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During the IPO season Francis Gaskins, editor of IPOdesktop.com & director of research for Equities.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg & CNBC. Over the past five years he has been quoted over 500 times by such financial media as the Wall Street Journal, Bloomberg, Reuters, Associated Press, USA Today among others. Those quotes are available at IPOdesktop.com. His varied personal interests include violin playing. For example, he is concertmaster of the Palisades Symphony. He also holds an MBA from Harvard Business School (finance) and an AB from Princeton University (economics).

IPO Preview: Ascendis Pharma A/S

Based in Hellerup, Denmark, Ascendis Pharma A/S (Pending:ASNDscheduled a $85 million IPO on Nasdaq with a market capitalization of $373 million at a price range midpoint of $17 for Thursday, Jan. 29, 2015.

The full IPO calendar is available at IPOpremium

SEC Documents

Manager, Joint-managers: BofA Merrill Lynch, Leerink Partners
Co-managers: Wells Fargo Securities

End of lockup (180 days): Tuesday, July 28, 2015
End of 25-day quiet period: Monday, February 23, 2015

ASND is a clinical stage biopharmaceutical company applying ASND’s TransCon technology to develop a pipeline of long-acting prodrug therapies with best-in-class profiles to address large markets with significant unmet medical needs.

ASND is developing its lead product candidate, TransCon human growth hormone, or TransCon hGH, for once-weekly administration to treat growth hormone deficiency, or GHD, and other indications.

Per share dilution . . $10.97
Valuation Ratios Mrkt Cap ($mm) Price /Sls Price /Erngs Price /BkVlue Price /TanBV % offered in IPO
annualizing Sept 9 mos
Ascendis Pharma A/S $372 20.4 -49.0 2.7 2.8 23%

Neutral plus

Competed Phase 2 study for Growth Hormone Deficiency

Collaboration rev -25%

Price-to-collaboration rev: 20

Low cash burn rate relative to market cap: P/E -49

Price-to-book 2.7

Insiders may purchase $22mm, 26%

Collaborations with Sanofi in the field of diabetes & with Genentech in the field of ophthalmology.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

ASND is a clinical stage biopharmaceutical company applying ASND’s TransCon technology to develop a pipeline of long-acting prodrug therapies with best-in-class profiles to address large markets with significant unmet medical needs.

ASND is developing its lead product candidate, TransCon human growth hormone, or TransCon hGH, for once-weekly administration to treat growth hormone deficiency, or GHD, and other indications.

In addition to proprietary programs, ASND has formed multi-product collaborations with leading biopharmaceutical companies on market-leading products and in therapeutic categories that are of strategic importance to collaboration partners.

These collaborations are with Sanofi in the field of diabetes and with Genentech in the field of ophthalmology.

ASND entered into a collaboration with Sanofi to develop TransCon Insulin as a once-weekly diabetes therapy, and with Genentech to develop TransCon Ranibizumab, to support up to half-yearly intravitreal injections, or injections into the back of the eye, for the treatment of ophthalmic diseases such as wet age-related macular degeneration.

TransCon Phase 2 study
ASND has successfully completed a Phase 2 study of TransCon hGH in adults with GHD and are currently conducting a six-month Phase 2 study in children with GHD.

In December 2014, ASND reported positive interim six-month height velocity data from 25 patients, representing approximately 50% of the total enrollment in the study, completing all six months of treatment, and ASND expects to report topline data for all patients in this study in mid-2015.

New paradigm
Using its TransCon technology, ASND has established a new paradigm that combines the benefits of conventional prodrug and sustained release technologies, and is broadly applicable to proteins, peptides and small molecules.

In addition to TransCon hGH, ASND has developed a pipeline of long-acting prodrug product candidates such as TransCon Treprostinil for the treatment of pulmonary arterial hypertension, or PAH, currently in a Phase 1 clinical proof-of-concept study, TransCon Insulin, for the treatment of diabetes, partnered with Sanofi, and TransCon Ranibizumab, in the field of ophthalmology, partnered with Genentech.

GHD (growth hormone deficiency)
GHD is a serious orphan disease that affects both children and adults.

Children with GHD are characterized by short stature, metabolic abnormalities, cognitive deficiencies and poor quality of life.

GHD in adults is associated with premature mortality, increased adiposity, or fat mass, as well as psychiatric-cognitive, cardiovascular, muscular, metabolic and skeletal abnormalities. Human growth hormone, or hGH, is used for the long-term treatment of children and adults that fail to secrete adequate amounts of endogenous growth hormone.

According to Medtrack, global sales from currently marketed hGH products grew to over $3 billion in 2013.

The use of recombinant hGH was introduced in 1981, and since then many of the world’s largest pharmaceutical companies have developed and now market daily hGH injections as the current standard of care for the treatment of GHD.

Despite the demonstrated benefits of hGH therapy, published studies have shown that the majority of patients on a daily hGH regimen are not fully compliant with their daily dosing schedule, which in pediatric patients has led to significant reductions in treatment outcomes.

Since the 1990s, the pharmaceutical industry has employed various approaches to develop long-acting growth hormone products to reduce the patient burden of daily injections and increase patient compliance with the dosing regimen.

To date, regulatory authorities have approved only two long-acting growth hormone products, each of which utilize unmodified growth hormone as the active drug substance. Neither of these products has achieved commercial success, due to manufacturing, regulatory, efficacy safety and/or tolerability reasons associated with the sustained release technology.

To address the unmet medical needs of GHD, ASND is developing TransCon hGH for once-weekly administration.

TransCon hGH is a prodrug that releases unmodified growth hormone and thus maintains the same mode of action as currently prescribed daily hGH therapies, which ASND believes reduces clinical and regulatory risk.

If approved, TransCon hGH may reduce the burden of daily treatment by requiring significantly fewer injections, which may improve compliance and treatment outcomes.

Intellectual property
As of December 31, 2014, ASND owns a total of 36 patent families, of which 13 are currently in their priority year or international phase and ASND owns several granted patents in the United States (6), Europe (2), Australia (6), Canada (1), China (3), Israel (2), New Zealand (2), Japan (4) and South Africa (5) and have more than 165 pending national/regional applications in a total of 19 jurisdictions (excluding the member states of the European Patent Convention in which ASND’s European patents were validated).

Smaller or early-stage companies may prove to be significant competitors, particularly through collaborative arrangements with large, established companies.

ASND’s competitors may succeed in developing, acquiring or licensing technologies and drug products that are superior to, or more effectively marketed than, the product candidates that ASND is currently developing or that it may develop, which could render its products obsolete and noncompetitive.

In addition, many of ASND’s competitors have greater experience than ASND does in conducting preclinical and clinical trials and obtaining FDA and other regulatory approvals.

Accordingly, ASND’s competitors may succeed in obtaining FDA or other regulatory approvals for drug candidates more rapidly than ASND does.

Companies that complete clinical trials, obtain required regulatory authority approvals and commence commercial sale of their drugs before their competitors may achieve a significant competitive advantage.

Drugs resulting from ASND’s research and development efforts or from its joint efforts with collaboration partners therefore may not be commercially competitive with ASND’s competitors’ existing products or products under development.

ASND is aware that other companies are developing or evaluating enhanced drug delivery and sustained release technologies, which may be competitive with ASND’s TransCon technology.

In particular, ASND believes Nektar, Inc., OPKO Health, Inc., ProLynx LLC and Serina Therapeutics, Inc. are developing technology platforms in the areas of enhanced drug delivery and reversible linkers that may be competitive with ASND’s TransCon technology.

ASND also expect that technological developments will occur at a rapid rate and that competition is likely to intensify as various enhanced delivery and sustained released technologies may achieve similar advantages.

5% shareholders pre-IPO
Sofinnova Capital V FCPR 31.9%

Gilde Healthcare II Sub-Holding B.V. 16.9%

Zweite TechnoStart Ventures Fonds GmbH & Co. KG i.L. 10.4%

Sofinnova Venture Partners IX, L.P. 7.2%

OrbiMed Private Investments V, L.P. 7.2%

Entities affiliated with Vivo Ventures 6.0%

Rafaèle Tordjman, M.D., Ph.D. 31.9%

Edwin de Graaf 16.9%

Michael Mayer 10.4%

James I. Healy, M.D., Ph.D. 7.2%

Albert Cha, M.D., Ph.D. 6%

No dividends are planned.

Use of proceeds
ASND expects to receive $75 million from its IPO and use it for the following:

$75 to $85 million to fund its ongoing and planned clinical development of TransCon hGH for the treatment of pediatric GHD and other associated indications;

$5 to $10 million to fund TransCon Treprostinil through its Phase 1 clinical proof-of-concept program;

$3.5 million to fund continued investment in its TransCon technology, including its intellectual property, its lab, clinical and commercial scale manufacturing capabilities and its methods and know-how; and

the balance to fund working capital and general corporate purposes.

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