Ascendis Pharma A/S — FY 2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS and presented in euros unless otherwise noted.
Business context and reporting period
Ascendis is a clinical-stage and commercial biopharmaceutical company developing medicines using its TransCon technology platform. Its marketed products are SKYTROFA (lonapegsomatropin) for pediatric growth hormone deficiency and, in the EU, YORVIPATH (palopegteriparatide) for adults with chronic hypoparathyroidism. The company also has clinical programs in endocrinology and oncology. At year-end it had 879 employees and 57.7 million ordinary shares outstanding.
Key financial metrics
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | €266.7 million | €51.2 million |
| Gross profit | €222.3 million | €39.0 million |
| Gross margin | 83.4% | 76.3% |
| Research and development costs | €413.5 million | €379.6 million |
| Selling, general and administrative expenses | €264.4 million | €221.2 million |
| Operating loss | €455.5 million | €561.8 million |
| Net loss | €481.4 million | €583.2 million |
| Operating cash used | €467.4 million | €495.7 million |
| Cash, cash equivalents and marketable securities | €399.4 million | €743.0 million |
| Consolidated total equity | (€145.7 million) | €263.3 million |
Revenue included €178.7 million from commercial product sales, €21.7 million from services, €0.3 million from clinical supply and €66.1 million from licenses. Product sales rose during 2023; quarterly commercial product sales were €31.6 million, €35.9 million, €47.0 million and €64.2 million in Q1 through Q4, respectively. The filing does not provide a clear total-revenue or net-loss figure for Q4 alone.
Cash flows from investing activities were positive €286.5 million, mainly reflecting net settlement of marketable securities; this was not operating cash generation. Financing cash inflow was €134.3 million. The company reported €545.5 million of borrowings at year-end, including the €407.1 million carrying amount of its convertible notes and €138.4 million of royalty funding liabilities. It also reported €143.3 million of derivative liabilities related to the notes and €98.8 million of lease liabilities.
Material changes versus 2022
- Revenue increased €215.5 million, largely due to higher SKYTROFA sales and a $70 million upfront payment under the Teijin license agreement.
- Commercial product sales increased to €178.7 million from €35.7 million. The company began shipping SKYTROFA to wholesalers in Germany in Q3 2023.
- R&D costs rose €33.8 million, with increased activity in oncology, TransCon CNP and ophthalmology; TransCon hGH project costs declined.
- SG&A expenses rose €43.2 million, reflecting commercial and launch preparation costs and organizational growth.
- Net loss narrowed by €101.7 million, while operating cash use remained substantial. Year-end cash and marketable securities fell by €343.6 million from 2022.
- Consolidated equity moved from positive €263.3 million to negative €145.7 million, mainly reflecting accumulated losses. The filing says the parent company retained positive equity and that the consolidated deficit did not directly affect liquidity.
Outlook, management commentary, risks and unusual items
- Management stated that year-end cash, cash equivalents and marketable securities were expected to fund the current operating plan for at least 12 months from the filing date. It cautioned that plans and funding needs could change and additional capital may be needed.
- The EC authorized YORVIPATH in November 2023; it became commercially available in Germany and Austria in January 2024. The FDA issued a complete response letter on the U.S. application in April 2023 concerning manufacturing controls for variability in delivered dose from the drug-device combination. The company resubmitted the application in November 2023; the FDA set a May 14, 2024 action date.
- Management reported positive topline Phase 3 results for TransCon hGH in adults in December 2023. It expected topline results from the pivotal TransCon CNP ApproaCH trial and Turner syndrome New InsiGHTS trial in Q4 2024, and initial data from specified oncology dose-expansion cohorts by year-end 2024.
- The September 2023 Royalty Pharma agreement provided $150 million upfront in exchange for 9.15% of U.S. SKYTROFA net sales beginning January 1, 2025, subject to a payment cap and buyout terms. The filing also describes security interests and operating covenants associated with the agreement.
- Significant risks include continued operating losses and capital needs; uncertain commercial uptake, reimbursement and pricing; clinical and regulatory uncertainty; reliance on third-party and, for some components, single-source manufacturers; competition; intellectual-property exposure; and foreign-exchange volatility. A 10% strengthening of the U.S. dollar versus the euro was estimated to reduce pretax profit or loss and equity by €36.9 million.
- Unusual financial items include a €14.7 million fair-value gain on the embedded note derivative, substantial non-cash share-based compensation (€66.7 million), and a €7.8 million impairment charge for R&D-site assets. The derivative’s valuation uses Level 3 inputs and is sensitive to share price and volatility.
- The company reported no significant legal claims or disputes known to it and no material legal proceedings. Deloitte issued an unqualified audit opinion and concluded internal control over financial reporting was effective; the audit identified derivative valuation as a critical audit matter.
Most important facts for investors to verify
- Whether U.S. FDA action on the resubmitted YORVIPATH application occurred as expected, and what approval, label or further requirements resulted.
- SKYTROFA sales growth, product-level profitability, payer coverage and reimbursement, and the commercial progress of YORVIPATH in Europe and the United States.
- Cash burn, available liquidity and financing needs against the stated 12-month runway, including the effect of the negative consolidated equity position.
- The future cash cost of the $575 million principal convertible notes due in 2028, their conversion and derivative accounting, and Royalty Pharma payments and buyout terms.
- Progress and final data from the pivotal TransCon CNP and other clinical programs, plus manufacturing capacity and dose-delivery controls.