Welcome everyone to the Ascendis Pharma Third Quarter 2017 Financial Results Conference Call. Following some prepared remarks from the Company, we will open up the call to Q&A. As a reminder, this call is being recorded. I would now turn the call over to Scott Smith, Senior Vice President and Chief Financial Officer at Ascendis Pharma.

Thank you, Operator. Thank you everyone for joining our third quarter financial results conference call today. I'm Scott Smith, Chief Financial Officer of Ascendis. Joining me today are Jan Mikkelsen, President and Chief Executive Officer, and Dr. Jonathan Leff, Chief Medical Officer. Before we begin, I would 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, our potential to become a leading integrated rare disease company, our progress on our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plan, our goals regarding our clinical pipeline of rare disease endocrinology programs, statements regarding the plans for our Phase 3 heiGHt Trial of TransCon Growth Hormone and the fliGHt and enliGHten trials, statements regarding the plans for our Phase 1 trial of TransCon PTH, statements regarding the market potential of our pipeline candidates, and statements regarding the planned regulatory filings. These statements are based on information that is available to us today. Actual results or events could differ materially from those in the forward-looking statements and we may not achieve our goals, carry out our plans or intentions, or meet the expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Our forward-looking statements do not reflect the potential impact of any in-licensing agreements, acquisitions, mergers, dispositions, joint ventures, or investments that we may enter into or terminate. 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 the Forward-Looking Statements section in today's press release and the Risk Factors section of our annual report on Form 20-F filed on March 22, 2017. Today, we will discuss our third quarter 2017 financial and business results. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over Jan Mikkelsen, our President and Chief Executive Officer.

Thanks, Scott, and good afternoon. We continue to make progress with our pipeline, as we execute on our vision to become a leading integrated rare disease company. The key step towards achieving our vision is to build a diverse pipeline of three independent endocrinology rare disease products that make meaningful difference in patient life. We are on track as planned with this vision. We are making continued progress with our TransCon Growth Hormone program in Phase 3, as well as our TransCon PTH, and TransCon CNP programs. You will recall that all of our three product candidates are destined to provide best-in-class efficacy, safety, and/or tolerability in markets with significant unmet medical needs. In addition, they also address high-value market opportunity. This quarter, I would like to reflect on the fundamentals behind each of our product candidates and why we believe our internal pipeline has a higher chance of success compared to traditional drug development. It all starts with the patients. We begin our product planning process by identifying important major unmet medical needs. We reduce our pipeline risk by asking, is there an existing parent drug with already established efficacy and safety which can solve this unmet medical need if we combine the parent drug with our TransCon technology? If yes, we will proceed. Then we have two questions related to product profile. First, will we create a clearly differentiated product with best-in-class properties? Second, will it be difficult or impossible for others to match this target profile? If yes to both questions, then we will proceed. We are also looking carefully at the clinical strategy to see if a clear clinical and regulatory pathway exists to establish differentiation from current standard of care. And of course, we evaluate the market size and growth potential. Do we have a…

Thanks Jan. We've had a very active quarter on the clinical front as we moved from one to two products in clinical trials and continued to advance all three of our pipeline programs. Our Phase 3 program for TransCon Growth Hormone is advancing nicely. The pivotal heiGHt Trial continues to enroll patients globally and we hope to complete enrollment of 150 treatment-naive patients by the end of this year. We are also pleased to have recently initiated the fliGHt Trial which will evaluate 150 subjects who will switch from daily growth hormone to once-weekly TransCon Growth Hormone. Additionally, this will include subjects as young as six months of age, some of whom may be treatment-naïve. Screening of subjects has already begun. We are off to a great start with the fliGHt Trial and there is excitement among the physician community following an investigator meeting in September. This single arm, open-label trial is designed to further strengthen the safety and efficacy assessment of TransCon Growth Hormone. It is an important component of our future regulatory submission. We anticipate the fliGHt Trial to enroll quickly and to be completed around the same time as the heiGHt Trial. In our discussions around the trial, investigators appear eager to offer patients the option to switch from daily to weekly therapy. We are also preparing to launch the enliGHten Trial, our long-term extension study. enliGHten will soon be open to the first patients from heiGHt as they reach the 12-month time point. In the future, subjects from fliGHt will also be eligible for the enliGHten Trial, further broadening the long-term experience with TransCon Growth Hormone. We also recently published a manuscript describing the structural design and rationale for TransCon Growth Hormone. This paper detailed how learnings from prior attempts to develop a long-acting growth hormone…

Thank you, Jonathan. Turning to our financial results for the three months ended September 30, 2017, let me review some highlights. We ended the third quarter with cash and cash equivalents of €206.3 million and approximately 36.4 million shares outstanding. Cash and cash equivalents include proceeds from the completion of our follow-on financing which closed on September 29 and raised net proceeds of approximately €107.1 million. Subsequent to the quarter end, the underwriters exercised their overallotment option, increasing net proceeds by approximately €16.2 million and increasing total shares outstanding to approximately 36.9 million. On a pro forma basis, including these subsequent proceeds, cash and cash equivalents as of September 30 were €222.5 million. This cash balance reflects an unrealized €2.8 million finance expense due to foreign exchange fluctuations for the quarter and an unrealized €10.8 million finance expense for the nine months year-to-date. For the third quarter, we reported a net loss of €33.9 million, or €1.04 per basic and diluted share, compared to a net loss of €18.3 million or €0.72 per basic and diluted share during the same period in 2016. Research and development costs for the third quarter were €29.1 million, compared to €16.5 million during the 2016 quarter. R&D costs in the 2017 quarter reflect increased development cost related to new and ongoing clinical trials and manufacturing costs for TransCon Growth Hormone, increased development and manufacturing costs for TransCon PTH related to our ongoing clinical trial as well as Phase 3 enabling activities, increased preclinical development and manufacturing costs associated with the TransCon CNP program, and an increase in personnel and related costs due to a greater number of employees and activity in research and development. General and administrative expenses for the third quarter of 2017 were €2.8 million compared to €2.6 million during the third quarter of 2016. We continue to expect our R&D costs to vary from quarter to quarter as we invest in and advance our wholly-owned internal pipeline programs. We expect these costs to reflect advancing our Phase 3 program for TransCon Growth Hormone including clinical trials and supply, validation of our commercial manufacturing process, and preparation for the introduction of the auto-injector into the enliGHten Trial, increasing costs related to our ongoing Phase 1 clinical trial and Phase 3 enabling activities for TransCon PTH, and ongoing preclinical development and manufacturing activities for TransCon CNP. We are pleased to have successfully completed our follow-on offering this quarter, which welcomes a number of new investors and provides additional funds to support the clinical development of TransCon Growth Hormone, TransCon PTH and TransCon CNP, for which we retain worldwide rights. Looking ahead, with TransCon Growth Hormone and TransCon PTH already in the clinic and with TransCon CNP moving into the clinic next year, we believe Ascendis will be very well positioned with three wholly-owned rare disease products in clinical development, each representing a market opportunity greater than $1 billion. Operator, we are now ready to take questions.

[Operator Instructions] Our first question comes from Jessica Fye with JP Morgan. Your line is now open.

Just wanted to confirm the timeline for the PTH update, I think you said first quarter, could that be early in the first quarter? I think you've been suggesting very early in the year previously. And then second, just want to make sure I heard correctly that the heiGHt Trial is still on track to complete enrollment by year-end?

Related to the disclosure about the top line data from our Phase 1, we are extremely dedicated to get this product as fast as possible into the patients and we are now in a situation where we are running all the different cohorts now in the Phase 1 trial, and we think that we will be ready to provide – and really what I call an update to give a good insight in how we can improve the target profile with our Phase 1 data in the beginning of the year. Potentially, it could be at the JP Morgan conference in early of January or we will have it later in the quarter. And I think Jonathan can confirm the last one.

We do remain on track to complete enrolment by the end of this year in the heiGHt Trial.

Great. Thank you.

Our next question comes from Tazeen Ahmad with Bank of America. Your line is now open.

One on PTH, Jan how are you thinking about what the next steps would be after the study results? It is obviously an area of under-met need. Do you think it could go straight into a pivotal study, for example, as long as this study's directionality goes the way you are wanting it to go? And then, in terms of how you are thinking about the addressable population, we have talked a little bit about this before but wanted to get a sense if you've gotten a more narrowed view on whether or not you think this would be best served in let's say the severe population up first or do you think this could be used across the board? And then I have a follow-up on Growth Hormone.

Yes, let me start on the PTH and then I can come over to my colleagues. So, yes, you are right, we are dedicated with high level of passion to get this product as fast as possible out to the patients, and I think we have a clear roadmap. And the roadmap will be is that we are getting the Phase 1 data as fast as possible and we’d go to regulatory agencies. And what is perhaps more important, we are doing all the preparation for being ready to move into Phase 3. We are developing everything for moving it up to manufacturing scale. So we are now running a manufacturing scale. We are conducting all the preclinical safety activities that's necessary for supporting initiation of Phase 3. We are developing an optimal pen device, so we are ready to be sure that there can be optimal adherence and optimal compliance for the patient. Related to the clinical pathway, I could think that Jonathan will take that question, and Scott is really working, dedicated and trying to find out the number of centers or patients we will take, and really give opportunity to give this unique product.

So, if the question is, why do we believe we can move from Phase 1 to Phase 3, I think we have high confidence for a couple of reasons. So, normally when you do a Phase 2 program, it's to establish the safety profile, the preliminary efficacy, a proof of concept of your drug, the dose selection for Phase 3, and immunogenicity. We arguably will have all of that settled at the end of Phase 1. This is a large Phase 1 study in a lot of subjects. We'll have a very good view on safety. Efficacy, we will know clearly from our Phase 1 results since pharmacodynamics in healthy volunteers are the same as in patients, and that's been known for a while, and there is 30-plus years of experience with PTH. We'll know the dose from our Phase 1 study, and it's titratable in any case. And we'll know the immunogenicity from our Phase 1. And furthermore, if there is any doubt at all, we will likely start our Phase 3 program with a sentinel cohort and relieve any concerns from any regulatory body, because after the first bolus of patients have gone through, we'll have a safety review meeting, and then if all else looks good, we'll continue on. So, we think it's a very compelling scientific database argument, and we'd be very surprised if regulatory authorities do not agree with us.

And then maybe keeping with that line, do you think you'd have to have an active control versus the currently approved drug?

It's likely we will compare ourselves to standard of care, which will include calcium, vitamin D, and in some subjects likely Natpara. So that is very likely the ultimate design, although we have not completed our designs of the Phase 3 program yet.

Okay. And then in terms of the commercial opportunity?

This is Scott. So, the best studies out there indicate, in the U.S. there is about 77,000, up to 115,000, hypoparathyroid patients in the United States, so we'd like to assume roughly 80,000 available to treat. The number in Europe based on the best data, which interestingly comes out of Denmark, is comparable to maybe slightly less than that. But just focusing on the U.S., about 80,000 patients for the mass general long-term follow-up study, we think the low-hanging fruit is really 25% of those patients that have an excess rate of kidney stones and nephrocalcinosis, that's really the low-hanging fruit, the most severe. However, if you look at some of the other studies done by NPS, such as PARADOX, you can see that patient demand is probably much higher, and in some cases we believe that a much broader portion of these patients should be treated not just for the biomarker effects but also for the CNS effects.

Okay, great. Thanks for all that color. And then on the Growth Hormone, just wanted to get a sense of timeline, so after let's say the heiGHt Trial reads out, where are you in terms of kind of validating the device that you would want to use commercially? I believe in the past you've said that there might be a need for bridging studies. Is that the case and when would that be happening?

Where we want to introduce our device for the patients will be in our extension trial, the enliGHten Trial. And we are already getting a lot of feedback related to the device. And when we are looking at this feedback, we really believe that this device is built for the future, as this is a device that's not only easy to use but also integrating essential new elements on how to build optimal adherence type automatic data capture of doses and time of an injection, would give you opportunity to build up an entire IT platform for building up adherence. So, we actually believe that device is really living up to everything what we had expected. And related to, for example, yes, we are running a bioequivalent trial. It's actually happening just now. It has been progressing as we had hoped for, and we are complete on track to introduce the device and to have it to be ready and part of our initial filing.

Okay. So, just to be clear, you plan on launching with the new device?

Yes, this is exactly what we want to do.

Okay. Thanks Jan.

Our next question comes from Alethia Young with Credit Suisse. Your line is now open.

Maybe two, just one as it relates to on the Growth Hormone, have you seen any benefit like from maybe the discontinuation of the Versartis trial ending, are you seeing interest from the sites that were there, and maybe that helps you kind of fill some of the extension or switch studies? And then I guess on the other question, if you look at the Natpara study in the Phase 3, it did like a 24 week with a run-in. Do you think that's something that will be viable for you guys or do you think you'll have to study the drug longer and treatment between titration and maintenance or will there be a titration arm? Thanks.

You ought to repeat the second question, but the first question, with the Versartis studies closing down, there is certainly interest at multiple sites of ours. But unfortunately we can't enroll Versartis patients in our trial. That's long been an exclusion criteria. Not only for Versartis, but any experimental drug cannot be used in our switch trial. So these are just patients who are currently taking daily growth hormone commercially approved products. And I'm sorry, could you just repeat the second question? On Natpara, sorry?

No problem. I guess I'm just trying to figure out, in the Natpara Phase 3 study obviously we had the run-in and then you did the treatment and titration for 24 weeks, is that how we should think about maybe what a Phase 3 would look like for you guys?

Yes, you should. So, certainly the standard of care patients will dramatically down-tritrate their calcium, vitamin D, and there will be some subjects who were likely on Natpara who will do a little bit of maybe down-titrating, maybe not, but there will be titrations throughout the entire trial in early titration phase and then a maintenance phase, much like the Natpara Phase 3.

And as far as sample goes, will that have 125 patients, is that probably fair, or would you need to do more patients since you're kind of going from Phase 1 to Phase 3?

We haven't completely designed it yet, but it's not going to be a large program. PTH is a very well known commodity, so we don't feel you need a huge safety database. So, it will be on the smaller end of things, but we'll be well powered to satisfy our primary endpoint.

Okay, great. Thanks.

Our next question comes from Liana Moussatos with Wedbush Securities. Your line is now open.

Since TransCon hGH is the only game in town, once approved do you anticipate that doctors will switch their patients from daily to TransCon rapidly?

I actually think that we are being extremely you can say positively surprised, because when we actually ran our model, we were potentially too conservative in we only thought that we will mainly get new patients. The feedback we are getting more and more is that there will be many more switch patients. And I think Jonathan also sees just as a huge, huge interest for having patient coming into our fliGHt Trial switch trial, and I think that just indicates the unmet medical need. So, I personally believe that it will – we were too conservative where we said that there will mainly be patients that are coming from naive patients that will start treatment that are coming in on a once-weekly product. We see now because of feedback not only for physician but also from parents and patient that is part of that that we [indiscernible] our modeling is quite different now where we forecast now for all manufacturing forecast, actually are expecting much more patients that will come from switch.

Our next question comes from Jim Birchenough with Wells Fargo. Your line is now open.

Congrats on all the progress. A few questions. I guess just on sticking with the commercial opportunity for TransCon hGH, when you think about this switch opportunity, is there a sweet spot in terms of patients that you think are most apt to switch to your drug and any insights into patients that have a certain growth velocity that's inadequate or a certain age, how do you sort of frame what you think will be the low-hanging fruit in terms of the switch opportunity?

Jim, it's a great question, and that was part of the analysis, because what we actually thought in the beginning and what we first had in our modelling was only patient that was not getting what we could call the right outcome, that will be mainly the patients that will be switched. What we are now realizing by having interaction with physician, the community and [indiscernible], nearly all patients will be willing to switch. If you were in position that potentially to just add patients who have perhaps only one year treatment left, perhaps [indiscernible] this patient, but nearly everyone else will be really open for this switch if they compared, assessed to our product opportunity. And that is really what we have seen now really and this is what is building into our forecast modeling.

And Jan, certainly the experience of some of your competitors seems to bear out your view on the advantage of an unmodified versus modified growth hormone product. But just wanted to check that there is not a possibility that the actual pharmacokinetics of the growth hormone delivery could be at play as well, and that is, is there any suggestion that the more pulsatile nature of the daily has an advantage over a weekly? I just want to make sure what gives you confidence that beyond the advantage of having an unmodified growth hormone that there is not some risk around the less pulsatile nature of the delivery and a different pharmacokinetics?

I think great question, Jim. [Indiscernible] we actually started already to discuss that question, and you can find really great peer-reviewed publication where we took both adult and children with growth hormone deficiency on infusion pump and compared them directly to how would the treatment outcome be after six months. And there was actually some of the fundamentals that was being developed to ensure that you really were in a position that making a flat curve with you [indiscernible] optimal in an infusion pump really would give the same outcome. And the other thing that supported [indiscernible] is a product that is also built on an unmodified growth hormone, the product LG from South Korean company where they'll have two to three years both efficacy and safety data, where they have the once-weekly dosing profile. And it's also being performed in 12 months – sorry, six months in adults with growth hormone deficiency, and both [indiscernible] in this two patient group there was no different compare to daily growth hormone. So, I'm quite sure that what you see as the main important thing, what you can see out from the data and the science we know about it, that the only place you have seen possible to get the same outcome as daily growth hormone has been with product opportunities where you apply an unmodified growth hormone in creating the long-acting effect. And it has been illustrated by our product but also believe that the data that is already topic for everyone from the LG also proving exactly the same thing.

And then just final question on TransCon PTH, to the extent that kidney stones and nephrocalcinosis really represents a lot of the burden of disease, do you need to see an effect on calciuria to move from your Phase 1 to your pivotal, is that part of your go/no go decision and how confident are you that you will see an effect on calciuria?

So, great question, Jim, this is Jonathan. We do not need to see that in Phase 1 since these are healthy volunteers. So whereas we might see a PTH effect on their kidney and see a reduction in urinary calcium, recall that they are normal. So they have endogenous PTH anyway, and as we raise serum calcium, that by itself will increase the calcium load to the kidney and that by itself will increase urinary calcium and the PTH effect will reduce the urinary calcium. So, where that plays out? It could net-net out in healthy volunteers where you don't see a change. That said, we might actually still see a reduction in urinary calcium in healthy volunteers that are not deficient in PTH. So, it's not a necessary requirement at all in our Phase 1 study. The infusion like profile is more what we are looking for. The lack of immunogenicity, the consistent prolonged effect on serum calcium, those are the effects that we expect to see in healthy volunteers.

And Jonathan, just quickly, what do you expect the primary endpoint to be in the Phase 3?

It will likely be a composite endpoint that includes the two most clinically relevant measures, which is normalization of serum calcium and normalization of urinary calcium, that notably was not present in the Natpara program and we think those are two pivotal components of any composite. Now maybe there will be another element or two, we are still finalizing it, but it will certainly contain those two important elements.

Great. Thanks for all the detail.

Our next question comes from Joseph Schwartz of Leerink Partners. Your line is now open.

So, physicians tell us that one of the reasons Natpara hasn't gained much traction in the marketplace is a lack of outcomes data. So, as you look forward towards your Phase 3, how extensive of a data package do you think you will need to have more of an impact than Natpara has? Do you think urinary calcium improvements alone would do it or do you think that you could need more data than that, such as kidney stones, renal survival or surrogate biomarkers like [indiscernible] filtration rate?

So, thanks, Joe, for the question, very good question. So, the biology of PTH and the pathophysiology of hypoparathyroidism are very well understood. So, I think it stands to reason for all, including the regulatory bodies that if you control serum calcium and if you control urinary calcium, all of the downstream effects should be improved. So, that does not mean we are not going to continue and collect long-term data. We clearly will. But I think the presumption is certainly going to be, if we normalize those two factors, then all of the downstream effect should be improved. But they are important outcomes, probably not to be captured in clinical trials since those are multi-year outcomes and renal failure takes years to develop, it's unlikely a clinical trial could ever show that, but I do not think you need that to be shown. As long as you normalize serum calcium and urinary calcium, the regulatory bodies will clearly connect the dots.

Okay, great. Thanks. And then how physiologically relevant is a constant exposure profile like what TransCon PTH would offer in hypoparathyroidism? It's obviously been good to date in growth hormone deficiency but I'm wondering about in hypo PTH if there could be any drawbacks from this if there is no pulsatility which might drive anabolic and catabolic activity?

Again a very good question, but this has been extremely well studied at the NIH over 20 years, where it's been shown in multiple studies by [Karen Weiner] [ph] that if you maintain an infusion like profile, then you normalize all of the issues with hypoparathyroidism, and in her earlier studies where she didn't quite achieve that because she is once-daily or twice-daily curtailed, it got incrementally better, and as you approach the infusion like profile with an insulin pump, then everything normalized. So, I think the data is very clear and it's quite logical that if you are missing parathyroid hormone, you would want to replace it within the normal range to normalize all of the physiology and abnormalities in the disease, including bone marker and bone turnover.

Great. Thanks for taking my questions.

I am not showing any further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone have a wonderful day.