On Monday, Stifel maintained a Buy rating on Ascendis Pharma (NASDAQ:ASND) shares with a price target of $200.00 following the successful outcome of the company's Phase 2/3 ApproaCH study for its drug TransCon CNP in treating achondroplasia.
The study results demonstrated a significant difference in annualized growth velocity (AGV) when compared to placebo, with a 1.49 cm/year increase, which aligns closely with competitor BioMarin Pharmaceutical (NASDAQ:BMRN)'s vosoritide that showed a 1.64 cm/year increase.
The ApproaCH study, which included a broader age range of patients between 2 and 11 years, revealed an even greater AGV difference of 1.78 cm/year in the subgroup of 5 to 11-year-olds. This subgroup is more directly comparable to the population studied with vosoritide. The positive outcomes of the study have provided clarity regarding the previously observed discrepancies between Ascendis Pharma's Phase 2 data and the experiences with vosoritide.
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. However, the requirement for two-year data remains a significant regulatory consideration.
Looking forward, Stifel noted that the key focus for Ascendis Pharma is the anticipated launch of Yorvipath in the United States, which is expected to occur in the first quarter of 2025. This upcoming launch represents a major driver for the company's performance and is likely to capture the attention of investors and industry watchers alike.
In other recent news, Ascendis Pharma disclosed positive results from its ApproaCH Trial evaluating TransCon CNP in children with achondroplasia. The study demonstrated a significant increase in annualized growth velocity compared to placebo. Analyst firms such as Citi, TD Cowen, and Oppenheimer have maintained or upgraded their ratings on Ascendis Pharma, reflecting the company's recent developments.
Furthermore, Ascendis Pharma reported promising signs from its ongoing Phase 1/2 IL-Believe Trial with TransCon IL-2 β/γ showing clinical activity in patients with platinum-resistant ovarian cancer. However, the company also observed a decrease in SKYTROFA revenue due to adjustments and higher sales deductions.
The company secured a new funding agreement with Royalty Pharma worth $150 million and received U.S. approval for its product YORVIPATH for adult hypoparathyroidism. Ascendis Pharma's R&D costs decreased by 21% year-over-year, while SG&A expenses increased due to higher employee costs.
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. These are among the recent developments for Ascendis Pharma.
InvestingPro Insights
Amidst the positive clinical trial outcomes and Stifel's maintained Buy rating for Ascendis Pharma, InvestingPro data and tips provide additional context for investors considering the company's stock. Ascendis Pharma, with a market capitalization of $6.84 billion, is trading at a negative P/E ratio of -12.27, reflecting its current lack of profitability. Despite this, the company has experienced a substantial revenue growth rate of 166.54% over the last twelve months as of Q2 2024, indicative of its rapid expansion in its market segment.
InvestingPro Tips highlight that analysts have recently revised their earnings downwards for the upcoming period and do not anticipate the company will be profitable this year. Moreover, the company's short-term obligations exceed its liquid assets, which could pose a liquidity risk.
However, it is worth noting that Ascendis Pharma has been trading at a high revenue valuation multiple, which could be attributed to investor optimism surrounding its long-term growth potential and the anticipated launch of Yorvipath in the United States.
For investors seeking a more comprehensive analysis of Ascendis Pharma, InvestingPro offers additional tips that can be accessed on their platform. These insights may serve as a valuable resource for making informed investment decisions.
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