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Ascendis Pharma (NASDAQ:ASND)
Q3 2018 Earnings Conference Call
Nov. 28, 2018, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Q3 2018 Ascendis Pharma financial results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-answer session and our instructions will be given at that time. If during the conference, you require operator assistance, press * then 0 and an operator will be happy to assist you. As a reminder, this conference call may be recorded for replay purposes. It is now my pleasure to hand the conference over to Mr. Scott Smith, chief financial officer. Sir, you may begin.

Scott Smith -- Chief Financial Officer

Thank you, operator. Thank you, everyone, for joining our third-quarter 2018 financial results conference call today. I'm Scott Smith, chief financial officer of Ascendis. Joining me on today's call are, as usual, 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 progress on our pipeline candidates and our expectations with respect to their continued progress, statements regarding our strategic plans, our goals regarding our clinical pipeline of rare disease endocrinology programs, 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 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 28th, 2018.

On today's call, we will discuss our third-quarter 2018 financial results and provide a business update. Following some prepared remarks, we will then open up the call to questions. I will now turn the call over to Jan Mikkelsen, our president, and chief executive officer.

Jan Mikkelsen -- President and Chief Executive Officer

Thanks, Scott, and good afternoon. We continue to make progress toward our goal to create sustainable goals by building a diversified pipeline of three independent product opportunities in rare disease endocrinology. Let me review our recent progress.

We are reporting today the expected and predicted Phase 1 clinical results for the third rare disease endocrinology product candidate in a row, TransCon CNP. Our clinical results to date support our target product profile and confirm findings from our preclinical research. Our goal is to provide continuous and therapeutic levels of CNP for 20 hours a day 7 days a week without increased cardiovascular risk and without weekly administration. We have now clinical data that reinforce our target product profile.

We expanded our global footprint through the formation of VISEN pharmaceuticals in greater China. Earlier this month, we announced the VISEN partnership which provided with a compelling offsite opportunity in China. VISEN also expands the potential reach of our rare disease clinical programs into China with half a larger population than the United States and Europe combined.

And, at the end of the third quarter, we completed recruitment in our fliGHt trial, which brings us up to more than 300 pediatric subjects enrolled in our TransCon Growth Hormone Phase 3 program. This was another key step to advance our long-acting growth hormone therapy to those patients as we await results of the Phase 3 heiGHt Trial in the first quarter of 2019.

My reflections today will focus on TransCon CNP. TransCon CNP is now the third rare disease endocrinology product candidate where we have created a potential best-in-class therapy. The clinical results presented to date also demonstrate, once again, an excellent translation from preclinical to clinical data and the bold applicability of the TransCon technology.

As you may know, the fibroblast growth factor receptor 3 is a negative regulator of bone growth. As activation of the receptor signaling pathway in the growth plate inhibits chondrocyte proliferation and differentiation, achondroplasia is caused by a continuous overactivation of the FGFR3 signaling pathway by dominant mutation in the receptor. This continuous overactivation severely limits bone growth. We believe to provide a highly effective treatment for achondroplasia, the continuous overactivation of the receptor signaling pathway much be counterbalanced 24 hours a day 7 days a week.

CNP and its receptor, NPRP, are well established as positive regulators of growth. CNP binds to its receptor in the growth plate and counterbalances the signaling pathway of the FGFR3. Increased CNP levels are closely related to linear growth in healthy children at all ages. In achondroplasia, CNP counterbalances the constant overactive signaling pathway caused by receptor mutation, therefore, continuous exposure to CNP at effective levels should result in normalization of the (inaudible) routine of the activity of the FGFR3, and the CNP pathways. (Inaudible) that is essential for normal bone growth.

The biology of CNP has been known for many years, but the use of CNP as a pharmaceutical product has been limited by shortcomings of the native CNP peptide. These include, firstly, a short duration of acids. Native CNP has a half-life of only two to three minutes in humans, making it impractical to maintain constant dark exposure from one administration to the next. Secondly, the concentration of the native CNP in the subcutaneous tissue and dark component by natural endo peptidases require IV administrations in humans to maintain an effective CNP level. Lastly, high systemic concentration of CNP causes vasodilation which can trigger adverse cardiovascular effects. Therefore, developing a safe and effective CNP therapy is difficult, but a challenge that our TransCon technology is uniquely designed to overcome.

Today, we are reporting topline clinical data from our TransCon CNP program. Let me review these findings. First, we have demonstrated in the clinic that a single dose of TransCon CNP provides continued CNP exposure over the entire week with a half-life of around 90 hours -- an improvement of around 2,000 times the half-life of native CNP. The continuous release of CNP from TransCon CNP also avoids high peak levels that trigger adverse cardiovascular effects.

TransCon CNP PK profile also supports a once-a-week administration. The PK profile of different doses of TransCon CNP show that it has dose-related increase in CNP exposure and low intrasubject variability. This data suggests the ability to provide straight TransCon CNP to the target CNP levels 24/7. At the target CNP levels, we believe we can balance CNP, FGFR3 pathways, and normalize growth in achondroplasia and other diseases that CNP may treat.

Turning to safety findings, our results in healthy adult subjects who received single injections across five different dose cohorts of TransCon CNP show no impact on mean resting blood pressure and heart rate compared to pre-dose levels even at the highest tested dose of 150 micrograms per kilo. These findings are consistent with our pre-clinical studies and publications with continuous IV infusion of native CNP in healthy subjects.

Finally, our preliminary safety data suggests an attractive safety profile with no severe or serious drug-related adverse events and well-tolerated injection site reactions. In fact, orthostatic changes appear unrelated to the study drug and consistent between placebo and treated cohorts.

There is currently no FDA approved medical treatment for achondroplasia. Our goal is to develop TransCon CNP as a new therapeutic option that has a significant impact on patients' lives. Not only affecting height but potentially addressing the many comorbidities associated with this disease. TransCon CNP has the potential to deliver a continuous exposure of CNP at therapeutic levels for 24 hours a day, 7 days a week without adverse cardiovascular effects. Most importantly, it provides patients with achondroplasia and other FGF receptor-related diseases the potential for an effective and safe therapeutic option.

Today, daily growth hormone therapy is the cornerstone treatment for many growth disorders, including growth hormone deficiency, idiopathic short stature, Turner's syndrome, and others. With today's data we believe, as (inaudible) the potential to bring both a once-weekly growth hormone and a once-weekly CNP therapy to patients. Given the promise of these two product opportunities, Ascendis is in a unique position to have the potential to treat a broad spectrum of growth disorders. Some disorders may be optimally treated with TransCon Growth Hormone, and others with TransCon CNP. Indeed, some growth disorders may potentially be treated optimally with a combination of both TransCon Growth Hormone and TransCon CNP, and we are intrigued to explore this opportunity and position us on the frontier of growth biology.

Today's date is an important step forward for our TransCon portfolio. Now, I turn it over to Jonathan for an update on the clinical programs.

Jonathan Leff -- Chief Medical Officer

Thanks, Jan. I am pleased to provide an update today on recent pipeline developments, including additional details on our TransCon CNP program. First, I will share some highlights for our other two clinical candidates, TransCon Growth Hormone and TransCon PTH. We remain on track to report top-line results for our Phase 3 heiGHt Trial in the first quarter of 2019.

As a reminder, heiGHt is a randomized, open-label, active-control trial comparing once-weekly TransCon Growth Hormone to daily Genotropin in treatment-naïve pediatric subjects with growth hormone deficiency. The primary endpoint is annualized height velocity at 52 weeks. A non-inferiority analysis will compare both treatment groups. We enrolled 161 subjects ranging in age from 3 to 12. We believe the strong statistical power of heiGHt bodes well for the potential of TransCon Growth Hormone.

We also recently passed our third data safety and monitoring board review for heiGHt, during which independent experts evaluated the safety data and recommended the trial continue as planned. We are pleased with the safety profile for TransCon Growth Hormone as our review of aggregate data from heiGHt continue to be consistent with that of published literature and experience with daily growth hormone therapies.

Our second clinical trial for TransCon Growth Hormone, the fliGHt or SWITCH Trial, also completed enrollment at the end of the third quarter. A total of 146 subjects were enrolled, which means we now have more than 300 pediatric subjects enrolled in our Phase 3 clinical program. The combined safety data will form an important component of our filing package, and achieve the safety database as agreed with regulatory authorities in Europe and the U.S.

To review, the fliGHt Trial is evaluating safety in subjects who switched from daily growth hormone therapy to weekly TransCon Growth Hormone, with a follow-up of 6 months. The results of this trial will not only strengthen the safety experience for TransCon Growth Hormone but are also expected to guide physicians on switching patients from daily to weekly therapy. Importantly, fliGHt includes some who are below 3 years of age. This will provide important information on utilization of TransCon Growth Hormone in subjects than those enrolled in the heiGHt Trial.

Finally, enrollment continues in the third component of our Phase 3 program, the enliGHten Trial -- an open-label long-term extension that includes subjects who participated in either the heiGHt or fliGHt Trials. To date, about 165 subjects have been enrolled as subjects complete the heiGHt and fliGHt Trials. While we proceed with our clinical programs, our underlying focus remains on patients. We believe a once-weekly growth hormone therapy could overcome a key challenge that hinders children with growth hormone deficiency -- the continued struggle of adherence with daily therapies.

Missed doses not only impact height, but can also adversely affect bone, muscle, heart, and brain development. With the potential to provide the same efficacy, safety, and tolerability of daily growth hormone, TransCon Growth Hormone is designed to overcome this barrier and have a positive impact on patients' lives.

Turning now to our second pipeline candidate, TransCon PTH, we are making good progress preparing to initiate a randomized placebo-controlled Phase 2 trial in the first quarter of 2019. As a reminder, TransCon PTH is a long-acting pro-drug of parathyroid hormone, or PTH. It is in development to treat hypoparathyroidism -- a rare endocrine disorder characterized by insufficient levels of PTH resulting in low calcium and elevated phosphate levels in the blood. Maintaining continuous and sustained levels of PTH in the physiological range has been shown to not only raise serum calcium levels, but also normalize the processes related to bone turnover in kidney function.

We expect the Phase 2 trial to enroll approximately 40 subjects in North America and Europe. The primary endpoint will be a composite endpoint, representing control of serum and urinary calcium levels, as well as reduction in calcium and Vitamin D requirements. In this trial, TransCon PTH will be administered via an injection pen. As mentioned previously, the trial will explore a titration schedule designed to evaluate the ability to completely remove standard of care with activated Vitamin D and calcium supplementation. The trial duration will be 4 weeks, after which subjects may enter a long-term extension trial.

Finally, let me add some comments on our third pipeline candidate, TransCon CNP, including details related to the preliminary data presented today and shown in the deck posted on our website. The Phase 1 trial was a double-blind randomized placebo-controlled trial evaluating the safety, tolerability, and pharmacokinetics of TransCon CNP in healthy adult subjects. In this trial, a total of 45 subjects were enrolled. The trial tested 5 doses sequentially -- 3, 10, 25, 75, and 150 micrograms per kilogram. Up to 10 subjects were randomized to receive TransCon CNP or placebo in a 4 to 1 ratio. After each dose level was completed, the DSMB was convened to review the blinded data and approve escalation to the next higher dose. The data were unblinded after each assessment.

As Jan described, the preliminary data from this trial will support our moving ahead with plans to file U.S. IND in mid-2019 and initiate a Phase 2 trial of TransCon CNP in subjects with achondroplasia soon thereafter. They also support our desired profile for TransCon CNP. In addition, we plan to initiate the ACHIEVE trial -- our natural history study in achondroplasia -- by the end of this year. We believe the ACHIEVE trial will provide important observational insights into the experience of children living with achondroplasia, further informing our clinical program going forward.

We are all acutely aware of the need for a safe and effective therapeutic option for achondroplasia. It is the most common form of dwarfism occurring in about 1 in 10,000 to 30,000 newborns, or approximately 250,000 worldwide. Current treatments and developments may increase heights, but for patients, the associated comorbidities are much more devastating. These include spinal stenosis -- a narrowing of the spinal canal that can compress the upper part of the spinal cord, hydrocephalus -- the buildup of fluid in the brain, and sleep apnea, among many others. With the potential of TransCon CNP to deliver continuous levels of CNP over one week, our hope is to develop a treatment option that improves many aspects of patients' lives -- well beyond just height.

All three of our pipeline programs have now been clinically validated and we're exploring opportunities to strengthen our global presence and bring our innovative therapies to patients worldwide. Our VISEN partnership enables this for all three of our clinical programs in China, and in parallel, we continue to pursue additional opportunities in other parts of Asia with our other programs.

Throughout the year we've made great strides with our three potential therapies for rare endocrine diseases. Looking ahead to 2019, we are enthusiastic about reporting pivotal data for our TransCon Growth Hormone program, and ramping up clinical activities for our other two programs in hypoparathyroidism and achondroplasia. Our pipeline now includes three endocrinology programs with strong target product profiles, all three supported by clinical data.

In closing, I would like to thank our investigators and patient communities for their contributions in supporting our efforts to develop new and differentiated therapies to treat rare endocrine diseases. Now Scott will provide a financial update.

Scott Smith -- Chief Financial Officer

Thank you, Jonathan. Turning to our financial results for the three months ended September 30, 2018, let me review some highlights. For the third quarter, we reported a net loss of EUR 34 million or EUR 0.81 per basic and diluted share compared to a net loss of EUR 33.9 million or EUR 1.04 per basic and diluted share during the same period in 2017. The third-quarter 2018 results reflect financial income of EUR 4.3 million due to foreign currency exchange rate fluctuations of our cash holdings.

Research and development costs for the third quarter were EUR 31.5 million compared to EUR 29.1 million during the same period in 2017. The higher costs were primarily attributable to an overall increase in R&D activities across all programs, including an increase in personnel costs due to a higher number of employees in R&D functions, and general increases due to growth in headcount and activities, including an increase in facility, IT, and patent costs allocated to R&D.

For TransCon Growth Hormone, external development costs were lower due to lower costs associated with manufacturing TransCon Growth Hormone for use in clinical trials, partially offset by an increase in costs related to the continued execution and expansion of our Phase 3 clinical program and the ongoing development of the auto-injector, as well as the preparation and manufacturing of TransCon Growth Hormone validation batches.

For TransCon PTH, higher external development costs were driven by costs related to Phase 2 enabling activities, including manufacturing of TransCon PTH and device development, partially offset by lower preclinical costs and lower clinical trial costs due to completion of our Phase 1 trial.

And for TransCon CNP, external development costs were comparable to the same period in 2017, reflecting higher costs associated with execution of the Phase 1 trial and ongoing Phase 2 enabling activities offset by lower preclinical costs.

General and administrative expenses for the third quarter of 2018 were EUR 6.8 million compared to EUR 2.8 million during the third quarter of 2017. These higher costs primarily reflect in administrative personnel, including increased site costs, as well as the initial costs of building out a commercial organization. We ended the third quarter with cash and cash equivalents of EUR 310.3 million and 42,032,522 ordinary shares outstanding.

We expect costs to continue to increase as we advance our internal pipeline programs and further invest in the TransCon technology. Costs are expected to include, for TransCon Growth Hormone, costs associated with our Phase 3 program including manufacturing of clinical supplies and validation batches, as well as continued development and manufacturing of the auto-injector used for administration.

For TransCon PTH, ongoing IND-enabling activities, including nonclinical talks, manufacturing of clinical supply in validation batches, regulatory and device development activities as well as preparation for and execution of our Phase 2 clinical trial. For TransCon CNP, costs associated with initiation of the ACHIEVE natural history trial and activities related to Phase 2, including nonclinical talks and manufacturing, further development of commercial capabilities and related activities, and finally, outside of our rare endocrine disease product candidates, costs associated with further developing the TransCon technology, including potentially entering into new therapeutic areas.

We plan to continue to create long-term sustainable growth as we apply our innovative TransCon technology and product development algorithm in other therapeutic areas and expand on the global basis. To that end, subsequent to the completion of the third quarter, we announced the formation of VISEN pharmaceuticals with an investor syndicate led by VIVO capital to develop, manufacture, and commercialize our endocrine rare disease therapies in greater China. With VISEN, Ascendis found a partner with a great management team dedicated to accelerating development of our rare endocrine disease product candidates in the world's second largest pharmaceutical market.

Our equity ownership will be carried on the balance sheet under the equity method of accounting, adjusted for our share of the profit or loss of VISEN. Development of the rare endocrine disease product candidates will be governed by agreements, including a research and technical development plan. VISEN has agreed to reimburse Ascendis for services delivered under the plan. Ascendis will also provide product supply to VISEN for use in conducting clinical trials in greater China, pursuant to separate clinical supply agreements for which VISEN will also reimburse Ascendis.

Operator, we are now ready to take questions.

Questions and Answers:

Operator

Thank you, Sir. Ladies and gentlemen, at this time, if you'd like to ask a question over the phone, press * and then 1 on your telephone keypad. If your questions have been answered or you simply wish to remove yourself from the queue, press the # key. Once again, ladies and gentlemen, that's the * and then 1 to ask a question.

And our first question will come from the line of Michelle Gilson with Canaccord Genuity. Your line is now open.

Michelle Gilson -- Canaccord Genuity Inc. -- Analyst

Hi. Congratulations on the data. I was just wondering -- can you talk a little bit about the path forward for TransCon CNP? And what is the age range of patients that you would plan to enroll in your Phase 2 study? And then you talk a lot about correcting comorbidities and can you talk a little bit about how young that you think that patients may be treated in order to correct for those comorbidities? And then, I have a follow-up as well.

Jan Mikkelsen -- President and Chief Executive Officer

Thanks a lot for the question, and it's going back to our vision about what we really want to achieve with TransCon CNP. Our hope with TransCon CNP is we're really not only addressing height but really can address the comorbidity of the disease. And you are 100% right. To address these comorbidities, we strongly believe that we need to go down to basic newborn children. So, we can ensure they get a balanced growth of bone so they can develop them in a more normal manner. Because sometimes you potentially first see the physical symptoms later on in life, but potential is always predetermined in the beginning of the early part of the development.

So, therefore, we are not spending years on making high trial. Our vision is to move as fast as possible through a stated process that we will discuss with the regulatory agencies and ensure we can get the right pathway forward so we can get this treatment as fast as possible down to newborn children. This is basically our whole vision for that.

More concrete question, I'm quite sure, Jonathan can follow up with.

Jonathan Leff -- Chief Medical Officer

Yeah, I don't have a whole lot to add. I mean, we'll likely start because of our very clean safety profile in children as young as 2 and above, and then move quickly -- as quickly as we can after discussions with regulatory authorities -- to newborns. So, our clear goal is to get to the newborn children. Those are the ones with the greatest need where the impact can be the greatest.

So, we look forward to those discussions with regulatory authorities based on our safety profile that we've developed in the Phase 1 study.

Michelle Gilson -- Canaccord Genuity Inc. -- Analyst

Okay. And then, when you think about dose in that Phase 2 when you're choosing a Phase 2 dose range or a dose, are you looking at trends that you see in nature with CNP within the population? Or data from others in this space, or what you're seeing in animals? And then, are you thinking about it -- about looking at it based on concentration or titrating that dose?

Jan Mikkelsen -- President and Chief Executive Officer

That is an excellent question, and what we have done, we have gone and integrated analysis where we are integrating preclinical findings in models of achondroplasia and other related diseases. What we have seen of what CNP can promote in overgrowth in humans, and also the literature -- all the data that is related to CNP and the phenotype of CNP in patients with achondroplasia.

I can give you a little bit of flavor on this vast integrated analysis. For example, when we look on continuous exposure on preclinical models, there is a clear effect on dose. And the effective dose is down for 2 to 15 picomolar, so we're down in a range of very, very low dose of CNP if it's just being provided in a continuous manner.

If we go to all growth in humans, there was a girl with overgrowth -- meaning you go up to 97% of the percentile, and this person only had twofold higher concentrations than normal people of CNP. And when we go to achondroplasia children, there is a really nice correlation between high velocity and the phenotype of CNP, and always what we are seeing of data is that the phenotype of CNP is already correlating to the CNP. And what you see with the phenotype is that a two to threefold increase in this phenotype can promote or correlate up to growth of to 18 centimeters in achondroplasia. So, this is why we in some ways know exactly what the dose and potentially the dose needs to be individualized to each single patient, but we believe a range between 4 to 30 picomoles is where we expect -- and perhaps 30 is just too high -- but this is the level where we exactly believe where we would be in our target to a perfect range.

Jonathan Leff -- Chief Medical Officer

And just to add, I think it's very unlikely there'll be a single target level that we want to achieve in all subjects. I think it's very likely there'll be a distribution of response and, as you suggested, it may well be that titration individually by patient is the way to go here. So, we look forward to learning a whole lot in our Phase 2 study where we will explore different doses and begin to correlate the growth that we see and other beneficial effects versus the target levels that we see in the blood.

Operator

Thank you. And our next question will come from the line of Jim Birchenough with Wells Fargo Securities. Your line is now open.

Jim Birchenough -- Wells Fargo Securities -- Analyst

Yeah, hi, guys. Thanks for taking the question and congrats on all the progress. Just a question on each program. So, for TransCon Growth Hormone, the patients that have gone into open-label extension, what proportion of available patients does that represent? On the PTH program, I'm interested in if you've got more detail on what defines a responder. It seems like you're contemplating serum calcium, urine calcium, use of Vitamin D and calcium. Just understanding more explicitly what a responder might be. And then, finally, on CNP, do you think the natural history study could provide a control arm ultimately for registration of the product, and when do you think you'll get better visibility from FDA on what an approvable profile would represent? Thanks.

Jonathan Leff -- Chief Medical Officer

Okay, thanks Jim, for all the questions. And starting with Growth Hormone, as I said we have 165 subjects in the enliGHten Trial. So, that's over half of all the subjects who are now already in enliGHten. We're really thrilled with the execution of the trial. It's moving along as expected and we're just accumulating more and more data every week.

In terms of PTH, our primary endpoint will be a composite endpoint requiring normalization of serum calcium. Importantly, normalization of urinary calcium, and a reduction in calcium and Vitamin D, which may be quite extensive in some subjects. So, in order to achieve the primary endpoint, you need to achieve all three components of the composite. And that will be in both our Phase 2 and our subsequent Phase 3 study.

In terms of CNP, the natural history study will be beneficial in a lot of ways. It will form a control group. There's also published literature and norms that can represent a control group. It's a little premature to talk about the actual Phase 2 and Phase 3 study designs. We have not finalized those yet, but certainly the natural history study will form an important component to the analysis of those studies.

Jim Birchenough -- Wells Fargo Securities -- Analyst

And Jonathan, just to follow up on the question on TransCon Growth Hormone, just on the 165 patients that have gone into enliGHten, what proportion of eligible patients does that represent? It sounds like it represents 50% of total, but patients may not yet be eligible to go into the open-label extension. So, what proportion of eligible patients does that represent? And what reasons are you seeing for patients not going into open-label extension, if there are many?

Jonathan Leff -- Chief Medical Officer

Sure. So, that represents the vast majority of patients who are capable. So, there were literally one, maybe two, who for logistical reasons chose not to enter enliGHten, but they were not due to any adverse experience. One patient moved from one site away from the site, for example. So, the vast majority of patients have very willingly joined the enliGHten Trial.

Operator

Thank you. And just as a reminder, ladies and gentlemen, please keep to one follow-up. And our next question will come from Jessica Fye with JP Morgan. Your line is now open.

Jessica Fye -- JP Morgan -- Analyst

Great, thanks for taking my question. I wanted to follow up on one of the earlier questions. I'm curious, as you think about discussing these two with the FDA for TransCon CNP, what you want to measure? And what you might kind of ask the FDA for feedback on in terms of what you measure in that study, I guess, outside of just growth?

Jan Mikkelsen -- President and Chief Executive Officer

I think this is really a great question and this is actually where we're spending a lot of thinking about what is the optimal endpoint that really reflecting comorbidities? And it also needs to be practical. It needs to be something we can measure pretty fast. We don't want to wait 3, 4, 5 years. So, we basically have generated an integrated list of opportunities. We are integrating all these lists of opportunities to get together with key opinion leaders, getting a lot of feedback from them. We also will discuss that with the regulatory agencies, but the obvious one from the list is some way where we really can address something that is extremely meaningful for the patient. It can be something like severe sleep apnea, it can be the way to look on spinal stenosis, it can be all elements.

This is the thing we've been thinking about. Sure, we will also measure height because there's also some way to test the efficacy of the compound, but when we saw these results it was basically the best we ever had hoped for. And when we saw that, we really for the first time got a strong belief that we have an opportunity to provide a highly effective treatment. And we know from our preclinical model we can basically reverse the phenotypes and I would think that is what we want to achieve.

 Jessica Fye -- JP Morgan -- Analyst

Okay. And I guess I'm kind of asking because if you think titration to maybe a given pre-CNP level might be how the product is used, I'm curious what you might measure to establish an association that different levels have different effects on whatever those metrics are.

Jan Mikkelsen -- President and Chief Executive Officer

You're 100% right and this is what we call the feasibility of conducting the trial, and often that we are addressing a lot of aspects and it could be a specific biomarker that's reflecting growth velocity or effect on growth plates. It could also be different kinds of imaging system, where we're looking about how can we see the development of a growth plate? So, that is what we are integrating into our decision how really to bring forward this product as fast as possible. And really, address some of the morbidities.

Jessica Fye -- JP Morgan -- Analyst

Okay, and I'm just going to reask my question from last quarter. Can you just provide the latest status of where you stand on manufacturing for TransCon Growth Hormone and those validation batches?

Jan Mikkelsen -- President and Chief Executive Officer

It's going forward as we had hope according to our plans -- no deviation, no change. So, we are executing as we had planned for and every month we executing on our plan we are getting more and more happy.

Operator

Thank you. And our next question will come from the line of Liana Moussatos with Wedbush Securities. Your line is now open.

Liana Moussatos -- Wedbush Securities -- Analyst

Thank you for taking my question. Will VISEN in pharma have the same pipeline as Ascendis? What is the cash runaway from the EUR 310 million? And did the third DSMB meeting have a futility analysis?

Jan Mikkelsen -- President and Chief Executive Officer

So, I will take the first part of the first question. No, VISEN Pharmaceutical will not have the same pipeline as Ascendis Pharma. We have provided to VISEN Pharmaceutical three defined product opportunities in the area of TransCon Growth Hormone, TransCon PTH, and TransCon CNP. And we have provided them an option for negotiation on looking on other endocrinology products we potentially will develop. So, there is no (inaudible) between the two partners.

And Scott will take the second part of that question, and then Jonathan will take the last one.

Scott Smith -- Chief Financial Officer

So, we had about EUR 310 million as of the quarter end. As you know, we don't give cash burden guidance, but if you proforma our cash from the beginning of the year we had a little over EUR 390 million, so if you do the math that's EUR 80 million or so for the nine months. And Jonathan?

Jonathan Leff -- Chief Medical Officer

There is no futility analysis in the DSMB meetings.

Liana Moussatos -- Wedbush Securities -- Analyst

All right. But you said, Scott, that costs are gonna increase from the EUR 80 million over the nine months, so that's a base and what are you thinking over the next 12 months? Increase over that base?

Scott Smith -- Chief Financial Officer

I mean, look, we haven't changed our policy. We still don't give official forward-looking guidance, but you're right. If we would expect costs to increase in those different categories overall, but specifically within those categories. But we have plenty of cash going forward if that's the question. I mean, there's no liquidity concerns.

Liana Moussatos -- Wedbush Securities -- Analyst

Thank you.

Operator

Thank you. And our next question will come from the line of Adam Walsh with Stifel. Your line is not open.

Adam Walsh -- Stifel Financial Corp. -- Analyst

Oh, hey, guys. Thanks for taking my questions. I've got a couple quick ones here. The first one's for Jonathan. You know, obviously, the safety data looks pretty clean here with no serious AEs. I'm just curious to check a safety box here. What were the most commonly observed AEs in the CNP study -- TransCon CNP? And then a second question, in terms of advancing the CNP program next year, can you give us some guess at what the timing would be in terms of trial launch? And what the expected duration of such a trial would be? Just trying to figure out when we might see the next data point from the CNP program. Thanks.

Jonathan Leff -- Chief Medical Officer

So, in terms of AEs there was really nothing remarkable. I mean, it's headaches, it's just the usual AEs that you see in a clinical trial -- back pain -- that sort of thing. When you look for orthostatic blood pressure changes you can see some of that even in placebo, pre-dose levels, post-dose. So, just the normal scattering of AEs that you see in trials.

The CNP study, we would initiate it mid next year. So, that will take many, many months so we don't even have our timelines for recruitment established yet, so it certainly would not be in 2019.

Jan Mikkelsen -- President and Chief Executive Officer

So, Adam, I think that's a great question. I think it's a question where we will come with clear milestones when we feel confident that we really have been in a sufficient high-level discussion with regulatory agents that we feel comfort with the timeline. So, when we give you timelines, there's a basic belief we can reach and keep.

Adam Walsh -- Stifel Financial Corp. -- Analyst

That's fair. Thank you.

Operator

Thank you. And our next question will come from the line of (inaudible) with Credit Suisse. Your line is now open.

Unknown Analyst -- Credit Suisse -- Analyst

Hey, guys, thanks for taking the question. So, for the fliGHt Trial -- I understand it as mostly a safety study. But should we be looking for anything on the secondaries? And can you perhaps recap the work that you're doing to introduce the device into the extension study? For GH? Thanks.

Jan Mikkelsen -- President and Chief Executive Officer

You're really nailing it down to a great point because I still think, when I think of heiGHt, this is most important for regulatory approval, but the fliGHt Trial is really the most interesting trial related to the commercial opportunity we have with our TransCon Growth Hormone because we basically will know what is the prescription of a daily growth hormone before the (inaudible), meaning is that we get the reality check, what do you really prescribe of daily growth hormone before you go out to a TransCon Growth Hormone that will provide much, much higher adherence?

And this is why it's so really interesting to get this data, analyze them, and we can provide you with guidance about what is really the ratio that will be when you have, for example, 4.3 sera milligram on average of a daily growth hormone. Do we need to go down to 0.24 or 0.27? Or what is the ratio you need to go? Or 0.20 for having the amount of our TransCon Growth Hormone?

Besides that, Jonathan is (inaudible) to get all the safety data is because that is what he has committed himself into in both Europe and U.S. and this is why he wants to get it down so he can start closing his databases.

Jonathan Leff -- Chief Medical Officer

You're probably also wondering about height and efficacy data, and we will measure height, of course, in every patient. And I only caution you that there's patients, or subjects, who are on daily growth hormone therapies for varying lengths of time. You know, some for a few months, some for a year, some for two years. So, when you do those analyses it would be confounded in our assessment, so we will, of course, look at it. We will do our best to ferret out real height data. Jan already mentioned the varying potency of the effect of IGF1 when we switched to .24 mgs per kgs per week.

And in terms of the device, we're in the second quarter of 2019 beginning to roll the device into our extension program. So, patients won't come in specifically for that. They're on a schedule of every three months, so the next visit that they come in they would get the device. So, over the course of 2019, we'll be rolling out the device beginning in the second quarter.

Unknown Analyst -- Credit Suisse -- Analyst

Okay, perfect. Thank you.

Operator

Thank you. And our next question will come from the line of Joseph Schwartz with Leerink Partners. Your line is now open.

Joseph Schwartz -- Leerink Partners -- Analyst

Great, thanks very much. So, regarding the CNP data first, I was just wondering if you titrated any pharmacogenetic biomarkers which you could present beyond this preliminary data. Things like collagen-10 or alkaline phosphatase or anything else? All the complex bone signaling pathways?

Jan Mikkelsen -- President and Chief Executive Officer

So, great question. What we are using here is adult, and because the adult we are using will have close (inaudible), so, therefore, it is missing some of the things that you basically measure in a pediatric population where the child is still growing. It's not possible in an adult population. And so, we had a lot of funny discussion about certain CNP and Jonathan came back to me and said, "Jan, if we see super-CNP I would be worried because then I will actually believe the key basal chelation."

And definitely, this is really pretty clear. The super-CNP in our view the best predictor of vasodilation and cardiovascular risk because the super-CNP not likely is coming from the growth plate, but highly, highly likely coming from the cardiovascular system where you actually are introducing a vasodilation effect. So, therefore, when you see that with other CNP products, you see super-CNP -- I don't think you can ever effect that into any kind of effect related to its effect on growth plate, but its many effects on how you actually see cardiovascular risk effects.

Joseph Schwartz -- Leerink Partners -- Analyst

Right. Okay, that makes sense. And then, regarding TransCon PTH, Natpara was associated or it associated, but in its pivotal trial, it was associated with hypo and hypercalcemia. I was wondering if based on your agreement with the FDA to keep this dose-ranging study how you're ensuring that patients will be titrated accordingly?

Jonathan Leff -- Chief Medical Officer

Well, it's pretty straightforward with an infusion-like profile like we see. Of course, we're gonna measure serum calcium levels very frequently in these subjects, so we'll be monitoring them very closely. We don't think we will see the hypo or hypercalcemia that Natpara saw because that's very clearly related to the pharmacokinetics of Natpara, where you have very high C-max and then a very low C-trough over the course of a day.

Instead, we'll have a steady level over the course of a day, which should make it much easier to monitor the calcium levels. And we should see much fewer excursions of serum calcium. So, we'll essentially just monitor it and I'm sure FDA will be very comfortable with that approach.

Joseph Schwartz -- Leerink Partners -- Analyst

Okay, great. Thanks for taking my question.

Operator

Thank you. And as a reminder, ladies and gentlemen, if you would like to ask a question over the phone, press * and then 1 on your telephone keypad. And our next question will come from the line of Jim Birchenough with Wells Fargo Securities. Your line is now open.

Jim Birchenough -- Wells Fargo Securities -- Analyst

Oh, hey, guys. Thanks for taking the follow-ups. We get a lot of questions on how we kind of think about the scenarios in the heiGHt Trial. So, maybe from a commercial planning perspective, you can give us your thoughts on the different outcomes and whether it's just success or failure and non-inferiority, or whether you think numerical superiority's important for growth velocity. And then I've got a follow-up. Thanks.

Jan Mikkelsen -- President and Chief Executive Officer

Jim, that is a great question. But we did, we tried to de-risk everything on a Phase 2 state. That was where we had the phase set up with inclusion-exclusion criteria as we now have it in Phase 3. This is where we used the same comparative actual arm. This is where we have the same clinical endpoint.

So, what we did and what we hope to include was seen here in our Phase 3 study that we can repeat in our Phase 2 study because then basically that's what we're trying to attempt to happen with our Phase 3 study. The main difference is one single dose and it's a 12-month instead of 6 months. But the fundamentals are not changed. We are providing the same mode of action as daily growth hormone and (inaudible) growth hormone in the same favor.

Being proven to give optimal efficacy from daily growth hormone. And that is what we're doing, so I think that the question is not so much speculation. I think the best thing you can do -- analyze all Phase 2 data and see how robust they are and how well we can predict. And this is why we're happy to have all this data that have provided us the best biostats analysis to really give a comfort on the outcome on all heiGHt Trial.

Jim Birchenough -- Wells Fargo Securities -- Analyst

That's helpful, Jan. And then just on CNP, it seems like spinal stenosis contributes a fair amount of morbidity to these patients. And so, do you have a sense from the published literature on how early you'd have to treat to have some hope at having an effect on spinal stenosis? Or is that still to be determined from your own natural history work? Thanks.

Jan Mikkelsen -- President and Chief Executive Officer

I think it's a great, great, great question. I think I would take from where I got confidence. Jonathan will go out and can explain when it's closest because it's actually pretty well known. Where I got confident is for our preclinical model where we could really prevent the premature fusion of the simple doses. Meaning is that if we give TransCon CNP after birth, then we have really the impact we want to have on the forum. And this is where I actually believe that it give me a comfort and that I really hope that we have an opportunity to really, really address one of these severe morbidities as spinal stenosis.

Jonathan Leff -- Chief Medical Officer

Jim, I think it's pretty clear that the spinal stenosis begins to occur very, very early -- even beginning near birth. And the way you know that, though, is heavily dependent on the treatment patterns at the sites. So, there are some centers that routinely measure MRI in everybody and, of course, when you do that you see a lot of spinal stenosis that would otherwise go unnoticed. Even as high as 47% of children in the first two years, if you do routine MRIs.

Other sites don't do MRIs other than for clinical reasons, and they will see a little bit less. But I think it's really clear that you start to see changes soon after birth, which is why we are so eager to get down to the neonates as soon as we can to make the biggest difference.

Jim Birchenough -- Wells Fargo Securities -- Analyst

Thanks, guys.

Operator

Thank you. There are no further questions in queue at this time. Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program and we may all disconnect. Everybody, have a wonderful day.

Duration: 59 minutes

Call participants:

Scott Smith -- Chief Financial Officer

Jan Mikkelsen -- President and Chief Executive Officer

Jonathan Leff -- Chief Medical Officer

Michelle Gilson -- Canaccord Genuity Inc. -- Analyst

Jim Birchenough -- Wells Fargo Securities -- Analyst

Jessica Fye -- JP Morgan -- Analyst

Liana Moussatos -- Wedbush Securities -- Analyst

Adam Walsh -- Stifel Financial Corp. -- Analyst

Unknown Analyst -- Credit Suisse -- Analyst

Joseph Schwartz -- Leerink Partners -- Analyst

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