Ascendis Pharma A/S (NASDAQ:ASND) Capital Efficiency Analysis

• Ascendis Pharma's ROIC is -50.64%, significantly lower than its WACC of 6.12%, indicating poor capital efficiency.
• Compared to peers like argenx SE, Apellis Pharmaceuticals, BeiGene, and Blueprint Medicines, Ascendis has one of the highest inefficiencies in capital utilization.
• Despite innovative technology, all companies analyzed, including Ascendis Pharma, struggle to generate returns above their cost of capital.

Ascendis Pharma A/S (NASDAQ:ASND) is a biopharmaceutical company focused on developing therapies for rare diseases. The company uses its proprietary TransCon technology to create long-acting prodrugs. Despite its innovative approach, Ascendis faces challenges in capital efficiency, as seen in its financial metrics.

Ascendis Pharma's ROIC is -50.64%, significantly lower than its WACC of 6.12%. This indicates that the company is not generating sufficient returns to cover its cost of capital. The negative ROIC to WACC ratio of -8.27 further highlights inefficiencies in capital utilization, which is a concern for investors.

In comparison, argenx SE (ARGX) has a ROIC of -4.67% and a WACC of 5.00%, resulting in a ROIC to WACC ratio of -0.93. Although still negative, argenx SE's ratio is the least negative among its peers, suggesting it is closer to covering its cost of capital. This could indicate a relatively better performance in capital efficiency.

Apellis Pharmaceuticals, Inc. (APLS) and BeiGene, Ltd. (BGNE) also show negative ROICs of -29.46% and -9.31%, respectively. Their WACC figures are 7.65% and 7.25%, leading to ROIC to WACC ratios of -3.85 and -1.28. These figures suggest that both companies face challenges in generating returns that exceed their cost of capital.

Blueprint Medicines Corporation (BPMC) has a ROIC of -17.59% and a WACC of 8.44%, resulting in a ROIC to WACC ratio of -2.09. This indicates inefficiencies in capital utilization, similar to its peers. Overall, the analysis shows that all companies, including Ascendis Pharma, are struggling to generate returns that cover their cost of capital.