After manufacturing setback at FDA, Ascendis strikes $150M royalty deal on its first commercial drug

Royalty Pharma, a company known for ponying up chunks of cash in exchange for long-term drug royalties, has hopped on board with Ascendis Pharma's long-acting growth hormone Skytrofa.

In exchange for the $150 million in funding, Ascendis will grant Royalty a 9.15% royalty on its U.S. Skytrofa revenues starting Jan. 1, 2025.

With the cash, Ascendis aims to reduce its cost of capital and bring its products to patients “as fast as possible,” CEO Jan Mikkelsen said in a statement.

Skytrofa, which is also known as TransCon hGH, won approval in 2021 for children ages 1 and older with growth hormone deficiency who weigh at least 25.4 pounds. It's the first approved pediatric therapy for the condition that can be taken once weekly as opposed to the standard-of-care daily somatropin.

The drug generated 36 million euros ($39 million) in 2022, and Ascendis recently raised its full-year 2023 revenue expectations for the drug to between 165 million euros and 170 million euros.

Meanwhile, Ascendis' application for TransCon PTH was due for an FDA approval decision in April, but those efforts hit a setback.

In a complete response letter, the FDA didn’t take issue with any clinical data nor did it request more studies. Instead, the agency flagged manufacturing concerns. Specifically, the agency cited issues with Ascendis’ manufacturing control strategy for the variability of delivered doses.

Ascendis recently submitted additional information about its updated manufacturing control strategy and held a “constructive” meeting with the agency, the company said in its second-quarter earnings report. The company aims to resubmit its TransCon PTH application by October.

If approved, the med would be Ascendis’ second approved product. 

As for Skytrofa, that drug has a new rival in Pfizer and OPKO Health’s Ngenla, which recently gained an FDA nod to treat kids 3 and older with stunted growth. The rival drug was hot on Ascendis’ heels until the FDA requested longer-term data and hit the partners' application with a complete response letter.