Ascendis Pharma A/S

NASDAQ:ASND

Earnings Call Analysis

Ascendis Pharma's Q2 2024 Performance and Outlook

Ascendis Pharma saw significant market adjustments in the first half of 2024, affecting their revenue. Despite a 27% drop in Q2 2024 revenue for SKYTROFA compared to last year, volume more than doubled. Revenue was adjusted by a EUR 27.1 million true-up. YORVIPATH saw initial success in Europe, with EUR 5.2 million in Q2 revenue. Full-year 2024 SKYTROFA revenue is projected at EUR 220-240 million, and total operating expenses are expected to be around EUR 600 million. Ascendis aims to break even by 2025, driven by expanded market access and new product launches .

SKYTROFA: Growth and Market Challenges

SKYTROFA's performance has been a mixed bag this quarter. Volume growth was impressive, more than doubling year-over-year. However, revenue for Q2 2024 dropped by 27% compared to the same period last year, settling at EUR 26.2 million due to higher sales deductions and adjustments to previous periods. Despite this, the first half of 2024 showed a 35% revenue increase year-over-year, reaching EUR 91.2 million. Market access improvements are expected to drive future growth, with full-year revenue estimated to range from EUR 220 million to EUR 240 million【4:0†source】【4:1†source】.

TransCon PTH: Promising Initial Returns

TransCon PTH, marketed as YORVIPATH, has shown promising initial returns. Revenue for the second quarter came in at EUR 5.2 million, up from EUR 1.5 million in Q1. This growth was driven by patient and physician demand in Germany and Austria, with additional contributions from other markets. Looking ahead, YORVIPATH's commercial prospects in the U.S. are bolstered by its recent FDA approval【4:1†source】【4:5†source】.

Financial Position and Strategic Moves

Operating expenses for the second quarter were EUR 157.8 million, a 10% decrease from last year, primarily due to lower R&D costs. Despite this, SG&A expenses increased slightly to EUR 74.3 million, driven by higher employee costs and global commercial expansion【4:1†source】. Net finance income rose to EUR 29.4 million, up from EUR 26.4 million in Q2 2023. The company ended the quarter with EUR 259 million in cash and equivalents【4:4†source】.

Expansion in Oncology

Ascendis continues to make progress in its oncology sector, advancing three Phase II trials with multiple indications. The company is optimistic about the potential of its products, TransCon IL-2 beta/gamma and TransCon TLR 7/8 Agonist, expecting initial results later this year. This diversification aims to position Ascendis for sustainable growth beyond endocrinology and rare diseases【4:0†source】.

Guidance for 2024

Looking ahead, Ascendis maintains a cautiously optimistic outlook. The full-year revenue for SKYTROFA is expected to be in the range of EUR 220 million to EUR 240 million. Total operating expenses for the year are projected to be around EUR 600 million, fueled by ongoing and upcoming product launches【4:2†source】【4:10†source】.

Earnings Call Transcript 2024-Q2

[Operator]

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 speaker's 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.

[Timothy Lee, executive]

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, U.S. 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 in the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to statements regarding our commercialization and continued development of SKYTROFA and YORVIPATH the U.S. 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 [ clinsults ], 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 you 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 7, 2024.

TransCon Growth Hormone for TransCon hGH, is approved in the U.S. 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 U.S. by the FDA for the treatment of hypoparathyroidism adults and the European Commission and the United Kingdom's Medicines and Healthcare Products Regulatory Agency has 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'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.

[Jan Mikkelsen, executive]

Thanks, Tim. Good afternoon, everyone. With the recent U.S. approval of YORVIPATH as the first and the only FDA-approved treatment of hypoparathyroidism in adults. Ascendis has successfully obtained approval for 2 out of 3 endocrinology rare disease product candidate in 2 major markets, the U.S. 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 3 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] faster and with a higher success rate compared to traditional drug development. We attempt to continue to develop new product candidates in endocrine disease. And last therapeutic areas such as oncology, [ CT ], 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 U.S. alone, an estimated [ 72, 090, 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 the United States can now look forward to having a treatment option for treatment of hypo. We are preparing for YORVIPATH [indiscernible] in the U.S., levering our established commercial infrastructure and expertise. We are expanding our dedicated team of sales reps and field medical person who would engage with around 6,000 physician would treat 80,000 -- 80% of patients with hypopara in the U.S.

Other key launch initiatives are underway. Including the rollout of our patient support programs designed to support access to YORVIPATH. For example, eligible patient on commercial [indiscernible] 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 assistant program. We have also started engaging U.S. payers and [ PBMs ]. We expect product availability in the U.S. in the first quarter of 2025 or soon, if it's possible. Consisting with premier responsible pricing, we will launched with a bed price corresponding to 285,000 annual per patient reflecting the value of YORVIPATH to the U.S. health care system.

In the U.S., there are around 140 patients currently active in the expanded access program. And about 50 more patients in the open-label extension of our clinical studies. Physician will begin TransCon these patients over to commercial product as soon as it's available. In Europe, the number of patients and prescribing physician initiating YORVIPATH continues to increase, and we see a good mix of [ PT ] experience and new menu patients. This was the first full quarter of commercial loans in Germany and Australia, where sales momentum continues to build. We now have more than 250 patients on treatment and an estimated 125 prescribers in these 2 markets.

YORVIPATH patients with [indiscernible] 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 [ NPA ]. The interest for serving patients under named patient programs prior to full commercial loans is increasing. We now have patients in this program 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 for SKYTROFA in the first 3-year symptoms and to have a sheep market value leadership while expanding the overall growth hormone market. A key component of our strategy to make SKYTROFA a blockbuster product in the U.S. include simplifying broadened market assets for both treatment ave or switch patients as well as expanding our label. In the first half of the year, that we set to broader market assess 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 markets transition largely completed. SKYTROFA is now positioned as a premium product with a net value prepatient of around 3x compared to [indiscernible]. We are now focused on using our new market assess covers to drive further demand. Continue to expand the overall growth hormone market and are aiming to reach blockbuster data for SKYTROFA in the U.S. 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 II trial in Turnet 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 fewer trial in the coming weeks. We have consistent in our [indiscernible] over the past 8 years since we announced our product candidate that our aim is to develop a treatment that address both linear growth and [indiscernible] that affect health and quality of life for people living with achondroplasia.

Earlier this year, you saw a competitive result for our Phase II accomplish trial. Demonstrating that our once-weekly TransCon CNP increased annualized growth velocity similar to sort [ vosoritide ] about 5.6 centimeter after 12 months of treatment. In addition, for first-time [ A4 ] 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 [ Belvin ] in [indiscernible] 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, 1 quarter earlier than guided. This trial enrolled [indiscernible] age 2 to 11 with [indiscernible]. The mean [indiscernible] 5.7 years, similar to our Phase II trial. We also continue to enrolling in [ COD ] a Phase II trial of TransCon CNP in combination with TransCon Growth [indiscernible] designed to show that adding SKYTROFA to TransCon CNP could provide cash up group 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 26 data expected in the second quarter of 2025.

Turning now to oncology. We continue advancing 3 Phase II trials with multiple indications with a big cohort to study the best-in-class potential of our 2 product candidates, TransCon IL-2 beta/gamma and TransCon TLR 7/8 Agonist in different combination scenarios. We plan to present initial results from our TransCon IL-2 beta/gamma in combination with chemotherapy in plasm resistant award [ tuberine ] cancer from the I believe tried later this month at the ESMO conference in Barcelona. I'm pleased how this program are progressing.

In closing, for Ascendis, it's all about the patients. Patients tell us the U.S. approval of YORVIPATH is transformative. We hear from parents that [ Descartova ] has changed the life of children and parents both. With data expected in the next week for TransCon CNP. It is our goal that we are able to show that we also transform the life of people living with achondroplasia. With our ongoing progress in our oncology program and exploration of other areas of innovation in that market opportunity such as obesity. We continue to position Ascendis for sustainable growth with an expanded pipeline and transformative TransCon product candidate.

I'll now turn it over to Scott for a financial update.

[Scott Smith, executive]

Thanks, Jan. SKYTROFA volume more than doubled in the second quarter of 2024 compared to second quarter last year while reported revenue was EUR 26.2 million compared to EUR 35.9 million recorded 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 U.S. alone.

In total, Q2 2024 reported revenue was reduced by a true-up of EUR 27.1 million, of which EUR 19.5 million was attributable to the first quarter 2024 sales and EUR 7.6 million to sales prior to January 1, 2024. SKYTROFA revenue for the first half of 2024 totaled EUR 91.2 million, a 35% year-over-year increase compared to EUR 67.4 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 EUR 7.6 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 U.S. 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 and 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 EUR 220 million to EUR 240 million.

Shifting to TransCon PTH. Second quarter YORVIPATH revenue of EUR 5.2 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 EUR 1.5 million in Q1, driven by growing patient and physician demand. Closing of the top line, total revenue for the second quarter was EUR 36 million, including EUR 4.6 million tied to rendering of services and license revenue.

Turning to expenses. R&D costs in the second quarter of 2024 totaled 38-- sorry, EUR 83.5 million compared to EUR 105 million during the second quarter of 2023. The 21% decline was largely tied to lower external development costs for TransCon TLR 7/8 Agonist and lower cost for TransCon PTH as well as the [ Iconas ] spin-off. SG&A expenses in the quarter totaled EUR 74.3 million compared to EUR 70.3 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 EUR 157.8 million for the second quarter, 10% decrease compared to the EUR 175.3 million during the second quarter of 2023. Total operating expenses for the first half of 2024 were EUR 295 million.

Net finance income in the quarter was EUR 29.4 million compared to EUR 26.4 million in the second quarter of last year. As a reminder, the net finance line can fluctuate quarter-to-quarter driven in part by noncash items related to our outstanding convertible notes. We ended the second quarter with cash, cash equivalents and marketable securities totaling EUR 259 million compared to EUR 399 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 and for USD 150 million in exchange for a 3% royalty on net sales of YORVIPATH within the United States. The royalty payments are capped at 1.65x the purchase price if fully paid prior to December 31, 2029, or 2x thereafter. Further details are disclosed in a separate [indiscernible] also filed today.

Looking ahead for the full year 2024, based on current plans, we expect SKYTROFA revenue to be in the range of EUR 220 million to EUR 240 million. Total operating expenses, which include SG&A and R&D to be approximately EUR 600 million, including YORVIPATH related launch activities in the U.S. And pending launch timing of YORVIPATH in the U.S., 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 log 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.

[Operator]

[Operator Instructions] Our first question comes from the line of Jessica Fye with JPMorgan.

[Jessica Fye, analyst]

I want to better understand how you project getting SKYTROFA to a blockbuster in the U.S. 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 created Growth Hormone market. Can you walk through that a little bit?

[Jan Mikkelsen, executive]

Thanks, Jess. I will start, and I have my 2 commercial colleagues with me here today. So that can also some give you more details if that is desired. Currently, we see the market is about USD 1.4 billion, the entire Growth Hormone market in the U.S. And as I stated in my prepared remarks, when we look on net value per patient, the basic [ Wittropher ] have about 3x 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 assess, clearly, clearly, clearly, SKYTROFA is the preferred product. Even in places where we don't have market assets, we really see SKYTROFA coming in because it's really up avoiding a unique improvement compared to the other 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 turn a data coming in for Phase II later this year, we will initiate trials very fast, and we can do it in a basket manner. So we basically 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 U.S. And with the reset of the what we call the market asset, 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 yes, you have and want to get more in-depth knowledge about specific comments from my side.

[Operator]

[Operator Instructions] Our next question comes from the line of Tazeen Ahmad with Bank of America Securities.

[Tazeen Ahmad, analyst]

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 [ Novo ] competing products?

[Jan Mikkelsen, executive]

Thanks for the question. I think it in their line with some of the same question that got asked us the first question. Yes, today, there is 2 other long-acting products in the U.S. market. We basic see one of them in [ Genza ] 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 [indiscernible]. [ Sagora ] have a preferred position on some of the big PPM, 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 best generation when we also get the -- for example, you should also look on what happened 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 a reset of the entire market that potentially come a little bit more unexpected to many of us that it was so fast adapted into the system.

[Operator]

Thank you. Our next question comes from the line of Derek Archila with Wells Fargo.

[Derek Archila, analyst]

Just wanted to know what payer feedback you might have received thus far on the proposed YORVIPATH pricing in the U.S.? And then I have a follow-up.

[Jan Mikkelsen, executive]

We are coming out 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 they can be treated. In that entire mathematic agreement or to achieve that, we came to this responsible pricing on back. And we have not got any feedback against that. That is not total acceptable.

[Derek Archila, analyst]

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

[Jan Mikkelsen, executive]

I can come with some initial comments and you can get some further comments on Camilla. Our initial aim and how we look at how we expected the penetration profile would be that we will see typical 1 to 2 patients per physician in the beginning. There was what we expected to see.

Before this single physicians really see the benefit of really what YORVIPATH can give to the patients. When they observe that we expect later in this year that eats patients or physicians 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 had really prescribed it. We are extremely proud about this penetration to physicians. But I think what does really are the most impressive thing for me in this [indiscernible] is basic retention. When you think about we have a retention, when you start to take patients in and really test them, are they really providing a benefit for the patient and then they have a retention of 98%. And I have never seen that for any product before. That is really, really unique. What is really described the benefit that is really giving to the patient and the state on the treatment exactly as we have observed in our clinical trials.

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

[Unknown Executive]

Yes. And I think you said it very, very well. We are very pleased with the uptake of the YORVIPATH in Germany. We are benchmarking other rare disease launches, and we are doing very well compared to them. So the team is working hard on both breadth and depth, and that's working well and also creating the mix between the [ PGHD ] patients and the ones that have been on that path and the switch that we are making from that path to YORVIPATH is growing very, very fast. So all in all, we are very pleased with how it's going and where we'll go in the future.

[Jan Mikkelsen, executive]

Yes. What we have seen in different European countries that [ NAPA ] basically because of its stop of manufacturing. There is a tendency to keep the patient on that par 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 more, more [indiscernible] taking up from the [ NetPower ] patient 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 '25, we will have the next 6, 7, 8 European contracts being added in, really rolling out in the way we generate revenue from this region in a much faster speed.

[Operator]

Thank you. Please stand by for our next question. Our next question comes from the line of Li Watsek with Cantor.

[Li Wang Watsek, analyst]

Maybe just a follow-up on SKYTROFA. Maybe help us understand what went into the assumptions for the lower guidance for schedule for this year. Just looking for more details on what's driving that EUR 100 million our reduction. Maybe talk a little bit about the dynamics between broader market access and pricing? And I have a follow-up.

[Jan Mikkelsen, executive]

I can come with some overall statement first related to how we did the forecasting because what we basically did that we saw a growth in volume between Q1 and Q2. And as we utilize that growth basically to predict rest of the year and it's basically given the lower value. And after we now have visit our market assess portfolio, we are in a position that we expect that the DTN 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 would potentially materialize, but we also note 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 U.S. you can 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.

[Joseph Kelly, executive]

So the health care 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 health care providers are documenting intolerance, 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 '25. 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.

[Li Wang Watsek, analyst]

Okay. And I also wonder if you can talk a little bit about where you can further reduce from the cost perspective? And is there any chance that you can still break even this year given the lower SKYTROFA guidance?

[Jan Mikkelsen, executive]

Scott is really good at the numbers. So I will summary give you [indiscernible] or 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 as different regions are really starting to take in now.

So potentially, we have a YORVIPATH outside U.S. We're still in a situation where we are still discussing with FDA related to how we can really help the patient that is in shortage of a treatment here in the U.S. We hope we can help them. We will do everything to help them. It means that we will have a much faster launch that we actually are taking into our clients. We hear the voice from the patients. We hear the voice for 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, comments?

[Scott Smith, executive]

I think you've said it well, Jan, 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 patients 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 USD 150 million. But we continue to have great scrutiny on costs, particularly where they're not leading to getting our products to patients.

[Operator]

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

[Gavin Clark-Gartner, analyst]

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?

[Jan Mikkelsen, executive]

I think it was gradual during the first half year. So some of them are first taking in here in Q2. The complexity of these agreements are very complex in this way that potential rebate compared to volume increase some way not really aligned and there was some of the issue we ranked 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 would expect first, all the effect that we now have installed as Joe told before, is first ticking in the second half, okay? So I will first see the expected growth coming in, in the second half.

[Gavin Clark-Gartner, analyst]

Okay. That makes sense. And I just wanted to ask on [ IQVIA ] data overall. Have you guys noticed any changes in capture rate trends over time?

[Jan Mikkelsen, executive]

I think the issue -- I personally have the data is that it's a sampling of a few places. And if you someway keep everything stable. You can use it as an overall trend. If there is a shift between different PBMs, [indiscernible] different market access, you often will see some difference in volume that really are totally unpredictable up from the perspective at the sampling between the different PBMs are different.

So out from that, I think you should pay it, if you give them all money, but 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.

[Operator]

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

[Vikram Purohit, analyst]

I guess switching to TransCon CNP. We were just curious for the upcoming ApproaCH readout. And then also for the COACH readout in 2Q '25, just which parameters of data you expect to report out and how you would currently guide people to compare and contrast the data sets versus a competitor CNP data sets available in this space?

[Jan Mikkelsen, executive]

I think the most easiest way to compare anything is to go through vosoritide because this is to, you can say, mode of action that is very most aligned between them even if there is a different in healthy function because we have a continuous exposure of CNP molecule where from the vosoritide it basically is only had an active cover for 2 or 3 hours in every 24 of dosing cycle.

So when we look on our aim, as we have said in the last 8 years, we want both to provide linear growth but also provide and address the co-morbidity of the disease. And what we have seen until now and now I'm referring into Phase II because this is the data I can talk about today is that we have seen and analyzed high velocity exactly at the same level of vosoritide with a once-weekly dosing profile. But we have seen the improvement in many of the ways that the children, the physician, the caregivers talk about the benefit to the patient.

And up from that perspective, we also can show when we compare our Phase II 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 co-morbidity, which have never been shown by any other product. And when they 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 basically to address some of the co-morbidities.

So it gives you where we started from. I need to see the data that are coming in the next week. So it's pretty, pretty, pretty near. So the database has been locked. People are running the [indiscernible]. So assume they're finished, I will be taken into a room and see the data.

[Operator]

Thank you. Please stand by for our next question. Our next question comes from line of Kelly Shi with Jefferies.

[Dingding Shi, analyst]

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

[Jan Mikkelsen, executive]

We have an extremely constructive dialogue with FDA related to how potential to address the shortest of PTH drops in the U.S. It's been driven by patients that basic are seeing the huge unmet medical need. The situation where patients have been missing [ NATPAR ] for a long time and extremely serious consequence of patients that now today, are on their path and certainly need to be disrupted of the treatment because net par will not be available longer.

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

[Operator]

Thank you. Please stand by for our next question. Our next question comes from the line of David Lebowitz with Citi.

[David Lebowitz, analyst]

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

[Jan Mikkelsen, executive]

I think you have understood it correct. This is a true up that is basically reflecting net revenue from mainly net revenue for Q1 but about 7.6 million also from '23. 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, Scott any comments? Or did I get it right?

[Scott Smith, executive]

You got it right, Jan. Good.

[David Lebowitz, analyst]

Got it. And on CNP what has occurred to actually essentially accelerate the pivotal data time line from prior updates?

[Jan Mikkelsen, executive]

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 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.

[Operator]

Thank you. Our next question comes from the line of Alex Thompson with Stifel.

[Alexander Thompson, analyst]

I guess, again on sort of the YORVIPATH potential in the U.S. 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 U.S. launch in the fourth quarter?

[Jan Mikkelsen, executive]

I actually 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 most material do we have and all the things like that. So we can ensure that when we start, we basic , we really can manage this entire demand that we expect to come.

[Operator]

Thank you. Our next question comes from the line of Paul Choi with Goldman Sachs.

[Kyuwon Choi, analyst]

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 multiyear? 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?

[Jan Mikkelsen, executive]

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 resetted. This is why Scott used the great work reset. We have reset our coverage in the U.S. And out from that perspective, that GTN, 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 '25, '26, '27, '28, '29 and '30. I can only come with 5 years' guidance.

[Operator]

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

[Yaron Werber, analyst]

Great. Hope you can hear me. My question is in two parts, just relating to the -- as you think about the guidance for the year, the 220 to 240. Does that entail the 71.5 million that you sort of did in the first half for SKYTROFA on a net basis? Or is that including the 91 million, assuming you did 65 million in Q1?

And then secondly, on , you said you did 53 million in Q2, is that a good run rate to then start into Q3. And four, should we really think of the 26 million this quarter is a good run rate into the second half.

[Jan Mikkelsen, executive]

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 to day 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 basic at everything what we to true up, both from '23 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 EUR 53 million if I calculate it right, that I think is a 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 cup we will see an improved pickup in Q3 and Q4. And when we did the forecasting, the basic to conservative approach and saying we use the number between Q1 and Q2 and view 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 questions related to your mathematic algorithm related to the numbers. Scott, do you have anything to add?

[Scott Smith, executive]

Yes. Just one thing, Jan. The for the first half, we reported EUR 91.2 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 EUR 7.6 million of true-up for periods prior to January 1. So in other words, it would have been 7.2 higher or about EUR 100 million for the first half.

[Operator]

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.