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On Wednesday, Jefferies, a global investment banking firm, adjusted its outlook on Ascendis Pharma (NASDAQ:ASND), reducing the share price target from $196.00 to $174.00. Despite the decrease in the target price, the firm maintains a Buy rating on the stock.
Ascendis Pharma, a biopharmaceutical company, experienced a significant decline in revenue for its drug Skytrofa in the second quarter, with a 58% quarter-over-quarter decrease and a 25% drop year-over-year, totaling €26 million. This downturn was primarily attributed to an unforeseen net price reduction, likely influenced by the competitive landscape in the human Growth Hormone (hGH) market.
As a result of the revenue shortfall, Ascendis Pharma revised its full-year 2024 revenue guidance to a range of €220 million to €240 million, a downward adjustment from the previously forecasted €320 million to €340 million. In response to these developments, Jefferies has increased the gross-to-net (GTN) deductions in their financial model starting from the second quarter of 2024, leading to the lowered price target for Ascendis Pharma's stock.
However, the investment bank remains optimistic about the prospects of Yorvipath, Ascendis Pharma's other medication, which is gearing up for its launch in the United States. Additionally, new data for TransCon CNP, another drug in the company's pipeline, is now expected to be released in the third quarter of 2024, with further results from combination therapies anticipated in the first quarter of 2025. These forthcoming milestones have the potential to broaden Ascendis Pharma's product portfolio and contribute to the company's growth.
In other recent news, Ascendis Pharma has experienced several significant developments. The company reported its second-quarter financials for 2024, which fell short of revenue and GAAP EPS expectations, leading to Citi and Goldman Sachs adjusting their price targets to $178 and $180 respectively, while maintaining a Buy rating.
Ascendis Pharma also revised its full-year 2024 guidance for Skytrofa, reducing it by approximately 30%. Despite this, the company's Yorvipath franchise has seen growth, and the U.S. Food and Drug Administration (FDA) approved Yorvipath in August.
Ascendis Pharma also entered into a $150 million royalty agreement with Royalty Pharma, which includes a 3% royalty on U.S. net sales of Yorvipath. In response to these developments, JPMorgan increased its price target for Ascendis Pharma to $174 and maintained an Overweight rating.
Goldman Sachs followed suit, raising its price target for Ascendis to $195 and forecasting peak sales of EUR 1.6 billion for Yorvipath. TD Cowen upgraded Ascendis Pharma's stock rating from Hold to Buy, and Stifel initiated coverage on Ascendis Pharma with a Buy rating and a $200 price target.
These are the recent developments for Ascendis Pharma, a company that continues to make significant strides in the medical field. Goldman Sachs remains positive about Ascendis Pharma's prospects, underlining the potential for recovery in the share price based on the successful launch and supply of Yorvipath in the United States.
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