Ascendis Pharma (ASND) reported data from the pivotal double-blind placebo-controlled ApproaCH Trial of TransCon CNP, a potential treatment for children with achondroplasia, which Wall Street analysts say could rival BioMarin Pharmaceuticals' (BMRN) approved drug, Voxzogo. JPMorgan called the results "clinical de-risking news" and increased market share expectations for TransCon CNP in achondroplasia.
TRIAL RESULTS: Ascendis Pharma announced topline data from the pivotal double-blind placebo-controlled ApproaCH Trial of TransCon CNP, which included 84 children with achondroplasia randomized 2:1. TransCon CNP is an investigational prodrug of C-type natriuretic peptide administered once weekly and designed to provide sustained release and continuous exposure of active CNP. In the trial, children treated with once-weekly TransCon CNP demonstrated annualized growth velocity superior to placebo. TransCon CNP also demonstrated statistically significant improvements in other growth parameters, including height Z-score and change from baseline AGV.
For the primary endpoint of AGV at Week 52, children treated with TransCon CNP demonstrated an LS mean AGV of 5.89 cm/year compared to 4.41 cm/year in the placebo arm, an LS mean difference of 1.49 cm/year. Children aged 2 to less than5 years, treated with TransCon CNP demonstrated a change from baseline AGV at Week 52 of 1.57 cm/year compared to 0.43 cm/year in the placebo arm. For the secondary endpoint of change in ACH Height Z-score, children treated with TransCon CNP demonstrated an LS mean change from baseline ACH Height Z-score of 0.30 compared to 0.01 in the placebo arm
CLINICAL DE-RISKING NEWS: Citi raised the firm's price target on Ascendis Pharma to $207 from $178, while keeping a Buy rating on the shares after the company reported positive topline data from its pivotal ApproaCH trial of TransCon CNP in patients with achondroplasia, with improvements in annualized growth velocity, suggesting a profile that is superior to incumbent and only approved therapy, BioMarin's Voxzogo. The firm says this is well ahead of what investors had anticipated based on the Phase 2 AccompliSH results reported late-2022. Given the high treatment burden of daily injections for children with achondroplasia, Citi believes TransCon CNP's weekly profile positions the drug as a best-in-class option.
Keeping an Overweight rating on the shares, JPMorgan raised the firm's price target on Ascendis Pharma to $180 from $165. The firm updated its BioMarin and Ascendis models to reflect Monday's "clinical de-risking news" as well as increased market share for TransCon CNP in achondroplasia. More credit will come into Ascendis shares over time and the urgency to own the stock will only build as we near the U.S. Yorvipath launch, JPMorgan told investors in a research note.
Meanwhile, Oppenheimer raised the firm's price target on Ascendis Pharma to $190 from $180 with an Outperform rating on the shares. The firm believes the Phase 3 success in achondroplasia not only puts once weekly navepegritide on track to launch in 2025-2026 but also paints a compelling clinical profile vs. BioMarin's daily Voxzogo. With shares having closed up 17% on Monday, Oppenheimer thinks the news surprised many who had written off navepegritide, which it now expects to become an important valuation contributor.
Wells Fargo and Evercore ISI also upped their targets on Ascendis to $289 and $205, respectively, while keeping Buy-equivalent ratings on the name.
MARKET SHARE LOSS: On the flip side, Stifel lowered the firm's price target on BioMarin to $87 from $115, but keeping, however, a Buy rating on the shares. The firm is reducing its price target to reflect positive TransCon-CNP data, as it views the drug as clinically equivalent for BioMarin's Voxzogo. Based on Stifel's key opinion leader, or KOL, call, it now models substantial switching when Ascendis Pharma attains approval. BioMarin's stock setup has become "significantly trickier," though the firm argues at a price "not that far above our valuation for the legacy business" that the skew is upside biased as it still thinks Voxzogo, even with minority share in Achondroplasia, can be a roughly $600M worldwide sales drug in 2033.
RBC Capital also lowered the firm's price target on BioMarin to $85 from $100, with a Sector Perform rating on the shares, after Ascendis reported Phase 3 data for achondroplasia, which hit the primary endpoint point with 1.49 cm/year improvement in annualized growth velocity compared to placebo, along with "clean" safety and benefit for key secondary endpoints, including quality of life. The data suggests that BioMarin is likely to face material competition given Ascendis has a drug that is dosed less frequently - weekly vs daily - and that may offer efficacy generally on par if not directionally better vs Voxzogo, the firm added.
Meanwhile, Truist lowered the firm's price target on BioMarin to $90 from $118, maintaining a Buy rating on the shares. The firm cites "impressive results" from the company's competitor Ascendis Pharma, driving Truist to lower its assumed future share of BioMarin's Voxzogo in achondroplasia from 100% to 40% starting 2032, though this may also "not be the end" pending results of BridgeBio's (BBIO) infigratinib - an oral FGFR1-3 inhibitor currently in Phase 3 study for achondroplasia.
Keeping a Buy rating on the shares, BofA also lowered the firm's price target on BioMarin to $115 from $130. Ascendis' data were "solid," comparing favorably against BioMarin's Voxzogo, though "somewhat less so" to BridgeBio's infigratinib, the firm tells investors. Cross-trial comparison are "admittedly challenging here, and there's arguably much to hash out over the regulatory/commercial side of things" before it becomes clear to what extent TransCon CNP can capture share, but once weekly administration is a clear advantage over Voxzogo's daily injectable, especially in young children, and BofA "would not be surprised if it becomes a key part of the discussion between parents and their providers." The firm argues that TransCon CNP's potential impact to BridgeBio "was always likely to be less," given a differing mechanism of action and oral formulation, BofA added.
PRICE ACTION: In Tuesday morning trading, shares of Ascendis are fractionally up at $139.43, while BioMarin's stock has gained about 1% to $70.63, recovering some of Monday's losses.
Ascendis Pharma
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BioMarin
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