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Here's Why Ascendis Pharma Shares Are Surging Higher Today

By Cory Renauer – Aug 26, 2021 at 2:13PM

Key Points

  • The FDA approved Ascendis' first drug, a weekly growth-hormone injection named Skytrofa.

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Approval of the company's weekly growth hormone is making investors smile today.

What happened

Shares of Ascendis Pharma (ASND -0.90%) are on the move following the approval of the company's first drug. Investors are more than a little excited about potential sales of the company's new once-weekly injection for human growth hormone therapy, now named Skytrofa. The stock was up 21.3% as of 1:42 p.m. EDT on Thursday.

So what 

According to Ascendis Pharma, annual U.S. spending on human growth hormone treatments works out to around $500 million from U.S. adults and another $700 million from pediatric indications.

Pharmacist holding up a pill bottle.

Image source: Getty Images.

The Food and Drug Administration approved Skytrofa (lonapegsomatropin-tcgd) for the treatment of pediatric patients 1 year of age and older who weigh at least 25 pounds. The indication is also limited to patients diagnosed with growth failure due to inadequate secretion of endogenous growth hormone.

Now what

Giving a toddler growth hormone treatment can be a major challenge that upsets everyone's day. As the first weekly injection that parents can get for their children, who are often very young, Skytrofa will have a big advantage over available care.

Unfortunately for Ascendis Pharma, Skytrofa's first-mover advantage probably won't last more than a couple of months. In January, the FDA began reviewing an application for another once-weekly therapy for growth hormone deficiency from Opko Health (OPK 0.71%) and its collaboration partner Pfizer (PFE -0.16%).

The agency is expected to announce its approval decision for the treatment, tentatively named Somatrogon, in October. New drug launches from small biotechs tend to start out a lot slower than drug launches from bigger companies with larger, experienced sales teams already in the field. If the contender from Pfizer and Opko Health earns approval in the expected time frame, Ascendis Pharma's independent drug launch could get extremely challenging.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Ascendis Pharma Stock Quote
Ascendis Pharma
ASND
$118.42 (-0.90%) $-1.08
Pfizer Stock Quote
Pfizer
PFE
$49.49 (-0.16%) $0.08
Opko Health Stock Quote
Opko Health
OPK
$1.41 (0.71%) $0.01

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