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Presentation

Ascendis Pharma A/S beats earnings expectations. Reported EPS is $0.32, expectations were $0.21.

Operator: Good day, and thank you for standing by. Welcome to the First Quarter Ascendis Pharma Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Chad Fugure, Vice President of Investor Relations. Please go ahead.

Chad Fugure: Thank you, operator, and thank you, everyone, for joining our first quarter 2026 financial results conference call. I’m Chad Fugure, Vice President, Investor Relations at Ascendis Pharma. Joining me on the call today are Jan Mikkelsen, President and Chief Executive Officer; Scott Smith, Chief Financial Officer; Sherrie Glass, Chief Business Officer; and Jay Wu, EVP and President, U.S. Market. Before we begin, I’d like to remind you that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements may include, but are not limited to, statements regarding our commercialization and continued development of YORVIPATH, YUVIWEL and SKYTROFA, as well as certain expectations regarding patient access and financial outcomes, our pipeline candidates and our expectations with respect to their continued progress and potential commercialization.

Our strategic plans, partnerships and investments, our goals regarding our clinical pipeline, including the timing of clinical results and trials, our ongoing planned regulatory filings and our expectations regarding timing and the result of regulatory decisions. These statements are based on information that is available to us as of today. Actual results may differ materially from those in our forward-looking statements. You should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change, except as required by law. For additional information concerning the factors that could cause actual results to differ materially, please see our forward-looking statements section in today’s press release and the Risk Factors section of our most recent annual report on Form 20-F filed with the SEC on February 11, 2026.

TransCon PTH is approved in the U.S. by the FDA for the treatment of hypoparathyroidism in adults and the European Commission and the United Kingdom’s Medicines and Healthcare Products Regulatory Agency have granted marketing authorization for TransCon PTH as a replacement therapy indicated for the treatment of adults with chronic hypoparathyroidism. TransCon CNP is approved in the U.S. by the FDA for the treatment of hypochondroplasia in children aged 2 years and older. Continued approval for this indication, which is based on an improvement in annualized growth velocity may be contingent upon verification and description of clinical benefit and confirmatory trials. TransCon hGH is approved in the U.S. by the FDA for the replacement of endogenous growth hormone in adults with growth hormone deficiency.

In addition to the treatment of pediatric growth hormone deficiency and in the EU has received MAA authorization from the European Commission for the treatment of pediatric growth hormone deficiency. Otherwise, please note that our product candidates are investigational and not approved for commercial use. As investigational products, the safety and effectiveness of product candidates have not been reviewed or approved by any regulatory agency. None of the statements during this conference call regarding our product candidates shall be viewed as promotional. On the call today, we’ll discuss our first quarter 2026 financial results, and we’ll provide further business updates. Following some prepared remarks, we’ll then open up the call for your questions.

With that, let me turn it over to Jan.

Jan Mikkelsen: Thanks [indiscernible] Good day, everyone, here from Copenhagen. The first quarter of 2026 was [indiscernible] inflection point for Ascendis, with the FDA approval of our third [indiscernible] product, YUVIWEL. Our revenues are growing rapidly. We are profitable. We have a pipeline of high-value product opportunities to support long-term growth. Three elements are cementing our position as a leading global biopharma company. First, our diversified product portfolio in one single therapeutic area. Following FDA approval of YUVIWEL, we have now achieved approval of 3 products in a row across 4 rare endocrine indications. Second, our rapid revenue growth from our existing endocrine rare disease portfolio, [indiscernible], YUVIWEL and SKYTROFA, each highly differentiated with long durability, we expect sustained revenue growth for many years to come.

Third, expanding our pipeline. We have proven our ability to create transformative medicines, addressing unmet medical needs using our TransCon technology platform. To date, we have more than 20 ongoing or planned clinical trials, aiming at label and market expansion, including 4 new clinical entities in preclinical development. Turning now to YORVIPATH. Global YORVIPATH revenue in the first quarter reached EUR 197 million. YORVIPATH revenue for the first quarter was impacted by 2 onetime items. A temporary increase of U.S. patients supported by free drug caused by reimbursement disruption and onetime impact of Europe Direct related to expanded market. Scott will explain the financial impact of these two events in his remarks. In the U.S., new patient enrollment in Q1 remained in line with the strong uptake we have seen in Q4 2025, with more than 1,000 new patients prescribed YORVIPATH during the quarter.

Through the end of March 2026, more than 6,300 patients have been prescribed YORVIPATH by more than 2,700 unique health care providers. March was our last revenue month ever for YORVIPATH, supported by an increased number of new patients, as well as patients returning to reimbursement from free drug. Importantly, the enrollment trend we saw in Q1 have continued through April, consistent with our guidance. Insurance approval rates and medium time to approval continue to improve. This strong support a strong foundation for revenue growth in 2026 and many years to come. Outside the U.S., YORVIPATH is available commercially or to [indiscernible] patient programs in 35 countries, including full commercial reimbursement in 6 of our Europe Direct markets, with additional launches expected through ’26.

Looking [ forward ] ahead, we continue to pursue multiple expansion opportunities for YORVIPATH in new markets and indications. This includes doses up to 60 micrograms in the U.S., global expansion to patients 8, 12 to 18 and continued development of once-weekly TransCon PTH for patients on stable YORVIPATH [ process ]. With 70,000 to 90,000 patients living with chronic hypopara in the U.S., and 5 to 10x that number outside the U.S., we remain highly confident in YORVIPATH’s long-term global potential. I will now turn to our growth disorder [indiscernible]. With week our once-weekly growth hormone, SKYTROFA, we believe Ascendis is uniquely positioned to strengthen its leadership in those disorders. Our U.S. commercial infrastructure built and refined since SKYTROFA launched in 2021 has enabled a focused and high-impact launch for YUVIWEL, which became commercially available in early April.

Since then, YUVIWEL has already been prescribed for more than 60 children by more than 35 unique health care providers. With children approved for reimbursement as fast as a few days, YUVIWEL has shown compelling results compared to placebo across multiple clinical trials in addition to linear growth outcomes. These results include improvements in final [indiscernible] dimensions, body operationality, physical function and health-related quality of life compared to placebo, without compromising safety or tolerability. We believe this outcome reflects YUVIWEL’s unique ability to provide continuous systemic [ CMP ] exposure throughout the body over the weekly dosing interval. Looking ahead, we plan to make YUVIWEL available in selected international markets through early access programs using the U.S. FDA approval.

As a reminder, our global infrastructure covers over 70 countries and has already generated product revenue for us in more than 35 countries. In EU, a regulatory decision on our marketing authorization application for YUVIWEL is expected in the fourth quarter of ’26. We are also pursuing label expansion for YUVIWEL to ongoing trials. These include infants on the 2 years of age with hypochondroplasia and [ 7 with ] hypochondroplasia as well as geographic label expansion in clinical trials. Turning now to SKYTROFA. In the U.S., SKYTROFA maintained consistent performance as a premium product with [ 7% ] share of the overall growth hormone market, reflecting steady demand across pediatric and adult patients as the only once-weekly product delivering on [indiscernible].

With the expected label expansion that could double the addressable patient population in the U.S. and geographic expansion outside the U.S., we believe SKYTROFA will remain a cornerstone product in our growth disorder portfolio. Turning to our pipeline. This includes combination therapy with once-weekly TransCon CNP and TransCon Growth Hormone for children with hypochondroplasia. In our Phase II COACH trial, we have reported unprecedented results that exceeds the already compelling foundation established by YUVIWEL monotherapy. Week 52 data from COACH presented in January showed improvement in hypochondroplasia specific height score that indicates a triple of efficacy compared to TransCon CNP monotherapy, along with improvement in body proportionality.

More recently, we shared additional week 52 data that showed improvement in lower limb alignment, as well as an [indiscernible] improvement in spinal can dimensions and an improvement in arm strength, not previously demonstrated with pharmacotherapy within a single treatment. Based on this finding, we believe our unique combination therapy of TransCon CNP and TransCon Growth Hormone could potentially eliminate the need for highly invasive procedure such as [indiscernible] and leg straightening surgeries. We believe that this combination therapy could become the preferred treatment option for hypochondroplasia. I will now briefly turn to oncology. In our Phase I/II [indiscernible] trial, we have elevated TransCon IL-2 beta gamma in combination with [indiscernible] in patients with late-stage [ platinum-resistant ] ovarian cancer or PRC.

Median OS improved up to 10 months from 6 to 7 months from historical [indiscernible] with a general well-tolerated safety profile, validated the science on TransCon IL-2 [indiscernible]. As further internal oncology development does not align with our strategic focus, we have decided to discontinue internal development of TransCon IL-2 beta [ gamma ] in oncology and will explore other ways to maximize the value of these assets. Turning now to our partnership. Our once-monthly TransCon semaglutide with Novo Nordisk continue to advance towards the clinic and [indiscernible] TransCon anti-VEGF also remain on track to enter the clinic this year. These programs further highlight the broader potential of our TransCon technology platform to address product opportunities in larger indications.

In closing, in the first quarter of 2023, we made significant progress across our business and our ability to make a meaningful difference for patients. We have 3 FDA-approved TransCon products across 4 indications, growing revenues, improving cash generation and a pipeline that supports long-term growth. I will now turn the call over to Scott to review our financial results.

Scott Smith: Thanks a lot, Jan, and good afternoon, everyone. I will touch on some key points surrounding our first quarter financial results, which reinforce our confidence for growing operating profit and cash flow into the future. For further details, please refer to our Form 6-K filed today. YORVIPATH global revenue was EUR 197 million in Q1. The first quarter was characterized by steady global uptake and normal seasonality as well as 2 onetime items. Patients temporarily transitioned to free drug in the quarter in the U.S. and a onetime impact in Europe direct related to expanded market access. The combined impact of these 2 items was approximately EUR 15 million. SKYTROFA contributed EUR 44 million in Q1. On a sequential basis, performance reflected consistent underlying demand with the expected drawdown in channel inventory built in Q4.

Including EUR 6 million in collaboration revenue, total Q1 2026 revenue amounted to EUR 247 million. Continuing to expenses. R&D expenses in Q1 were EUR 59 million, down from EUR 78 million in Q4 ’25. R&D in Q1 was favorably impacted by a write-up of YUVIWEL inventory consisting of EUR 11 million due to U.S. FDA approval and lower clinical activity across the portfolio. SG&A expenses rose to EUR 145 million in Q1 2026, compared to EUR 136 million in Q4 2025, reflecting continued impact of global commercial expansion. Total operating expenses for Q1 2026 were EUR 204 million and operating profit was EUR 25 million, reflecting a 10% operating margin. Non-IFRS operating profit was EUR 55 million and non-IFRS operating margin was 22%. As revenue scales, we expect meaningful improvement in our operating margin, which will be visible over the course of 2026 and beyond.

Net finance expense for Q1 2026 was EUR 63 million, primarily driven by noncash items, including remeasurement loss of financial liabilities of EUR 34 million. Net cash financial expense for Q1 ’26 was about EUR 1 million. Net profit for Q1 2026 was EUR 629 million, which included recognition of a EUR 679 million deferred tax asset in the P&L. Refer to our 6-K for more detail. Non-IFRS net profit was EUR 18 million, or EUR 0.27 per share. We ended Q1 2026 with EUR 573 million in cash and cash equivalents, which includes the impact of EUR 60 million in Q1 from our previously announced share repurchase program and net settlement of certain RSUs. In April, we successfully completed our transition to a direct listing of our ordinary shares on NASDAQ.

We believe this will broaden access to global investment in the company, which has the potential to further enhance institutional ownership and trading liquidity for Ascendis shares. In May, we completed the full redemption of all of our outstanding convertible senior notes. Finally, today, we announced that we entered into an agreement to sell our PRV for USD 187.5 million in cash. The PRV was awarded by the U.S. FDA upon approval of YUVIWEL in February. Turning to our commercial outlook. For YORVIPATH, we expect continued steady underlying increase in patients on therapy and the reversal of onetime factors seen in Q1 to drive strong growth sequentially in Q2. For SKYTROFA, we expect stable revenue throughout the year following a similar seasonal pattern to 2025.

Regarding YUVIWEL, as Jan indicated earlier, we are encouraged by the early demand trends and look forward to sharing more with you on our Q2 call. With that, operator, we are now ready to take questions.

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Operator: [Operator Instructions] And our first question comes from the line of Jessica Fye of JPMorgan.

Jessica Fye: I was wondering if you could help us estimate what U.S. YORVIPATH sales were in the quarter. I think in the past, you had run through an algorithm to consider, but I know the press release noted some onetime impact to Europe Direct as well. So just trying to get a better sense of the U.S. versus ex U.S. split this time around.

Jan Mikkelsen: I think that Scott will give you just a little bit more background on the financial element, specific onetime in Europe Direct. And it’s actually happening when we sometime and specific for one single country because we had an early access program that was running for nearly 15 months, 16 months. And it gave us a onetime event where we needed to write down for this single case. It’s not something that really happening in other countries, but it was a single country event, which basically impacted our YUVIWEL, you can say, Q1 results. But Scott, you can give you a little bit more flavor on the financial numbers.

Scott Smith: Yes. And just for modeling purposes, it’s probably a little bit more of an impact. But I would say the best way to think about it is take the algorithm that we laid out where you add 4 to 5 a quarter. And for Q1, basically that addition was just shifted into Q2. And then from there, the algorithm continues.

Jan Mikkelsen: But I think just one of the key element I will take into regard is basically the underlying patient demand. Because I think the key element is really that we continue the same successful, you can say, rollout of the launch, both in U.S. where we now — as we have provided you the number of indicated new patients on treatment with YORVIPATH. And as we have given in our previous guidance, we’re still 100% correct in that, where we really see the same stability. We see the same flow coming in. And Jay can comment about how he’s already starting to improve both the time to reimbursement and the numbers. I do not, Jay, will you comment about your effort in really improving what you call the reimbursement situation for the U.S.

Jay Wu: Sure. When you think about our reimbursement, we’re seeing improved metrics across the board. So first and foremost, we’ve talked a little bit about our upstream coverage now expanding to about 80% of patient lives, which we’re feeling really good about given the time on market. And I think, again, a testament to the compelling clinical value proposition that we have. We’re also seeing continued rapidity as it relates to patients being approved for reimbursement upon entering the funnel. So again, over half approved within 8 weeks of enrollment. And we are seeing continued progress against patients moving through the funnel whether it’s upstream as the enrollments are coming in, but also supporting patients as they’re entering into the funnel.

Operator: Our next question comes from the line of Tazeen Ahmed of Bank of America.

Tazeen Ahmad: Mine will also be on YORVI, and maybe this is for Jay. Can you talk about the reauthorization rates that you’re seeing now that patients are starting to annualize at this time of year? Any things to point out about things that were maybe unexpected or taking a little bit longer? And then can you talk about usage among physicians? So is there a way of providing a split between how much of use is coming from first-time physicians versus an increasing use among doctors who’ve tried your YORVIPATH before?

Jan Mikkelsen: Okay. There was multiple questions. I hope you got everyone down. Will you start on some of them?

Jay Wu: Sure. I think I heard a few questions. One, which maybe I’ll start with towards the end, which is prescriber breadth and depth, I think, was the question. We’re seeing continued traction across both. So as Jan mentioned earlier in the script, we’ve had over 2,700 prescribers, which again is an addition of about 300-plus quarter-over-quarter, which we’re feeling really good about. So that would answer your question around new prescribers. And then within existing prescribers, we’re also feeling really good because the average prescription per physician continues to increase as well. In fact, over — about 10%-ish of prescribers have now over 5 enrollments for patients. Again, as you think about the provider landscape here, they all do have a different patient volume just given how diffuse the patient volume is.

But generally speaking, we’re seeing not only one additional prescriber sign on to YORVIPATH given the strong patient satisfaction scores that we’re seeing. But then because of those positive patient experiences, we’re also seeing providers expand their scope of who they deem to be eligible given that lab values alone are not the reason that patients should be treated.

Tazeen Ahmad: Okay. And then reauthorization was the last one.

Jay Wu: And reauthorization, yes, that was the first part of your question. We’re not seeing any meaningful differences in terms of approval rates for re-auth versus necessarily a patient that’s coming in at the top of the funnel. We typically, again, have shared that 4- to 8-week time frame. We’ve seen those numbers continue to increase in terms of speed, which I referenced earlier with the first analyst question, but we’re not seeing any meaningful difference with the re-auth coming in versus a new patient coming in. Generally, what you’ll see is if it’s a re-auth of an existing payer insurance where there hasn’t been a change in insurance, you might see some faster time line there. But if it’s a brand-new insurance, then you’re obviously going to treat it as just a brand-new case, so to speak.

Operator: Our next question comes from the line of Yaron Werber of TD Cowen.

Yaron Werber: Great. Maybe a quick follow-up and then a question on YUVIWEL. A follow-up on YORVI. So of the [ $15 million ], should we roughly kind of split it like half in Europe and half in the U.S.? I don’t know if you can give us any sort of view on that. And then for YUVIWEL, in the ITC case is progressing, the bridge document, the briefs are out kind of back and forth. And it looks like the court is kind of siding with both parties. What — I know you’ve been importing drug in the meantime. Any view sort of on how much capacity you might be able to have in the system by the time a decision is rendered?

Jan Mikkelsen: First of all, I believe when you see the uptick in the prescriptions of in the U.S. We have more than 60 children being prescribed YUVIWEL treatment in less than 4 or 5 weeks. I think it illustrates the unmet medical need that exists in the U.S. related to an improved treatment in hypochondroplasia. And I believe what we have seen of clinical data in our multiple trials with YUVIWEL just as a monotherapy is really describing the reason why we see this take up. This is not just of having a once-weekly product. This is providing a tolerability profile and documentated effect on benefit beyond linear growth. And I think everyone is aligning with the unmet medical need, the public interest for this to have a product [indiscernible] in the market.

We will continue to be in a position that we have such a strong belief that in this case here, too, like it was in Europe, we can prove that this IP case should never have existed and only is built on promises. So [indiscernible] I’m confident YUVIWEL is here to stay, and it will always be a treatment option for patients with hypochondroplasia in the U.S. I hope that answers your question related to that part. The other part, I think you are somewhere in the right estimate when you think about it.

Operator: Our next question comes from the line of Gavin Clark-Gartner of Evercore ISI.

Unknown Analyst: This is [indiscernible] on for Gavin. We have 2 quick questions. Number one is for the Phase III [indiscernible] and growth hormone combo trial, can you share any update on the enrollment speed? And secondly, what are you seeing in your discontinuation rates over time?

Jan Mikkelsen: So when we talk about — as I understood your question right, it was related to the combination trial, the Phase II trial we call [indiscernible] trial. And we basically are now — I do not know how many years we are into the trial now, but I think we are 2 years in 1.5 years now. And I think we see basically an extremely high element of retention in this trial. To my knowledge, last time, it was 100%. And I think it’s really been harder to get more than 100% in a clinical trial to my knowledge. And I think that’s a very, very few trial where you have 100% retention after nearly 18 months. So from that perspective, I think it’s really illustrating and addressing the satisfaction with the benefit you see in the treatment compared to the burden of treatment. And I think that is really the key element that we are always looking in the fundamentals. We want to see benefit for patients. This is why we’re working, and we will continue to focus on that.

Operator: Our next question comes from the line of Li Watsek of Cantor Fitzgerald.

Li Wang Watsek: I guess on new patient adds you mentioned, steady growth. Is it reasonable for us to assume 1,000 is sort of the number that we should be looking at for the coming quarters? And will you be sharing new script number going forward?

Jan Mikkelsen: That’s a great question. Now some going back to the last time I said I will not come up with more prescription data for YORVIPATH because I believe that the revenue progression was so clear. And when I said that there was a big, big, what I call element of some interesting funds that pushed back and saying, I didn’t want to come out with numbers because it must be really, really bad. And now we have illustrated for 1 quarter more that they are not bad. They are extremely good and exactly as predictable as we have said in this way. And I expect a steady state enrollment in all the quarters because that is what we expect. We are only touching a small amount of this patient group. We have some more patient that is coming new patients every, every, every year.

So I’m somewhat giving up to say that I will not come out 1 quarter more because last time, I said we will not come out with one quarter and then I got basic press because I didn’t want to listen to that, that we didn’t want to come up with a number because they are bad. I don’t hide anything. I always want to be transparent. And this is why I come out with a number, then you can see it. So I think we will continue to be so transparent on everything what we’re doing. So you always have the best possible opportunity to see how well we are performing in our fundamentals.

Operator: Our next question comes from the line of Alex Thompson of Stifel.

Unknown Analyst: This is Patrick on for Alex. Could you guys just talk about the potential impact of the YORVI 60 micrograms being on the label? And maybe what percentage of those 6,300 patients in the U.S. is dose caps at 30 with, maybe less than ideal supplementation levels?

Jan Mikkelsen: This is a question which are very difficult for us to answer today because we see different kind of [ up titration ] in both different situation in clinical trials and also sideration in what I call more real world. We are following it a lot. We are now open for enrollment in our trial where we are having 2 arms in our evaluation of dose titration 30 up to 60. And we will enroll that in a decent speed. We only do that in the U.S. because it’s the only place where we restricted down to 30 and not have 60. And we believe that even if you are coming up to 30 micrograms, you still have a major benefit to be still on 30 microgram compared to many of the positive effect that YORVIPATH is still providing to it. So I think you can say, yes, there is someone that will benefit to go higher. But today, we’re still providing the benefit to the patient that need to stop on 30 micrograms.

Operator: Our next question comes from the line of Joe Schwartz of Leerink Partners.

Joseph Schwartz: So some physicians we’ve spoken with have suggested that they might not want to put their office staff through the reimbursement challenges of switching their hypochondroplasia patients to a once-weekly injection only to then later switch them to a once-daily pill in the not-too-distant future. Is this a dynamic that you guys are aware of? And what can Ascendis do to help support the hypochondroplasia patient, or physician community rather and encourage uptake? And then have any — my second question is, have any physicians prescribed YUVIWEL in combination with SKYTROFA since YUVIWEL was approved?

Jan Mikkelsen: Answering your first part of the question, I think the number speaks for itself. When you think about it, more than 10 prescriptions per week [indiscernible] rare disease product. I think they talk about the unmet need and the willingness for basic physician in connection with the parents, in connection with the child to basically to have the desire to take them on a treatment with YUVIWEL. I think it says everything with numbers. You can go out and ask one physician. You can go out and ask one parents. I look at numbers from a statistic. The numbers talks for itself. Related to the last question, I cannot some way discuss an element we cannot promote. We cannot promote anyway [indiscernible] combination therapy.

We have disclosed the benefit of the combination therapy. And that is up to the physicians if they really want to prescribe it or not prescribe it. And to my knowledge, and I can be pretty open about it, yes, it happens, and I understand why. This is the only way you basically can be in a position where you basically can avoid any kind of surgeries. Which I think is just a positive element for any child with hypochondroplasia to avoid the invasive surgeries. And I think this is the reason why the physician do it. And sure, we’re looking forward to finalize the Phase III trial. We’re looking forward to have it on label. So we really also can go and promote it.

Operator: Our next question comes from the line of Ellie Merle of Barclays.

Unknown Analyst: This is Jasmine on for Ellie. Just kind of a follow-up to the last question. For YUVIWEL, can you say how many of those 60 enrollments were new starts versus switches? And more generally, do you think the initial population is going to see more new starts or switches? And what kind of patients do you think are the most likely to initially want to switch?

Jan Mikkelsen: The insight you’re asking for is the insight we will develop in the coming months and quarter. After 5 weeks to try to come with a general statement about what kind of patient, what kind of preference they have to go on to YUVIWEL treatment. I think it’s too early for us to come with a conclusion but it is such a topic. The only thing I can say, and Jay, you can add on, what we see is basically coming from everywhere. It’s not just naive patients. It’s not just [ switch ] patients. It’s coming everywhere from where we expect it also to come from. And one of the things we have done at Ascendis that Jay has [indiscernible] impact on to help the physician, the patient is really to have a part that can go out and really help the physician, the patients everywhere to get through this journey to be sure they can come on the right treatment. Jay, do you have anything to add?

Jay Wu: Yes. I think you summed it up well. The only 2 additional things I would add is, one, to Jan’s point, we’re seeing across all segments. And we’ve discussed before the 3 areas or types of patients that we envision coming are. One, patients currently on VOXZOGO that are switching over. Two, patients that were previously on VOXZOGO but since discontinued and were on no therapy. And then three, a patient that perhaps had never made the decision to start therapy at all. And we are seeing anecdotally that it’s coming across all 3 of those groups. And I think really what that underscores is the continued and existing unmet need that exists in hypochondroplasia today even with the existing therapy on market, which I think emphasizes the value of having YUVIWEL on the market and the compelling value proposition that it offers patients.

I think the second area that Jan was talking about is our continued investment in just making sure that everything we’re doing is hand in glove with patients, both as it relates to partnerships with the patient advocacy groups, but also as it relates to our scaling up of our patient access liaison team, which is our patient-facing field group that invest in the support and the journey as they go through the continuum of prescription to ultimately being on therapy.

Operator: Our next question comes from the line of Yun Zhong of Wedbush.

Yun Zhong: My question is on the monotherapy for hypochondroplasia. I remember that there have been some changes in terms of approach for that program, whether you’re going to pursue that indication at all and whether it’s going to be mono or combo or maybe just — wanted to know the — are you able to share any information regarding the thought process behind the decision if this is the final decision that you are going to just using monotherapy to target hypochondroplasia?

Jan Mikkelsen: Yes. I think the strategy that we have applied to [ achondroplasia ] where we started with monotherapy and the addition to combination therapy. I think you will see that there will be alignment between the strategic approach that we have used in [ achondroplasia ], we will likely also use in hypochondroplasia. I can basically tell you that we’re using the same principle between the 2 indications. The 2 indication is very much aligned in the fundamentals of the disease. There’s only, you can say, different mutation, different severity and other things like that. And we will implement the same thinking in treatment regime between these 2 indications.

Operator: Our next question comes from the line of Luca Issi, RBC Capital.

Luca Issi: Maybe Jay or Scott, can you educate us on the mechanics of the free drug for YORVIPATH? Who are the patients that got the free drug? For how long do they stay on free drug? And are you expecting any patients still on free drug in Q2? Or is this just a kind of Q1 phenomenon? Any color there, much appreciated. And super quickly, I think AstraZeneca has presented their Phase III data for [indiscernible] this week in the European Congress on Endocrinology. So wondering if you can comment on what are your expectations for that data?

Jan Mikkelsen: Yes. I can start from the last question, and then I can move it up and then Jay can take over in the end. The compound we are talking about in the end is the amyloid compound. And we have discussed that on many earnings calls, the lack of information that was related to data. Now that is disclosed some kind of information of the data package 1 year after finalization of the Phase III trial. And for me, and I think the key question, do this data package provide an approvability of any way of this compound? And to my best judgment, I hope this product never will be approved, and I don’t see really as possibility that it should be and going to be approved. So I think when we look on the competitive landscape for treatment in hypopara, I see YORVIPATH, our once-weekly approach to stable patient on YORVIPATH is really providing the fundamentals for a 20, 30 years treatment regime where I don’t see anything that really can give up to the benefit we will see in the treatment with YORVIPATH or any other product that is currently in clinical development from that perspective.

Related to the first part of your question, you’re right. We started to take already December a group of patients over to free drug because the essential part of YORVIPATH is that you cannot stop we first have started taking over to basically the element on what we call the conventional therapy. This basically is a disaster for the patient. So if there was a hiccup in the reimbursement that was a hiccup and it’s something we have done corrective action to ensure that we can handle it much better next year. We were in a position that we took, and Scott explained the impact of that here in Q1, to take already from December until March and series of patients on free drug, and they are now coming back to be fully reimbursed. And we are in a position that — and the organization in the U.S. some way have built up network or other things that can help it that we’re not ending in the same situation on time.

Jay, have you any comments too?

Jay Wu: Again, I think you summarized the need for bridge program well. I think just to clarify the earlier question, there is 2 types of [indiscernible] programs. We have bridge program, which again is pretty standard across the industry for those that have experienced a temporary insurance lapse. But we also just have our patient assistance program for patients that are underinsured or uninsured. So I think that’s an important point to note because there will always be some patients that qualify for the patient assistance program. So we don’t anticipate that, that will ever go away completely knowing that there will always be a certain level of patients that qualify for that.

Jan Mikkelsen: Yes. I think that is a clarification. That’s great from Jay, where we talk about this number of patients is only what we exceeded as success compared to the base level of patients. We always will help and provide free drug if there is an element of something where there is a disruption of the normal way to have drug. It’s a drug for the patients that we are — always will take our patient focus first. And if there’s a patient that gets disrupted, we will do everything to help this patient. And that includes also to take them for a period of free drugs until the disruption getting solved, and we will always be there for the patients.

Operator: Our next question comes from the line of Maxwell Skor of Morgan Stanley.

Unknown Analyst: This is [indiscernible] on for Max. Given the relatively low treatment penetration in [indiscernible] in the U.S. to date, what proportion of patients typically initiate treatment at age 2 years or older?

Jan Mikkelsen: I think some way to roll it a little bit back because you can ask the question why you have under treatment in the U.S? And I think actually this is the key question to find out how can we really help this patient better. And I think — and we believe that the undertreatment is basically the cause of lack of the right efficacy to show real benefit beyond linear growth. Many of these parents, children don’t see linear growth as a key element. They really want us to address all the [ comorbidity ], specific if you can avoid surgeries, or changing the pain [indiscernible] with leg bone. You can avoid [indiscernible]. And I believe by having this focus on these elements and here, I talk about the older children. If you go to the younger newborn, yes, if we can avoid any kind of spinal stenosis by having early intervention from newborn, yes, there will be a major benefit for treatment in the state.

So I believe our product profile that we have generated [indiscernible] a product, clear benefit compared to placebo. It needs always to be placebo controlled because there is a development to. So you cannot say, we also improve a [indiscernible] child with actually have a big increase in arm length. So you always need to really show it compared to a placebo-controlled trial. It’s the only way you can really just the benefit of the medical treatment in it. So the question and the answer to you is I believe will be appealing product to the vast majority of parents, children in the U.S. also because they provide a way to address the comorbidities. So important one, everything that you basically will see benefit for not only quality of life that’s associated with it, but also the element of physical strength.

Operator: Our next question comes from the line of Paul Choi of Goldman Sachs.

Kyuwon Choi: Congrats on the good start with YUVIWEL. I was just wondering if you could clarify in terms of the 60 — more than 60 prescriptions you’ve seen to date, whether it’s more driven by treatment-naive patients or switches? Any quantification there would be great. And I’m also curious in terms of your early starts or through the quarter, if you’re seeing potential utilization in the below 2 years of age population, even though that’s not officially on label yet.

Jan Mikkelsen: Yes. We need to come with a meaningful answer. We need longer time because we only have been there for 4 or 5 weeks now. And we want to be sure that what we see in the initial part of the launch is also being representative of what we’ll see in the later stage of launch. So Paul, we can discuss it, as Jay said, in a perfect manner. We see patients coming in for all 3 different groups, which was in a new group, patients that have discontinued [indiscernible] and patients that come directly on switching for [indiscernible]. So out from that, we see it coming in for all 3 different groups in the initial launch, we will expect to see perhaps one mix and when we come a little bit longer into the launch, we will potentially see a switch in the different 3 classes.

And this is why really to make it meaningful, we need to wait longer time before we can give you something you can do the right modeling on. But when I look at this number we’re coming up more than 10 patients per week, it’s an orphan drug indication. I’m extremely proud that our product profile is getting so well recognized in the society in this way. Under 2, I cannot comment on that currently.

Unknown Analyst: For the 70% cumulative U.S. insurance approval rate that you previously cited, can you give us any more color on what that cumulative rate looks like today? And then second, the EUR 500 million operating cash flow target that you laid out previously, are you reaffirming that guidance given the Q1 trends that you’re seeing? And how should we think about the contribution of [indiscernible] to that target?

Jan Mikkelsen: [indiscernible] one, we would like to come back in Q2 because we have a lot of positive data coming in now. We have the selling of our PMV and launch of YUVIWEL going much, much stronger than even myself hope. So apart from that, we will come with that claims guidance, but we will prefer to do it after our Q2 call, and we will give you what will be reflected on ’26. Scott is saying yes to me. And Jay, you can give the [indiscernible] number, how it’s improving the overall numbers.

Jay Wu: Sure. So the overall cumulative approval rate since launch has continued to creep up as well. I think we’re now closer to mid-70%, which again is incredibly high for any rare disease asset, much less one that has been on the market for the amount of time that we have. A lot of that is just a function of time given the favorable access policies that we have. So even some enrollments that might be many months old are coming through on appeal online, which would affect the cumulative approval rate over time. But given that it is a lagging indicator, it will take quite a bit of time for that metric to mature.

Operator: And our last question comes from the line of [ Cecilia Hernandez ] of [indiscernible].

Unknown Analyst: This [indiscernible] is on for [indiscernible]. So given the revenue now from commercial products, the redemption of the convertible notes and the sales of the [ PRP ], can you tell us anything on your capital allocation strategy? What is the order of priority for you guys?

Jan Mikkelsen: I think Scott you want really to answer the last question for today. So Scott get this opportunity now.

Scott Smith: Thanks a lot, Jan. Of course, as you’ve seen with our R&D success, a key component for us is to invest in R&D and allocate capital there to continue to sustain not only into the 2030s, but the 40s and beyond with the continuous flow of new products. I think Jan highlighted new NCEs in his prepared remarks, and you’ll learn about more of those in the coming future. And of course, I think after we give an update after Q2, as Jan mentioned, to our outlook for the rest of the year, you may get more color at that point as well.

Operator: Thank you. That’s all the time we have for questions. Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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