Ascendis Pharma A/S (ASND)
Summary
Biopharmaceutical company using their TransCon technology platform to develop medicines that will address areas of unmet medical needs.
The company is initially focusing their drug development in endocrinology and oncology.
Upcoming regulatory milestones and a phase 3 data readout in adults with hypoparathyroidism (HP) could unlock value for Ascendis (ASND) in the near term.
Data in Focus — TransCon PTH in adult HP (Phase 2)
The phase 2 PaTH Forward trial data points used to assess the likelihood of success of the Q1 2022 phase 3 data trial are the proportion of subjects at 4 weeks with: normal serum calcium AND normal fractional excretion of calcium (FECa) (or at least 50% decrease from baseline AND off active vitamin D AND taking ≤ 1,000 mg/day calcium.
Data from the phase 2 and its open extension were positive across the board. (5,6,7)
TransCon PTH was generally well tolerated with no drug-related serious treatment emergent adverse events (TEAEs) or any TEAEs that led to discontinuation and no new safety signals seen in the open label extension portion of the study
Regulatory Comments
ASND made a major amendment to their marketing application which resulted in a new FDA review completion date of 25 September 2021.
The industry average of the likelihood of approval when a product in endocrinology submits a marketing application is 86.3%.
Given the data to date from the growth hormone deficiency (GHD) TransCon hGH program (1,2,9), it is likely that ASND receives FDA approval (25 Sep 2021), a positive Committee for Medicinal Products for Human Use (CHMP) opinion (2H 2021), and an eventual European Commission (EC) approval (1H 2022).
Negatives
Despite promising data in the phase 2 trial, there is still a risk of clinical trial failure of the phase 3 study of TransCon PTH in adult HP.
Phase 2 trial was smaller and used earlier time points (4 weeks) to measure efficacy compared to the on-going phase 3 trial.
There is a chance that the positive findings from the phase 2 trial may not translate positively in the larger and longer phase 3 trial (low-medium risk).
There is still the potential for the marketing applications in the US and EU to be denied by both health authorities (low-medium risk).
The company is transitioning into a commercial stage company, so over time ASND’s future valuation will be based more on sales of the eventually approved TransCon hGH product rather than the data readout from the phase 3 trial in adult HP or regulatory catalysts.
Positives
Technology platform is arguably validated given the advancement of TransCon hGH program to the regulatory filings stage.
Regulatory approvals in the US and EU of TransCon hGH in GHD could act as catalysts in bringing short term movement to ASND’s share price.
The endpoint of interest in the the phase 2 trial were positive across the board, and the data from the open label extension affirmed the efficacy beyond the 4 week time period.
These data imply that the phase 3 trial in HP is set up for success and that the phase 3 trial will likely have a positive data readout.
Despite the likelihood of success of the phase 3 trial in PTH being positive, the market is currently not considering a positive phase 3 data readout in HP into the company’s current valuation.
Assessment
Primary endpoints for the phase 3 PaTHway trial in adults with HP were similar to the endpoints used in the phase 2 trial.
Endpoints were: proportion of subjects with albumin-adjusted serum calcium (sCA) within the normal range, and independence from active vitamin D, and independence from therapeutic doses of calcium.
Based on the positive TransCon PTH phase 2 data in HP, data from the phase 2 open label extension in HP, and platform success in treating GHD, then I am inclined to believe the trial is set up for success and we will see a positive Q1 2022 phase 3 data readout of TransCon PTH in adults with HP.
Regulatory approvals in US and EU are likely and regulatory rejections from either country would be a negative surprise.
A long position until Q1 2022 could be used in advance of the regulatory approvals and phase 3 readout in HP to capture value not realized in the current company’s valuation.
Long positions could be protected from downside surprises in the stock price with selling covered calls for Q3 2021 given the juicy option premiums.
More value can be extracted via selling cash secured puts for Q3 2021 if feeling extra bullish on the company’s near term future.
Holdings ASND long term comes with risks given its transition to a commercial company which would require sales to validate its market valuation.
Interesting Tidbits
Ownership by successful biotech funds such as RA capital management, Baker Brothers, Avoro Capital, Vivo capitals, Sofinnova investments, and Orbimed.
I heard they have a very healthy ‘company culture’, which makes me believe the people who work there care enough to not just coast on the job.
References
Author’s Note
I really like what ASND is planning to do and to date I’ve only heard good things about their company culture. Wishing for their success for the patients they plan on serving.
Lastly, I hope this short write-up acts as a starting point for your research if you are interested in supporting ASND through an investment. If you want me to highlight a biotech/pharma company you are interested in, then let me know!
Disclosures
As of the date of this post, I do not have any positions on ASND, but I plan on opening a position by the time this post is published. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it from any related parties mentioned in the article, directly or indirectly. I have no business relationship with any company whose stock is mentioned in this article.
