Ascendis Pharma A/S (ASND) Q2 2020 Earnings Call Transcript

Ascendis Pharma A/S  (NASDAQ: ASND) Q2 2020 earnings call dated Aug. 27, 2020

Corporate Participants:

Scott T. Smith — Senior Vice President and Chief Financial Officer

Jan Moller Mikkelsen — President and Chief Executive Officer

Dana Pizzuti — Head of Development Operations

Analysts:

Michelle Gilson — Canaccord Genuity — Analyst

Joori Park — SVB Leerink — Analyst

Josh Schimmer — Evercore ISI — Analyst

Jessica Fye — JPMorgan — Analyst

Jim Birchenough — Wells Fargo — Analyst

Tazeen Ahmad — Bank of America — Analyst

Alethia Young — Cantor Fitzgerald — Analyst

Trevor Allred — Oppenheimer — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Second Quarter 2020 Ascendis Pharma Earnings Conference Call. [Operator Instructions] After the speakers’ presentation there’ll be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is also being recorded.

[Operator Instructions] I would now like to hand the conference over to your speaker today, Scott Smith, Senior Vice President and Chief Financial Officer, Ascendis Pharma. Please go ahead.

Scott T. Smith — Senior Vice President and Chief Financial Officer

Thank you, operator. Thank you everyone for joining our second quarter 2020 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; Dr. Dana Pizzuti, Head of Development Operations; and Dr. Juha Punnonen, Head of Oncology.

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, 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, 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 and the Risk Factors section of our most recent Annual Report on Form 20-F. Please note that our TransCon product candidates are investigational product candidates and not approved for commercial use as investigational products, the safety and effectiveness of the TransCon product candidates have not been reviewed or approved by any regulatory agency. None of the statements made on the conference call regarding our TransCon product candidates shall be viewed as promotional on today’s call we will discuss our second quarter 2020 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?

Jan Moller Mikkelsen — President and Chief Executive Officer

Thanks, Scott, and good afternoon everyone. This second quarter, we achieved several key milestones for Ascendis, as we continue to events towards our Vision 3×3 to build a fully integrated biopharma company. We submitted our first BLA to the FDA for TransCon Growth Hormone for the treatment of pediatric growth hormone deficiency in June. The BLA submission was completely in line with our stated 2020 corporate goals. And it moves Ascendis another step closer to become a fully integrated global biopharma company.

To see our first TransCon technology product, TransCon Growth Hormone progressed from the idea state through three Phase 3 clinical programs, covering over 400 subjects and into a regulatory filing, which also includes our auto injector makes me proud of what we have achieved. But we are not stopping here. What makes Ascendis unique is that we are global company with a broad diversified pipeline, where all product candidates are created with the TransCon technology platform.

With the TransCon technology, we are able to deliver that validated by already of assisting drug and create highly differentiated product candidates, by identifying significant unmet medical needs with well defined clinical strategies. Starting the times underlying the disease and applying our TransCon technology to an existing clinically validated parent drug apparently, we are able to create new product candidate solving the unmet medical need.

Starting with non-biology, we are able quite simple to create highly differentiated products with last commercial potential with an expected high success rate. To achieve our goal of sustainable both long-term growth we will continue our acknowledgement of building multiple high value product opportunities in endocrinology rare disease, on quality, and our third therapeutic area. The BLA filing for TransCon Growth Hormone in the US is just one more milestone for Ascendis towards achieving our Vision 3×3 strategy to be a leading biopharma company.

We also continue to execute across all areas of the company. Let me update you on some of this recent development. For TransCon Growth Hormone, after the BLA filing for the treatment of pediatric growth hormone deficiency, Ascendis received a positive opinion from the pediatric committee of the European Medicines Agency, PDCO. On this agreement with the proposed pediatric mitigation plan or PIP covering children from 6 months to less than 18 years of age. We are pleased by the PDCO decision because we believe this reflect the unique product features of TransCon Growth Hormone, which enables the long acting release of unmodified somatropin by releasing unmodified growth hormone, the same molecule, a static growth hormone or in doses growth hormone.

The TransCon technology is designed to leverage both the direct and indirect effect of growth hormone in the same balanced way as static growth hormone has for decades. To our knowledge, the approval of our PIP is the first time PDCO has concluded that a development program for a long-acting growth hormone treatment support the clinical development in children. With the approval of the PIP, we are on track for filing the MAA or Marketing Authorization Application in Europe this quarter, instead of the plan Q4 2020 filing.

To establish global clinical reach for TransCon Growth Hormone, we continue to advance on several fronts. In Greater China, VisEn Pharmaceuticals, our strategic investment continues to enroll subjects in our Phase 3 trial for TransCon Growth Hormone in pediatric growth hormone deficiency. In Japan, we remain on track to initiate the Phase 3 trial for TransCon Growth Hormone in pediatric growth hormone deficiency in the fourth quarter.

For indication label expansion, we continue to execute on our global Phase 3 trial evaluating TransCon Growth Hormone in adults with growth hormone deficiency. Why is this trial so exciting? Daily growth hormone treatment for children and adults with growth hormone deficiency support or will own endocrine health including improved body composition, mental health, cardiovascular health and bone health. In contrast to pediatric growth hormone deficiency that we measure height as primary endpoint. In adult growth hormone deficiency, we typically measure the impact on all body composition, such as change in truncal fat mass or lean body mass.

To achieve this optimized clinical effect on truncal fat mass, it’s essential that growth hormone has its direct effect on the target tissue. As the decrease in truncal fat mass by growth hormone is partly facilitated by the direct activation of the growth hormone receptor on truncal fat cells. Our adult growth hormone deficiency trial, the foresiGHt trial is a global Phase 3 trial designed to compare the safety and efficacy of once-weekly TransCon Growth Hormone with placebo and a daily growth hormone product.

The foresiGHt trial will be conducted in around 120 sites in North America, Europe, Asia including China and Japan. Around 240 adult subjects with growth hormone deficiency who are treatment-naive or have not received growth hormone therapy for at least 12 months prior to screening will be enrolled in the trial. Subjects will be randomized one to one to one across three arms with expected 80 subject in each arm. Once weekly TransCon Growth Hormone placebo administrated once per week and a daily growth hormone product. The once weekly TransCon Growth Hormone and placebo arms will be double-blinded and the daily growth hormone arm will be open label.

The treatment period will be 38 weeks, with 12 weeks for dose titration and 26 weeks for maintaining. The primary endpoint is the change from baseline in truncal fat percentage at week 38. Secondary efficacy endpoints are change from baseline in truncal fat mass and change from baseline in total lean body mass. Al exploratory endpoint will be assessed along with the patient reported outcome measures, safety PK and PD. The primary regulatory update, is to evaluate the efficacy of once-weekly TransCon Growth Hormone versus placebo.

From a commercial perspective, it is important to show at least comparable efficacy, safety and tolerability to growth hormone. Adult growth hormone deficiency is the least penetrated market segment for growth hormone. With well documented health channels and health channels, we believe TransCon Growth Hormone may provide an alternative to daily growth hormone that address overall endocrine health and may provide a convenient alternative, which also leads to a better outcome for adult patients and expansion of the growth hormone market.

Moving to TransCon PTH. The data that we have reported from the 4-week fixed dose double-blind period or PaTH Forward in April 2020 combined with the additional data we reported this afternoon demonstrated for the first time, we believe the potential to transform will dive of people living with hypoparathyroidism with a hormone-replacement therapy. Earlier this year, we reported top line data from the full weeks fixed dose double-blinded portion of our Phase 2 PaTH Forward trial, which demonstrated that TransCon PTH has the potential to replace the standard of care activated Vitamin D and calcium supplements.

The data reported to date, support our view that TransCon PTH replace the standard of care in just four weeks, 80% of [indecipherable] on TransCon PTH removed standard of care, compared to 50% on placebo. Even if subjects were kept to a fixed-dose of TransCon PTH. In our open-label extension trial subjects are allowed to optimize up and down the TransCon PTH dose. So we expect that additional stock might be able to remove standard of care. We have been pleased to see all 58 subjects in the open label extension trial continue in the trial at the six months point. These subjects had been have continued regardless of baseline — severe TOPD disease and whether that had the response or not in the 4-week portion.

We believe from this excellent retention that may be some positive effect of results independent of historical burden and other biochemical parameters that we have reported out. What we have not known is where PTA therapy may improve quality of life for the patients. To date, we released new data which we believe is another element in demonstrating that TransCon PTH is better than standard of care for treating HP patients and support TransCon PTH as a hormone-replacement therapy. It is first time to our knowledge that the treatment for hypoparathyroidism has demonstrated a statistically significant improvement in quality of life, compared to placebo in a double-blinded controlled trial using the SF-36 Health Survey, a commonly used and validated non-disease specific PO instrument for overall assessment of health and wellbeing.

The survey consists of 36 questions and the results are summarized in a physical component summary PCS and mental component summary MCS. At baseline in the Phase 2 PaTH Forward trial subjects in both arms of the trial had a lower than average SF-36 course, suggesting that there is a reduced health related quality of life in this patient population. This is in alignment with several other stock. Already in the 4-week double-blinded controlled part of the Phase 2 trial statistically significant and clinically meaningful improvement in PCS and MCS were observed.

For the PCS score using a normative scoring system with a score of 50 as the norm for general population and an ANCOVA models, TransCon PTH subject demonstrated a mean difference of 5.2 points compared to placebo with a p-value of 0.013. The minimum important difference for PCS is 2 points. Fundamental component summary TransCon PTH subjects demonstrate a different in mean of 9.8 points compared to placebo with a p-value of 0.0003. The minimum important different for MCS is 3 points.

Our 4-week data suggests that sustained normal PTH levels off of something else prior than just normalization of serum calcium. Both PTH treated and placebo subject as high rates of normal calcium, 92% and 18%, respectively. Yet that was a meaningful difference in quality of life scores. Based on clinical experience clinicians and patients with hypoparathyroidism had not discussed that physiological PTH levels contribute to optimal function of the central nervous system.

Our 4-week data suggest that sustain normal PTH level rather than just normal serum calcium is indeed as is stated with health benefits. While these data are considered exploratory, they are the first dividend, we will ever see for our randomized double-blinded control trial indicated as a treatment for HP compared to placebo, may have the significantly improved physical function as well being to us at normal level. In previous published randomized controlled trials of PTH product, where SF-36 was compared to placebo, no significant treatment difference was detected versus placebo.

One possible explanation for this finding is the lack of sustained PTH levels. We continue working on validating our own disease specific PO instrument to help us evaluate additional patient benefit of TransCon PTH that may strengthen our overall value proposition. We plan to discuss our 4-week double-blind data and 6-month open label extension data for our own disease specific PO instrument and SF-36 with FDA in the coming months. We remain on track to report six months data from the open label extension portion of the PaTH Forward trial this quarter and some regulatory filings to initiate a global Phase 3 trial for TransCon PTH in North America and Europe in the fourth quarter.

We have initiated our global end of Phase 2 meetings with regulatory authorities and are pleased with the feedback so far. From the results that we have seen in our Phase 2 PaTH Forward trial, we believe that TransCon PTH potentially represent a new treatment paradigm for HP as a replacement therapy. At therapy, we will be able to replace convincement care normalize biochemical permits and associated long-term risk factors and improve the quality of life for patients. We look forward to sharing the six months open label extension data with you later this quarter.

A quick update on the rest of the pipeline. For TransCon CNP, we continue to work towards escalating dose cohorts in the ongoing ACcomplisH trial, our global Phase 2 trial that is evaluating the safety and efficacy of TransCon CNP at escalating doses in children with achondroplasia from 2 years to 10 years of age. We received orphan designation from the European Commission for TransCon CNP for achondroplasia giving us orphan designation in both Europe and the US.

As part of an integrated global clinical program, clinical development in China is being done through VISEN Pharmaceutical where an independent Phase 2 accomplished China trial is expected to be initiated in the fourth quarter.

Moving to oncology, preclinical data for TransCon IL-2 beta/gamma, a product candidate designed to provide sustained systemic release of a receptor biased IL-2, IL-2 beta/gamma specific were presented at the American Association of Cancer meeting in June. These data show the potential of TransCon IL-2 beta/gamma to be best-in-class IL-2 molecule and demonstrated that a single dose in the non-human primates provided a potent expansion and activation of lymphocyte with low activation of Tregs cells and eosinophils.

In addition, along the half life overrun 32 hours were observed in non-human primates which is expected to support potential dosing of every 3 weeks in patients. We are on track to submit the first IND filing for TransCon TLR7/8 Agonist in the fourth quarter of 2020, followed by a planned IND filing of similar for TransCon IL-2 beta/gamma in 2021. Based on the promising preclinical results we have seen in our TransCon IL-2 beta/gamma and TransCon TLR7/8 Agonist product candidate, we believe our TransCon technologies, which enable both systemic and long-acting intra-tumoral administration has the potential to improve treatment outcome for patients with cancer.

As you can see our clinical pipeline progress has kept Ascendis very busy during the first half of 2020. During the current quarter, we continue to grow our headcount in both R&D and the commercial organization as we’re preparing for the potential launch of our first product and expand our pipeline and global clinical needs.

Now let me turn the call over to Scott for a financial review before we open for questions.

Scott T. Smith — Senior Vice President and Chief Financial Officer

Thank you, Jan. Turning to our financial results for the quarter ended June 30, 2020, we reported a net loss of EUR94.9 million or EUR1.97 per basic and diluted share compared to a net loss of EUR58.9 million or EUR1.25 per basic and diluted share during the same period in 2019.

Now I will run through some of the key components of these results. Research and development costs for the second quarter were EUR63.6 million compared to EUR43.8 million during the same period in 2019. The increase in R&D costs reflect continued advancement of our pipeline with the primary drivers, including for TransCon Growth Hormone costs were higher compared to the same period of the prior year due to increased costs related to manufacturing of commercial product supply, as well as increased clinical trial activities including start-up costs for the global Phase 3 adult GHD trial, the foresiGHt Trial, and the phase 3 pediatric GHD trial in Japan. And for both TransCon PTH and TransCon CNP, costs were higher, primarily due to increased clinical trial and manufacturing costs.

We also saw higher external costs related to the continued build-out of our oncology therapeutic area and across all programs, and overall increase in personnel-related costs. Selling, general and administrative expenses for the second quarter were EUR20.8 million compared to EUR11 million during the same period in 2019. These higher costs primarily reflected an increase in personnel and related costs, as well as expenses associated with the continued build-out of our commercial capabilities. Other income and expenses included in an unrealized non-cash loss of EUR9.9 million compared to an unrealized non-cash loss of EUR8.2 million during the same period in 2019 due to foreign currency exchange rate fluctuations.

We ended the second quarter with cash, cash equivalents and marketable securities totaling EUR471.6 million. In July, subsequent to quarter end, we completed a follow on financing with net proceeds of $654.7 million or approximately EUR580.7 million. Including net proceeds from the July offering, pro forma cash, cash equivalents and marketable securities as of quarter end would have been approximately EUR1 billion.

We also remain on track to achieve the following milestones for the remainder of 2020. For TransCon Growth Hormone, these include submitting the MAA filing in Europe during the current quarter, executing the foresiGHt Trial, a global phase 3 study for adult GHD, and initiating a phase 3 clinical trial for pediatric GHD in Japan in the fourth quarter. For TransCon PTH, these include reporting six-month open-label extension data in the phase 2 PaTH Forward trial in the third quarter and initiating the global phase 3 clinical program for adult hypoparathyroidism in the fourth quarter.

For TransCon CNP, this includes initiation of ACcomplisH in China, a phase 2 clinical trial for achondroplasia through our strategic investment in VISEN Pharmaceuticals in the fourth quarter. And lastly, in our oncology therapeutic area, we continue to invest in CMC and preclinical activities related to TransCon TLR7/8 Agonist and TransCon IL-2 beta/gamma, and we plan to submit our first IND or similar filing in the fourth quarter for our TransCon TLR7/8 Agonist.

We continue to execute on our goal of building a leading biopharma company with a diverse pipeline of potential high-value product candidates in multiple therapeutic areas. Combining our TransCon technology with clinically validated parent drugs in areas of well-known biology has allowed us to deliver unique product candidates and clinical results with an expected high probability of success.

We saw that first with TransCon Growth Hormone, where, for the first time, we are aware of a long-acting growth hormone demonstrated in a randomized controlled clinical trial, similar or superior efficacy and safety on a broad spectrum of parameters compared to a daily growth hormone. Today, you see similar results from the four-week randomized double-blinded fixed dose portion of PaTH Forward with TransCon PTH which demonstrated for the first time to our knowledge that a treatment for hypoparathyroidism had a statistically significant improvement compared to placebo for the SF-36, a commonly used and validated non-disease specific PRO instrument for overall assessment of health and well-being. We look forward to potentially sharing similar first with you in our TransCon CNP, TransCon TLR7/8 Agonist and TransCon IL-2 beta/gamma programs in the coming years.

With our recent follow-on financing, we remain well capitalized to execute on our Vision 3×3. Operator, we are now ready to take questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Michelle Gilson with Canaccord Genuity. Your line is now open. Hi, congratulations on the data and thank you for taking my question. I know it’s not apples-to-apples because of the duration of treatment in the baseline but perhaps you can expand a little bit on some of your comments about this being the first trial to show a difference in quality of life for SF-36 results in a randomized, placebo-controlled study. And maybe specifically you can understand — you can help us understand if there is comparison to be made with the results from the REPLACE study, which showed that net par treatment did not result in a statistically significant improvement in either of those domains compared to placebo.

Jan Moller Mikkelsen — President and Chief Executive Officer

Thanks, Michelle. Why we really are so excited about the data is because we’ve basically had been missing something because — and when we started the TransCon PTH product, we had a long discussion about how do we really describe the severity of the disease. And people tried some way to describe it from the [Indecipherable]. And when we look on the patient demographic that we have enrolled in our Phase 2 trial, some of the patient is definitely being placed in the group of mild, taking low amount of activated vitamin D, taking a low amount of calcium supplement. And then we have the more moderate and then we have the severe. But what we saw because all the 58 patients now is past this six months step.

And then we know the burden of daily administration. But still patients are staying and not dropping out and typically, I have seen many trial, tried many trial, typically I would expect in an open-label extension, we would already have seen a lot of drop out. Why all the and then it was including the mild patient in this, there must be something else which we cannot just get compile chemical analysis. And this is why we developed the disease-specific patient reported outcome for hypoparathyroidism because we wanted really to cash that and get it validated and seen, the SF-36 is what we call it non-disease specific validation just describing the benefit you can really achieve in well-being of a person.

And what we saw here is that SF-36 came out so clear in just the first four weeks and we believe that is because we are providing the physiological PTAs level 24 hours, seven days a week, meaning is it’s a flat curve without huge fluctuations. And this is why we believe other product has not been possible to show a statistic significant change in SF-36 when they have a double-blinded period. And I actually believe this is just talking about the strengths of the product opportunity, but I think perhaps more important for me and Ascendis is, we really see the benefit that the patient get, we see how they really are changing their life, they are coming and adapting more to a normal life because they get the right hormone-replacement therapy.

Michelle Gilson — Canaccord Genuity — Analyst

Great. And just as a follow-up, are you planning to report the PRO with your 6-months data later this quarter? And just moving forward, when we do get those data without a placebo arm in the open-label extension study, how should we think about interpreting the PRO or SF-36 results?

Jan Moller Mikkelsen — President and Chief Executive Officer

I think with both type of studies, SF-36 results. But then Dana, you can comment about our…

Dana Pizzuti — Head of Development Operations

Right. As far as our own PRO instrument to HPES, we’ve already submitted to the FDA the documentation to get that validated by them. And so it’s really not so much to look at the individual groups and how patients fit with more about the instrument itself, how it behaves, how predictive it is. And as we’ve talked about before, there were the two major aspects of that which was the symptom side of it and then the impact side. So we’re pretty excited that it seems to function quite well. But the thing is that it’s not validated. And the reason that we came forward with the SF-36 was because that was — it’s a validated instrument again not specific for hypoparathyroidism but well established in terms of patient well-being as Jan mentioned. And so, we’ll be able to sort of correlate actually both of those scales as we go forward.

Now the issue that we’re going to have in interpreting the six-month data is that there is no control arm beyond the first four weeks, so we can follow and see how patients do. And based upon what we’ve seen so far with patients, as Jan said, staying on the trial, we would expect nothing less than a maintenance or an improvement in the four-week results we got from either the SF-36 or the HPES data as well. So again, we will be looking at that very closely once we finalize the six-month data in all of the 58 subjects that are still in the trial.

Jan Moller Mikkelsen — President and Chief Executive Officer

We have never had any doubt that was a reduced health-related quality of life in patients with hypoparathyroidism. There is multimode fabrication that’s showing that. But what is the interesting part for me from a high-level scientific perspective is that, it looked like this level can be independent on calcium levels. And this is where I think that what we are seeing more and more, it is potential and direct CNS effect that is providing this benefit related to health-related quality of life and this is what we would like to sustain further with both our own PRO but also continuum with SF-36. But we are really unsure of the assessments about this result because is really are the best thing you ever can see when you see the huge benefit that you can provide with an endocrine product where you basically also providing a high level of health-related quality of life.

Michelle Gilson — Canaccord Genuity — Analyst

Okay. Thank you for taking my questions.

Operator

Thank you. Our next question comes from the line of Joseph Schwartz with SVB Leerink. Your line is now open.

Joori Park — SVB Leerink — Analyst

Hi. I’m Joori, dialing for Joe. Thanks for taking our questions. So first one has to do with the — with TransCon PTH. We were just wondering, if you talk to the FDA about the SF-36 data and do you have a sense about how the FDA feels about the study design and primary endpoint for phase 3?

Jan Moller Mikkelsen — President and Chief Executive Officer

I think we just got the data now. This is why we released it here together with our Q2 earnings. And definitely Dana and his team will really go in and discuss it whether you can comment on that Dana.

Dana Pizzuti — Head of Development Operations

Yeah. I mean, we actually are preparing to communicate not only these data with just about the SF-36, but also the six months data once we get that all compiled and finalized. So, in addition to our — validating our new instrument, the HPES, we’ll talk further about the SF-36, and the long-term efficacy and safety of the product after the six-month time period.

Jan Moller Mikkelsen — President and Chief Executive Officer

So in conclusion, we have not shown regulatory agencies this data yet. We are going to do it in the — together with our six months data that’s coming later this quarter.

Joori Park — SVB Leerink — Analyst

Okay, great. That’s helpful. And then if I could just dive a little bit deeper about your HPES PRO. Could you talk a little bit more about it, what potential differences could there be between your HPES PRO and SF, and what do you believe — obviously, you just — you submitted it and it’s under — it’s in the hands of the regulator, but what do you believe, or what do you wish to capture with your PRO that the off-the-shelf endpoint of SF-36 will not be able to?

Dana Pizzuti — Head of Development Operations

Well, I think that the major difference is that this has been developed and sort of validated in hypoparathyroidism patients, right. And so SF-36 has been around for quite a while. It’s been used in all sorts of therapeutic areas for sort of looking at how the patients react or respond to therapies. So what we were able to do though as we look at the different, for instance, the symptoms, many of them that are sort of more prominent or more of a problem in patients who have hypoparathyroidism, so CNS things around remembering and concentration, which are the big things that patients tell us about this brain fog and things like that.

So we ask specific questions about that. And then as well, other like less CNS-related symptoms are also part of the different queries that we made to the patients. So that’s the symptom side. And then on the impact side, then it becomes a question about, so how much better or worse are you with respect to your sort of general physical activity, okay your ability to work, your sort of mood and then also your social relationships. So those are like the different parameters like on the impact side. But again, the big difference is that it’s validated in patients with hypoparathyroidism.

Operator

Thank you. Our next question comes from the line of Josh Schimmer with Evercore ISI. Your line is now open.

Josh Schimmer — Evercore ISI — Analyst

Hey, thanks for taking the questions. I have three of them. First on the foresiGHt trial, can you describe the dose and titration schedules for the weekly, and daily treatment arms? For the CN — actually still on the growth hormone market, you had indicated that the adult growth hormone market is under-penetrated. Maybe you could talk a little bit more about the unmet need to symptomatology and the benefits that they could derive from the convenient growth hormone option. And then, when do you think we’re going to get a clear sense on the TransCon CNP candidate profile in terms of its differentiated effect on growth, specifically in patients? Thank you.

Jan Moller Mikkelsen — President and Chief Executive Officer

Let me start with your last question, Josh. It’s a good question when we are getting the efficacy on the right cohort. We are dose escalating now. And what we already know from our knowledge about the product profile, we basically already think it’s highly differentiated because it’s continuous exposure of CNP molecule without the high peak that is associated with any effect on vasodilation and other things like that, and we see the efficacy is really highly differentiated too. When we will see the impact on this highly differentiated product opportunity in the clinical trial will we see when we go into a state in the — our dose escalation cohorts that we are finding the right dose that is providing what we call high meaningful efficacy, not only related to high but also related to potential other comorbidities.

I will hope and expect but I don’t know. I hope we will see that in a time where the next six to nine months, but I cannot guarantee that because I do not know which one is basically the right cohort where we will see the effect that we want to have. Related to adult growth hormone deficiency, it’s a quite different patient population that you’re basically see in growth hormone deficiency in pediatric where many of the adult patients are coming from complete different background, meaning there is only 15% to 20% that basically are coming from the pediatric growth hormone deficiency, many of them are coming from the cancer setting on quality, coming from trauma and other places, where the half and decreased amount in growth hormone.

This area is basically underserved. There has been a lot of different studies about what is the penetration, people are talking about 15% to 20% is really get it treated of the total patient population. So it definitely is an possibility to both help a lot of patients in adult growth hormone deficiency because it’s very hard for them to adhere to the daily injection and we can move them over to once weekly dosing. Typically and what we wanted to do in our foresiGHt trial which are built in such a way we have an 1 to 1 to 1 randomization because we think it’s not only important to show that we are better than placebo from a regulatory perspective, but the real product out there is daily growth hormone. So we want to be sure that we at least get the same efficacy as daily growth hormone.

And in the site how we titrate them up, you try to titrate them up in the same manner that you will see with daily growth hormone where we start on a low dose because the issue is how to get the body to adapt suddenly to have growth hormone again. And when the body is getting used to that, you basically can titrate up to, what I call, normal IGF-1 levels.

Josh Schimmer — Evercore ISI — Analyst

Great. Thank you very much.

Operator

Thank you. Our next question comes from the line of with Jessica Fye with JPMorgan. Your line is now open.

Jessica Fye — JPMorgan — Analyst

Hello, guys. Good afternoon. Thanks for taking my questions. On an PTH data today, I’m curious if the four-week SF-36 results or the HPES results track with the biomarker and supplement withdrawal components of the primary and key secondary efficacy endpoints in PaTH Forward. Essentially will the responders on the primary and secondary more likely to benefit on SF-36 or HPES on the non-responders? And related to that, it sounds like you’re saying that some patients benefited meaningfully on quality of life, even if they did not meet the responder criteria for some reason.

And if so, I was hoping that we could dig into which element of the responder criteria seemed less important for quality of life? You alluded to calcium in response to an earlier question, was that serum calcium or urinary calcium?

Jan Moller Mikkelsen — President and Chief Executive Officer

I think we have still a lot to learn about how really TransCon PTH have so many positive effect when you have a normal replacement therapy. What we could not see any clear correlation was reflecting a serum calcium and any kind of the parameter related to quality of life. So there was one of the more interesting perspective we wanted to analyze. Taking to the next deep dive, we have not reached yet and we will continue to analyze are there any kind of the subgroup of the SF-36 where you can subgroup it further down in the 36 of question in different domains where some of them are much more reflecting to one single parameter of other one.

We are not to the level where at least I’ve not seen analysis that basically are describing any kind of correlation or lack of correlation, but is basically a very, very interesting topic, what we really will follow-up on. What we basically are coming from is that what we see in SF-36 is also some of the same positive trends that we’re seeing in our disease specific PRO. So I think that is a great alignment in the data.

Jessica Fye — JPMorgan — Analyst

Okay. And following up on that, do you see any possibility of changing the planned phase 3 endpoint to SF-36 or HPES?

Jan Moller Mikkelsen — President and Chief Executive Officer

I actually believe that when we look at our primary endpoint, we actually will include such a parameter potential as a key secondary element, which is a great way to also have an opportunity to isolate and be ensuring that we can either build it on our patient specific PRO, but we can also include an element as SF-36. So, definitely we have a chance but we are not thinking on building it into the primary endpoint, but basically, take it up as a key secondary endpoint.

Jessica Fye — JPMorgan — Analyst

Okay, great. And last one, maybe a quick one. Is it possible to refine when in the third quarter we can expect to the six-month PaTH Forward update?

Jan Moller Mikkelsen — President and Chief Executive Officer

There is not so many months left now in the third quarter. I had to think that they will be — there is only one month left now, basically the September, so it will be in the next four to six weeks.

Jessica Fye — JPMorgan — Analyst

Okay, thank you.

Operator

Thank you. Our next question comes from the line of Jim Birchenough with Wells Fargo. Your line is now open.

Jim Birchenough — Wells Fargo — Analyst

Hey guys, congrats on another strong update. Couple of questions. I guess first maybe not to nitpick on data, but just on the mental component of the SF-36, it just seems like there is a pretty substantial decline in the placebo group from baseline to week 4. Is that an expected natural history and is the drug result statistically superior to the baseline of the placebo. I’m just trying to understand if the decline in the placebo contributed to the results.

Jan Moller Mikkelsen — President and Chief Executive Officer

I have not got any feedback, Jim, that indicate that the decline anyway should be reflecting any kind of the treatment outcome there. So I have not seen that part in this. But what you will see is that everyone has been normalized to the 50 account. And I think that is where we see the norm generation — general population. So when you have the number, you basically transform it into a normalization.

Jim Birchenough — Wells Fargo — Analyst

Got it. Okay. Yeah, it just looked like the baseline was that around 47 for placebo and then drop down to maybe 42 and that it was part of the delta with the treatment effect at week 4. So I was trying to understand that a bit better.

Jan Moller Mikkelsen — President and Chief Executive Officer

Exactly. But I think this is how you make the different domains and then make it over in a summary scheme where you normalize it to a norm scheme, and this is where you basically see this kind of difference coming in.

Jim Birchenough — Wells Fargo — Analyst

Got it, okay. And then just in terms of going beyond the six-month data this quarter the interactions with regulators, when should we hear back on the results of those interactions and is breakthrough designation part of the discussion?

Jan Moller Mikkelsen — President and Chief Executive Officer

So, currently we are only discussing with regulatory agencies our first 4-week data. There was the fixed-dose double-blinded part. And in this discussion we had not even included our SF-36 data. What we have discussed is how do we look about our 4 weeks data which basically are proving one single thing that we have with replacement therapy. The regulatory feedback where we have got regulatory feedback now from the US, we are getting in beginning of September regulatory feedback for different European agencies.

And also from the feedback we got from US that basically our understanding, yes, this is basically is an replacement therapy. I believe that is an essential data target that will come up when we can come and discuss and send in our six months data in addition of the element we have from our SF-36 for the first four-week blinded — doubled-blinded period and also our disease-specific PRO, which we also would include as soon as we got the six months data.

Jim Birchenough — Wells Fargo — Analyst

Maybe just one final question, just on the adult growth hormone deficiency. Could you maybe give us a sense of the burden of the abnormal body composition in patient — in adult patients with growth hormone deficiency and what the — what’s the clinically relevant change in that metric and what is the consequence of that? And I’m imagining there are drastic metabolic consequences of those change parameters, but maybe just a bit of background, if you would, on just the body composition metric and what level of change would be meaningful?

Jan Moller Mikkelsen — President and Chief Executive Officer

Yeah. You can say that in pediatric growth hormone deficiency we measure height, but it is not the same thing to say in this patient population that body composition is also extremely important. But as a primary endpoint, you are basically is always measuring height velocity for one year as an primary outcome. If you go to adults of obvious reasons, they are not growing in height but typical in a different dimension. And this is where you often measuring a decrease in truncal fat because growth hormone has a direct effect of breaking down truncal fat. But also have major impact on other element like a patient reported outcome and also have impact on cardiovascular parameters, has impact on exercise capacity.

But from a traditional perspective how it always have elevated as a primary outcome growth hormone treatment that has been done in a pediatric population by high velocity and in adult population on the decrease on truncal fat typical as a percent or absolute amount and secondary is something like increase in the body mass. This is not the same thing that you also always would expect that overall positive effect you can get on endocrine helped by growth hormone treatment is also expected to be associated with this decrease in truncal fat.

Operator

Thank you. Our next question comes from the line of Tazeen Ahmad with Bank of America. Your line is now open.

Tazeen Ahmad — Bank of America — Analyst

Okay, guys. Hi, how are you? A few questions from me. For SF-36 in the three doses that you study, the 15, the 18, the 21, can you give us an idea of how the response has changed as you went from the low dose to the higher dose. I’m just trying to get a little bit of granularity on that. Specifically, can you talk about whether the highest dose that showed the best results? And then I have a couple of follow-ups.

Jan Moller Mikkelsen — President and Chief Executive Officer

I have not seen the breakdown directly on the three different patient group. It’s mainly being done on PTH arm and placebo arm and deal with how the primary analysis are done. I am not sure there is any kind of difference between different groups because that is not being brought up to my attention. So I actually think that will be a same positive effect on all the three different groups.

Tazeen Ahmad — Bank of America — Analyst

Okay. Going to the GHD for a second. So you have phase 3 now ongoing in China, phase 3 starting in Japan soon. Can you give us a little bit more color on the timelines for how you’re thinking about when those studies could read out? And then to follow up on that we traditionally have a sense of rare disease launches in Japan and price points. But can you talk to us a little bit, Jan, about how you’re thinking about the market in China?

Jan Moller Mikkelsen — President and Chief Executive Officer

Yeah. TransCon Growth Hormone being evaluated by our strategic investment, VISEN Pharmaceutical in Greater China. They are in a situation where they are enrolling patients. They expect that in the first quarter next year, it will be fully enrolled and therefore you can basically expect that after 12 months, you will see and some months to clean data, you will see the endpoint. If you go to the Japanese trial, it’s a much larger — smaller trial. The Chinese trial is about 150 patients. In Japan, it will be much, much, much less. And we will start to enroll this patient group here in filing the IND equivalent in Japan end of this year. The growth hormone market in Greater China and Japan are interesting because it’s basically number two or three single largest market, and the growth hormone market in China has typically dominated a lot with local player where — one company that’s providing — I think the vast majority of the growth harmone, and what is interesting is that we can come in this interesting market which is very different compared to a traditional Chinese market because 75% of that is basically not in the hospital segment but basically a direct payment from the caregivers.

So it’s very, very different market compared to the general segment. And size of it is pretty large. Our best estimation is about a $600 million to $700 million is the established Chinese market now and actually growing really large every year. The Japan market is nearly in the same size and also have been pretty well established for many years. So when we think about TransCon Growth Hormone and really we want to be the leading brand, we want to be the leading brand on a global manner. This is one of the reason why we have hired a person like Jesper Hoiland, who is coming from a global commercial background and want to implement our rare disease endocrinology products on a global basis.

Some of the countries we will go direct as the US and selected European countries. Other places you will see we use our innovative way of really building up the strategic alliance where we at the same time can be part of really getting the value that we are creating like we did with VISEN Pharmaceuticals in Greater China and you will see this kind of way of thinking be implemented in a lot of geographic regions where we accept that we need to have local knowledge, local people really to make it to a leading brand.

Operator

Thank you. Our next question comes from the line of Alethia Young with Cantor Fitzgerald. Your line is now open.

Alethia Young — Cantor Fitzgerald — Analyst

Hi guys, thanks for taking my question. A couple, one, can you talk a little bit about why kind of decided to focus first on TLR 7/8 versus maybe like IL-2. I just wonder if there’s anything you’re seeing preclinically or commercial that kind of makes you think about the landscape. The second question is talking a little bit about the CMP trial, has it been potentially impacted by COVID or is it just an element of dose escalations and then my third question is just have you got any feedback from the FDA on the growth hormone submission since you filed probably about late June? Thanks.

Jan Moller Mikkelsen — President and Chief Executive Officer

Yes, let’s start from the backlog of your question, because then I can easily remember them. So you’re right, the 60 days period have passed and Dana, please inform.

Dana Pizzuti — Head of Development Operations

Well, right. So the agency has confirmed that they filed it, but we’re still waiting for the day 74 letter. So that will disclose what the review period will be, whether they think we might go to advisory committee or any other issues they’ve identified but they have confirmed that they have filed the application.

Jan Moller Mikkelsen — President and Chief Executive Officer

Second question related to TransCon CMP, I don’t think we have disclosed any kind of information about when we expect to have, and what we call the cohort where we expect to see our own expectation to efficacy. We have not disclosed that. And we are still on track to follow the pattern that we have laid out. The only thing we have disclosed whilst we expect to initiate a trial which are — is a double-blinded placebo-controlled trial in achondroplasia patient down to the age of 2. We have disclosed that we expect to initiate that end of this year. We call it ACcomplisH China and we still expect to initiate this trial by the end of this year.

Alethia Young — Cantor Fitzgerald — Analyst

And then, my first question was on TLR 7/8…

Jan Moller Mikkelsen — President and Chief Executive Officer

That was a good question, and the two project was competing at the same time frame and basically both of them we believe is transformative high-value product opportunity, very different in concept but one is our TransCon TLR 7/8 where we basically can provide long-term exposure inter-tumor for weeks, months of an agent that can turn tumors from being basic unreactive to reactive. We believe that is really paradigm shift and never been done before. What we’re doing with bios IL-2, really believe that is going to be a best-in-class product opportunity, move both of them up both to a unique position as our two first most unbanked product opportunity in our oncology. That one is coming before the other one is basically from the practical perspective is that we need to have a product opportunity being going to clinical operation initiation of trail filings and other elements like that and we will have one coming end of this year and the other one will come around six months after. So there is nothing that have changed for that. We are extremely excited on both of this product opportunity and continue to build up a unique pipeline in oncology.

Operator

Thank you. Our next question comes from the line of Trevor Allred with Oppenheimer. Your line is now open.

Trevor Allred — Oppenheimer — Analyst

Hi guys. Thanks for squeezing me in. Couple from me. So following your recent capital raise, are you guys thinking about doing M&A and if so what therapeutic category do you think you’re focusing on, and then also are you hearing anything about the pace of enrollment that VISEN is having in China and how do you expect that to translate to your other trials that you’re enrolling? Thanks.

Jan Moller Mikkelsen — President and Chief Executive Officer

When we having our portfolio review, we just had it here on our oncology pipeline. We are looking on this unique product opportunities we can build. We are thinking about how we have built Ascendis Pharma to the stage we are today. We are doing by the TransCon technology because we don’t believe — we have not seen other technology where we basically can make highly differentiated product opportunities, really addressing major unmet medical need, but still having a high success rate because the TransCon technology enables us to be in a position that we can work on validated target, validated parent drugs. Why should we ever go away from that and starting to be like anyone else? We have a huge competitive edge with our TransCon technology and we will continue to build on the algorithm that has proven so successful and because there is so many still low-hanging fruits that we can address. So I don’t expect us to see and move into any kind of M&A there.

Related to how we are executing in other geographic region, for example, to our strategic investment in VISEN Pharmaceutical, I think they have highly talent company set up, and they’re working in the same standards as we do, they’re working with the same dedication. So I actually believe they are coming and you will see the same kind of results coming out of their pipeline with our product as you’ve seen out of coming out of Ascendis.

Trevor Allred — Oppenheimer — Analyst

Okay. And any impact that you’re seeing from enrollment from COVID-related things with VISEN, and then do you see that translating like those learnings translate into anything that you’re going to be doing with your initiations later this year?

Jan Moller Mikkelsen — President and Chief Executive Officer

I have to believe that if you look on the Greater China, I still think it’s one of the areas which has less COVID-19 issue compared to all other areas. And we have not seen any kind of restriction after the first quarter in Greater China how really to enroll the trials.

Trevor Allred — Oppenheimer — Analyst

All right. Sounds great. Thanks.

Operator

Thank you. There are no further questions in the queue.

[Operator Closing Remarks]