Oppenheimer has raised Ascendis Pharma (NASDAQ: NASDAQ:ASND) from Perform to Outperform, setting a price target of $180.
The upgrade comes as the firm anticipates the upcoming U.S. launch of Ascendis Pharma's hypoparathyroidism treatment, Yorvipath, expected by the first quarter of 2025, and the imminent release of top-line results from the Phase 3 trial of TransCon CNP for achondroplasia.
The firm's optimism is fueled by strong demand signals from key opinion leaders (KOLs) for Yorvipath, and the potential for robust sales growth towards a 2029 estimate of €1.7 billion in global revenue.
Furthermore, there is a sentiment that the market has undervalued TransCon CNP, suggesting a favorable opportunity should the drug demonstrate competitive efficacy in its pivotal trial.
The perspective is set against the backdrop of Ascendis Pharma's shares experiencing a decline following an unexpected drop in second-quarter sales and a reduction in full-year guidance for Skytrofa, as reported earlier this week.
In other recent news, Ascendis Pharma has released its financial results for the second quarter of 2024, indicating both growth and challenges. The company reported U.S. approval for YORVIPATH, a treatment for adult hypoparathyroidism, and a new funding agreement with Royalty Pharma worth $150 million.
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. Forecasts for SKYTROFA revenue are set at EUR220 million to EUR240 million for the full year of 2024.
InvestingPro Insights
Ascendis Pharma (NASDAQ:ASND) has become a focal point for investors with Oppenheimer's recent upgrade. To add context, InvestingPro data reveals that Ascendis Pharma currently holds a market cap of approximately $6.85 billion, with a notable revenue growth of 166.54% in the last twelve months as of Q2 2024. Despite the impressive growth, the company's operating income margin stands at -111.27%, reflecting significant operational costs relative to its revenue.
InvestingPro Tips suggest caution, as the stock is considered to be in oversold territory based on the Relative Strength Index (RSI), and analysts have recently revised their earnings downwards for the upcoming period. Moreover, Ascendis Pharma's short-term obligations exceed its liquid assets, which could pose liquidity risks. On the other hand, the company has been recognized for its high return over the last decade, although it does not pay a dividend to shareholders. For investors interested in a deeper dive, there are additional tips available on InvestingPro, which can be found for Ascendis Pharma at https://www.investing.com/pro/ASND.
With the company's next earnings date slated for November 6, 2024, and the InvestingPro Fair Value estimate at $134.25, which is below the current analyst target, investors will be closely watching the performance of Ascendis Pharma's upcoming product launches and their impact on the company's financial health.
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