On Monday, BofA Securities maintained a Buy rating for Ascendis Pharma (NASDAQ:ASND) with a price target of $175.00. Ascendis Pharma reported positive topline results from the phase 3 ApproaCH trial, which evaluated its TransCon CNP treatment in patients with achondroplasia (ACH). The study achieved its primary endpoint, showing a statistically significant difference in annual growth velocity (AGV) compared to placebo after 52 weeks.
The AGV difference recorded was 1.49 cm/year, which is comparable to results from a competing product, BioMarin Pharmaceutical (NASDAQ:BMRN)'s Voxzogo, which was approved in 2021. Ascendis Pharma's treatment offers a once-weekly injection, an advantage over the daily injections required by the current standard of care. This convenience factor could be pivotal if TransCon CNP receives approval, with an expected New Drug Application (NDA) filing in the first quarter of 2025.
The analyst noted this outcome as a significant de-risking event for Ascendis Pharma, as it advances its third pipeline asset toward commercialization. The company's net pipeline value is maintained at a negative $500 million net present value (NPV). The focus now shifts to upcoming updates from management regarding the robustness of the NDA package, particularly in light of the longer-term data included in Voxzogo's filing.
Additionally, there is anticipation for discussions about the ability to operate without infringing on BioMarin Pharmaceutical's patents, although Ascendis Pharma's management expressed confidence in their position during an analyst call. Further insights are expected from key opinion leaders (KOLs) to understand the potential use of TransCon CNP in clinical practice.
The approval of TransCon CNP is seen as a potential offset for risks associated with long-term sales of Skytrofa, another growth hormone deficiency treatment by Ascendis Pharma. The firm reiterates its Buy rating and a price objective of $175, signaling confidence in the stock's future performance.
In other recent news, Ascendis Pharma has made several significant strides in its drug development and financial growth. The company's Phase 2/3 ApproaCH study for its drug TransCon CNP in treating achondroplasia yielded successful results, leading to Stifel maintaining a Buy rating on Ascendis Pharma shares and setting a price target of $200.00. Analyst firms such as Citi, TD Cowen, and Oppenheimer have also maintained or upgraded their ratings on Ascendis Pharma, reflecting the company's recent positive developments.
Furthermore, Ascendis Pharma is preparing to seek regulatory approval for TransCon CNP, with plans to file in the United States in the first quarter of 2025 and in the European Union in the third quarter of 2025. The company's other drug, TransCon IL-2 β/γ, showed promising signs of clinical activity in patients with platinum-resistant ovarian cancer in its ongoing Phase 1/2 IL-Believe Trial.
Ascendis Pharma also secured a new funding agreement with Royalty Pharma worth $150 million and received U.S. approval for its product YORVIPATH for adult hypoparathyroidism. The company 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.
InvestingPro Insights
As Ascendis Pharma (NASDAQ:ASND) continues to make headway with its TransCon CNP treatment, it's valuable to consider the financial health and market performance of the company. With a current market capitalization of $6.84 billion, Ascendis is trading at a high revenue valuation multiple, which reflects the market's expectations for future growth, especially in light of its recent phase 3 trial success. Despite not being profitable over the last twelve months, the company has seen a remarkable revenue growth of 166.54% in the same period. This growth trajectory could be an indicator of Ascendis Pharma's potential to scale its operations and improve financial outcomes.
InvestingPro Tips suggest that analysts are cautious, having revised their earnings downwards for the upcoming period and not anticipating profitability this year. The company also faces liquidity challenges, with short term obligations exceeding liquid assets. While these factors may raise concerns, it's noteworthy that Ascendis Pharma has managed a high return over the last decade, which may attract long-term investors. For those interested in more in-depth analysis, there are additional InvestingPro Tips available at InvestingPro.
Investors tracking the stock's performance will note that Ascendis Pharma's price is at approximately 87% of its 52-week high, with a previous close at $119.22. The company's next earnings date is set for November 6, 2024, which will be a pivotal moment for investors to assess the company's financial health and the market's response to its strategic initiatives. With the firm's reiteration of a Buy rating and a price target of $175, investors may find Ascendis Pharma to be a compelling consideration for their portfolios.
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