P2YP2Y
Exhibit 99.1
ASCENDIS PHARMA A/S
INDEX TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
    
Page
  
Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income / (Loss) for the Three and Six Months Ended June 30, 2021 and 2020
      2  
Unaudited Condensed Consolidated Interim Statements of Financial Position as of June 30, 2021 and December 31, 2020
      3  
Unaudited Condensed Consolidated Interim Statements of Changes in Equity at June 30, 2021 and 2020
      4  
Unaudited Condensed Consolidated Interim Cash Flow Statements for the Six Months Ended June 30, 2021 and 2020
      5  
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
      6  
 
1
Unaudited Condensed Consolidated Interim Statements of Profit or Loss
and Comprehensive Income / (Loss) for the Three and Six Months Ended June 30
 
           
Three Months Ended

June 30
    
Six Months Ended
June 30
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Notes
     
2021
    
2020
    
2021
    
2020
  
           
(EUR’000)
    
(EUR’000)
  
Consolidated Interim Statement of Profit or Loss
                                          
Revenue
   
 
5
 
      1,022       1,436       1,767       3,661  
Research and development costs
   
 
7
 
      (83,306 )      (63,578 )      (171,455 )      (121,093 ) 
Selling, general and administrative expenses
   
 
7
 
      (35,345 )      (20,805 )      (72,591 )      (38,720 ) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Operating profit / (loss)
            
 
(117,629
) 
  
 
(82,947
) 
  
 
(242,279
) 
  
 
(156,152
) 
Share of profit / (loss) of associate
               (4,817 )      (1,885 )      23,289       (3,400 ) 
Finance income
               145       86       23,268       1,996  
Finance expenses
               (12,141 )      (10,292 )      (1,703 )      (876 ) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Profit / (loss) before tax
            
 
(134,442
) 
  
 
(95,038
) 
  
 
(197,425
) 
  
 
(158,432
) 
Tax on profit / (loss) for the period
               68       106       259       183  
             
 
 
    
 
 
    
 
 
    
 
 
  
Net profit / (loss) for the period
            
 
(134,374
) 
  
 
(94,932
) 
  
 
(197,166
) 
  
 
(158,249
) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Attributable to owners of the Company
               (134,374 )      (94,932 )      (197,166 )      (158,249 ) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted earnings / (loss) per share
               €(2.50 )      €(1.97 )      €(3.66 )      €(3.29 ) 
Number of shares used for calculation (basic and diluted)
 (1)
               53,848,166       48,207,661       53,804,300       48,096,749  
             
 
 
    
 
 
    
 
 
    
 
 
  
       
           
(EUR’000)
    
(EUR’000)
  
Consolidated Interim Statement of Comprehensive Income
                                          
Net profit / (loss) for the period
            
 
(134,374
) 
  
 
(94,932
) 
  
 
(197,166
) 
  
 
(158,249
) 
Other comprehensive income / (loss)
                                          
Items that may be reclassified subsequently to profit or loss:
                                          
Exchange differences on translating foreign operations
               77       (147 )      1,765       (61 ) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Other comprehensive income / (loss) for the period, net of tax
            
 
77
 
  
 
(147
) 
  
 
1,765
 
  
 
(61
) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Total comprehensive income / (loss) for the period, net of tax
            
 
(134,297
) 
  
 
(95,079
) 
  
 
(195,401
) 
  
 
(158,310
) 
             
 
 
    
 
 
    
 
 
    
 
 
  
Attributable to owners of the Company
               (134,297 )      (95,079 )      (195,401 )      (158,310 ) 
             
 
 
    
 
 
    
 
 
    
 
 
  
 
(1)
A total of 6,065,823 warrants outstanding as of June 30, 2021 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 5,788,390 warrants outstanding as of June 30, 2020 are also considered antidilutive for the periods presented and have not been included in the calculation.
 
2
Unaudited Condensed Consolidated Interim Statements of Financial Position
 
    
Notes
     
June 30,
2021
     
December 31,
2020
  
           
(EUR’000)
  
Assets
                           
Non-current
assets
                           
Intangible assets
               5,495        5,717  
Property, plant and equipment
               123,924        108,112  
Investment in associate
               45,783        9,176  
Deposits
               1,702        1,375  
Marketable securities
   
 
8
 
      90,693        115,280  
             
 
 
     
 
 
  
             
 
267,597
 
   
 
239,660
 
             
 
 
     
 
 
  
Current assets
                           
Trade receivables
               394        387  
Other receivables
               11,398        6,957  
Prepayments
               21,826        13,994  
Marketable securities
   
 
8
 
      166,094        134,278  
Cash and cash equivalents
               384,539        584,517  
             
 
 
     
 
 
  
             
      
584,251
 
   
 
740,133
 
             
 
 
     
 
 
  
Total assets
            
 
851,848
 
   
 
979,793
 
             
 
 
     
 
 
  
Equity and liabilities
                           
Equity
                           
Share capital
   
 
9
 
      7,237        7,217  
Distributable equity
               680,250        831,494  
             
 
 
     
 
 
  
             
 
687,487
 
   
 
838,711
 
             
 
 
     
 
 
  
Non-current
liabilities
                           
Lease liabilities
   
 
10
 
      94,059        85,116  
Other payables
               —          3,162  
             
 
 
     
 
 
  
             
 
94,059
 
   
 
88,278
 
             
 
 
     
 
 
  
Current liabilities
                           
Lease liabilities
   
 
10
 
      6,950        6,859  
Contract liabilities
               145        363  
Trade payables and accrued expenses
               44,207        21,897  
Other payables
               18,623        23,384  
Income taxes payable
               377        301  
             
 
 
     
 
 
  
             
 
70,302
 
   
 
52,804
 
             
 
 
     
 
 
  
Total liabilities
            
 
164,361
 
   
 
141,082
 
             
 
 
     
 
 
  
Total equity and liabilities
            
 
851,848
 
   
 
979,793
 
             
 
 
     
 
 
  
 
3
Unaudited Condensed Consolidated Interim Statements of Changes in Equity
 
  
 
 
  
Distributable Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Share
Capital
 
  
Share
Premium
 
  
Foreign
Currency
Translation
Reserve
 
 
Share-based
Payment
Reserve
 
  
Accumulated
Deficit
 
 
Total
 
 
 
 
 
 
  
(EUR’000)
 
Equity at January 1, 2021
   
 
7,217
 
   
 
1,728,747
 
   
 
(76
) 
  
 
133,101
 
   
 
(1,030,278
) 
  
 
838,711
 
Loss for the period
      —          —          —         —          (197,166 )   
 
(197,166
) 
Other comprehensive income / (loss), net of tax
      —          —          1,765       —          —      
 
1,765
 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
Total comprehensive income / (loss)
   
 
—  
 
   
 
—  
 
   
 
1,765
 
  
 
—  
 
   
 
(197,166
) 
  
 
(195,401
) 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
Transactions with Owners
                                                    
Share-based payment (Note 7)
     
—  
 
     
—  
 
     
—  
 
     39,396  
  
   —      
 
39,396
 
Capital increase
      20        4,761        —         —          —      
 
4,781
 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
Equity at June 30, 2021
   
 
 
 
 
 
 
 
 
7,237
 
  
 
 
1,733,508
 
  
 
 
1,689
 
  
 
 
 
 
 
172,497
 
     
(1,227,444
) 
  
 
 
687,487
 
       
 
  
 
 
  
Distributable Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Share
Capital
 
  
Share
Premium
 
  
Foreign
Currency
Translation
Reserve
 
 
Share-based
Payment
Reserve
 
  
Accumulated
Deficit
 
 
Total
 
 
 
 
 
 
  
(EUR’000)
 
Equity at January 1, 2020
   
 
6,443
 
   
 
1,122,097
 
   
 
(34
) 
  
 
79,931
 
   
 
(611,323
) 
  
 
597,114
 
Loss for the period
      —          —          —         —          (158,249 )   
 
(158,249
) 
Other comprehensive income / (loss), net of tax
      —          —          (61 )      —          —      
 
(61
) 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
Total comprehensive income / (loss)
      —          —       
 
(61
) 
     —       
 
(158,249
) 
  
 
(158,310
) 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
Transactions with Owners
                                                    
Share-based payment (Note 7)
      —          —          —         28,364        —      
 
28,364
 
Capital increase
      48        9,928        —         —          —      
 
9,976
 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
Equity at June 30, 2020
   
 
6,491
 
   
 
1,132,025
 
   
 
(95
) 
  
 
108,295
 
   
 
(769,572
) 
  
 
477,144
 
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
 
4
Unaudited Condensed Consolidated Interim Cash Flow Statements for the
Six Months Ended June 30
 
    
Six Months Ended
June 30,
  
    
2021
    
2020
  
    
(EUR’000)
  
Operating activities
                 
Net profit / (loss) for the period
   
 
(197,166
) 
  
 
(158,249
) 
Reversal of finance income
      (23,268 )      (1,996 ) 
Reversal of finance expenses
      1,703       876  
Reversal of tax charge
      (259 )      (183 ) 
Adjustments for
non-cash
items:
                 
Reversal of
non-cash
consideration relating to revenue
      (1,155 )      (2,215 ) 
Reversal of share of profit / (loss) of associate
      (23,289 )      3,400  
Share-based payment
      39,396       28,364  
Depreciation
      7,112       4,192  
Amortization
      222       —    
Changes in working capital:
                 
Receivables
      (4,035 )      (944 ) 
Prepayments
      (7,832 )      (5,385 ) 
Contract liabilities (deferred income)
      (218 )      (858 ) 
Trade payables and other payables
      10,902       8,008  
    
 
 
    
 
 
  
Cash flows generated from / (used in) operations
   
 
(197,887
) 
  
 
(124,990
) 
Finance income received
      1,915       1,776  
Finance expenses paid
      (699 )      (798 ) 
Income taxes re
c
eived / (paid)
      (149 )      615  
    
 
 
    
 
 
  
Cash flows from / (used in) operating activities
   
 
(196,820
) 
  
 
(123,397
) 
    
 
 
    
 
 
  
Investing activities
                 
Investment in associate
      (10,187 )      —    
Acquisition of property, plant and equipment
      (7,607 )      (10,725 ) 
Development expenditures (software)
      (530 )      (311 ) 
Purchase of marketable securities
      (76,358 )      (233,446 ) 
Settlement of marketable securities
      75,600       —    
    
 
 
    
 
 
  
Cash flows from / (used in) investing activities
   
 
(19,082
) 
  
 
(244,482
) 
    
 
 
    
 
 
  
Financing activities
                 
Payment of principal portion of lease liabilities
      (3,371 )      (2,306 ) 
Proceeds from exercise of warrants
      4,782       9,976  
    
 
 
    
 
 
  
Cash flows from / (used in) financing activities
   
 
1,411
 
  
 
7,670
 
    
 
 
    
 
 
  
Increase / (decrease) in cash and cash equivalents
   
 
(214,491
) 
  
 
(360,209
) 
    
 
 
    
 
 
  
Cash and cash equivalents at January 1
      584,517       598,106  
Effect of exchange rate changes on balances held in foreign currencies
      14,513       2,708  
    
 
 
    
 
 
  
Cash and cash equivalents at June 30
   
 
384,539
 
  
 
240,605
 
    
 
 
    
 
 
  
Cash and cash equivalents include:
                 
Bank deposits
      383,073       183,153  
Short-term marketable securities
      1,466       57,452  
    
 
 
    
 
 
  
Cash and cash equivalents at June 30
   
 
384,539
 
  
 
240,605
 
    
 
 
    
 
 
  
 
5
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 1—General Information
Ascendis Pharma A/S, together with its subsidiaries, is a biopharmaceutical company applying its innovative TransCon technologies to build a leading, fully integrated biopharmaceutical 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,
Hellerup, Denmark.
On February 2, 2015, the Company completed an initial public offering 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 August 25, 2021.
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 annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2020 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 accounting policies applied are consistent with those of the previous financial year. 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, 2020.
The preparation of financial statements in conformity with IFRS requires the use of certain significant accounting estimates and requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the unaudited condensed consolidated interim financial statements are disclosed in Note 3.
New and Amended IFRS Standards Adopted by the Company
Several new amendments and interpretations became applicable for the current reporting period, but do not have an impact on the accounting policies applied by the Company.
 
6
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
 
Note 3—Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In the application of the Company’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. Judgements and estimates applied are based on historical experience and other factors that are relevant, and which are available at the reporting date. Uncertainty concerning judgements and estimates could result in outcomes, that require a material adjustment to assets and liabilities in future periods.
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. While the application of significant accounting estimates is subject to material estimation uncertainties, management’s ongoing revisions of significant accounting estimates have not revealed any material impact in the consolidated interim statements of profit or loss for any of the periods presented.
The unaudited condensed consolidated interim financial statements do not include all disclosures for significant accounting judgements, estimates and assumptions, that are required in the annual consolidated financial statements, and therefore, should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2020.
Significant judgements made in the process of applying our accounting policies and that have the most significant effect on the amounts recognized in the unaudited condensed consolidated interim financial statements relate to revenue recognition, share-based payment, internally generated intangible assets related to drug development, classification of collaboration agreements and recognition principles related to
pre-launch
inventories. For the six months ended June 30, 2021, the Company has for the first time, in connection with determining the grant date fair value of warrants and accordingly, warrant compensation costs, applied its own share price as input for expected volatility. Details are provided in section “Warrant Compensation Costs”. Until December 31, 2020, the expected volatility was calculated using a simple average of daily historical data of comparable publicly traded companies, as the Company did not have sufficient data for the volatility of the Company’s own share price.
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, primarily relate to recognition and measurement of accruals and prepayments for manufacturing and clinical trial activities.
Other than as set out below, there have been no other changes to the application of significant accounting judg
e
ments, or estimation uncertainties regarding accounting estimates compared to December 31, 2020.
Warrant Compensation Costs
IFRS 2, “Share-Based Payment” requires an entity to reflect in its consolidated statement of profit or loss and financial position, the effects of share-based payment transactions. Warrant compensation costs are recognized over the vesting period as research and development costs or selling, general and administrative expenses, as appropriate, based on management’s best estimate of the number of warrants that will ultimately vest, which is subject to uncertainty.
Warrant compensation costs are measured according to the grant date fair values of the warrants granted. Estimating fair values requires the Company to apply generally accepted valuation models and apply these models consistently according to the terms and conditions of the specific warrant program. Under all warrant programs, the Black-Scholes option-pricing model has been applied to determine the fair value of warrants granted. Subjective judgements and assumptions, which are subject to estimation uncertainties, need to be exercised in determining the appropriate input to the valuation model. These inputs include expected volatility of the Company’s share price for a historic period equaling the expected lifetime of the warrants, reflecting the assumption that the historical volatility over a period similar to the life of the warrants is indicative of future trends. For the six months ended June 30, 2021, the expected volatility has been calculated using the Company’s own share price.
 
7
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
 
Note 4—Significant Events in the Reporting Period
Impact from
COVID-19
pandemic
A novel strain of coronavirus,
(“COVID-19”)
was reported to have surfaced in Wuhan, China, in December 2019. Since then, COVID-19 has spread around the world into a pandemic, including into countries where we are operating, where we have planned or have ongoing clinical trials, and where we rely on third-parties to manufacture preclinical and clinical supplies, as well as commercial supply.
We monitor these risks closely, and work with relevant stakeholders to avoid disruptions, and to develop and establish working measures. However, while
COVID-19
continues to impact global societies, the uncertainty related to the duration and direction of the pandemic makes the future impact from
COVID-19,
including the magnitude of any impact on our operational results, highly uncertain and unpredictable. At the reporting date,
COVID-19
did not have a direct impact on the
consolidated
interim financial statements
.
VISEN Pharmaceuticals Investment
On January 8, 2021, the Company entered into an equity investment of $12.5 million in its associate, VISEN Pharmaceuticals, or VISEN, as part of VISEN’s $150 million Series B financing. Following VISEN’s Series B financing, the Company retains approximately 44% of VISEN’s issued and outstanding shares. As a result, the Company has recognized a
non-cash
gain in the first quarter of 2021 of €42.3 million, which is presented as part of “Share of profit / (loss) of associate” in the consolidated interim statement of profit or loss. The Series B financing has not changed the Company’s accounting treatment of VISEN.
Note 5—Revenue
The Company’s revenue is primarily generated from three license agreements, which were entered into in 2018. The licenses grant VISEN exclusive rights to develop and commercialize TransCon hGH, TransCon PTH and TransCon CNP in Greater China. As consideration for the granting of such rights, the Company has received
up-front,
non-refundable,
non-cash
consideration of $40.0 million in the form of 50% ownership in VISEN. At the reporting date, the Company retains approximately 44% of VISEN’s issued and outstanding shares.
Consideration received is recognized partly as license revenue, and partly as rendering of services over time. In addition to granting exclusive rights, the Company will provide clinical trial supply and development services to VISEN.
 
 
  
Three Months Ended
June 30,
 
  
Six Months Ended
June 30,
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
2021
 
  
2020
 
  
2021
 
  
2020
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
(EUR’000)
 
  
(EUR’000)
 
Revenue from external customers
  
  
  
  
Revenue from the rendering of services (recognized over time)
      226        779        395        2,091  
Sale of clinical supply (recognized at a point in time)
      217        —          217        246  
“Right-to-use”
licenses (recognized at a point in time)
      579        657        1,155        1,324  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total revenue
(1)
   
 
1,022
 
   
 
1,436
 
   
 
1,767
 
   
 
3,661
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Attributable to
                                    
VISEN Pharmaceuticals
      913        1,436        1,550        3,661  
Other collaboration partners
      109        —          217        —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Total revenue
   
 
1,022
 
   
 
1,436
 
   
 
1,767
 
   
 
3,661
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Revenue by geographical location
                                    
North America
      688        657        1,373        1,324  
China
      334        779        394        2,337  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total revenue
   
 
1,022
 
   
 
1,436
 
   
 
1,767
 
   
 
3,661
 
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
 
For the three months ended June 30, 2021 and 2020, and for the six months ended June 30, 2021 and 2020, “Total revenue” includes recognition of previously deferred revenue/internal profit from associate of €579 thousand and €1,013 thousand, and of €1,155 thousand and €2,215 thousand, respectively.
Note 6—Segment Information
The Company is 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, no additional information on business segments or geographical areas is disclosed.
 
8
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
 
Note 7—Warrants and Share-based Payment
Share-based
Payment
Ascendis Pharma A/S has established warrant programs and equity-settled share-based payment transactions, as an incentive for all its employees, members of its Board of Directors and select external consultants.
Warrants are granted by the Company’s Board of Directors in accordance with authorizations given to it by the shareholders of the Company. As of June 30, 2021, 11,023,308 warrants have been granted, of which 19,580 warrants have been cancelled, 4,327,249 warrants have been exercised, 2,168 warrants have expired without being exercised, and 608,488 warrants have been forfeited. As of June 30, 2021, the Company’s Board of Directors was authorized to grant up to 2,603,979 additional warrants to employees, board members and select consultants without preemptive subscription rights for the shareholders of the Company. Each warrant carries the right to subscribe for one ordinary share of a nominal value of DKK 1. The exercise price is fixed at the fair market value of the Company’s ordinary shares at the time of grant as determined by the Company’s Board of Directors. The exercise prices of outstanding warrants under the Company’s warrant programs range from €6.48 to €145.5 depending on the grant dates. Vested warrants may be exercised in two or four annual exercise periods. Apart from exercise prices and exercise periods, the programs are similar.
Warrant Activity
The following table specifies the warrant activity during the six months ended June 30, 2021:
 
 
  
Total

Warrants
 
 
Weighted Average
Exercise Price
EUR
 
     
                                
      
                                
  
Outstanding at January 1, 2021
   
 
6,148,004
 
   
 
69.97
 
    
 
 
     
 
 
  
Granted during the period
      158,590        120.15  
Exercised during the period
      (150,604 )       33.51  
Forfeited during the period
      (90,167 )       121.80  
    
 
 
    
 
 
  
Outstanding at June 30, 2021
   
 
6,065,823
 
   
 
71.04
 
    
 
 
     
 
 
  
Vested at June 30, 2021
   
 
3,565,573
 
   
 
46.23
 
    
 
 
     
 
 
  
 
Warrant Compensation Costs
Warrant compensation costs are determined with a basis in the grant date fair value of the warrants granted and recognized over the vesting period as research and development costs or as selling, general and administrative expenses. For the three months ended June
30
, 2021 and 2020, and for the six months ended June 30, 2021 and 2020, warrant compensation costs recognized in the consolidated interim statement of profit or loss was €16,320 thousand and €13,415 thousand, and €39,396 thousand and €28,364 thousand, respectively.
 
9
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
 
Note 8—Marketable Securities
Marketable securities are measured at amortized cost, and fair values are determined based on quoted market prices (Level 1 in the fair value hierarchy).
The composition of the portfolio is specified in the following table
.
 
 
  
June 30, 2021
 
  
December 31, 2020
 
 
  
Carrying amount
 
  
Fair value
 
  
Carrying amount
 
  
Fair value
 
 
  
(EUR’000)
 
Marketable securities
  
      
  
      
  
      
  
      
U.S. Treasury bills
      —          —          46,243        46,245  
U.S. Government bonds
      85,049        85,049        62,088        62,101  
Commercial papers
      8,832        8,833        10,583        10,581  
Corporate bonds
      144,830        144,734        121,282        121,234  
Agency bonds
      18,076        18,077        9,362        9,369  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total marketable securities
   
 
256,787
 
   
 
256,693
 
   
 
249,558
 
   
 
249,530
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Classified based on maturity profiles
                                    
Non-current
assets
      90,693        90,623        115,280        115,277  
Current assets
      166,094        166,070        134,278        134,253  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total marketable securities
   
 
256,787
 
   
 
256,693
 
   
 
249,558
 
   
 
249,530
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Specified by rate structure
                                    
Fixed rate
      231,342        231,249        175,757        175,732  
Floating rate
      16,613        16,611        16,975        16,972  
Zero-coupon
      8,832        8,833        56,826        56,826  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total marketable securities
   
 
256,787
 
   
 
256,693
 
   
 
249,558
 
   
 
249,530
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Specified by investment grade credit rating
                                    
Prime
      6,398        6,398        7,716        7,714  
High grade
      127,690        127,678        142,339        142,352  
Upper medium grade
      119,785        119,706        99,503        99,464  
Lower medium grade
      2,914        2,911        —          —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Total marketable securities
   
 
256,787
 
   
 
256,693
 
   
 
249,558
 
   
 
249,530
 
    
 
 
     
 
 
     
 
 
     
 
 
  
 
The Company’s marketable securities are all denominated in U.S. Dollars. At June 30, 2021, the portfolio has a weighted average duration of 6.6 and 17.5 months, for current and
non-current
positions, respectively. The entire portfolio has a weighted average duration of 10.4 months.
All marketable securities have investment grade ratings, and accordingly, the risk from probability of default is low. The risk of expected credit loss over marketable securities has been considered, including the hypothetical impact arising from the probability of default which is considered in conjunction with the expected loss given default from securities with similar credit ratings and attributes. This assessment did not reveal a material expected credit loss, and accordingly, no provision for expected credit loss has been recognized.
 
10
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
 
Note 9—Share Capital
The share capital of Ascendis Pharma A/S consists of 53,900,990 outstanding shares at a nominal value of DKK 1, all in the same share class.
Note 10 —Lease Liabilities
The Company primarily leases office and laboratory facilities. Lease arrangements contain a range of different terms and conditions and are typically entered into for fixed periods. Generally, the lease terms are determined according to the
non-cancellable
period and are between two and twelve years. In addition, in order to improve flexibility to the Company’s operations, lease terms may provide the Company with options to extend the lease or to terminate the lease within the enforceable lease term. In the Company’s current lease portfolio, extension and termination options range between two to ten years, in addition to the
non-cancellable
period.
Maturity analysis for lease liabilities recognized in the consolidated statements of financial position at June 30, 2021 is specified below.
 
     
                         
      
                         
      
                         
      
                         
      
                         
  
 
  
< 1 year
 
  
1-5 years
 
  
>5 years
 
  
Total
contractual
cash-flows
 
  
Carrying
amount
 
 
  
(EUR’000)
 
June 30, 2021
  
      
  
      
  
      
  
      
  
      
Lease liabilities
      7,051        45,162        71,397        123,610        101,009  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total lease liabilities
   
 
7,051
 
   
 
45,162
 
   
 
71,397
 
   
 
123,610
 
   
 
101,009
 
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
Note 11—Subsequent Events
O
n August 25, 2021, the Company announced that the U.S. Food and Drug Administration, or FDA, has approved SKYTROFA (lonapegsomatropin-tcgd) for the treatment of pediatric patients one year and older who weigh at least 11.5 kg (25.4 lb) and have growth failure due to inadequate secretion of endogenous growth hormone (GH). In order to accommodate market demands, the Company has initiated manufacturing of inventories prior to obtaining marketing approval, or pre-launch inventories, for SKYTROFA. However, since pre-launch inventories are not realizable prior to obtaining marketing approval, pre-launch inventories are immediately written down to zero through research and development costs. As a result of the marketing approval received on August 25, 2021, the Company will reverse prior periods’ write-downs of pre-launch inventories through research and development costs, at the lower of cost and net-realizable value. Subsequent to the reporting date, reversal of prior periods’ write-downs is expected to have a positive impact on research and development costs of approximately €
50
 million.
No other events have occurred after the reporting date that would influence the evaluation of these unaudited condensed consolidated interim financial statements.
 
11