On Tuesday, Evercore ISI updated its financial outlook for Ascendis Pharma (NASDAQ:ASND), increasing the stock's price target to $205 from the previous $191. The firm maintained its Outperform rating on the biopharmaceutical company's shares. The revision reflects the analyst's expectations for the sales performance of Ascendis Pharma's TransCon CNP, a product aimed at treating achondroplasia, a form of dwarfism.
The analyst noted ongoing efforts to refine sales estimates through discussions with healthcare professionals. Current projections include $450 million in peak sales for TransCon CNP in achondroplasia, with the majority of revenue anticipated to come from new patient starts. This estimate is conservative, as it includes only a small contribution from potential combination therapy with Skytrofa, another Ascendis product.
In their assessment, Evercore ISI acknowledged the possibility of competitive risks from oral treatments in the market but noted that these risks are already factored into their sales projections to some extent. The analyst's outlook remains cautiously optimistic, suggesting there could be further upside to their numbers if combination therapies demonstrate strong efficacy.
Furthermore, the analysis by Evercore ISI anticipates that TransCon CNP sales will have a significant impact on Ascendis Pharma's profit margins. The incremental sales and marketing expenses associated with commercializing this therapy are expected to be minimal due to the existing infrastructure for Skytrofa and Yorvipath, another Ascendis treatment. This advantageous cost structure is projected to contribute to Ascendis Pharma's transition to cash flow positivity in the next year.
In other recent news, Ascendis Pharma has been the focus of multiple analyst upgrades and positive trial data. Jefferies, Goldman Sachs (NYSE:GS), BofA Securities, and Stifel have all either increased their price targets or maintained their "Buy" ratings for Ascendis Pharma after the company reported encouraging results from its ApproaCH trial for TransCon CNP, a treatment for achondroplasia. The trial showed a significant increase in annualized growth velocity compared to placebo, leading to a positive outlook for the product.
Ascendis Pharma is expected to submit a New Drug Application for TransCon CNP in the first quarter of 2025. The company also reported hopeful signs from its Phase 1/2 IL-Believe Trial with TransCon IL-2 β/γ in patients with platinum-resistant ovarian cancer.
In terms of financials, Ascendis Pharma secured a $150 million funding agreement with Royalty Pharma and received U.S. approval for its product YORVIPATH for adult hypoparathyroidism. The firm concluded the quarter with EUR259 million in cash and equivalents, projecting SKYTROFA revenue to be between EUR220 million and EUR240 million for the full year of 2024. These are among the recent developments for Ascendis Pharma.
InvestingPro Insights
Evercore ISI's positive outlook on Ascendis Pharma is further contextualized by recent data and insights from InvestingPro. Ascendis Pharma's market capitalization stands at $8 billion, reflecting a significant presence in the biopharmaceutical market. Despite the challenges, such as analysts revising earnings downwards and the company's short-term obligations exceeding its liquid assets, the firm's revenue growth over the last twelve months has been impressive at 166.54%. This growth, however, is contrasted by a quarterly revenue decline of 24.04% in the same period.
InvestingPro Tips highlight that Ascendis Pharma is trading at a high revenue valuation multiple and does not pay a dividend to shareholders, indicating a strategy focused on reinvesting earnings into growth and development rather than providing immediate returns to investors. Additionally, the company's moderate level of debt and the absence of profitability in the last twelve months are important considerations for investors looking at the long-term financial health of the company.
For readers seeking a deeper dive into Ascendis Pharma's financials and future prospects, InvestingPro offers additional tips and metrics. It's worth noting that there are currently more tips available on InvestingPro, providing a comprehensive analysis of the company's performance and potential investment opportunities.
With a keen eye on the biopharmaceutical sector, InvestingPro's insights can serve as a valuable resource for investors considering positions in Ascendis Pharma. These metrics and tips provide a broader perspective on the company's financial status and market potential, complementing the analysis by Evercore ISI and enriching the investment discussion.
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