UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO
SECTION 13a-16
OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of
May, 2022
Commission File Number:
001-36815
(Exact Name of Registrant as Specified in Its Charter)
Tuborg Boulevard 12
DK-2900
Hellerup Denmark
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F
or Form 40-F.
Form
20-F ☒ Form
40-F ☐
Indicate by check mark if the registrant is submitting the Form ☐
6-K
in paper as permitted by Regulation S-T
Rule 101(b)(1):Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation S-T
Rule 101(b)(7): ☐ INCORPORATION BY REFERENCE
This report on Form
6-K
shall be deemed to be incorporated by reference into the registration statements on Form S-8
(Registration Numbers 333-203040,
333-210810,
333-211512,
333-213412,
333-214843,
333-216883,
333-228576,
333-254101
and 333-261550)
and Form F-3
(Registration Numbers 333-209336,
333-211511,
333-216882,
333-223134,
333-225284
and 333-256571)
of Ascendis Pharma A/S (the “Company”) (including any prospectuses forming a part of such registration statements) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished. Furnished as exhibits to this Report on Form
6-K
is information regarding the Company’s financial results for the fiscal quarter ended March 31, 2022. Exhibits
Exhibit No. |
Description | |
99.1 |
||
99.2 |
||
101.INS |
XBRL Instance Document. | |
101.SCH |
XBRL Taxonomy Extension Schema Document. | |
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document. | |
101.IAB |
XBRL Taxonomy Extension Labels Linkbase Document. | |
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Ascendis Pharma A/S | ||||||
Date: May 11, 2022 |
By: |
/s/ Michael Wolff Jensen | ||||
Michael Wolff Jensen | ||||||
Senior Vice President, Chief Legal Officer | ||||||
Exhibit 99.1
ASCENDIS PHARMA A/S
INDEX TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Page |
||||
| Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income / (Loss) for the Three Months Ended March 31, 2022 and 2021 |
2 | |||
| Unaudited Condensed Consolidated Interim Statements of Financial Position as of March 31, 2022 and December 31, 2021 |
3 | |||
| Unaudited Condensed Consolidated Interim Statements of Changes in Equity at March 31, 2022 and 2021 |
4 | |||
| Unaudited Condensed Consolidated Interim Cash Flow Statements for the Three Months Ended March 31, 2022 and 2021 |
5 | |||
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements |
6 | |||
Unaudited Condensed Consolidated Interim Statements of Profit or Loss
and Comprehensive Income / (Loss) for the Three Months Ended March 31
Three Months Ended March 31 |
||||||||||||
Notes |
2022 |
2021 |
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(EUR’000) |
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| Statement of Profit or Loss |
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| Revenue |
5 |
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| Cost of sales |
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| Gross profit / (loss) |
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| Research and development costs |
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| Selling, general, and administrative expenses |
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Operating profit / (loss) |
( |
) |
( |
) | ||||||||
| Share of profit / (loss) of associate |
( |
) | ||||||||||
| Finance income |
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| Finance expenses |
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| |
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| Profit / (loss) before tax |
( |
) |
( |
) | ||||||||
| Tax on profit / (loss) for the period |
( |
) | ||||||||||
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| Net profit / (loss) for the period |
( |
) |
( |
) | ||||||||
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| Attributable to owners of the Company |
( |
) | ( |
) | ||||||||
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| Basic and diluted earnings / (loss) per share |
€ | ( |
) | € | ( |
) | ||||||
| Number of shares used for calculation (basic and diluted) (1) |
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(EUR’000) |
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| Statement of Comprehensive Income |
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| Net profit / (loss) for the period |
( |
) |
( |
) | ||||||||
| Other comprehensive income / (loss) |
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| Items that may be reclassified subsequently to profit or loss: |
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| Exchange differences on translating foreign operations |
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| Other comprehensive income / (loss) for the period, net of tax |
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| Total comprehensive income / (loss) for the period, net of tax |
( |
) |
( |
) | ||||||||
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| Attributable to owners of the Company |
( |
) | ( |
) | ||||||||
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(1) |
As of March 31, 2022, a total of warrants outstanding, each carrying the right to subscribe for one ordinary share, and senior convertible notes which can potentially be converted into ordinary shares, can potentially dilute earnings per share in the future but have not been included in the calculation of diluted earnings per share because they are antidilutive for the periods presented. Similarly, a total of warrants outstanding as of March 31, 2021, are also considered antidilutive for the periods presented and have not been included in the calculation. The weighted average number of shares takes into account the weighted average effect of changes in treasury shares during the period . |
2
Unaudited Condensed Consolidated Interim Statements of Financial Position
Notes |
March 31, 2022 |
December 31, 2021 |
||||||||||
(EUR’000) |
||||||||||||
| Assets |
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| Non-current assets |
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| Intangible assets |
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| Property, plant and equipment |
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| Investment in associate |
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| Other receivables |
10 |
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| Marketable securities |
10 |
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| Current assets |
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| Inventories |
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| Trade receivables |
10 |
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| Income tax receivables |
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| Other receivables |
10 |
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| Prepayments |
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| Marketable securities |
10 |
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| Cash and cash equivalents |
10 |
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| Total assets |
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| Equity and liabilities |
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| Equity |
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| Share capital |
8 |
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| Distributable equity |
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| Non-current liabilities |
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| Borrowings |
10 |
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| Derivative liabilities |
10 |
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| Contract liabilities |
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| Current liabilities |
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| Borrowings |
10 |
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| Contract liabilities |
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| Trade payables and accrued expenses |
10 |
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| Other liabilities |
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| Income taxes payable |
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| Provisions |
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| Total liabilities |
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| Total equity and liabilities |
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3
Unaudited Condensed Consolidated Interim Statements of Changes in Equity
Share Capital |
Distributable Equity |
Total |
||||||||||||||||||||||||||
Share Premium |
Treasury Shares |
Foreign Currency Translation Reserve |
Share-based Payment Reserve |
Accumulated Deficit |
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(EUR’000) |
||||||||||||||||||||||||||||
Equity at January 1, 2022 |
( |
) |
( |
) |
||||||||||||||||||||||||
Loss for the period |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Other comprehensive income/(loss), net of tax |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Total comprehensive income/(loss) |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||
Transactions with Owners |
||||||||||||||||||||||||||||
Share-based payment (Note 7) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Acquisition of treasury shares |
— |
— |
( |
) |
— |
— |
— |
( |
) | |||||||||||||||||||
Capital increase |
— |
— |
— |
— |
||||||||||||||||||||||||
Equity at March 31, 2022 |
( |
) |
( |
) |
||||||||||||||||||||||||
Distributable Equity |
||||||||||||||||||||||||||||
Share Capital |
Share Premium |
Treasury Shares |
Foreign Currency Translation Reserve |
Share-based Payment Reserve |
Accumulated Deficit |
Total |
||||||||||||||||||||||
(EUR’000) |
||||||||||||||||||||||||||||
Equity at January 1, 2021 |
( |
) |
( |
) |
||||||||||||||||||||||||
Loss for the period |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Other comprehensive income / (loss), net of tax |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Total comprehensive income / (loss) |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||
Transactions with Owners |
— |
|||||||||||||||||||||||||||
Share-based payment (Note 7) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Capital increase |
— |
— |
— |
— |
||||||||||||||||||||||||
Equity at March 31, 2021 |
( |
) |
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4
Unaudited Condensed Consolidated Interim Cash Flow Statements for the
Three Months Ended March 31
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
(EUR’000) |
||||||||
| Operating activities |
||||||||
| Net profit / (loss) for the period |
( |
) |
( |
) | ||||
| Reversal of finance income |
( |
) |
( |
) | ||||
| Reversal of finance expenses |
||||||||
| Reversal of tax charge |
( |
) | ||||||
| Increase/(decrease) in provisions |
||||||||
| Adjustments for non-cash items: |
||||||||
| Non-cash consideration relating to revenue |
( |
) |
( |
) | ||||
| Share of profit / (loss) of associate |
( |
) | ||||||
| Share-based payment |
||||||||
| Depreciation |
||||||||
| Amortization |
||||||||
| Changes in working capital: |
||||||||
| Inventories |
( |
) |
||||||
| Receivables |
( |
) |
||||||
| Prepayments |
( |
) |
( |
) | ||||
| Contract liabilities (deferred income) |
( |
) |
( |
) | ||||
| Trade payables, accrued expenses and other payables |
( |
) |
||||||
| |
|
|
|
|||||
| Cash flows generated from / (used in) operations |
( |
) |
( |
) | ||||
| Finance income received |
||||||||
| Finance expenses paid |
( |
) |
( |
) | ||||
| Income taxes received / (paid) |
( |
) |
( |
) | ||||
| |
|
|
|
|||||
| Cash flows from / (used in) operating activities |
( |
) |
( |
) | ||||
| |
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|
|||||
| Investing activities |
||||||||
| Investment in associate |
( |
) | ||||||
| Acquisition of property, plant and equipment |
( |
) |
( |
) | ||||
| Reimbursement from acquisition of property, plant and equipment |
||||||||
| Development expenditures (software) |
( |
) | ||||||
| Purchase of marketable securities |
( |
) |
( |
) | ||||
| Settlement of marketable securities |
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| |
|
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| Cash flows from / (used in) investing activities |
( |
) | ||||||
| |
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|
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| Financing activities |
||||||||
| Payment of principal portion of lease liabilities |
( |
) |
( |
) | ||||
| Net proceeds from convertible senior notes |
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| Proceeds from exercise of warrants |
||||||||
| Acquisition of treasury shares, net of transaction costs |
( |
) |
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| |
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| Cash flows from / (used in) financing activities |
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| Increase / (decrease) in cash and cash equivalents |
( |
) | ||||||
| |
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| Cash and cash equivalents at January 1 |
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| Effect of exchange rate changes on balances held in foreign currencies |
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| Cash and cash equivalents at March 31 |
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| Cash and cash equivalents include: |
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| Bank deposits |
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| Short-term marketable securities |
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| Cash and cash equivalents at March 31 |
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5
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 1—General Information
Ascendis Pharma A/S, together with its subsidiaries, is applying its innovative TransCon technologies to build a leading, fully integrated, global biopharmaceutical company. Ascendis Pharma A/S was incorporated in 2006 and is headquartered in Hellerup, Denmark. Unless the context otherwise requires, references to the “Company,” “we,” “us,” and “our”, refer to Ascendis Pharma A/S and its subsidiaries.
The address of the Company’s registered office is Tuborg Boulevard 12,
DK-2900,
Hellerup, Denmark. On February 2, 2015, the Company completed an initial public offering which resulted in the listing of American Depositary Shares (“ADSs”), representing the Company’s ordinary shares, under the symbol “ASND” in the United States on The Nasdaq Global Select Market.
The Company’s Board of Directors approved these unaudited condensed consolidated interim financial statements on May 11, 2022.
Note 2—Summary of Significant Accounting Policies
Basis of Preparation
The unaudited condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.” Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2021, and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (the “IASB”) and as adopted by the European Union (the “EU”).
The accounting policies applied are consistent with those of the previous financial year. A description of our accounting policies is provided in the Accounting Policies section of the audited consolidated financial statements as of and for the year ended December 31, 2021. In addition, the accounting policy for convertible senior notes applied for the first time in this reporting period, is described below.
The preparation of financial statements in conformity with IFRS requires the use of certain significant accounting estimates and requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the unaudited condensed consolidated interim financial statements are disclosed in Note 3, “Significant Accounting Judgements and Estimates”.
Convertible Senior Notes
Convertible senior notes (“convertible notes”) are separated into a financial liability and an embedded derivative component based on the terms and conditions of the contract. The embedded derivative component is accounted for separately if this is not deemed closely related to the financial liability.
The convertible notes include an embedded equity conversion option which is not deemed closely related to the financial liability, and initially recognized and measured separately at fair value as derivative liabilities based on the stated terms upon issuance of the convertible notes. The conversion option is classified as a foreign currency conversion option and thus not convertible into a fixed number of shares for a fixed amount of cash. Accordingly, the conversion option is subsequently recognized and measured as a derivative liability at fair value through profit or loss, with any subsequent remeasurement gains or losses recognized as part of financial income or expenses.
In addition, the convertible notes include a redemption option, which entitle the Company to redeem the notes at a cash amount equal to the principal amount of the convertible notes, plus accrued and unpaid interest. The redemption option is closely related to the financial liability, and not separately accounted for. The initial carrying amount of the financial liability component including the redemption option is the residual amount of the proceeds, net of transaction costs, after separating the derivative component.
Transaction costs are apportioned between the financial liability and derivative component based on the allocation of proceeds when the instrument is initially recognized. Transaction costs apportioned to the financial liability component form part of the effective interest and are amortized over the expected lifetime of the liability. Transaction costs allocated to the derivative component are expensed as incurred.
The financial liability is subsequently measured at amortized cost until it is extinguished on conversion, optional redemption or upon repayment at maturity. The financial liability is presented as part of borrowings on the statement of financial position.
6
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
New International Financial Reporting Standards Not Yet Effective
The IASB has issued a number of new or amended standards, which have not yet become effective or have not yet been adopted by the EU. Therefore, these new standards have not been incorporated in these unaudited condensed consolidated interim financial statements.
Amendments to IAS 1, “Classification of Liabilities as Current or
Non-current”
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1, “Presentation of Financial Statements”, to specify the requirements for classifying liabilities as current or
non-current.
The amendments clarify: | • | What is meant by a right to defer settlement; |
| • | That a right to defer must exist at the end of the reporting period; |
| • | That classification is unaffected by the likelihood that an entity will exercise its deferral right; and |
| • | That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification. |
If approved by the EU, the amendments are effective for annual reporting periods beginning on or after January 1, 2023 and must be applied retrospectively. The amendments are expected to require the convertible notes (presented as part of borrowings on the statement of financial position) and derivative liabilities, presented as 365.6 million and €141.4 million, respectively.
non-current
liabilities at March 31, 2022, to be presented as current liabilities. On March 31, 2022, the carrying amount of convertible notes and derivative liabilities were €The consolidated financial statements are not expected to be affected by other new or amended standards.
Note 3—Significant Accounting Judgements and Estimates
In the application of the Company’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Judgements, estimates and assumptions applied are based on historical experience and other factors that are relevant, and which are available at the reporting date. Uncertainty concerning estimates and assumptions could result in outcomes, that require a material adjustment to assets and liabilities in future periods.
The unaudited condensed consolidated interim financial statements do not include all disclosures for significant accounting judgements, estimates and assumptions, that are required in the annual consolidated financial statements, and therefore, should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively. While the application of critical accounting estimates is subject to material estimation uncertainties, management’s ongoing revisions of critical accounting estimates and underlying assumptions have not revealed any material impact in any of the periods presented in the unaudited condensed consolidated interim financial statements.
Other than as set out below, there have been no other changes to the application of significant accounting judgements, or estimation uncertainties regarding accounting estimates compared to December 31, 2021.
Valuation of Embedded Derivatives
Foreign currency conversion options, embedded in the convertible notes, are accounted for separately as derivative liabilities at fair value through profit or loss.
Fair value cannot be measured based on quoted prices in active markets, or other observable input, and accordingly, derivative liabilities are measured by use of valuation techniques in form of the Black-Scholes Option Pricing model. Subjective judgements and assumptions, which are subject to estimation uncertainties, need to be exercised in determining the appropriate input to the valuation model (Level 3 in the fair value hierarchy). These inputs include volatility of the Company’s share price for a historic period, reflecting the assumption that the historical volatility is indicative of a period similar to the expected lifetime of the options.
Changes in assumptions relating to these factors could affect the reported fair value of derivative liabilities.
7
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 4—Significant Events in the Reporting Period
COVID-19
Pandemic The
COVID-19
pandemic has affected countries where we are operating, where we have planned or have ongoing clinical trials, and where we rely on third-parties to manufacture preclinical, clinical and commercial supply. COVID-19
did not have a direct material impact on the unaudited condensed consolidated interim financial statements. Conflict in the Region Surrounding Ukraine and Russia
The ongoing conflict in the region surrounding Ukraine and Russia has impacted our ability to continue clinical trial activities in those countries. The conflict did not have a direct material impact on the unaudited condensed consolidated interim financial statements.
Leases
An additional facility lease in Germany with an enforceable lease term of four years asset of €2.3 million asset of €55.2 million is expected to be recognized at the commencement date.
commenced in January 2022, and an
initial lease liability and corresponding right-of-use
was recognized
. In addition, in February 2022, the Company entered into a facility lease in Germany with an enforceable lease term of 15 years, which is expected to commence in 2025. Subject to changes in
terms and conditions and development in interest rates, an initial lease liability and corresponding right-of-use
Convertible Senior Notes Offering
On March 29, 2022 (trade date, March 25, 2022), the Company issued an aggregate principal amount of $575.0 million of fixed rate 2.25 % convertible notes. The net proceeds from the offering were $557.9 million (€503.3 million), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses.
Further details are disclosed in Note 10, “Financial
Assets and Financial Liabilities
”. Acquisition of Treasury Shares
The Company used $116.7 million (€105.2 million) of the net proceeds from the offering of the convertible notes to repurchase 1,000,000 ADSs representing the Company’s ordinary shares. Total holding of treasury shares is disclosed in Note 9, “Treasury Shares”.
8
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 5—Revenue
Revenue from commercial sale of products relates to sale of SKYTROFA30 days from the transaction date. SKYTROFA (lonapegsomatropin-tcgd) was approved by the U.S. Food and Drug Administration on August 25, 2021, and the Company began shipping products to commercial customers in the fourth quarter of 2021.
®
(lonapegsomatropin-tcgd) on the U.S. market, which is sold to specialty pharmacies and specialty distributors (“commercial customers”). Customer payment terms are typically In addition, other revenue is generated primarily from three license agreements, which were entered into in 2018. The licenses grant VISEN Pharmaceuticals (“VISEN”) exclusive rights to develop and commercialize TransCon hGH, TransCon PTH and TransCon CNP in Greater China. As consideration for the granting of such rights, the Company received 40.0 million in the form of 50 % ownership in VISEN. At the reporting date, the Company retains approximately 44 % of VISEN’s issued and outstanding shares.
up-front,
non-refundable,
non-cash
consideration of $Three Months ended March 31, |
||||||||
2022 |
2021 |
|||||||
(EUR’000) |
||||||||
| Revenue from external customers |
||||||||
| Commercial sale of products |
||||||||
| Rendering of services |
||||||||
| Sale of clinical supply |
||||||||
| Licenses |
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| |
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| Total revenue |
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| |
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|||||
| Attributable to |
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| Commercial customers |
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| Collaboration partners and license agreements (1) |
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| |
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| Total revenue |
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| |
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|||||
| Specified by timing of recognition |
||||||||
| Recognized over time |
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| Recognized at a point in time |
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| |
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| Total revenue |
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| Specified by geographical location |
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| Europe |
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| North America |
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| China |
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| Total revenue |
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| |
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|||||
(1) |
For the three months ended March 31, 2022 and 2021, “Total revenue” includes recognition of previously deferred revenue/internal profit from associate of € million and € million, respectively. |
9
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 6—Segment Information
The Company is managed and operated as one business unit. No separate business areas or separate business units have been identified in relation to product candidates or geographical markets. Accordingly, no additional information on business segments or geographical areas is disclosed.
Note 7—Share-based Payment
As an incentive to the Executive Board, employees, members of the Board of Directors and select consultants, Ascendis Pharma A/S has established warrant programs and, since December 2021, a Restricted Stock Unit program (“RSU program”), which are equity-settled share-based payment transactions.
Share-based Compensation Costs
Share-based compensation costs are determined 20.0 million and €23.1 million, respectively.
using
the grant date fair value of warrants and Restricted Stock Units (“RSUs”) granted, and are recognized over the vesting period as research and development costs, selling, general and administrative expenses, or cost of sales. For the three months ended March 31, 2022 and 2021, share-based compensation costs recognized in the unaudited condensed consolidated interim statement of profit or loss was €Restricted Stock Unit Program
RSUs are granted by the Board of Directors in accordance with authorizations given to it by the shareholders of Ascendis Pharma A/S to the Executive Board, select employees and members of the Board of Directors
(“RSU-holders”)
in accordance with the Company’s Restricted Stock Unit Program adopted in December 2021. Further, RSUs may be granted to select consultants. One RSU represents a right for the RSU-holder
to receive one ADS of Ascendis Pharma A/S upon vesting if the vesting conditions are met or waived by the Board of Directors at its discretion. All RSUs are hedged by treasury shares that have been repurchased in the market. Upon vesting, the Company may at its sole discretion choose to make a cash settlement instead of delivering ADSs.
RSU Activity
The following table specifies the number of RSUs granted, and outstanding RSUs at March 31, 2022:
Total RSUs |
||||
| Outstanding at January 1, 2022 |
||||
| |
|
|||
| Granted during the period |
||||
| Settled during the period |
||||
| Transferred during the period |
||||
| Forfeited during the period |
( |
) | ||
| |
|
|||
| Outstanding at March 31, 2022 |
||||
| |
|
|||
| Specified by vesting date |
||||
| December, 2022 |
||||
| December, 2023 |
||||
| December, 2024 |
||||
| |
|
|||
| Outstanding at March 31, 2022 |
||||
| |
|
|||
The fair value of RSUs at the date of grant was €123.46 for the years ended December 31, 2021, which was the first date of granting RSUs.
Warrant program
Warrants are granted by the Board of Directors in accordance with authorizations given to it by the shareholders of Ascendis Pharma A/S to all employees, members of the Board of Directors and select consultants (“warrantholders”). Each warrant carries the right to subscribe for one ordinary share of a nominal value of DKK 1 . The exercise price is fixed at the fair market value of the Company’s ordinary shares at the time of grant as determined by the Board of Directors. Vested warrants may be exercised in two or four annual exercise periods.
10
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Warrant Activity
The following table specifies the warrant activity during the three months ended March 31, 2022:
Total Warrants |
Weighted Average Exercise Price EUR |
|||||||
| Outstanding at January 1, 2022 |
||||||||
| |
|
|
|
|||||
| Granted during the period |
||||||||
| Exercised during the period |
( |
) |
||||||
| Forfeited during the period |
( |
) |
||||||
| |
|
|
|
|||||
Outstanding at March 31, 2022 |
||||||||
| |
|
|
|
|||||
| Vested at March 31, 2022 |
||||||||
| |
|
|
|
|||||
The exercise prices of outstanding warrants under the Company’s warrant programs range from €6.48 to €145.5 depending on the grant dates.
Note 8—Share Capital
The share capital of Ascendis Pharma A/S consists of 56,958,391 fully paid shares at a nominal value of DKK 1 , all in the same share class.
Note 9—Treasury Shares
The holding of treasury shares is specified below:
Nominal values |
Holding |
Holding in % of total outstanding shares |
||||||||||
(EUR’000) |
(Number) |
|||||||||||
| Treasury shares |
|
|
|
|
|
|
|
|
|
|
|
|
| At January 1, 2022 |
% | |||||||||||
| Acquired from third-parties |
||||||||||||
| |
|
|
|
|
|
|||||||
| At March 31, 2022 |
% | |||||||||||
| |
|
|
|
|
|
|||||||
11
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 10 —Financial
Assets and Financial Liabilities
Financial assets and liabilities comprise the following:
March 31, 2022 |
December 31, 2021 |
|||||||
(EUR’000) |
||||||||
| Financial assets by category |
||||||||
| Trade receivables |
||||||||
| Other receivables (excluding VAT receivables) |
||||||||
| Marketable securities |
||||||||
| Cash and cash equivalents |
||||||||
| |
|
|
|
|||||
| Financial assets measured at amortized cost |
||||||||
| |
|
|
|
|||||
| Total financial assets |
||||||||
| |
|
|
|
|||||
| Classified in the statement of financial position |
||||||||
| Non-current assets |
||||||||
| Current assets |
||||||||
| |
|
|
|
|||||
| Total financial assets |
||||||||
| |
|
|
|
|||||
March 31, 2022 |
December 31, 2021 |
|||||||
(EUR’000) |
||||||||
| Financial liabilities by category |
||||||||
| Borrowings |
||||||||
| Convertible senior notes |
||||||||
| Lease liabilities |
||||||||
| Trade payables and accrued expenses |
||||||||
| |
|
|
|
|||||
| Financial liabilities measured at amortized cost |
||||||||
| |
|
|
|
|||||
| Derivative liabilities |
||||||||
| |
|
|
|
|||||
| Financial liabilities measured at fair value through profit or loss |
||||||||
| |
|
|
|
|||||
| Total financial liabilities |
||||||||
| |
|
|
|
|||||
| Classified in the statement of financial position |
||||||||
| Non-current liabilities |
||||||||
| Current liabilities |
||||||||
| |
|
|
|
|||||
| Total financial liabilities |
||||||||
| |
|
|
|
|||||
12
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Marketable Securities
Marketable securities are measured at amortized cost, and fair values are determined based on quoted market prices or for marketable securities with short-term and infrequent market trades on mathematical calculations applying observable inputs (Level 1 or 2 in the fair value hierarchy).
The composition of the portfolio is specified in the following table:
March 31, 2022 |
December 31, 2021 |
|||||||||||||||
Carrying amount |
Fair value |
Carrying amount |
Fair value |
|||||||||||||
(EUR’000) |
||||||||||||||||
| Marketable securities |
||||||||||||||||
| U.S. Government bonds |
||||||||||||||||
| Commercial papers |
||||||||||||||||
| Corporate bonds |
||||||||||||||||
| Agency bonds |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total marketable securities |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Classified based on maturity profiles |
||||||||||||||||
| Non-current assets |
||||||||||||||||
| Current assets |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total marketable securities |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Specified by rate structure |
||||||||||||||||
| Fixed rate |
||||||||||||||||
| Floating rate |
||||||||||||||||
| Zero-coupon |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total marketable securities |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Specified by investment grade credit rating |
||||||||||||||||
| High grade |
||||||||||||||||
| Upper medium grade |
||||||||||||||||
| Lower medium grade |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Total marketable securities |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
The Company’s marketable securities are all denominated in U.S. Dollars. At March 31, 2022 and December 31, 2021, the portfolio 5.7 and 5.8 months for current positions, and 15.5 and 16.7 months for 8.4 months and 9.2 months, respectively.
had
a weighted average duration of non-current
positions, respectively. At March 31, 2022 and December 31, 2021, the entire portfolio had
a weighted average duration of All marketable securities have investment grade ratings, and accordingly, the risk from probability of default is low. The risk of expected credit loss over marketable securities has been considered, including the hypothetical impact arising from the probability of default which is considered in conjunction with the expected loss given default from securities with similar credit ratings and attributes. This assessment did not reveal a material expected credit loss, and accordingly, no provision for expected credit loss has been recognized.
Convertible Senior Notes
On March 29, 2022 (trade date, March 25, 2022) the Company issued an aggregate principal amount of $575.0 million of fixed rate 2.25 % convertible senior notes (“convertible notes”). The net proceeds from the offering of the convertible notes were $557.9 million (€503.3 million), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses. The convertible notes rank equally in right of payment with all of existing and future senior unsecured indebtedness. Unless earlier converted or redeemed the convertible notes will mature on April 1, 2028 .
The convertible notes will accrue interest at a rate of 2.25 % per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2022 . At any time before the close of business on the second scheduled trading day immediately before the maturity date, noteholders may convert their convertible notes at their option into the Company’s ordinary shares represented by ADSs, together, if applicable, with cash in lieu of any fractional ADS, at the then-applicable conversion rate. The initial conversion rate is 6.0118 ADSs per $1,000 principal amount of convertible notes, which represents an initial conversion price of $166.34 per ADS. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events.
13
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
The convertible notes will be optionally redeemable, in whole or in part (subject to certain limitations), at the Company’s option at any time, and from time to time, on or after April 7, 2025 , but only if the last reported sale price per ADS exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related optional redemption notice; and (ii) the trading day immediately before the date the Company sends such notice.
On March 31, 2022, the carrying amount of the convertible notes were €365.6 million, and the fair value 379.8
was
approximately €million. Fair value cannot be
measured
based on quoted prices
in active markets, or other observable input, and accordingly the fair value was estimated by using an estimated market rate for an equivalent non-convertible instrument, and by excluding transaction costs (Level 3 in the fair value hierarchy). Derivative Liabilities
Derivative liabilities relate to foreign currency conversion options embedded in the convertible notes.
Fair value cannot be measured based on quoted prices in active markets, or other observable input, and accordingly, derivative liabilities are measured by use of valuation techniques in form of the Black-Scholes Option Pricing model (Level 3 in the fair value hierarchy). Fair value of the options is calculated, applying following assumptions: (1) conversion price; (2) own share price at the reporting
date;
(3) maturity of the options; (4) a risk-free interest rate equaling the effective interest rate on a U.S. government bond with the same lifetime as the maturity of the options; (5) no payment of dividends;
and (6) an expected volatility using the Company’s own share price Derivative liabilities were recognized on March 25, 2022, at the initial fair value of €142.5 million. For the three months ended March 31, 2022, remeasurement gains recognized in the unaudited condensed consolidated interim statement of profit or loss was €1.1 million.
Sensitivity Analysis
On March 31, 2022, all other inputs and assumptions held 10 % increase in 15.5 million and indicates a decrease in profit or loss and equity before tax. Similarly, a 10 %
constant
, a volatility
will increase the fair value of derivative liabilities by approximately €,
decrease in volatility indicates the opposite impact.
Similarly, on March 31, 2022, all other inputs and assumptions held constant, a 10 % increase in the share price, will increase the fair value of derivative liabilities by approximately €23.6 million and indicates a decrease in profit or loss and equity before tax. Similarly, a 10 % decrease in the share price indicates the opposite impact.
Maturity Analysis
Maturity analysis (on an undiscounted basis) for
non-derivative
financial liabilities recognized in the unaudited condensed consolidated statements of financial position at March 31, 2022 is specified below. < 1 year |
1-5 years |
>5 years |
Total contractual cash-flows |
Carrying amount |
||||||||||||||||
(EUR’000) |
||||||||||||||||||||
| March 31, 2022 |
||||||||||||||||||||
| Borrowings |
||||||||||||||||||||
| Convertible senior notes |
||||||||||||||||||||
| Lease liabilities |
||||||||||||||||||||
| Trade payables and accrued expenses |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total financial liabilities |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
Note 11—Subsequent Events
No events have occurred after the reporting date that would influence the evaluation of these unaudited condensed consolidated interim financial statements.
14
Exhibit 99.2
ASCENDIS PHARMA A/S
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated interim financial statements, including the notes thereto, included with this report and the section contained in our Annual Report on Form 20-F for the year ended December 31, 2021 – “Item 5. Operating and Financial Review and Prospects”. The following discussion is based on our financial information prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.” Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. IFRS as issued by the International Accounting Standards Board, and as adopted by the European Union, might differ in material respects from generally accepted accounting principles in other jurisdictions.
Special Note Regarding Forward-Looking Statements
This report contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
| • | the timing or likelihood of regulatory filings and approvals for our product candidates; |
| • | our expectations regarding the commercial availability of TransCon Growth Hormone, or TransCon hGH, and related patient support services; |
| • | the commercialization of TransCon hGH and our other product candidates, if approved; |
| • | our commercialization, marketing and manufacturing capabilities of TransCon hGH and our other product candidates and associated devices; |
| • | the scope, progress, results and costs of developing our product candidates or any other future product candidates, and conducting preclinical studies and clinical trials; |
| • | our pursuit of oncology as our second of three independent therapeutic areas of focus, and our development of a pipeline of product candidates related to oncology; |
| • | our expectations regarding the potential market size and the size of the patient populations for TransCon hGH and our other product candidates, if approved for commercial use; |
| • | our expectations regarding the potential advantages of TransCon hGH and our other product candidates over existing therapies; |
| • | our ability to enter into new collaborations; |
| • | our expectations with regard to the ability to develop additional product candidates using our TransCon technologies and file Investigational New Drug Applications, or INDs, or similar for such product candidates; |
| • | our expectations with regard to the ability to seek expedited regulatory approval pathways for our product candidates, including the potential ability to rely on the parent drug’s clinical and safety data with regard to our product candidates; |
1
| • | our expectations with regard to our current and future collaboration partners to pursue the development of our product candidates and file INDs or similar for such product candidates; |
| • | our development plans with respect to TransCon hGH and our other product candidates; |
| • | our ability to develop, acquire and advance product candidates into, and successfully complete, clinical trials; |
| • | the implementation of our business model and strategic plans for our business, TransCon hGH and our other product candidates and technologies, including global commercialization strategies; |
| • | the scope of protection we are able to establish and maintain for intellectual property rights covering TransCon hGH and our other product candidates; |
| • | estimates of our expenses, future revenue, capital requirements, our needs for additional financing and our ability to obtain additional capital; |
| • | our financial performance; |
| • | developments and projections relating to our market conditions, competitors and industry; and |
| • | the potential effects on our business of the worldwide COVID-19 pandemic. |
These forward-looking statements are based on senior management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this report may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section in our Annual Report on Form 20-F for the year ended December 31, 2021 — “Item 3.D. Risk Factors”. You are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this report. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. Given these risks and uncertainties, you are cautioned not to rely on such forward-looking statements as predictions of future events.
You should read this report and the documents that we reference in this report and have filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect. You should also review the factors and risks we describe in the reports we will file or submit from time to time with the Securities and Exchange Commission after the date of this report. We qualify all of our forward-looking statements by these cautionary statements.
Overview
We are applying our innovative TransCon technologies to build a leading, fully integrated, global biopharmaceutical company and develop a pipeline of product candidates with potential best-in-class profiles to address unmet medical needs.
Our product candidates combine our TransCon technologies with clinically-validated parent drugs and pathways, with the goal of optimizing therapeutic effect and improving tolerability and convenience.
We have applied these technologies in combination with a clinically-validated parent drug or pathway using our algorithm for product innovation with the goal of creating product candidates with the potential to be best-in-class in endocrinology rare diseases and oncology. In addition, we plan to apply this algorithm for product innovation and selection in new therapeutic areas. We believe our approach to product innovation may reduce the risks associated with traditional drug development, and that our TransCon technologies have been validated by non-clinical and clinical programs completed to date.
We had a net loss of €125.5 million for the three months ended March 31, 2022, and a net loss of €383.6 million for the year ended December 31, 2021. Our total equity was €672.8 million as of March 31, 2022 compared to €883.6 million as of December 31, 2021.