Tuesday, Citi reiterated its Buy rating on Ascendis Pharma (NASDAQ:ASND) with a price target of $178.00. The firm initiated a 30-day Catalyst Watch in anticipation of upcoming data from the ApproaCH trial for TransCon CNP, a treatment for achondroplasia. The results, expected to be released in the third quarter of 2024, have sparked interest due to the accelerated timing from the previously anticipated fourth quarter.
The focus is on the imminent update from Ascendis Pharma, as management typically announces data within two weeks of entering a quiet period, which began last Thursday. The analyst noted that despite skepticism from investors regarding TransCon CNP's efficacy compared to BioMarin's Voxzogo, the differences in trial design and demographics may have influenced perceptions. The forthcoming results from the ApproaCH trial are anticipated to present a competitive profile for TransCon CNP.
Citi's analysis suggests that if TransCon CNP is perceived to be on par with or superior to Voxzogo, there could be significant positive implications for Ascendis Pharma's share value. This potential development is particularly notable following the second quarter's weakness related to Skytrofa, another product from Ascendis Pharma's portfolio.
The analyst expressed confidence that the risk-reward profile for Ascendis Pharma is currently tilted in a favorable direction. With the data release on the horizon, there is a possibility for a substantial positive shift in the company's stock performance if the trial outcomes meet or exceed current market expectations.
In other recent news, Ascendis Pharma has been making significant strides in their drug development and financial growth. The company received U.S. approval for YORVIPATH, a treatment for adult hypoparathyroidism, and secured a $150 million funding agreement with Royalty Pharma.
Despite a decrease in SKYTROFA revenue due to adjustments and higher sales deductions, Ascendis Pharma aims to gain approval for all three of its product candidates by the end of 2025. The company's R&D costs saw a decrease of 21% year-over-year, while SG&A expenses rose due to higher employee costs. Ascendis Pharma ended the quarter with EUR259 million in cash and equivalents, with forecasts for SKYTROFA revenue set at EUR220 million to EUR240 million for the full year of 2024.
Investment firm Oppenheimer recently upgraded Ascendis Pharma from Perform to Outperform, anticipating the upcoming U.S. launch of Yorvipath and the release of top-line results from the Phase 3 trial of TransCon CNP for achondroplasia. TD Cowen also maintains a Buy rating on Ascendis, keeping its target at $157, based on the firm's analysis of the company's upcoming Phase 3 data for TransCon CNP and the potential of infigratinib, an oral once-daily medication currently in Phase 3 trials.
InvestingPro Insights
As Ascendis Pharma (NASDAQ:ASND) approaches a critical juncture with the upcoming results from its ApproaCH trial, real-time data from InvestingPro provides additional context for investors monitoring the stock. The company's market capitalization stands at $6.7 billion, reflecting investor sentiment and market expectations. Despite the anticipation of trial results that could significantly impact the stock, recent performance indicators show that Ascendis Pharma's stock has experienced a notable decline over the past week, with a 13.25% drop in price total return.
InvestingPro Tips highlight that Ascendis Pharma's stock is currently in oversold territory according to the RSI, which may suggest a potential rebound if the trial data proves to be favorable. However, it's worth noting that seven analysts have revised their earnings projections downwards for the upcoming period, indicating some caution in the market. Additionally, Ascendis Pharma operates with a moderate level of debt and has not been profitable over the last twelve months, which are factors investors may want to consider when assessing the company's financial health.
For those seeking a deeper dive into Ascendis Pharma's financials and stock performance, there are 10 additional InvestingPro Tips available at https://www.investing.com/pro/ASND. These tips could provide further insights and help investors make more informed decisions as they watch for the pivotal trial results that have the potential to reshape the company's future.
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