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Ascendis Pharma’s Stock Surge: What’s Driving the Momentum?

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs

Ascendis Pharma A/S is trading up by 4.61 percent on Tuesday, driven by positive market sentiment surrounding recent key developments. The most impactful news includes successful clinical trial results for a new hormone replacement therapy, which has significantly bolstered investor confidence in the company’s future growth prospects. This collective optimism is reflected in the stock’s upward momentum.

Sep 16, 2024 — Here’s why Ascendis Pharma’s stock is skyrocketing.

Candlestick Chart

Live Update at 16:43:34 EST: On Tuesday, September 17, 2024 Ascendis Pharma A/S stock [NASDAQ: ASND] is trending up by 4.61%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Ascendis Pharma (ASND) climbed 19% after news of TransCon CNP’s successful trial results.
  • FDA granted Orphan Drug exclusivity to Yorvipath, ensuring seven years of market dominance.
  • A new $150M royalty funding deal for Yorvipath adds to ASND’s bottom line.
  • Initial data from a new cancer treatment trial shows promising activity, fueling optimism.

Ascendis Pharma’s Earnings and Financial Key Metrics

The stock price of Ascendis Pharma (ASND) has been on a rollercoaster recently, and rightly so. This month, it rose from $139.57 to $146.59, driven by a string of encouraging news and strong financial figures. But what lies beneath this surge? Let’s dive deep.

Earnings and Financial Metrics

In their latest earnings report, Ascendis Pharma reported revenue of EUR36M for Q2 2024, alongside some key financial updates. Their cash on hand stands at an impressive EUR392M, providing a solid cushion for future investments and trials. However, their debt position is noteworthy: long-term debt is at EUR534M, with total liabilities clocking in at EUR971M.

What does that mean? Well, they’ve got plenty of cash, but they’re also heavily leveraged. It’s like owning a golden goose but also owing the farmer for the feed. They can sustain for now but need those revenue-generating drugs to keep the momentum.

Key Ratios Tell a Tale of Their Own:

  • Profitability: The company is still in its growth phase and investing heavily in R&D, meaning profitability ratios aren’t spectacular yet.
  • Valuation Measures: Ascendis Pharma’s price-to-sales ratio is at 26.75, indicating high investor expectations for future growth.
  • Financial Strength: The high debt-to-equity ratio suggests they are funding growth through debt.

The Big Drivers: ASND’s Recent Successes

TransCon CNP Trial Success

The announcement of the positive results from the pivotal ApproaCH trial of TransCon CNP was a major boost. This trial tested TransCon CNP, a once-weekly prodrug, in children with achondroplasia—a form of dwarfism. The significant improvements in growth velocity compared to placebo were nothing short of a home run.

Think of it like this: You’re at bat, two strikes against you, and then you hit a grand slam. That’s essentially what ASND did with this trial. Investors love a good success story, particularly when it promises potential market entries in both the U.S. and Europe.

Yorvipath’s Orphan Drug Status

Receiving the FDA’s Orphan Drug exclusivity is like getting a golden ticket. Yorvipath, for treating hypoparathyroidism in adults, now enjoys seven years of market protection. No direct competition, just a smooth road to revenue generation. This development alone has cemented confidence in ASND’s pipeline.

Royalty Funding Agreement with Royalty Pharma

Enter the $150M royalty funding deal for the U.S. sales of Yorvipath. This isn’t just a financial infusion; it’s a solid vote of confidence from a major player. It’s like getting backed by the brand with the Midas touch. Add that money to their war chest, and Ascendis now has more firepower to push their therapies to market.

More Breaking News

Ascendis’ New Cancer Treatment Data

Combining TransCon IL-2 beta/gamma with chemotherapy in treating platinum-resistant ovarian cancer has shown initial positive results. This is a big deal. Platinum resistance is like a stubborn stain on your favorite shirt—tough to treat and harder to ignore. Yet, ASND’s new combo therapy is showing promise where little else has.

Imagine you’re at the roulette wheel, bets placed all around. The ball lands on your number. That’s how this initial data feels to analysts and investors keeping a close eye on oncology breakthroughs.

Charting ASND’s Stock Price

Looking at the recent stock movement, from Sep 11 to Sep 16, ASND’s price jumped from $112.93 to $146.59. Significant bumps happened on Sep 13 and Sep 16, coinciding perfectly with the release of news regarding clinical successes and financial gears shifting in favor of Ascendis.

If we zoom into the 5-minute intraday trading chart on Sep 16, we notice a steady climb from the opening bell. This isn’t a fluke or a speculative spike—this is confidence in action. It’s the market digesting good news bite by bite and reacting positively.

Market Implications of News and Financials

Growth Potential: With successful trials and new drugs attaining exclusivity, Ascendis is well-positioned for substantial growth. The financial backing and strong cash reserves will aid in extensive R&D, while minimizing the risks associated with their debt load.

Investor Confidence: Multiple analyst upgrades, including Oppenheimer’s elevation to “Outperform,” further add to the sense of growing investor trust. When key analysts speak, the market listens. Picture it as a chef recommending a dish; it boosts diner confidence in their meal choice.

Wrap-up Summary:

As we glance over the past few weeks, Ascendis Pharma has had a flight path that’s soaring upwards. Thanks to a slew of positive clinical results, smart financial moves, and strategic regulatory wins, the stock is in rally mode. Yet, it’s also important to remember that the company remains heavily leveraged. While the golden goose is laying eggs, keeping it well-fed is crucial. For now, though, investors are savoring the golden glow of recent successes.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”