Ascendis Pharma A/S — FY 2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a quarterly filing; it reports fourth-quarter commercial product sales but does not provide a full Q4 income statement. Financial statements are prepared under IFRS in euros.
Business context
Ascendis is a clinical-stage biopharmaceutical company commercializing SKYTROFA (lonapegsomatropin), a once-weekly growth hormone therapy, and developing TransCon candidates in endocrinology rare diseases and oncology. It also announced ophthalmology as a third therapeutic focus in January 2023. SKYTROFA was approved in the U.S. in 2021 and in the EU in January 2022; the U.S. was the only commercial market reflected in 2022 product sales.
Financial performance and liquidity
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | €51.2 million | €7.8 million |
| Commercial product sales | €35.7 million | €0.9 million |
| Gross profit | €39.0 million | €4.3 million |
| Gross margin | 76.3% | 54.7% |
| Research and development costs | €379.6 million | €295.9 million |
| Selling, general and administrative expenses | €221.2 million | €160.2 million |
| Operating loss | €561.8 million | €451.8 million |
| Net loss | €583.2 million | €383.6 million |
| Operating cash flow | €(495.7) million | €(417.6) million |
SKYTROFA sales rose through the year, reaching €17.1 million in Q4 2022, versus €0.9 million in Q4 2021. Total revenue also included €8.5 million of clinical supply sales, €4.4 million of services, and €2.5 million of license revenue. The company reported a net loss per share of €10.40, compared with €7.00 in 2021.
Cash, cash equivalents and marketable securities totaled €742.9 million at year-end (€740.6 million at fair value). Total assets were €1.09 billion, total liabilities €826.4 million, and total equity €263.3 million, down from €883.6 million in 2021. Management said available liquidity was expected to fund projected requirements for at least 12 months from the annual report date.
In March 2022, Ascendis issued $575 million of 2.25% convertible senior notes due April 1, 2028, receiving net proceeds of €503.3 million. It used €105.3 million to repurchase one million ADSs. At year-end, the notes’ carrying amount was €399.2 million, with a separately recognized €158.0 million embedded derivative liability. Lease liabilities were €109.2 million.
Material changes versus 2021
- Revenue increased €43.4 million, principally from a full year of SKYTROFA commercialization; Q4 product sales were substantially higher than earlier quarters.
- R&D costs rose €83.8 million, reflecting pipeline advancement, organizational growth and €12.3 million of TransCon PTH pre-launch inventory manufacturing. The comparison was also affected by a €53.7 million pre-launch inventory write-down reversal in 2021.
- SG&A increased €61.0 million, including higher commercial costs associated with the U.S. SKYTROFA launch and organizational expansion.
- Operating cash use increased €78.1 million, while net loss widened by €199.6 million. Finance expenses included €25.9 million of note interest and amortization, €15.5 million of derivative remeasurement loss and €4.2 million of transaction costs.
- The associate, VISEN, moved from a reported €12.0 million profit in 2021 to a €17.7 million loss in 2022. The 2021 result included a €42.3 million non-cash gain associated with VISEN’s Series B financing.
Outlook, catalysts and key risks
The filing provides no numerical revenue or earnings guidance. Management expected a SKYTROFA launch in Germany in Q3 2023. The FDA had accepted TransCon PTH for Priority Review with an April 30, 2023 action date; if approved, Ascendis expected a U.S. launch by the end of Q2 2023. An EU application was submitted in November 2022, with a decision anticipated in Q4 2023. The company also expected topline results from the adult GHD Phase 3 foresiGHt trial in Q4 2023 and reported positive Phase 2 topline results for TransCon CNP in achondroplasia in November 2022.
Material risks include continued substantial losses and cash burn; uncertainty around commercial uptake, pricing, reimbursement and launch execution; clinical and regulatory uncertainty; reliance on third-party and certain single-source suppliers; competition; and possible disruption from geopolitical events, including the Russia-Ukraine conflict, and COVID-19. Management reported that these events had not caused significant clinical or manufacturing disruption to date, but noted the Ukraine conflict affected enrollment in the foresiGHt trial.
Results are exposed to currency movements, particularly the U.S. dollar, and the company does not hedge foreign exchange exposure with derivatives. Convertible-note derivative valuations depend on unobservable assumptions and share-price volatility, creating potentially material non-cash earnings fluctuations. The filing also reports €130.7 million in inventory, including work in progress, and €64.2 million in share-based payment expense.
Important facts for investors to verify
- Track U.S. SKYTROFA sales, quarterly growth, gross margin, rebate provisions and the timing and uptake of the planned European launch.
- Confirm regulatory outcomes and commercial timing for TransCon PTH, including the FDA action and EU review, and review any post-approval requirements.
- Assess cash burn against €742.9 million of reported liquidity, including planned R&D, commercialization and supply commitments; note management’s runway statement is based on its operating plan.
- Review the convertible notes’ conversion, redemption and maturity terms, derivative valuation sensitivity, and potential dilution; the notes could convert into approximately 3.46 million ordinary shares.
- Monitor clinical readouts, supply continuity, inventory realizability and any changes in risk from trial enrollment, reimbursement, competition or currency exposure.