Ascendis Pharma(ASND) - 2023 Q1 - Quarterly Report

FORM 6-K Filing Information Ascendis Pharma A/S filed Form 6-K for April 2023, detailing its incorporation by reference and the included interim financial statements Filing Details and Incorporation by Reference Ascendis Pharma A/S filed Form 6-K for April 2023, incorporated by reference into Form S-8 and F-3 registration statements, and files annual reports under Form 20-F - Ascendis Pharma A/S filed Form 6-K for April 2023, indicating it files annual reports under Form 20-F[1] - This Form 6-K report is incorporated by reference into the Company's registration statements on Form S-8 and Form F-3[2] Report Content and Signatures The Form 6-K contains the Company's Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis for the period ended March 31, 2023, and was signed on April 27, 2023 - The report includes Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations for the period ended March 31, 2023[3] - The report was signed on April 27, 2023, by Michael Wolff Jensen, Executive Vice President, Chief Legal Officer[5] Unaudited Condensed Consolidated Interim Financial Statements This section presents Ascendis Pharma A/S's unaudited condensed consolidated interim financial statements, including statements of profit or loss, financial position, changes in equity, cash flows, and accompanying notes Index to Unaudited Condensed Consolidated Interim Financial Statements This section provides an index to the unaudited condensed consolidated interim financial statements, including statements of profit or loss, financial position, changes in equity, cash flows, and accompanying notes - The index lists the Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income / (Loss), Statements of Financial Position, Statements of Changes in Equity, Cash Flow Statements, and Notes to the Financial Statements[8] Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Comprehensive Income / (Loss) For Q1 2023, Ascendis Pharma A/S reported a net loss of €110.9 million, an improvement from €125.5 million in Q1 2022, driven by increased revenue and finance income despite higher operating expenses Consolidated Statement of Profit or Loss (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 (EUR'000) | 2022 (EUR'000) | | :------------------------------------ | :------------- | :------------- | | Revenue | 33,589 | 6,828 | | Cost of sales | 4,621 | 4,246 | | Gross profit | 28,968 | 2,582 | | Research and development costs | 106,114 | 83,193 | | Selling, general and administrative expenses | 66,539 | 47,418 | | Operating profit / (loss) | (143,685) | (128,029) | | Share of profit / (loss) of associate | (1,227) | (4,873) | | Finance income | 45,135 | 13,044 | | Finance expenses | 9,840 | 5,399 | | Profit / (loss) before tax | (109,617) | (125,257) | | Income taxes (expenses) | (1,297) | (241) | | Net profit / (loss) for the period | (110,914) | (125,498) | | Basic and diluted earnings / (loss) per share | € (1.98) | € (2.21) | - Total comprehensive income / (loss) for the period, net of tax, was €(111.7) million for Q1 2023, compared to €(125.1) million for Q1 2022[12] Unaudited Condensed Consolidated Interim Statements of Financial Position As of March 31, 2023, total assets decreased to €966.3 million from €1,089.7 million at December 31, 2022, primarily due to reduced marketable securities, with total equity also decreasing to €167.2 million Consolidated Statement of Financial Position (March 31, 2023 vs. December 31, 2022) | Metric | March 31, 2023 (EUR'000) | December 31, 2022 (EUR'000) | | :------------------------------------ | :----------------------- | :-------------------------- | | Total assets | 966,274 | 1,089,738 | | Total equity | 167,201 | 263,348 | | Total liabilities | 799,073 | 826,390 | | Non-current assets | 156,429 | 166,267 | | Current assets | 809,845 | 923,471 | | Non-current liabilities | 600,712 | 655,119 | | Current liabilities | 198,361 | 171,271 | - Marketable securities decreased significantly from €298.2 million at December 31, 2022, to €84.5 million at March 31, 2023[14] - Cash and cash equivalents increased from €444.8 million at December 31, 2022, to €501.3 million at March 31, 2023[14] Unaudited Condensed Consolidated Interim Statements of Changes in Equity Total equity decreased from €263.3 million at January 1, 2023, to €167.2 million at March 31, 2023, primarily due to a €110.9 million net loss, partially offset by share-based payments and capital increase Consolidated Statement of Changes in Equity (Three Months Ended March 31, 2023 vs. 2022) | Metric | Equity at Jan 1, 2023 (EUR'000) | Equity at Mar 31, 2023 (EUR'000) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total Equity | 263,348 | 167,201 | | Net profit / (loss) for the period | N/A | (110,914) | | Share-based payment | N/A | 13,688 | | Capital increase | N/A | 1,866 | | Equity at Jan 1, 2022 (EUR'000) | 883,635 | N/A | | Equity at Mar 31, 2022 (EUR'000) | N/A | 672,816 | - Total comprehensive income / (loss) for Q1 2023 was €(111.7) million, compared to €(125.1) million for Q1 2022[16] Unaudited Condensed Consolidated Interim Cash Flow Statements Cash and cash equivalents increased by €62.9 million in Q1 2023, driven by €210.6 million from investing activities offsetting €147.0 million used in operating activities, contrasting with Q1 2022's larger increase from financing activities Consolidated Cash Flow Summary (Three Months Ended March 31, 2023 vs. 2022) | Cash Flow Activity | 2023 (EUR'000) | 2022 (EUR'000) | | :------------------------------------ | :------------- | :------------- | | Operating activities | (147,044) | (130,788) | | Investing activities | 210,646 | 38,542 | | Financing activities | (702) | 397,735 | | Net increase / (decrease) in cash and cash equivalents | 62,900 | 305,489 | | Cash and cash equivalents at March 31 | 501,281 | 755,643 | - Cash flows from investing activities increased significantly by €172.1 million, primarily due to net settlements of marketable securities[19][136] - Cash flows from financing activities decreased by €398.4 million, mainly due to the convertible notes issuance and treasury share acquisition in Q1 2022 not recurring in Q1 2023[19][137] Notes to the Unaudited Condensed Consolidated Interim Financial Statements This section provides detailed notes to the unaudited condensed consolidated interim financial statements, covering accounting policies, significant events, revenue, and financial instruments Note 1—General Information Ascendis Pharma A/S, incorporated in 2006 and headquartered in Denmark, is a global biopharma company utilizing its TransCon technologies, with ADSs listed on Nasdaq under "ASND" since 2015 - Ascendis Pharma A/S was incorporated in 2006, is headquartered in Hellerup, Denmark, and applies its TransCon technologies to build a leading, fully integrated, global biopharma company[21] - The Company's American Depositary Shares (ADSs) have been listed on The Nasdaq Global Select Market under the symbol "ASND" since February 2, 2015[21] Note 2—Summary of Significant Accounting Policies Interim financial statements are prepared under IAS 34 consistent with prior year IFRS policies, with IAS 1 amendments expected to reclassify €399.9 million convertible notes and €116.8 million derivative liabilities to current in 2024 - The unaudited condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," and should be read in conjunction with the 2022 audited annual consolidated financial statements prepared under IFRS[23] - The accounting policies applied are consistent with those of the previous financial year[24] - Amendments to IAS 1, effective January 1, 2024, are expected to reclassify convertible notes (€399.9 million) and derivative liabilities (€116.8 million) from non-current to current liabilities[25][26] Note 3—Significant Accounting Judgements and Estimates Management's ongoing revisions of critical accounting estimates have not revealed any material impact, and no changes to significant accounting judgments or estimation uncertainties have occurred since December 31, 2022 - Management's ongoing revisions of critical accounting estimates and underlying assumptions have not revealed any material impact in any of the periods presented[28] - There have been no other changes to the application of significant accounting judgments or estimation uncertainties compared to December 31, 2022[28] Note 4—Significant Events in the Reporting Period The company assessed the impact of the global banking situation (SVB closure), the Ukraine/Russia conflict, and the COVID-19 pandemic, none of which had a direct material impact on the financial statements - The Company did not hold deposits or securities at Silicon Valley Bank (SVB) and an assessment of the global banking situation did not reveal a material impairment loss[29] - The ongoing conflict in the region surrounding Ukraine and Russia did not have a direct material impact on the financial statements, though it impacted clinical trial activities[30] - The COVID-19 pandemic did not have a direct material impact on the unaudited condensed consolidated interim financial statements[31] Note 5—Revenue Total revenue for Q1 2023 significantly increased to €33.6 million from €6.8 million in Q1 2022, primarily driven by €31.6 million in commercial product sales, with North America contributing the majority Revenue from External Customers (Three Months Ended March 31, 2023 vs. 2022) | Revenue Category | 2023 (EUR'000) | 2022 (EUR'000) | | :------------------------------------ | :------------- | :------------- | | Commercial sale of products | 31,551 | 1,888 | | Rendering of services | 1,170 | 372 | | Sale of clinical supply | 254 | 3,936 | | Licenses | 614 | 632 | | Total revenue from external customers | 33,589 | 6,828 | Revenue by Geographical Location (Three Months Ended March 31, 2023 vs. 2022) | Geographical Location | 2023 (EUR'000) | 2022 (EUR'000) | | :------------------------------------ | :------------- | :------------- | | Europe | — | 135 | | North America | 33,070 | 6,456 | | China | 519 | 237 | Note 6—Segment Information The Company is managed and operated as a single business unit, and therefore no separate business or geographical segment information is disclosed - The Company is managed and operated as one business unit, with no separate business areas or geographical units identified[33] Note 7—Share-based Payment Ascendis Pharma A/S operates warrant, RSU, and PSU programs, with share-based compensation costs at €13.7 million in Q1 2023, down from €20.0 million in Q1 2022, despite increased RSU and PSU grants - Share-based compensation costs recognized were €13.7 million for Q1 2023, compared to €20.0 million for Q1 2022[35] RSU and PSU Activity (March 31, 2023) | Metric | Restricted Stock Units (Number) | Performance Stock Units (Number) | Total (Number) | | :------------------------------------ | :------------------------------ | :------------------------------- | :------------- | | Outstanding January 1, 2023 | 82,492 | — | 82,492 | | Granted during the period | 609,695 | 112,268 | 721,963 | | Forfeited during the period | (10,494) | — | (10,494) | | Outstanding March 31, 2023 | 681,693 | 112,268 | 793,961 | Warrant Activity (Three Months Ended March 31, 2023) | Metric | Total Warrants (Number) | Weighted Average Exercise Price (EUR) | | :------------------------------------ | :---------------------- | :------------------------------------ | | Outstanding January 1, 2023 | 6,864,011 | 81.30 | | Granted during the period | 113,585 | 103.60 | | Exercised during the period | (176,253) | 10.40 | | Forfeited during the period | (40,047) | 118.69 | | Outstanding March 31, 2023 | 6,761,296 | 83.30 | | Vested at March 31, 2023 | 5,013,862 | 70.58 | Note 8—Share Capital As of March 31, 2023, the Company's share capital consists of 57,328,548 fully paid ordinary shares, each with a nominal value of DKK 1 - The share capital consists of 57,328,548 fully paid ordinary shares, all in the same share class, with a nominal value of DKK 1 each[46] Note 9—Treasury Shares The Company held 1,113,152 treasury shares as of March 31, 2023, representing 1.9% of total outstanding shares, unchanged from January 1, 2023 Treasury Shares Holding (March 31, 2023 vs. January 1, 2023) | Metric | Nominal values (EUR'000) | Holding (Number) | Holding in % of total outstanding shares | | :------------------------------------ | :----------------------- | :----------------- | :--------------------------------------- | | January 1, 2023 | 149 | 1,113,152 | 2.0 % | | March 31, 2023 | 149 | 1,113,152 | 1.9% | Note 10—Financial Assets and Liabilities Total financial assets decreased to €610.3 million at March 31, 2023, from €758.7 million at December 31, 2022, mainly due to reduced marketable securities, while financial liabilities decreased to €753.6 million with lower derivative liabilities Financial Assets by Category (March 31, 2023 vs. December 31, 2022) | Financial Asset Category | March 31, 2023 (EUR'000) | December 31, 2022 (EUR'000) | | :------------------------------------ | :----------------------- | :-------------------------- | | Trade receivables | 16,121 | 11,910 | | Other receivables | 8,464 | 3,884 | | Marketable securities | 84,460 | 298,180 | | Cash and cash equivalents | 501,281 | 444,767 | | Total financial assets | 610,326 | 758,741 | Financial Liabilities by Category (March 31, 2023 vs. December 31, 2022) | Financial Liability Category | March 31, 2023 (EUR'000) | December 31, 2022 (EUR'000) | | :------------------------------------ | :----------------------- | :-------------------------- | | Convertible senior notes | 399,880 | 399,186 | | Lease liabilities | 105,501 | 109,191 | | Trade payables and accrued expenses | 131,438 | 101,032 | | Derivative liabilities | 116,768 | 157,950 | | Total financial liabilities | 753,587 | 767,359 | Marketable Securities Composition (March 31, 2023 vs. December 31, 2022) | Security Type | March 31, 2023 (EUR'000) | December 31, 2022 (EUR'000) | | :------------------------------------ | :----------------------- | :-------------------------- | | U.S. Treasury bills | — | 79,086 | | U.S. Government bonds | 42,955 | 99,337 | | Corporate bonds | 36,907 | 104,236 | | Agency bonds | 4,598 | 15,521 | | Total marketable securities | 84,460 | 298,180 | - The convertible senior notes had a carrying amount of €399.9 million and a fair value of approximately €388.0 million as of March 31, 2023[56] - Derivative liabilities, related to the foreign currency conversion option embedded in the convertible notes, decreased by €41.182 million from January 1 to March 31, 2023, to €116.768 million[57][61] - A 10% relative increase in volatility would increase the fair value of derivative liabilities by approximately €14.0 million, while a 10% increase in the share price would increase them by approximately €21.8 million, both indicating a decrease in profit or loss and equity before tax[58] 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 - No events have occurred after the reporting date that would influence the evaluation of these unaudited condensed consolidated interim financial statements[64] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's discussion and analysis of financial condition and results of operations, including company overview, product development, financial performance, and market risk disclosures Introduction and Forward-Looking Statements This section provides management's discussion and analysis of financial condition and results of operations, prepared in accordance with IAS 34, including a special note on forward-looking statements and potential risks - The discussion and analysis are based on financial information prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting"[65] - Forward-looking statements cover regulatory approvals, commercialization, R&D, pipeline expansion, market opportunities, intellectual property, financial performance, and external factors[66][67] - Actual results may differ materially from current expectations due to known and unknown risks, uncertainties, and other factors, including those listed in the Annual Report on Form 20-F[68] Company Overview and Strategy Ascendis Pharma A/S is a global biopharma company leveraging its TransCon technology platform to develop best-in-class therapies across Endocrinology Rare Diseases, Oncology, and Ophthalmology, guided by its Vision 3x3 strategic roadmap - Ascendis Pharma A/S is building a leading, fully integrated, global biopharma company using its innovative TransCon technology platform to create new and potentially best-in-class therapies[71] - The Vision 3x3 strategic roadmap through 2025 includes obtaining regulatory approval for three independent Endocrinology Rare Disease products, growing the pipeline, establishing a global commercial presence, advancing an oncology pipeline, and creating a third independent therapeutic area (Ophthalmology)[72] - The company's algorithm for product innovation focuses on identifying indications with unmet medical needs, clinically validated parent drugs/pathways, suitability to TransCon technologies, potential for differentiation, established development pathways, and large market potential[74] - The TransCon technology platform is designed to combine the benefits of conventional prodrug and sustained release technologies to extend drug action, aiming for improved efficacy, safety, tolerability, and convenience[79] TransCon Product Development Ascendis Pharma is advancing its pipeline across Endocrinology Rare Diseases, Oncology, and Ophthalmology, with SKYTROFA approved, TransCon PTH facing FDA deficiencies but progressing in EU, positive Phase 2 results for TransCon CNP, and new oncology and ophthalmology candidates in development Endocrinology Rare Diseases SKYTROFA is approved in the U.S. and EU, TransCon PTH faces FDA deficiencies but anticipates an EMA decision in Q4 2023, and TransCon CNP showed positive Phase 2 results for achondroplasia - SKYTROFA (TransCon hGH) is FDA approved (August 2021) for pediatric GHD and received EC marketing authorization (January 2022); a commercial launch in Germany is planned for Q3 2023[81][82] - The FDA identified deficiencies in the TransCon PTH NDA for hypoparathyroidism, which may delay the final regulatory decision, while an EMA decision on the MAA is anticipated in Q4 2023 with a planned Germany launch in early 2024 if approved[86][87] - The Phase 3 PaTHway Japan Trial for TransCon PTH met its primary objective, with 12 out of 13 patients achieving normal serum calcium levels and independence from conventional therapy[88] - The ACcomplisH Phase 2 trial for TransCon CNP in achondroplasia met its primary efficacy endpoint, demonstrating a consistent dose-dependent increase in annualized height velocity (AHV) at 100 µg/kg/week (p=0.0218) and was generally well tolerated[96][97] Oncology Ascendis Pharma is developing TransCon TLR7/8 Agonist and TransCon IL-2 ß/g in Oncology, with the former's Phase 2 dose declared and initial monotherapy data for the latter expected in Q2 2023 - TransCon TLR7/8 Agonist, an investigational long-acting prodrug of resiquimod, is in a Phase 1/2 clinical trial (transcendIT-101), with the recommended Phase 2 dose declared at 0.5 mg/lesion for up to two lesions[101][102] - TransCon IL-2 ß/g, an investigational long-acting prodrug, is in a Phase 1/2 clinical trial (IL-Believe), with initial monotherapy dose escalation data expected in Q2 2023 and combination therapy data in Q3 2023[103][104] - The Company plans to evaluate the clinical activity of a combination of TransCon TLR7/8 Agonist and TransCon IL-2 ß/g in 2023[105] Ophthalmology Ophthalmology is the third therapeutic area, targeting a €10 billion+ market with TransCon Hydrogel platform for sustained drug release, and TransCon RBZ as the lead candidate for conditions like wet AMD - Ophthalmology was announced as the third independent therapeutic area in January 2023, targeting vision loss caused by abnormal blood vessel growth and/or fluid build-up[76] - The global market for ophthalmology treatments exceeds €10 billion, with a key unmet medical need to extend the duration of therapeutic effect and reduce treatment frequency for conditions like wet AMD[108] - The TransCon Hydrogel platform is designed to provide sustained local drug release over at least six months, supporting twice-yearly administration to potentially increase patient adherence[109] - TransCon RBZ (ranibizumab) has been selected as the lead pipeline candidate, leveraging ranibizumab as a clinically validated parent drug[110] Results of Operations Ascendis Pharma reported a net loss of €110.9 million for Q1 2023, an improvement from €125.5 million in Q1 2022, driven by increased revenue and finance income despite higher operating expenses Net Profit / (Loss) The Company reported a net loss of €110.9 million for the three months ended March 31, 2023, an improvement from a net loss of €125.5 million for the same period last year - Net loss for Q1 2023 was €110.9 million, an improvement from €125.5 million in Q1 2022[112] Revenue Analysis Revenue for Q1 2023 significantly increased to €33.6 million from €6.8 million in Q1 2022, primarily driven by €31.6 million in commercial product sales - Revenue for Q1 2023 was €33.6 million, an increase of €26.8 million compared to Q1 2022, primarily driven by higher commercial sale of products and rendering of services[113] Quarterly Commercial Product Sales (2022-2023) | Quarter | March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | | :------------------------------------ | :------------- | :------------ | :----------------- | :---------------- | :------------- | | Sale of commercial products (EUR'000) | 1,888 | 4,435 | 12,252 | 17,084 | 31,551 | Cost of Sales Cost of sales increased by €0.4 million to €4.6 million in Q1 2023, primarily due to higher costs from increased commercial revenue, partially offset by lower clinical supply costs - Cost of sales for Q1 2023 was €4.6 million, an increase of €0.4 million compared to Q1 2022, primarily due to higher costs from increased commercial revenue[115] Research and Development Costs R&D costs increased by €22.9 million to €106.1 million in Q1 2023, mainly due to higher development costs for oncology programs and increased employee-related expenses - R&D costs for Q1 2023 were €106.1 million, an increase of €22.9 million compared to Q1 2022[119] - The increase was primarily due to higher development costs for oncology programs (TransCon IL-2 ß/g and TransCon TLR7/8) and higher employee and other costs attributable to organizational growth[119] External Project R&D Costs (Three Months Ended March 31, 2023 vs. 2022) | Project | 2023 (EUR'000) | 2022 (EUR'000) | | :------------------------------------ | :------------- | :------------- | | TransCon hGH | 18,010 | 19,939 | | TransCon PTH | 12,514 | 11,686 | | TransCon CNP | 10,945 | 9,555 | | TransCon IL-2 ß/γ | 10,135 | 1,446 | | TransCon TLR7/8 | 8,492 | 2,137 | | Other project costs | 3,288 | 602 | | Total external project costs | 63,384 | 45,365 | Selling, General and Administrative Expenses SG&A expenses increased by €19.1 million to €66.5 million in Q1 2023, driven by higher commercial expenses for SKYTROFA and TransCon PTH pre-launch activities, and increased employee costs - SG&A expenses for Q1 2023 were €66.5 million, an increase of €19.1 million compared to Q1 2022[120] - The increase was primarily due to higher external commercial expenses related to SKYTROFA and TransCon PTH pre-launch activities (€8.6 million), higher employee-related expenses (€4.4 million), and an increase in other general and administrative expenses (€5.8 million)[120] Net Profit / (Loss) of Associate Net loss of associate decreased by €3.6 million to €1.2 million in Q1 2023, reflecting a smaller share of loss in VISEN - Net loss of associate for Q1 2023 was €1.2 million, a decrease of €3.6 million compared to Q1 2022, reflecting the Company's share of loss in VISEN[121] Finance Income and Expenses Finance income increased by €32.1 million to €45.1 million in Q1 2023 due to higher remeasurement gain on derivative liabilities, while finance expenses rose by €4.4 million to €9.8 million - Finance income for Q1 2023 was €45.1 million, an increase of €32.1 million, primarily due to a €40.1 million higher remeasurement gain on derivative liabilities[122] - Finance expenses for Q1 2023 were €9.8 million, an increase of €4.4 million, primarily due to €8.2 million higher interest and amortization charges on convertible notes[122] Impact from COVID-19 Pandemic Ascendis Pharma has avoided significant disruptions to clinical and manufacturing activities from the COVID-19 pandemic, though its future impact remains highly uncertain - The Company has managed to avoid significant disruptions to its clinical and manufacturing operations despite the COVID-19 pandemic[124] - The future impact from COVID-19, including the magnitude on operational results, remains highly uncertain and unpredictable[124] Liquidity and Capital Resources As of March 31, 2023, total liquidity and capital resources were €585.7 million, deemed sufficient for the next twelve months, with investing cash flows increasing and financing activities decreasing year-over-year Liquidity and Capital Resources (March 31, 2023) | Metric | Carrying amount (EUR'000) | Fair value (EUR'000) | | :------------------------------------ | :------------------------ | :------------------- | | Marketable securities | 84,460 | 83,525 | | Cash and cash equivalents | 501,281 | 501,281 | | Total liquidity and capital resources | 585,741 | 584,806 | - The Company believes its existing capital resources as of March 31, 2023, will be sufficient to meet projected cash requirements for at least twelve months[129] - Historically, operations have been funded primarily through issuance of preference shares, ordinary shares (including IPO and follow-on offerings), exercise of warrants, convertible debt securities, and collaboration agreements[129] Cash Flow Summary (Three Months Ended March 31, 2023 vs. 2022) | Cash Flow Activity | 2023 (EUR'000) | 2022 (EUR'000) | | :------------------------------------ | :------------- | :------------- | | Operating activities | (147,044) | (130,788) | | Investing activities | 210,646 | 38,542 | | Financing activities | (702) | 397,735 | | Net increase / (decrease) in cash and cash equivalents | 62,900 | 305,489 | - Cash flows from investing activities increased by €172.1 million, primarily attributable to net settlements of marketable securities[133][136] - Cash flows used in financing activities decreased by €398.4 million, primarily due to the convertible notes issuance and acquisition of treasury shares completed in Q1 2022 not recurring[133][137] Off-balance Sheet Arrangements Ascendis Pharma A/S has not entered into any off-balance sheet arrangements or holdings in variable interest entities - The Company has not entered into any off-balance sheet arrangements or any holdings in variable interest entities[138] Qualitative Disclosures about Market Risk The company faces financial risks from foreign currency, interest rates, and equity price changes, managing liquidity and credit risk through policies, with equity risk impacting derivative liabilities Foreign Currency Risk The Company is exposed to foreign exchange risk, primarily with respect to the U.S. Dollar, Swiss Franc, and British Pound, mitigated by maintaining cash positions in expected expense currencies - The Company is exposed to foreign exchange risk, primarily with respect to the U.S. Dollar, the Swiss Franc, and the British Pound[140] - Foreign currency risk is minimized by maintaining cash positions in the currencies in which the majority of future expenses are expected to be incurred[140] Interest Rate Risk The Company's convertible notes and lease liabilities have fixed interest rates, but future interest income and derivative liabilities' fair value are exposed to interest rate changes - Outstanding convertible notes have a fixed rate of 2.25%, and interest rates on lease liabilities are fixed at commencement[141] - Future interest income from interest-bearing bank deposits and marketable securities may fall short of expectations due to changes in interest rates[141] - The fair value of derivative liabilities is exposed to volatility from changes in interest rates, impacting profit or loss[141] Inflation Risk Inflation could increase R&D, SG&A, and manufacturing costs, but did not have a material impact on the Company's results of operations for the three months ended March 31, 2023 - Inflation may increase R&D costs, SG&A expenses, and manufacturing costs as vendors pass on increased costs[142] - Inflation did not have a material impact on the Company's results of operation for the three months ended March 31, 2023[142] Credit Risk The Company's investment policy requires high credit-ratings for counterparties and marketable securities, resulting in low credit risk and no material impairment loss recognized - The investment policy establishes minimum ratings for institutions and concentration limits for marketable securities, with all material counterparties considered creditworthy[144] - Credit risk on bank deposits is limited as counterparties holding significant deposits are banks with high credit-ratings (minimum A2/A-)[144] - No material impairment loss for expected credit loss on bank deposits and marketable securities was recognized for the period[146] Equity Risk The Company is exposed to equity risk from its share price development, which impacts the fair value remeasurement of derivative liabilities calculated using the Black-Scholes option pricing model - The Company is exposed to equity risk from the development in its share price, which affects the fair value remeasurement of derivative liabilities[147] - Derivative liabilities are measured at fair value using the Black-Scholes option pricing model, where pricing is exposed to changes in the Company's share price[147]