On Friday, Citi adjusted its stance on Ascendis Pharma (NASDAQ:ASND) shares, reducing the price target to $200 from the previous $207. The firm retained a Buy rating on the stock despite the company's third-quarter financial results falling short of Wall Street expectations. Ascendis Pharma's top-line revenue and GAAP EPS did not meet analyst predictions, continuing a trend from the previous quarter.
The company experienced strong volume growth year-over-year at 60%, but this was overshadowed by higher sales deductions which impacted revenues. Moreover, Ascendis revised its full-year 2024 revenue guidance for Skytrofa downwards to €200 million - €220 million, compared to the previously forecasted range of €220 million - €240 million, following a more significant reduction in the last quarter.
Despite these challenges, Citi highlighted the potential for Ascendis Pharma's stock to be driven by the upcoming launch of Yorvipath in 2025. The European Union sales are picking up momentum, and the product is expected to be available in the United States by mid-January. The analyst noted that Ascendis is well-positioned for future growth.
The firm also pointed out several upcoming catalysts that could influence Ascendis Pharma's performance. These include Phase 2 data in Turner syndrome for Skytrofa expected in the fourth quarter of 2024, and data from a combination study of Skytrofa and TransCon CNP in achondroplasia, anticipated in the second quarter of 2025. These developments are seen as potential positive drivers for the company's stock.
In other recent news, Ascendis Pharma reported key developments in its Q3 financial report and earnings call. The company displayed a net loss of €99.2 million, lower than Oppenheimer's anticipated loss of €110.2 million.
Revenue from Skytrofa, an Ascendis product, was recorded at €47.2 million, falling short of the expected €50.0 million by Oppenheimer. Despite this, Ascendis revised its sales guidance for Skytrofa, now targeting €200–220 million for the year 2024.
In addition, the firm's product Yorvipath is expected to enter the U.S. market without direct competition by mid-January, potentially benefiting from pent-up demand. Ascendis Pharma also announced a strategic collaboration with Novo Nordisk (NYSE:NVO), which could lead to a $100 million upfront payment and royalties.
The company reported robust product revenue of EUR 57.8 million for Q3 2024, and anticipates achieving cash flow breakeven by the end of 2025. An NDA for TransCon CNP, another Ascendis product, is expected to be submitted in Q1 2025. These are the recent developments in Ascendis Pharma's journey.
InvestingPro Insights
Recent InvestingPro data provides additional context to Ascendis Pharma's financial situation. Despite the company's strong year-over-year revenue growth of 166.54%, Ascendis is currently not profitable, with an operating income margin of -111.27% for the last twelve months as of Q2 2024. This aligns with the article's mention of financial results falling short of expectations.
InvestingPro Tips highlight that analysts do not anticipate the company will be profitable this year, which is consistent with the challenges outlined in the article. However, it is worth noting that Ascendis Pharma operates with a moderate level of debt, potentially providing some financial flexibility as it navigates its growth strategy and upcoming product launches.
The company's market capitalization stands at $7.43 billion, reflecting investor expectations for future growth, particularly with the anticipated launch of Yorvipath in 2025 as mentioned in the article. For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide deeper insights into Ascendis Pharma's financial health and market position.
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