Shares of Ascendis Pharma tumbled Wednesday after the biotech company cut its full-year outlook for its human growth hormone amid marketwide price struggles.
Ascendis now expects its drug, Skytrofa, to bring in 220 million to 240 million euros in sales — or roughly $243.1 million to $265.2 million. That's a 100 million euro cut from the company's previous guidance. Skytrofa treats children with human growth hormone deficiency.
"Disappointing news that Skytrofa, along with the entire growth hormone market, was subject to a broader market access reset lowering the price of growth hormone agents," Leerink Partners analyst Joseph Schwartz said in a report.
During the June quarter, Skytrofa generated 26.2 million euros in sales — about $28.7 million. Sales plummeted 27% year over year and widely lagged expectations for 73.9 million euros, according to FactSet. This was despite a 134% increase in prescriptions vs. the year-ago period.
Ascendis Pharma stock toppled 11.3% to 119.50. Shares are near the lower boundary of a consolidation with a buy point at 161, MarketSurge shows. Ascendis stock also undercut its 50-day and 200-day moving averages.
Ascendis Pharma Inks $150 Million Deal
It wasn't all bad news, though. Ascendis announced the U.S. price tag for its hormone replacement therapy Yorvipath as $285,000 per patient each year. That's higher than Schwartz expected.
Yorvipath won't be available until the first quarter, unless the currently available supply turns out to be enough to meet the demands for a fourth-quarter launch. Pending the launch timing, Ascendis expects to hit quarterly operating cash flow break-even in 2024 or 2025.
Ascendis Pharma also announced a $150 million royalty agreement with Royalty Pharma for Yorvipath in the U.S.
"This transaction reflects the significant value of Yorvipath and our commitment to reduce our cost of capital while maintaining flexibility to support our global commercial capabilities," Ascendis Chief Executive Jan Mikkelsen said in a written statement.
Leerink's Schwartz reiterated his outperform rating on Ascendis stock, but trimmed his price target to 165 from 176.
"While it is disappointing that the growth hormone market, including Skytrofa, was subject to a market access reset, Ascendis appears to be navigating the tricky growth hormone market to the best of their ability to retain their presence making the sell-off after market an intriguing entry point," he said.
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