year and it basically giving the lower value.

And after we now have reset our market access portfolio, we are in a position that we expect that the GTN will be keeping constantly throughout the year. What we have observed, like last year, we saw a last seasonal effect between the first half compared to the second half.

We still see that as an upside which potential will materialize, but we also know that it could not materialize. So this is how we have basically taken the guidance forward in that. And that is not anything believing in that we potentially can accelerate growth. We see the potential, we see the best-in-class potential on it.

Joe, that is responsible for our US, you can also give a short summary about all the effect that's getting implemented now that first will provide effect in the second half of this year..

So the healthcare providers right now have extreme clarity about where they can provide SKYTROFA to patients with a high chance of reimbursement, but also where SKYTROFA is not on formulary, healthcare providers are documenting intolerance of growth below the average per rental height while on other growth hormones, therefore allowing a resubmission, so that pediatric growth hormone deficient patients can have access to SKYTROFA.

So, there's time left in this year. Obviously, things will stabilize in 2025. So we know now where we can continue to add patients and grow our net revenue and expand and grow the value of the entire growth hormone marketplace..

Okay.

And I also wonder if you can talk a little bit about where you can further reduce from a cost perspective? And is there any chance you can still breakeven this year, given the lower schedule for guidance?.

Scott is really good at numbers. So I will someway give you an all perspective and then Scott can go more back to some of the way we are looking at it today.

One of the things we are proud about is that we really keep our operating expenses in control and we really see that we really have a good internal system to keep Ascendis Pharma to be a highly effective organization. We also see that there is revenue, specific Europe has different regions are really starting to take in now.

So potentially, we have a YORVIPATH outside US. We're still in a situation where we are still discussing with FDA related to how we can really help a patient that is in shortage of a treatment here in the US. We hope we can help them. We will do everything to help them.

It -- meaning that we will have a much faster launch that we actually are taking into our plans. We hear the voice from the patients, we hear the voice from the physicians. We will do everything, so we can have an earlier launch. And as soon as we get clarity about that, we will come back to you. So, we have a lot of potential upside.

We have a lot of different ways where we're looking about how we can strengthen our revenue, how we basically still keeping our expenses in control, and this is how we are operating.

Scott, any comments?.

I think you said it well, Jan. Li, as you know, we always look to be cost effective in what we do as a company and we evaluate expenses that aren't tied to getting the product to patient as soon as possible. But at the same time, of course, we don't want to sacrifice doing that and getting the product.

So that's part of the reason we announced the new financing today after the close for the additional $150 million. But we continue to have great scrutiny on costs, particularly where they're not leading to getting our products to patients..

Thank you..

Thank you. Please standby for our next question. Our next question comes from the line of Gavin Clark-Gartner with Evercore ISI. Your line is open..

Hey, guys. Thanks for taking the questions.

First, I just wanted to ask for SKYTROFA, when did these policies with more favorable access go into place? And when should we expect a pickup in prescriptions?.

I think it was gradual during the first half year. So some of them are first ticking in -- here in Q2.

The complexity of these agreements are very complex in this way that potential rebate compared to volume increase are some way not really aligned and there was some of the issue we ran into that the rebate basically got established much faster than really we can start to grow the volume.

So from a modeling perspective, we see a double-digit number in increase in volume between Q1 and Q2, but we really will expect first, all the effort that we now have installed, as Joe told before, is first ticking in, in the second half, okay. So I will first see the expected growth coming in, in the second half..

Okay. That makes sense. And just wanted to ask on IQVIA data overall.

Have you guys noticed any changes in capture rate trends over time?.

I think the issue I personally have with the data is that it's a sampling of few places. And if you somewhere keep everything stable, you can use it as an overall trend.

If there is a shift between different PBMs, between different market access, you often will see some difference in volume that really are totally unpredictable from the perspective at the sampling between the different PPMs are different. So out from that, I think you should pay it.

If you give them all the money for the utilization of these data, at least I'm not paying for it. I get it for free because I showed so many times they were totally not useful to have. But still buy it if you want..

Okay. Thanks..

Thank you. Please standby for our next question. Our next question comes from the line of Vikram Purohit with Morgan Stanley. Your line is open..

Hi, good afternoon. Thank you for taking our questions. I guess switching to TransCon CNP, we were just curious for the upcoming ApproaCH readout and then also for the COACH readout in 2Q25.

Just which parameters of data you expect to report out and how you would currently guide people to compare and contrast the datasets versus competitor CNP datasets available in this space? Thank you..

I think the most easiest way to compare anything is to go through vosoritide because this is two, you can say mode of action that is very most aligned between them, even if there is a difference in how we function because we have a continuous exposure of CNP molecule where from the vosoritide, it basically is only have an active cohorts for two or three hours in every 24 hours dosing cycle.

So when we look on our aim, as we have said in the last eight years, we want both to provide linear growth, but also provide and address the comorbidity of the disease.

And what we have seen until now and now I'm referring into Phase 2 because this is the data I can talk about today is that we have seen and analyzed height velocity exactly at the same level of vosoritide with a once-weekly dosing profile.

But we have seen the improvement in many of the way that the children, the physician, the caregivers talk about the benefit to the patient. And out from that perspective, we also couldn't show when we compare our Phase 2 data directly to placebo and improvement in quality of life related to physical function.

And this is why we basically are taking into our trial different measuring on key secondary endpoint that basically hope for us that it can give an effect that really shows how we address the comorbidity, which have never, never been shown by any other product.

And when we go to the biochemical process, the science behind it, which we always love, then we basically can come with great explanation why you need to have a continuous exposure of CNP basic to address some of the comorbidities. So it give you where we started from. I need to see the data that coming in the next week.

So it's pretty, pretty, pretty near. So the database has been locked. People are running the stat now. So as soon they're finished, I will be taken into a room and see the data..

Got it. It. Thank you..

Thank you. Please standby for our next question. Our next question comes from the line of Kelly Shi with Jefferies. Your line is open..

Thank you for taking my questions.

Maybe for PTH, could you please elaborate more on your ongoing interactions with regulators regarding commercialization of existing batches for the US launch, which is likely of 4Q or the first quarter of next year at the moment?.

We have an extremely constructive dialogue with FDA related to how potential to address the shortage of PTH drops in the US.

It's being driven by patients that basic are seeing the huge unmet medical need, the situation where patients have been missing that power for a long time and extremely serious consequence of patients that now today are on that par and suddenly need to be disrupted of the treatment because that part will not be available longer.

Out from that, both patient organization, physician and us and FDA recognize this issue. And I think everyone is working together in an extremely constructive manner to find out how we can help the patient to avoid such a crisis that potentially will be..

Thanks..

Thank you. Please standby for our next question. Our next question comes from the line of David Lebowitz with Citi. Your line is open..

Well, thank you for taking my question. I got two here. First, on the SKYTROFA adjustments, just to make sure I got this right that you came to an agreement on new net pricing with the payers and as part of it, you had to true-up on prior sales in the last couple of quarters. And then I'll have one more after that..

I think you have understood it correct. This is a true-up that is basic reflecting net revenue from mainly net revenue for Q1, but about 7.6 million also from 2023. That is the true-up that is being taken away from Q2 revenue. So basically, if you want to calculate real sales in Q2, you need to add all this true-up to the net revenue from Q2.

That is reported here.

Scott, any comments? Or did I get it right?.

You got it right, Jan. Good..

Got it.

And on CNP, what is -- what has occurred to actually essentially accelerate the pivotal data timeline from prior updates?.

I have to say how fast physicians, the setup of our clinical operation has been function in this case have brought the data to come in much, much faster than we ever thought. I believe there is such a dedication that I only can compare to what we have seen for both PTH and SKYTROFA to get this product out as fast as possible.

We're also seeing the same kind of extremely, extremely high retention in this year too. So I think always when I see this data, when I see this positive thing coming in, I think people have one dedication to get it out to the patients as fast as possible..

Got it. Thank you..

Thank you. Please standby for our next question. Our next question comes from the line of Alex Thompson with Stifel. Your line is open..

Hey, great. Thanks for taking my question. I guess again on sort of the YORVIPATH potential in the US, could you talk specifically about the data that FDA needs to or wants to see in order to understand whether the material you have currently would be suitable for a US launch in the fourth quarter? Thanks..

I could think that they have all the data to take this decision and I don't believe any data need to be brought to them, at least the request we have on is not really on anything of the data. It's mainly how fast can we supply, how much material do we have and other things like that.

So, we can ensure that when we start, we basic are in a position, we really can manage this entire demand that we expect to come..

Thank you. Please standby for our next question. Our next question comes from the line of Paul Choi with Goldman Sachs. Your line is open..

Hi, thank you. Good afternoon, and thank you for taking our question.

On -- to revisit SKYTROFA, can you maybe comment on what percentage of your payer contracts were affected by this -- by the true-up and whether the duration of this -- these changes are multi-year? Basically, it would be helpful to understand if this is an issue we'll have to potentially revisit next year. So any comments there would be helpful.

And second, just in terms of the Royalty Pharma agreement that was announced this year, I just want to confirm that from your perspective, is this potentially the last source of external capital that you think you'll need prior to achieving operating cash flow breakeven either this year or next year? Thank you very much..

The question that you are asking for related to the implementation of the new contracts, the implementation of the new contract was a continued process to Q1 and Q2. We are now in a position that we have reset it. This is why Scott used the great work reset.

We have reset our coverage in the US and out from that perspective, the [indiscernible] we expect to see in the second half will be aligned to what we saw in the first half, and we expect the same GTN in 2025, 2026, 2027, 2028, 2029 and 2030. I can only come with five years guidance..

Thank you. Our last question will come from the line of Yaron Werber from TD Cowen. Your line is open..

Great. Thanks for taking my question. Hope you can hear me.

My question is two parts just relating to the -- as you think about the guidance for the year, the EUR220 million to EUR240 million, does that entail that the EUR71.5 million that you sort of did in the first half for SKYTROFA on a net basis? Or is that including the EUR91 million, assuming you did EUR65 million in Q1? And then secondly on, you said you did EUR53 million in Q2.

Is that a good run rate to then start into Q3? And four, should we really think of the EUR26 million this quarter as a good run rate into the second half? Thank you..

Yes. There was a lot of question in what you basically gave to Scott and me and Joe and the commercial team into it. I think when you start on the last question about basic the reported number today here in our numbers. And I see that the real number is basically the reported net sales plus the true out that we basically provided to you.

So you take the number that we had in our Q2 sales and then basically add everything what we took in throughout both from 2023 and what we did in Q1, there you will get a basic and net sales of what we had in the second quarter of '24. So I think that is the real number. And when you look at that, it is around EUR53 million, if I calculate it right.

That I think is the real number for Q2. If I do my calculation, it's 53.4 or something like that to be concrete. So we see, without doubt, a really good pickup in -- from Q1 to Q2. And when you go back and look on the seasonal variance that pertains to the [indiscernible], we will see an improved pickup in Q3 and Q4.

And when we did the forecasting, we basically took a conservative approach and saying we use the number between Q1 and Q2 and use that as a forthcoming number for every quarter, rest of the year, meaning is that we have not calculated any seasonal effect in the numbers we have given you today.

I think it answered most question related to your mathematic algorithm related to the numbers.

Scott, do you have anything to add?.

Yeah. Just one thing, Yaron. The -- for the first half, we reported EUR91.2 million without any -- those were the actual reported numbers. And as we said in the prepared remarks in the press release, that number was reduced -- had been reduced by EUR7.6 million of true-up for periods prior to January 1.

So in other words, it would have been 7.2 higher or about EUR100 million for the first half..

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. This concludes today's conference call. Thank you for your participation. You may now disconnect..