Ascendis Pharma A/S (ASND) 6-K 28 Nov 18 2018 Q3 Index to Unaudited Condensed Consolidated Interim Financial Statements Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2018
Document - Document and Entity Information [Abstract]
Document Type	6-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Trading Symbol	ASND
Entity Registrant Name	Ascendis Pharma A/S
Entity Central Index Key	1,612,042
Current Fiscal Year End Date	--12-31

Condensed Consolidated Interim

Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income / (Loss) - EUR (€) € in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Profit or loss [abstract]
Revenue		€ 20	€ 434	€ 66	€ 1,250
Research and development costs		(31,511)	(29,067)	(102,286)	(71,555)
General and administrative expenses		(6,796)	(2,840)	(16,684)	(9,396)
Operating profit / (loss)		(38,287)	(31,473)	(118,904)	(79,701)
Finance income		4,262	165	20,532	453
Finance expenses		(42)	(2,809)	(53)	(10,765)
Profit / (loss) before tax		(34,067)	(34,117)	(98,425)	(90,013)
Tax on profit / (loss) for the period		100	240	306	291
Net profit / (loss) for the period		(33,967)	(33,877)	(98,119)	(89,722)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations		(9)	(5)	(16)	41
Other comprehensive income / (loss) for the period, net of tax		(9)	(5)	(16)	41
Total comprehensive income / (loss)		(33,976)	(33,882)	(98,135)	(89,681)
Profit / (loss) for the period attributable to owners of the Company		(33,967)	(33,877)	(98,119)	(89,722)
Total comprehensive income / (loss) for the period attributable to owners of the Company		€ (33,976)	€ (33,882)	€ (98,135)	€ (89,681)
Basic and diluted earnings / (loss) per share		€ (0.81)	€ (1.04)	€ (2.41)	€ (2.76)
Number of shares used for calculation (basic and diluted)	[1]	41,888,908	32,607,497	40,757,686	32,513,641
[1]	A total of 4,480,805 warrants outstanding as of September 30, 2018 can potentially dilute earnings per share in the future, but have not been included in the calculation of diluted earnings per share because they are antidilutive for the periods presented. Similarly, a total of 3,698,895 warrants outstanding as of September 30, 2017 are also considered antidilutive for the periods presented and have not been included in the calculation.

Condensed Consolidated Interi_2

Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income / (Loss) (Parenthetical) - shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Warrants [member]
Warrants outstanding	4,480,805	3,698,895

Condensed Consolidated Interi_3

Condensed Consolidated Interim Statements of Financial Position - EUR (€) € in Thousands	Sep. 30, 2018	Dec. 31, 2017
Non-current assets
Intangible assets	€ 3,495	€ 3,495
Property, plant and equipment	3,513	2,557
Deposits	1,241	293
Total non-current assets	8,249	6,345
Current assets
Trade receivables	21	188
Other receivables	2,750	1,410
Prepayments	12,390	6,907
Income taxes receivable	1,491	778
Cash and cash equivalents	310,333	195,351
Total current assets	326,985	204,634
Total assets	335,234	210,979
Equity
Share capital	5,645	4,967
Distributable equity	298,560	182,244
Total equity	304,205	187,211
Current liabilities
Trade payables and other payables	31,021	23,768
Income taxes payable	8	0
Total liabilities	31,029	23,768
Total equity and liabilities	€ 335,234	€ 210,979

Condensed Consolidated Interi_4

Condensed Consolidated Interim Statements of Changes in Equity - EUR (€) € in Thousands	Total	Issued Capital [member]	Share Premium [member]	Foreign Currency Translation Reserve [member]	Share-based Payment Reserve [member]	Accumulated Deficit [member]
Equity at Dec. 31, 2016	€ 176,613	€ 4,354	€ 298,567	€ (79)	€ 13,084	€ (139,313)
Loss for the period	(89,722)					(89,722)
Other comprehensive income / (loss), net of tax	41			41
Total comprehensive income / (loss)	(89,681)			41		(89,722)
Share-based payment (Note 6)	6,923				6,923
Capital increase	115,505	530	114,975
Cost of capital increase	(7,210)		(7,210)
Equity at Sep. 30, 2017	202,150	4,884	406,332	(38)	20,007	(229,035)
Equity at Dec. 31, 2017	187,211	4,967	422,675	(14)	22,793	(263,210)
Loss for the period	(98,119)					(98,119)
Other comprehensive income / (loss), net of tax	(16)			(16)
Total comprehensive income / (loss)	(98,135)			(16)		(98,119)
Share-based payment (Note 6)	12,787				12,787
Capital increase	215,460	678	214,782
Cost of capital increase	(13,118)		(13,118)
Equity at Sep. 30, 2018	€ 304,205	€ 5,645	€ 624,339	€ (30)	€ 35,580	€ (361,329)

Condensed Consolidated Interi_5

Condensed Consolidated Interim Cash Flow Statements - EUR (€) € in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Operating activities
Net profit / (loss) for the period	€ (98,119)	€ (89,722)
Reversal of finance income	(20,532)	(453)
Reversal of finance expenses	53	10,765
Reversal of tax charge	(306)	(291)
Adjustments for:
Share-based payment	12,787	6,923
Depreciation and amortization	631	537
Changes in working capital:
Deposits	(948)	(15)
Trade receivables	167	(157)
Other receivables	(1,340)	32
Prepayments	(5,482)	(5,243)
Trade payables and other payables	7,237	6,554
Cash flows generated from / (used in) operations	(105,852)	(71,070)
Finance income received	3,065	453
Finance expenses paid	(53)	(80)
Income taxes received / (paid)	(400)	(245)
Cash flows from / (used in) operating activities	(103,240)	(70,942)
Investing activities
Acquisition of property, plant and equipment	(1,587)	(706)
Cash flows from / (used in) investing activities	(1,587)	(706)
Financing activities
Capital increase	215,460	115,505
Cost of capital increase	(13,118)	(7,210)
Cash flows from / (used in) financing activities	202,342	108,295
Increase / (decrease) in cash and cash equivalents	97,515	36,647
Cash and cash equivalents at January 1	195,351	180,329
Effect of exchange rate changes on balances held in foreign currencies	17,467	(10,684)
Cash and cash equivalents at September 30	310,333	206,292
Restricted cash included in cash and cash equivalents	€ 5,507	€ 0

General Information

General Information	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
General Information	Note 1—General Information Ascendis Pharma A/S, together with its subsidiaries, is a biopharmaceutical company applying its innovative TransCon technology to build a leading, fully integrated rare disease company. Ascendis Pharma A/S was incorporated in 2006 and is headquartered in Hellerup, Denmark. Unless the context otherwise requires, references to the “Company,” “we,” “us” and “our” refer to Ascendis Pharma A/S and its subsidiaries. The address of the Company’s registered office is Tuborg Boulevard 12, DK-2900, On February 2, 2015, the Company completed an initial public offering, or IPO, which resulted in the listing of American Depositary Shares, or ADSs, representing the Company’s ordinary shares, under the symbol “ASND” in the United States on The Nasdaq Global Select Market. The Company’s Board of Directors approved these unaudited condensed consolidated interim financial statements on November 28, 2018.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Summary of Significant Accounting Policies	Note 2—Summary of Significant Accounting Policies Basis of Preparation The unaudited condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2017 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board, and as adopted by the European Union. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the condensed consolidated interim financial statements are disclosed in Note 3. Changes in Accounting Policies As of January 1, 2018, the Company has adopted IFRS 9, “Financial Instruments”, which introduces a new impairment model for financial assets measured at amortized cost based on an expected credit loss model, which currently applies to the Company’s bank deposits and trade receivables. The adoption of IFRS 9 had no material impact on the Company’s financial reporting. Further, the Company has adopted IFRS 15, “Revenue from Contracts with Customers”, which establishes a single, comprehensive framework for revenue recognition, based on a five-step model, which applies to the Company’s licensing agreements with multiple activities. IFRS 15 was adopted using the ‘retrospective method with the cumulative effect of initially applying this standard recognized at the date of the initial application’. The adoption of IFRS 15 had no impact on the Company’s financial reporting. Except for the adoption of these two new standards, the accounting policies applied when preparing these condensed consolidated interim financial statements have been applied consistently to all the periods presented, unless otherwise stated and are consistent with those of the Company’s most recent annual consolidated financial statements. A description of our accounting policies is provided in the Accounting Policies section of the audited consolidated financial statements as of and for the year ended December 31, 2017.

Critical Accounting Judgments a

Critical Accounting Judgments and Key Sources of Estimation Uncertainty	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Critical Accounting Judgments and Key Sources of Estimation Uncertainty	Note 3—Critical Accounting Judgments and Key Sources of Estimation Uncertainty In the application of our accounting policies, we are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgments made in the process of applying our accounting policies and that have the most significant effect on the amounts recognized in our unaudited condensed consolidated financial statements relate to revenue recognition, share-based payment, internally generated intangible assets, and joint arrangements / collaboration agreements. The key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year relate to impairment of goodwill and to recognition of accruals for manufacturing and clinical trial activities. There have been no changes to the application of significant accounting estimates, and no impairment losses have been recognized during the first nine months of 2018 or 2017. The unaudited condensed consolidated interim financial statements do not include all disclosures for critical accounting estimates and judgments that are required in the annual consolidated financial statements, and should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2017.

Revenue

Revenue	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Revenue	Note 4—Revenue Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (EUR’000) (EUR’000) Revenue from the rendering of services 20 434 66 1,250 Total revenue 20 434 66 1,250 Revenue from external customers (geographical) USA 20 434 66 1,250 Total revenue 20 434 66 1,250

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Segment Information	Note 5—Segment Information We are managed and operated as one business unit. No separate business areas or separate business units have been identified in relation to product candidates or geographical markets. Accordingly, we do not disclose information on business segments or geographical markets, except for the geographical information on revenue included in Note 4.

Warrants and Share-based Paymen

Warrants and Share-based Payment	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Warrants and Share-based Payment	Note 6—Warrants and Share-based Payment Share-based payment Ascendis Pharma A/S has established warrant programs, equity-settled share-based payment transactions, as an incentive for all our employees, members of our Board of Directors and select external consultants. Warrants are granted by the Board of Directors in accordance with authorizations given to it by the shareholders of Ascendis Pharma A/S. As of September 30, 2018, 6,841,937 warrants had been granted, of which 19,580 warrants have been cancelled, 2,109,602 warrants have been exercised, 2,168 warrants have expired without being exercised, and 229,782 warrants have been forfeited. As of September 30, 2018, our Board of Directors was authorized to grant up to 3,774,375 additional warrants to our employees, board members and select consultants without pre-emptive Warrant Activity The following table specifies the warrant activity during the nine months ended September 30, 2018: Total Weighted Outstanding at December 31, 2017 4,621,154 17.62 Granted during the period 401,125 53.37 Exercised during the period (508,757 ) 11.16 Forfeited during the period (32,717 ) 26.23 Expired during the period — — Outstanding at September 30, 2018 4,480,805 21.49 Vested at the balance sheet date 2,318,357 14.57 Warrant Compensation Costs Warrant compensation costs are determined with basis in the grant date fair value of the warrants granted and recognized over the vesting period. Three Months Ended Nine Months Ended 2018 2017 2018 2017 (EUR’000) (EUR’000) Research and development costs 1,963 894 6,313 3,305 General and administrative expenses 1,922 1,018 6,474 3,618 Total warrant compensation costs 3,885 1,912 12,787 6,923

Share Capital

Share Capital	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Share Capital	Note 7—Share Capital The share capital of Ascendis Pharma A/S consists of 42,032,522 shares at a nominal value of DKK 1, all in the same share class. On February 26, 2018, the Company completed the sale and issuance of 4,539,473 ADSs in a public offering, increasing the Company’s share capital from 36,984,292 shares to 41,523,765 shares. In April and June 2018, an aggregate of 317,825 warrants were exercised, increasing the Company’s share capital from 41,523,765 shares to 41,841,590 shares. In September 2018, an aggregate of 190,932 warrants were exercised, increasing the Company’s share capital from 41,841,590 shares to 42,032,522 shares.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Subsequent Events	Note 8—Subsequent Events On November 8, 2018 the Company announced the formation of Visen Pharmaceuticals, a company established to develop, manufacture and commercialize Ascendis’ endocrinology rare disease therapies in the People’s Republic of China, including Hong Kong, Macau and Taiwan (“Greater China”). In connection with the formation of the company, Ascendis granted Visen Pharmaceuticals exclusive rights to develop and commercialize endocrinology therapeutic products based on our proprietary TransCon technology in Greater China, subject to certain exceptions. As consideration for the rights granted to Visen Pharmaceuticals, Ascendis received 50% ownership in the outstanding shares of Visen Pharmaceuticals and concurrently, entities affiliated with Vivo Capital and Sofinnova Ventures purchased shares in Visen Pharmaceutical for an aggregate purchase price of $40,000,000 in cash. No other events have occurred after the balance sheet date that would have a significant impact on the results or financial position of the Company.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Basis of Preparation	Basis of Preparation The unaudited condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2017 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board, and as adopted by the European Union. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the condensed consolidated interim financial statements are disclosed in Note 3.
Changes in Accounting Policies	Changes in Accounting Policies As of January 1, 2018, the Company has adopted IFRS 9, “Financial Instruments”, which introduces a new impairment model for financial assets measured at amortized cost based on an expected credit loss model, which currently applies to the Company’s bank deposits and trade receivables. The adoption of IFRS 9 had no material impact on the Company’s financial reporting. Further, the Company has adopted IFRS 15, “Revenue from Contracts with Customers”, which establishes a single, comprehensive framework for revenue recognition, based on a five-step model, which applies to the Company’s licensing agreements with multiple activities. IFRS 15 was adopted using the ‘retrospective method with the cumulative effect of initially applying this standard recognized at the date of the initial application’. The adoption of IFRS 15 had no impact on the Company’s financial reporting. Except for the adoption of these two new standards, the accounting policies applied when preparing these condensed consolidated interim financial statements have been applied consistently to all the periods presented, unless otherwise stated and are consistent with those of the Company’s most recent annual consolidated financial statements. A description of our accounting policies is provided in the Accounting Policies section of the audited consolidated financial statements as of and for the year ended December 31, 2017.

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 30, 2018
Text block1 [abstract]
Summary of Segment Revenue	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (EUR’000) (EUR’000) Revenue from the rendering of services 20 434 66 1,250 Total revenue 20 434 66 1,250 Revenue from external customers (geographical) USA 20 434 66 1,250 Total revenue 20 434 66 1,250

Warrants and Share-based Paym_2

Warrants and Share-based Payment (Tables)	9 Months Ended
	Sep. 30, 2018
Summary of Warrant Compensation Cost	Warrant compensation costs are determined with basis in the grant date fair value of the warrants granted and recognized over the vesting period. Three Months Ended Nine Months Ended 2018 2017 2018 2017 (EUR’000) (EUR’000) Research and development costs 1,963 894 6,313 3,305 General and administrative expenses 1,922 1,018 6,474 3,618 Total warrant compensation costs 3,885 1,912 12,787 6,923
Warrants [member]
Summary of Warrant Activity	The following table specifies the warrant activity during the nine months ended September 30, 2018: Total Weighted Outstanding at December 31, 2017 4,621,154 17.62 Granted during the period 401,125 53.37 Exercised during the period (508,757 ) 11.16 Forfeited during the period (32,717 ) 26.23 Expired during the period — — Outstanding at September 30, 2018 4,480,805 21.49 Vested at the balance sheet date 2,318,357 14.57

Revenue - Summary of Segment Re

Revenue - Summary of Segment Revenue (Detail) - EUR (€) € in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disclosure of operating segments [line items]
Revenue from the rendering of services	€ 20	€ 434	€ 66	€ 1,250
Total revenue	20	434	66	1,250
Revenue from external customers (geographical)
Total revenue	20	434	66	1,250
Total revenue	20	434	66	1,250
USA [member]
Disclosure of operating segments [line items]
Total revenue	20	434	66	1,250
Revenue from external customers (geographical)
Total revenue	20	434	66	1,250
Total revenue	€ 20	€ 434	€ 66	€ 1,250

Segment Information - Additiona

Segment Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2018Segment
Disclosure of operating segments [abstract]
Number of reportable segment	1

Warrants and Share-based Paym_3

Warrants and Share-based Payment - Warrant Activity - Additional Information (Detail)	Sep. 30, 2018EUR (€)shares	Sep. 30, 2018EUR (€)shares	Apr. 30, 2018	Jun. 30, 2018	Sep. 30, 2018kr / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Share nominal value | kr / shares					kr 1
Warrants [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Aggregate number of other equity instruments granted	6,841,937
Aggregate number of other equity instruments cancelled | shares	19,580	19,580
Aggregate number of other equity instruments exercised	2,109,602	190,932	317,825	317,825
Aggregate number of other equity instruments expired	2,168
Aggregate number of other equity instruments forfeited	229,782
Number of other equity instruments authorized	3,774,375	3,774,375
Share nominal value | kr / shares					kr 1
Warrants [member] | Bottom of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Exercise price | €	€ 6.48	€ 6.48
Warrants [member] | Top of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Exercise price | €	€ 60.23	€ 60.23

Warrants and Share-based Paym_4

Warrants and Share-based Payment - Schedule of Warrant Activity (Detail) - Warrants [member]	9 Months Ended
	Sep. 30, 2018EUR (€)
Disclosure Of Warrant Activity [Line Items]
Beginning balance	4,621,154
Granted during the period	401,125
Exercised during the period	(508,757)
Forfeited during the period	(32,717)
Expired during the period	0
Ending balance	4,480,805
Vested at the balance sheet date	2,318,357
Beginning balance	€ 17.62
Granted during the period	53.37
Exercised during the period	11.16
Forfeited during the period	26.23
Expired during the period	0
Ending balance	21.49
Vested at the balance sheet date	€ 14.57

Warrants and Share-based Paym_5

Warrants and Share-based Payment - Summary of Warrant Compensation Cost (Detail) - Warrants [member] - EUR (€) € in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total warrant compensation costs	€ 3,885	€ 1,912	€ 12,787	€ 6,923
Research and development cost [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total warrant compensation costs	1,963	894	6,313	3,305
General and administrative expense [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Total warrant compensation costs	€ 1,922	€ 1,018	€ 6,474	€ 3,618

Share Capital - Additional Info

Share Capital - Additional Information (Detail)	Sep. 30, 2018kr / sharesshares	Feb. 26, 2018shares	Sep. 30, 2018kr / sharesshares	Apr. 30, 2018	Jun. 30, 2018shares	Feb. 25, 2018shares
Disclosure of classes of share capital [line items]
Number of shares issued	42,032,522		42,032,522
Share nominal value | kr / shares	kr 1		kr 1
Number of shares issued public offering		4,539,473
Number of shares outstanding	42,032,522	41,523,765	42,032,522		41,841,590	36,984,292
Warrants [member]
Disclosure of classes of share capital [line items]
Share nominal value | kr / shares	kr 1		kr 1
Aggregate number of warrants exercised	2,109,602		190,932	317,825	317,825

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - Visen Pharmaceuticals [member] - Vivo Capital and Sofinnova Ventures [member]	Nov. 08, 2018EUR (€)
Disclosure of non-adjusting events after reporting period [line items]
Ownership percentage	50.00%
Aggregate purchase price	€ 40,000,000