What happened
Shares of Ascendis Pharma (NASDAQ: ASND) rose more than 19% Monday morning after the Danish pharmaceutical company received a critical response letter (CRL) from the Food and Drug Administration (FDA).
The biotech company specializes in therapies to treat rare endocrinology diseases and various cancers. Its shares are down more than 30% so far this year.
So what
The reason the stock went up rather than down following a CRL is it gave some clarity to the situation around TransCon PTH (palopegteriparatide), which is in phase 3 clinical trials to treat adults with hypoparathyroidism. While the FDA cited concerns about the company's manufacturing control strategy, it did not say it had concerns about the clinical data from Ascendis and did not request any additional clinical studies.
All this means the problem is something Ascendis can more easily fix, while the need for more clinical trials could easily delay the drug's launch by two years, and that's if Ascendis satisfied any FDA concerns. Ascendis said it plans to request a Type A meeting soon with the FDA.
"We are committed to working collaboratively with the FDA and, because the agency did not suggest that additional phase 3 studies may be needed to demonstrate the product's safety and efficacy, we believe we are well prepared to address their concerns," said Jan Mikkelsen, Ascendis Pharma president and CEO, in a press release.
Now what
Ascendis only has one FDA-approved therapy, Skytrofa. It is a once-weekly human growth hormone to treat pediatric growth hormone deficiency. In the first quarter, thanks mainly to Skytrofa, the company reported revenue of 31.6 million euros ($34.8 million), up 394% year over year.
The company had a net loss of 110.9 million euros ($122.4 million), thanks mainly to higher expenses related to the company's clinical oncology programs. Ascendis said it had, as of March 31, 585.7 million euros ($646.2 million), which is enough at its current burn rate to fund operations into early 2025.
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