Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) Q1 2024 Earnings Call Transcript

Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) Q1 2024 Earnings Call Transcript May 2, 2024

Ultragenyx Pharmaceutical Inc. misses on earnings expectations. Reported EPS is $-2.02505 EPS, expectations were $-1.72. RARE isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon, and welcome to the Ultragenyx First Quarter 2024 Financial Results Conference Call. [Operator Instructions] It is now my pleasure to turn the call to Joshua Higa, Vice President of Investor Relations. You may begin.

Joshua Higa: Thank you. We have issued a press release detailing our financial results, which you can find on our website at ultragenyx.com. Joining me on this call are Emil Kakkis, Chief Executive Officer and President, Erik Harris, Chief Commercial Officer; Howard Horn, Chief Financial Officer; and Eric Crombez, Chief Medical Officer. I’d like to remind everyone that during today’s call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties and our actual results may differ materially. Please refer to the risk factors discussed in our latest SEC filings. I’ll now turn the call over to Emil.

Emil Kakkis: Thanks, Josh, and good afternoon, everyone. This is the year that we’re harvesting the exciting results of multiple years of focused execution across our key clinical programs, and we’ve shared a lot of meaningful data already this year. At the World Symposium meeting in February, we presented positive biomarker and long-term cognition data from our UX-111 gene therapy in Sanfilippo syndrome. The data showed the treatment resulted in rapid and sustained reduction of CSF heparan sulfate and that this was correlated with improved long term cognitive development. We also participated in a workshop on the heparan sulfate biomarker hosted by the Reagan-Udall Foundation. This workshop brought together FDA representatives, patient advocates, scientists and industry leaders to discuss the overwhelming body of data supporting the use of CSF heparan sulfate as a biomarker to enable accelerated approval in neuronopathic MPS diseases.

The support of Peter Marks and the FDA in recognizing this biomarker as a surrogate endpoint to support accelerated approval would be a profound benefit for the MPS communities and companies working on these diseases and really to all companies working on gene therapies or other type precision medicines. Shifting to setrusumab, just this week, we announced that we’ve completed enrollment in our Phase II/III Orbit study and our Phase III COSMIC study in osteogenesis imperfecta. The Phase II data presented late last year was clearly compelling for the study investigators that led to accelerated interest and enrollment in the program. Two weeks ago, we announced strong positive interim data from the Phase I/II study of GTX-102 in Angelman syndrome.

The interim data we shared confirmed in a larger body of data that GTX-102 can fundamentally change the development trajectory of Angelman patients. Importantly, the magnitude of the effect across all domains and expansion cohorts was found to be similar or greater than what we observed previously with the dose escalation cohorts. Ongoing treatment with GTX-102 resulted in continuous and sustained improvement of these patients as evidenced by the long-term data in the dose escalation cohorts, and we’ve demonstrated the safety profile can be successfully managed. This Phase I/II study is valuing the most severe Angelman syndrome patients, those with genetic deletions, where there’s typically no improvement on the Bayley scale. This has been observed in both natural history and placebo-controlled studies.

For example, our recent Angelman clinical study after one year, their placebo group showed only a 0.8-point improvement in Bayley-III cognition score. What we saw in our study was a 5-point improvement in the Bayley-4 score beginning as early as day 170 in dose expansion cohorts and almost doubled that at one year in the dose escalation cohorts. We also saw that this improvement continued through day 758 in the dose escalation cohorts. The magnitude of the change we observed with the Bayley was further supported in multiple other assessments, including Angelman severity assessments and the aberrant behavior checklist. The improvements in domain of sleep and behavior or hyperactivity at day 170 were better than what we saw after a year or more in the prior cohorts.

Families also talked about their kids being calmer, more attentive, more aware of the world around them. This allowed greater independence across multiple facets of development like eating, sleeping, and mobility. The improvements in cognition and motor function really came across in the videos that we showed on April 15th call. The patient was able to solve puzzles and navigate more challenging walking paths, which provide a small real-world sample of the significant changes we’re seeing in the charts and graphs. The combination of improvements across cognition, receptive communication and motor function provides a real sense of the potentially transformative nature of this therapy. The Multi-domain Responder Index or MDRI also resonate with physicians and families.

The MDRI brings all the domain of movement across the study population together and is a great way to look at changes across the individual patients for a heterogeneous patient group. MDRI analysis across the four domains of cognition, receptors, communication, behavior and sleep resulted in statistically significant media improvement of two domains across all cohorts at this early time point of day 170. Further, the majority of the patients in the expansion cohorts achieved improvements in at least two and up to all four domains. Importantly, the data we presented show that GTX-102 has a tolerable safety profile. Lower extremity weakness is now a rare, well understood transient event that occurred in two out of 53 patients in extension cohorts who had completed the loading phase.

Both patients were in the Cohort A and B and no events observed in Cohort C through E. The events were classified as mild and moderate and all resolved quickly with the patient remaining in the study. Six earlier patients with this safety issue from the beginning of the study are all on chronic dosing and received multiple doses without any issues. Given our understanding of this issue and recent feedback from regulators, we’re comfortable that the current safety profile is acceptable and manageable, and we’ll continue providing routine safety updates only with our efficacy updates. We’ve heard strong enthusiasm from KOLs over the past couple of weeks, including those reviewed by our analysts, some of you might be on the call. These treating physicians expressed comfort with the safety profile and the route administration of these patient population and the broad agreement that treatment with GTX-102 resulted in clearly meaningful efficacy in these patients, where you just don’t typically see any improvements.

With all this put together, we have a strong product candidate and plan for Phase III development. We’re confident this product candidate has the potential to be a transformative treatment for patients with Angelman syndrome. Now, I’ll turn the call over to our Chief Commercial Officer, Erik Harris, to provide an update on our commercial efforts that led to another successful quarter.

Erik Harris: Thank you, Emil, and good afternoon, everyone. I’ll start with Crysvita’s performance in North America. I want to remind everyone that Kyowa Kirin has been responsible for driving Crysvita’s revenue in North America since the transition in April of last year. We have continued to augment their efforts through additional field support to ensure a smooth transition, maintain patient continuity and help them generate additional start forms. The demand for Crysvita in the U.S. remained strong in Q1 2024. Approximately 60% of the start forms came from adult patients prescribed by community physicians, resulting in nearly 70 new prescribers in the quarter. This is encouraging given adult penetration is in the low 20s, and this implies Crysvita has ample room to continue growing.

As it is typical, this quarter had some seasonality as patients work through the reauthorization process with their insurance providers at the beginning of the year. We are confident in our full year U.S. revenue projections given the strength of the underlying demand. Shifting to Crysvita in Latin America, where we lead commercialization. Our team delivered another successful quarter in Latin America by adding approximately 50 new patients to Crysvita, totaling over 550 patients on reimbursed therapy since launch. While Brazil drove more than 60% of Crysvita’s Latin America revenue in Q1 2024, We also saw a significant uptick from Argentina and Mexico. We are particularly excited about Mexico, the second largest market in Latin America, which recently cleared all pediatric and adult reimbursement hurdles.

IMSS, Mexico’s largest payer, approved Cyysvita for pediatric patients in about two years versus the three to five years it usually takes for such approval. This recognizes the value they see for Crysvita in pediatric patients. Our team is now busy getting Crysvita on local hospital formularies to expedite reimbursement for these patients. As I mentioned on previous earnings calls, we expect quarter-to-quarter variability in Latin America revenue driven by uneven ordering patterns, but remain confident in the underlying demand growth for our products. Moving on to Dojolvi. Growth of new start forms remained strong. In the U.S., we added over 30 start forms and 15 patients on reimbursed therapy, resulting in over 485 reimbursed patients since launch, with approximately a 65 to 35 split between pediatric and adult patients.

The number of new prescribers continued to grow, adding approximately 10 new prescribers in Q1 2024. As you know, Dojolvi has not yet been approved by the European Medicines Agency. So, across Europe and the EMEA region, Dojolvi is driven by named patient sales request. Approximately 200 patients are treated under MPS across 12 countries as of the first quarter. The majority of demand is from France, but we are receiving increasing requests from other countries within the EMEA region. 2024 is an important launch year for Evkeeza. As of Q1 2024, we are treating nearly 100 patients in EMEA through MPS and regular reimbursement processes where we have approval. We expect to launch Evkeeza in more EMEA countries in 2024. In Canada, we started enrolling patients in our hub after Health Canada’s approval last year.

Our next step is to secure reimbursement agreements with public payer authorities in late 2024 or early 2025. The team is also working closely with private payers to secure reimbursement in 2024 for enrolled patients who have insurance through these private plans. In Japan, we received the regulatory approval in January and pricing and reimbursement approval in April. The launch is underway. The HoFH physician and patient community in Japan is very excited about Evkeeza. We started to receive start forms in our hub, and we expect a robust launch in 2024 as we continue to educate physicians and patients on the benefits of the Evkeeza label for appropriate patients. Overall, Q1 2024 was a strong quarter for Ultragenyx, generating $109 million in revenue.

Given the strong underlying demand for our four commercial products across all regions and the upcoming Evkeeza launches, we remain confident in delivering our 2024 revenue guidance. With that, I’ll turn the call to Howard to share more details on our financial results for the quarter.

Howard Horn: Thanks, Erik, and good afternoon, everyone. I’ll briefly summarize our financials that were reported in our press release earlier today. As Erik noted, we reported $109 million in total revenue for the first quarter of 2024. Crysvita contributed $83 million including $40 million from North America, $36 million from Latin America and Turkey, and $6 million from Europe. Crysvita net sales and underlying patient demand continued to grow meaningfully compared to the prior year, including in North America. As a reminder, since the transition of North American commercial responsibilities to KKC in April 2023 and going forward, our revenue in the region shifted from a profit share to a royalty. This is calculated using annual revenue tiers based on net sales with royalties ranging from the mid-20s up to 30%.

As a result, our first quarter revenue started at the low end of the royalty range, and we expect the blended rate for the full year to be at the upper end of the range. With the increasing royalty rate and growing underlying demand, we expect North American Crysvita quarterly revenue to meaningfully increase throughout the year. Dojolvi revenue in the Q1 was $16 million and Mepsevii revenue in the first quarter was $7 million. Our total operating expenses in the Q1 were $274 million, which included R&D expenses of $178 million SG&A expenses of $78 million and cost of sales of $18 million. Operating expenses included non-cash stock-based compensation of $37 million. In the first quarter, net loss was $171 million or $2.03 per share. As of March 31, 2024, we had $569 million in cash, cash equivalents and marketable securities.

In the first quarter, net cash used in operations was $191 million. The first quarter of the year is typically a larger use of cash than the other three quarters because it includes items like the payment of annual bonuses. This quarter also ended with a relatively high accounts receivable balance due to the timing of receipts from our commercial activity. Importantly, our guidance for 2024 net cash used in operations remains unchanged from what we provided last quarter and is expected to be less than $400 million for the year. We are also reaffirming our 2024 revenue guidance ranges. Total revenue is expected to be between $500 million and $530 million which represents 15% to 22% growth versus 2023. Crysvita revenue is expected to be between $375 million and $400 million which includes all regions and all forms of Crysvita revenue to Ultragenyx.

Specifically, it includes Crysvita product revenue from Latin America and Turkey and the cash and non-cash royalties from North America and Europe. Our Crysvita guidance range represents 14% percent to 22% growth versus 2023. Dojolvi revenue is expected to be between $75 million and $80 million which represents 6% to 13% growth versus 2023. Our Dojolvi projections represent a blend of faster growth in countries where we commercialize and lower growth in countries where we respond to name patient requests. With that, I’ll turn the call to our CMO, Eric Crombez, who will provide an update on our upcoming clinical data readouts.

Eric Crombez: Thank you, Howard, and good afternoon, everyone. Emil already went through the exciting GTX-102 and two data that we shared last month, so I will focus most of my comments on some of our other programs. I would, however, like to reiterate the enthusiasm that we are hearing from patient advocacy organizations and the treating community, who all feel that GTX-102 has the potential to be a transformative treatment for patients with Angelman syndrome. We are at an important inflection point for the GTX-102 program. We have clear and clinically meaningful efficacy and we are transitioning to Phase III study startup. The Phase III will be a global randomized placebo-controlled study that is expected to enroll approximately 100 to 120 patients.

We expect to finalize these plans, including endpoints and study duration and an end of Phase 2 meeting that has been scheduled with the FDA in mid-2024. We plan to initiate the Phase III around the end of the year. Shifting to DTX401, our investigational gene therapy for the treatment of glycogen storage disease type 1a. Phase III data from this program, which we expect this quarter, will be the first pivotal data set from our large and late-stage gene therapy portfolio. All of the patients in the Phase I/II study demonstrated a clinically meaningful response to DTX401 that has proven durable with the earliest treated patients in their fifth year of follow-up. The randomized placebo-controlled Phase III study enrolled 49 patients and we expect to see clinically meaningful and statistically significant reductions in daily cornstarch therapy.

Our experience with the Phase I/II program helped us to better understand the importance of reducing dependence on overnight cornstarch and the great fear that all patients with GSD1a and their families have regarding missing a cornstarch dose and the resulting potential for hypoglycemia during sleep, which can be fatal, especially in children. As seen on our Phase I/II results, we do expect the Phase III to show improved glucose control during the day and also importantly overnight improvement. We plan to share top line data within the next couple of months. I’ll close with setrusumab, our fully human monoclonal antibody for the treatment of osteogenesis imperfecta. We recently announced completion of enrollment in our Phase III Orbit and COSMIC studies.

We ended up over enrolled in record time with 158 patients in Orbit and 66 patients in COSMIC and this could not have been done without the efforts and strong support from the patient and treating communities. We expect to share additional data from the Phase II portion of the Orbit study in the second half of this year. This data will include at least 12 months of follow-up and build on the data we presented last October. I’ll now turn the call back to Emil to provide some closing remarks.

Emil Kakkis: Thank you, Eric. In the first part of the year, we made significant progress advancing our clinical pipeline and I’ll close by quickly summarizing our key clinical catalysts for the rest of the year. Later in this quarter, we expect to share top line Phase III DTX401 data from our gene therapy for GSD1a. We’ve scheduled the GTX-102 and the Phase II meeting with FDA in mid-2024 that would enable initiating our Phase III around the end of the year. The UX701 for Wilson disease stage I data is expected in the second half of 2024. This will be approximately six months after the last patient was dosed in Phase III plus some time for all the data to be collected and analyzed. On UX143, we expect to share updated long term Phase II data in the second half of the year.

For the UX143 Phase III portion of the Orbit study, there are two interim analyses planned with the first anticipated by the year end or early 2025. The first analysis will have a stringent threshold of P less than or equal to 001. If the threshold is not met, a second interim analysis will occur a few months later, followed by a final analysis at 18 months. Interim analyses will not report to the company by the data monitoring committee, unless they are positive. In the event of a positive interim analysis, we would share that outcome, but top line results will not be announced immediately as the study would require patients to complete a final visit and time to collect and prepare the data for a formal analysis. For those of you keeping track, we may have three products at or near our readiness for BLA filings in Sanfilippo Syndrome with UX111, GSD1a with UX401 and osteogenesis imperfecta with setrusumab over the next year or so.

We are at a company defining inflection point that builds on our strong base of growing commercial products and positions us to transform the lives of even more rare disease patients. With that, let’s move on to your questions. Operator, please provide the Q&A instructions.

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Q&A Session

Operator: Thank you. [Operator Instructions]. Our first question will be coming from the line of Yigal Nochomovitz with Citigroup. Your line is open.

Yigal Nochomovitz: Oh, hi. Great. Thank you so much for taking the questions. I just had one on GSD1a program that we haven’t talked about too much, but you’re coming up on the pivotal data. Could you just remind everybody what is required in terms of the primary endpoint to reach a positive study? What are the timelines in terms of the filing strategy for this program? And then thirdly, can you just give a little bit perspective on the incidence and prevalence of GSD1a and how you would think about pricing this product? Thank you.

Emil Kakkis: Yes. So for the GSD1a program, the primary endpoint is the continuous variable now of some cornstarch utilization. And so, we’ll be comparing the decrease in cornstarch utilization for the primary, between the treated and placebo group. That is also requires that the patients have good glucose control for that reduction in starch. That’s the primary endpoint agreed with the FDA. In terms of filing strategy, we are transitioning the manufacturing into our plant and we plan with the data to go to FDA and have a discussion and lay that out. So, we’ll provide more detail on the filing timeline of when we have it. But the transition of the manufacturing and we’ll need to talk to the FDA in setting it, but it’s on path assuming our data are positive.

Now the last incidence prevalence and pricing. We believe there’s around 8,000 patients with GSD1a in the commercial territories, and that might be a little under 2,000 that are in the U.S. with the disease. That’s an estimate. We haven’t set pricing at all at this point. We’re thinking about it. But it is a severe disease. It is an urgent disease. Patients are on a treadmill every day trying to stay alive. And we’ve seen from the enrollment of the study that there’s a desire. So while prevalence of pricing have an impact, I think the degree of urgency is what defines success in gene therapy launches to date. I think GSD1a is urgent. I think people want to get treated. They want to get off the treadmill. They want to, as I say, put the gun down at this point at their head every day about managing their glucose.

So, we’re excited about the potential, but there’s still obviously more work to do.

Operator: Our next question comes from the line of Anupam Rama with JPMorgan. Your line is open.

Anupam Rama: Hey, guys. Thanks so much for taking the question. Emil, just thinking about the GTX102 update last month, just in your discussions with The Street, what do you think are the most misunderstood or divergent points of feedback you get relative to, say, the physician or KOL feedback you’re getting post AAN? Thanks so much.

Emil Kakkis: Well, I think that there’s still difficulty appreciating the meaning of the changes in Bayley, for example. And I think what we heard from some of the KOL feedback that they’re excited about the changes. These are meaningful changes and they know the Bayley doesn’t change for cognition. So, I think that’s one of the major ones. I think there was some misconception about the safety lower extremity weakness that was reported. It was really one patient moderate — one mild. They resolved quickly. But it’s out of 53 patients now through the full load. So, it’s a relatively small thing. It’s reversible. I think people are still overstating the meaningfulness, but I think if you talk to KOLs, they say it’s not a deal.

It’s not going to be change things. And the regulars said, yes, fine. It’s all good. They didn’t ask us to do anything. Just move ahead. And they went ahead and accept the end of Phase II schedule already. So, I think we’re on path. I think these are the two things that need to be straight. But what I’d say the magnitude of the data we saw, the speed and the combination of domains is something, quite exceptional. And I think people aren’t seeing that multiple domains of improvement for one treatment in treatment areas that normally don’t change. And we need to keep telling our story. And I hope that if people talk to more KOLs and have seen the data, understand it, that might help people inform what the meaningfulness of what we’re seeing and how unusual it is for this disease to see any change at all.

So, we’re excited about it.

Operator: Our next question comes from the line Tazeen Ahmad with Bank of America Securities. Your line is open.

Tazeen Ahmad: Hi, guys. Thanks for taking my questions. Just in terms of timing for the Orbit and COSMIC study for OI, do you think that they’re going to read out at around the same time? And is it your plan to submit for the different age groups as part of a single application or is it going to be scattered?

Emil Kakkis: Well, fortunately, both studies over enrolled, but got to the same point almost the same time. And I actually think the younger patients will probably, as historically true, even respond faster. So, I actually think both studies will have will probably read about at the same time. And our expectation would be to file for the full age range based on that data. So, we’re actually in good shape to do that. I think it’s the right thing. I think it would be tough to submit one part of the age range and not the youngest. So, with the young patient we’re excited getting enrolled, puts it in play to have both studies in parallel and get them both in the filing.

Operator: Our next question comes from the line of Gena Wang with Barclays. Your line is open.

Gena Wang: Thank you. Regarding the GTX-102, the Phase III trial design is going to finalize with FDA. So, what will be your single domain for primary endpoint? Is that the Bayley’s 4 cognition? And also, will you use full loading doses or three loading doses since you’re also exploring the three loading doses in Cohort C2E? And very quickly on the Orbit trial enrollment, Emil, did I hear you correctly the timing, the first interim analysis that will still be the same before year end? Or could that be earlier than initial assumption since now you complete enrollment ahead of expectation?

Emil Kakkis: Very good. So, on the GTX-102 Phase III, the primary endpoint we’re most likely looking at is the Bayley cognition score that we’ve talked about. It is an integration of multiple things that happen. They’re improving the most. It proves rapidly. It’s a validated tool. It’s well known. I think these are features. The FDA is certainly aware of this endpoint choice, we’ve had discussions on it. We’ll include other domains within the secondaries. And the MDRI will be, we think, one of the key secondaries. That’s our expectation in the plan. But I think we’ve got great data on all of these and could potentially use other ones if we wanted to. But I think Bayley cognition is most likely. With regard to three or four doses, let me clear the cohorts that we’re testing all have the same number of doses through day 170.

It’s just, in the cohorts A and B, they’re actually getting four and then there’s a three-month separation. In the other cohorts, there is we have the fourth dose separated by a month. So, it’s a slight difference between the two. So, it’s not really three versus four. It’s really six doses over about a six-month period, just exactly how they’re spread out. We will make a final decision on that with the agency looking at all of our data. But I don’t think there will be a material difference between the two. We were just testing them out just to see if there was any difference in how patients would behave or what safety would be like. But right now we feel comfortable doing either. Now on the UX143 timing, we got done here in April essentially.

The timing for the interim, it depends a little bit on when we think the fractures would be hit and timing. Our expectation is coming toward the end of the year, possibly early in the next year. So, it’s around that same timeframe. It’s not really changed. We just want to be clear that we have to there’s a lot of factors that come in and doing the interim. And so, it also is happening in December, let’s say December, January. So, it’s a lot of other things going on. But we’re not really changing that. I think it could begin — it could happen in early January before we would hear. Keep in mind that the actual process may begin for sure. And then it takes time to get through it because they have to clean the data, prepare it, analyze it, DMC meeting and then release it.

But so, our expectation is DMC opportunity for review would be end of the year, early next year. If it’s positive and hits less than P value less than 001, then we would hear about it. If it’s not positive, then it’ll go on to the next one. We set that stringent standard, so it may not mean much to miss because I think it could be a great result, which is not quite 0.01, but that’s the timing. Hopefully that’s clear for you.

Operator: Our next question comes from the line of Dae Gon Ha with Stifel. Your line is open.

Dae Gon Ha: Hey, good afternoon. Thanks for taking our questions and congrats on the progress. I’ll just bundle the questions and ask two straightaway. So, on the GTX-102, when the press release talks about other regulatory meetings in the second half, I mean, you’ve obviously had conversations with the FDA, but what do you think are some of the divergences or differences that they might bring up in terms of endpoints, for example, or even trial design like enrollment and duration? And then second question, just going earlier to the 401 GSD1a, Can you provide a little bit more color on how you’re thinking about presenting the euglycemia throughout the night since that’s such an important aspect for KOL? Thanks so much.

Emil Kakkis: Sure. So, the other [INDISCERNIBLE] meetings is just normal habit with a product of this important to the size that you’re going to talk to the European authorities and you’re going to talk to the Japanese authorities about what we’re doing. The FDA review to is really the dominant view. It will drive the decision making. We’ve had preliminary discussions, so it’s not like we haven’t had any. The design of the study is pretty standard. The expectation is likely to be day 338 or 48 weeks steady. So, I think these are pretty standard choices. I don’t expect there to be much problem with them. And I don’t actually think there’s going to be a lot of differences. If there were some differences on endpoints or we can of course customize the statistics plan for each region, which we have done in other programs when necessary.

But I think the hardwired pieces, randomized trial, 100, 120 patients and that basic design, I think that’s going to be a universal. I don’t think there’s going to be any problem. So, the rest of it is going to be more about statistics and positioning, if anything. We’re comfortable though that what we’re proposing is pretty straightforward. And I don’t really think that will be a problem. But of course, there can be feedback. As I said, the FDA’s position would dominate in our choices for going forward. With regard to the, GSD1a program, during we’ve been presenting the data looking at the fraction of time between the low and the high, right. That’s been mostly what we’ve been doing, Eric, right. And we’ll likely look at the nighttime on the CGM monitor, where the patients are asleep and CGM is monitored.

And we’ll look at those tracings. When we did that during Phase I/II, I was the most impressed with you take kids who were not taking starch at night any longer, and you can watch their glucose, you can see their glucose turn the corner and stabilize. And so, you knew their livers were turning on and releasing glucose. So, we’re going to look for that pattern that they can safely go through the night and that their livers are going to keep them safe. So, we’ll be able to do that even looking at CGM. I wasn’t sure you think there’s anything else, Eric?

Eric Crombez: Yeah. We are maintaining the controlled fasting challenge in the hospital setting. So, we will bring them in, fast them overnight and monitor them in a controlled setting. So that’s further support from the really large amount of data we’ll be getting from the CGM on a daily basis.

Dae Gon Ha: So, am I understanding it correct? It’s going to be an average graph, if you will, across the treated and untreated across the 48 weeks of what the low versus high would be on an every night basis?

Emil Kakkis: Yes. So, for each patient, there’s an interval time where we’re doing intensive monitoring of their glucose levels. During those periods, we’ll take that, create an average for each patient of where they are in their range, right? Set their target. We’re not averaging and then doing the mean of it. We’re taking each patient for their own control range. And then we’ll do the mean of that. And you’ll see a graph, which we’ve had before like a bar chart that shows, where the two groups, how they’re ranging over time between the high and the low. So, we can talk more about that, but there’s a way to present this over time. So, you can kind of see the sense of improving control, decreasing hyperglycemia and maintaining no hypoglycemia, and tightening up over time which is what we’ve been watching in our other patients.

Operator: Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Your line is open.

Kristen Kluska: Hi, good afternoon. Thanks for taking my questions. We often get asked about setting expectations for the first interim readouts for setrusumab. Could you please help us frame what are some of the factors that are controllable that we can kind of help to predict in advance? And then some of the items where we’re less sure about it and again, how to help frame these two expectations? Thank you.

Emil Kakkis: Well, I think our Phase II data kind of lay down what I think we’re going to expect. I would expect it to be better reduction would be very similar to what we’ve seen, if not better. So, we found there with only a minimum of six months, an average of nine months exposure, right, 67% reduction. The patients we’re enrolling are very comparable with that. If anything, enrolled patients might have a higher fracture rate, I think. And so, we would expect that reduction to be something what you’d expect to see. Those are I don’t know if you consider — when you enroll patients with fractures, it’s not exactly controllable. They are who they are. But because we have the threshold requirement to get in the trial, we’re essentially eliminating patients who would have very low factor rates and wouldn’t necessarily be able to demonstrate benefit in that period of time.

I think with the type of patients enrolled, the number of which type, I think we’ve set ourselves up to replicate what we saw before. And I really don’t see any uncontrolled factors. I don’t know, Eric, if you have anything.

Eric Crombez: Yes, definitely. I mean, I think the biggest controllable factor was really enrollment rate and the studies are fully enrolled. Yes, we know the types of patients and it was good to get a good mix of one, three and four in there. I would say, yes, I would agree. The uncontrollable factor may be, especially when you’re first initiating treatment in the 1st couple of months, you may have some patients who are having fractures before setrusumab really takes effect there. But, there is a degree of unpredictability with fractures.

Emil Kakkis: There’s probably also the fact that some people some of the kids like feel really good and start being more active. People were worried maybe that caused more fractures, but it didn’t look like that was true. Or that as they fell, they didn’t fracture. So, we actually are not concerned about the fact that his might feel good and start being more active. It doesn’t look like it’s going to cause a problem that looks like their bones are stronger, they’re doing great. So, the truth is the more activity probably strengthens the bone faster because the action actually puts strain in the bones. The bones actually are strengthened by that actual action. So, thank you for the question.

Operator: Our next question comes from the line of Maurice Raycroft with Jefferies. Your line is open.

Maurice Raycroft: Hi. Thanks for taking my question. Maybe I will ask one on Wilson’s disease. Just wondering how you are assessing changes in global copper metabolism and what drives the time point of the endpoint or the timeframe for when you can measure benefit and get adequate insight into benefit?

Emil Kakkis: Well, the two main ways we’re looking at copper is how much free copper is coming out in the urine, right? The urinate copper, which is a sign of how much is sort of oozing out of the tissues and coming out with a chelator. So, if you get rid of the detoxifying, if you detoxify copper through the bile, then you should have less coming out in your urine. So, that’s the detox side of the equation. On the other side of the question is loading copper on the ceruloplasmin oxidase activity. So, we’ll be measuring the ceruloplasmin oxidase activity, which is a very sensitive way of looking at copper loaded correctly on ceruloplasmin. So those two biomarker assays will give us a sense of the overall copper metabolism. I wasn’t sure Eric, was there anything else to add?

Eric Crombez: Yeah, we’re doing a liver biopsy study, so it’ll be great. This is really the first time we’ve been able to do liver biopsies. We made it optional, but the majority of patients did opt in for that. So, it will be interesting to look at copper concentration and histopathology in those samples.

Maurice Raycroft: Got it. Maybe just a quick question on setrusumab. We see that you’ve got a title at ENDO and you’re guiding to which is I think scheduled for June 1st and you’re guiding to having a longer-term Phase II data in the second half of this year. Just wanted to clarify, will that presentation at ENDO be an ENCORE or should we expect what should we expect in that update?

Eric Crombez: Yes, that will be a Pura ENCORE presentation.

Maurice Raycroft: Got it. Okay. Thanks for taking my questions.

Emil Kakkis: We’d like to see good news again, frankly, if it’s okay.

Operator: Our next question comes from the line of Jeffery Hung with Morgan Stanley. Your line is open.

Jeffery Hung: Thanks for taking my questions. For the setrusumab Orbit study, if you go to the second interim, what would the bar be for stopping the study at that point? And in that scenario, would you have greater confidence for stopping the study early with the second interim? And then for the COSMIC study, what would it take for you to stop the study early in that?

Emil Kakkis: Yes. So, the second interim as we’ve planned it right now would be at 0.01. So that’s much less stringent, right? That’s 10-fold larger P value. And then the final is 0.04. So, I think the reason the second is less stringent is that at that point everyone would have at least a year of treatment. So, we felt there was less regulatory issue there. And then 18 months would be the 0.04, it’s just sort of the backstop if we have to go that long. For COSMIC, remember, it’s an open label study, randomized, but open label. And so, we’ll be looking at the x-rays of the DMC. And our DMC will be looking, since these are little kids, one of the questions will be is if there is a stark separation in the fracture rates in that study, the DMC will probably be obligated to end the study and not keep kids on an inferior treatment.

And so, while we haven’t set criteria for that, they will be looking at the study during the year. And if they were to hit a strong separation of the groups that they felt was below expectation they could stop. Our expectation is that the younger patient will respond faster and since they finish enrollment, we think by the time we’re doing the first interim of the one study, the other study should be pretty far along. And if the one hits, I think the other one will be should be ready. So we’ll probably be pretty closely coordinated with the two. But the DMC will be all along have the opportunity to look at the data and determine is there a reason to stop that study. And remember going another year is a big deal if you’re two years old and you have a bone issue, right?

So, it’s a lot different in that study. But fortunately, being open label, DMC has a chance to take action at each time they take a look.

Operator: Our next question comes from the line of Joon Lee with Truist. Your line is open.

Joon Lee: Hey, thanks for the updates and for taking our questions. For the Angelman program, are you talking to CBER or the Neurology Department? And if it’s not CBER, would it be possible to request GTX-102 be reviewed by CBER? And the Phase II meeting, how strongly would you be advocating for MBRI as an approvable endpoint or has that ship already sailed? Thank you.

Emil Kakkis: Well, we’re under CBER. We’re actually in we said before in the psychiatry part of the neurology sciences group. And that’s where we’ve been the whole time. So, and they’re actually doing a great job. Tiffany is the leader of that group, but then we’ve had good meetings and she’s great to work with. So, I’m actually we’re very happy with the setting we’re in and how it’s going. So, they’re in CBER and there’s really no purpose. It’s not it’s really well characterized drugs. It’s not really gonna fit within the CBER mantra and there’s no benefit to us to doing that at this point. So, we’re comfortable where we are with that one. With regard to MDRI, we like MDRI, but it is something very different. While we had it in our Mepsevii program and it was used and had helped support the program, It’s still a methodology that’s new for FDA.

And we’ve had a lot of meetings. I’ve presented a lot of conferences. I think there’ll be growing support with it if we use it. So our plan rather than press our case is probably to put in a single primary validated type endpoint for them and then put our MDRI in as key secondary. That way we get the best of both. We manage what FDA may want or prefer and at the same time we get MDRI in there, which allows us to support the product. I do believe and my belief in the long run is that the MDRI will be a fundamentally new way and better way of doing particularly heterogeneous neurological disorder analysis. And once the FDA sees that in a large randomized trial, see how it performs and understand it, I think they’ll start gaining more appreciation why it’s a superior approach to analyzing clinical outcomes.

Operator: Our next question comes from the line of Joseph Schwartz with Leerink Partners. Your line is open.

Joseph Schwartz: Great. Hi, all. This is Will on for Joe today. Thanks for taking our questions and congrats on the progress this quarter. So, one for us on the DTX401 program. We recently saw the updated data in the ASGCT abstracts, which suggests that the cornstarch benefit rebounded favorably compared to the data shared last year. So just wondering if you could provide some comments on how you’re thinking about the durability of this treatment and how this may change your expectations, if at all, for the cornstarch reduction that we might see in the pivotal study later this quarter?

Emil Kakkis: Well, I don’t think that’s changed our opinion very much on that at all. I think the what we are noting over time is that the reduction in starch happens very quickly, but to get all the way down takes time and there’s some secondary factors. It does depend a little bit in the long run on how the doctor manages the starch. They have to get the starch down and get the glucose to come down, so that the gene therapy actually expresses. That the expression of the gene therapy is dependent on stimulating the promoter, because we’re using the normal GSD1a Glucose 6 Phosphatase promoter. So, there are some interesting features of how that operates, but we’re comfortable with where we are. We haven’t changed our expectations for the study.

We think that — we saw something like 50% reduction within a short period of time. But if you looked, it took a lot longer to get down and it was highly more dependent on how doctors were titrating in individual patients. But we’re very comfortable with what we’re seeing and we haven’t we don’t have concern yet on durability. We think it’s been good over the long haul.

Operator: Next question comes from the line of Brendan Smith with TD Cowen. Your line is open.

Brendan Smith: Great. This is Brendan on for Yaron. Thanks for taking the question, guys. Just a quick one from us on the gene therapy pipeline. I think you correct me if I’m wrong, but I think you recently said that you might file for GSD1a around the end of this year or early next year. Totally understanding that this is somewhat in flux. But I guess in light of the transition to the manufacturing, should we expect kind of similar timing between top line data and filing for OTC? Or would you expect that to potentially go more quickly after the manufacturing is in house? And then kind of along the same line, on pricing, is it fair to assume that both GSD1a and OTC would be priced similarly? And I guess, if not, what might be dropping the differences? Thanks.

Emil Kakkis: Yes. Well, the BLA, I don’t want to predict exactly the timing of filing. We have transitioned manufacturing internally. We’re running those — we’ll be running those runs. And we have to go meet with FDA to make sure, for example, whether they require of our manufacturing to be in the filing, right, at the time of filing versus can be submitted at, let’s say, during the filing. So those are factors that will impact the exact timing of filing. And we need to get the data and season in a pre BLA meeting and get that straight. So, we’ll put out a little bit more data. Our expectation though is probably going to end up being if it’s late in the year, it would be actually more likely next year to get all the pieces early next year.

But right now we don’t want to make a prediction because of some pieces we have to get straight. With regard to OTC timing, well, it’s a bit further out. I’m not sure I want to predict whether we’re going to how fast that’s going to go. What I can say is that if you look at everything we have and we don’t know that everything will be successful, but we have in front of us six BLA filings over the next three years or so, so something like that. So, we’re going to be busy, including three within the next year or so, right? So, we’ll be busy, and I’m sure OTC will have to be fit in once the Phase III is out. With regard to pricing, I don’t think there’s a big difference in how we price GSD1a and OTC. They’re very similar population sizes and severity of diseases.

OTC happens to have very expensive drugs like [INDISCERNIBLE], which a lot of patients use that you probably could justify pricing easier with regard to the cost reduction, assuming patients were getting off their other drugs. But right now, we haven’t put any stake in the ground regarding pricing. We’re listening and watching what’s going on and we’ll come up with a plan we get closer in.

Operator: Our next question comes from the line of Lidia Rachkova with Goldman Sachs. Your line is open.

Lidia Rachkova: Hi, this is Lidia on for Salveen. Thanks so much for taking our question and congrats on the progress. Just another on the end of Phase II meeting with the FDA for Angelman. What would you view as a positive outcome here? And could you just remind us how you plan to message to The Street post this meeting and what details you plan to disclose? Thanks so much.

Emil Kakkis: So, I think positive outcome is essentially finalize the endpoint palette of endpoints and statistical approach we’re taking, as well as what’s the ability to put that forth and get it a fileable for approval. That would be the idea. So, while we already have agreement on basic studies, I want to set some comfort on the duration as well as the dose dosing regimen and the endpoints. But I think the majority issue will be finalizing endpoints with them and that’s what people are most interested in. With regard to messaging, if we complete the meeting and have a very clear solution, we’ll put out a notice to the street on that fact. Sometimes the meeting can be pretty clear, but there’s still a couple of pieces to solve, in which case we’d finish that discussion until there’s a final agreement between FDA and us. And then we would only announce at that point in time.

Operator: Our next question comes from the line of Jack Allen with. Your line is open.

Jack Allen: Hi. Thanks so much for taking the question and congratulations to the team on the progress made over the course of the quarter. I know a few people have focused on this idea, but what are you thinking about as it relates to expectations for the annual fracture rate in the placebo on the Orbit? And I also wanted to ask, are you matching patients based on their seasonal enrollment in the study? I recently did some work with the KOL and they mentioned that seasonality can affect fracture rates as well. Any context you provide there would be very helpful.

Emil Kakkis: Yeah. Well, we don’t have any way to control the seasons, but if we did — so there’s a lot of things affect fracture rate. And one thing I’ll tell you is actually coming into a trial will increase the fracture rate simply coming into the trial because they’re transporting, getting out of cars. And in fact, in the Phase II study, 25% of the fracture occurred between screening in the beginning. It was like a lot of the fractures in their last year were actually part of the process coming to a trial. So, I would say to you there’s fractures and fractures that are harder to predict. What we have assumed right now, I think is about 0.67 fractures. The threshold to be in the study is one fracture per year, but we’re assuming and people ask me why we’d be assuming that.

Well, you don’t want to assume the middle ground of what you expect. You always assume on the boundary. You want to pick a safe boundary. Our expectation is it should be higher than 0.67. How much higher will be somewhat dependent on who’s enrolled, what happened to them, how far are they traveling, how many potential risks are there and the type of OI they have. But at the boundary of 0.67% and the 50% reduction, we have ample power for the study. And if the fracture rate is higher and the reduction is higher, you synergize those two, we could have substantially more power than required. So, I think we’re in a good place and what we’re positioning, but we’ve said 0.67 with the criteria for entry thought of having at least one a year.

Jack Allen: Got it. That’s great color. I guess just as it relates to seasonality component, I understand it’s a global study, the patient is going to be distributed and matched across the geographies?

Emil Kakkis: Yes, they will be. But remember, they’re always going to be in small, you randomize a little blocks. Right? So, within any period of time, the blocks are small enough that you should be creating evenness. We’ll also be stratifying based on fracture rate, right? So, the patients with high fracture, low fractures are even are even numbers between the two groups. I will also point out to you the way the trial enrolled, it actually enrolled the majority of the patient enrolled between November March, right, probably. So, they’re all really in a pretty tight window. I would say as synchronously enrolled as we’ve seen in terms of number of patients.

Eric Crombez: Yes. And the randomization should help with seasonality too, because you’re not random you’re not randomizing exactly one to one, but you are trying to keep that balance through randomization. So that could help there as well.

Operator: Our next question comes from the line of Luca Issi with RBC Capital. Your line is open.

Luca Issi: Great. Thanks so much for taking my question. Congrats on the progress. Maybe circling back on the prior questions and the first interim look for COSMIC, maybe just ask slightly differently. In a scenario where the Phase II data is replicated and the 57% reduction in fracture is actually reticulated in the Phase III, would that be sufficient to hit the staff by year end or do you need to see something better in order to hit the stats by year end? So, that’s question number one. And question number two on OI, can you just remind us the latest thinking on the competitive landscape? It looks like Amgen is actually running a trial Phase III versus bisphosphonate in 5 versus 17 years of age versus you’re obviously running a Phase III versus placebo in 5 to 25 years of age.

How should we reconcile that difference? Why is the FDA asking them to run a trial versus biphosphate in 5 and older versus your run rate trial versus placebo? Any thoughts there? Much appreciated. Thanks so much.

Emil Kakkis: Sure. Well, I’d reconcile that ours is better, but that would be the simple answer. Our trial will be 5 to 25 against placebo, but we’re also running a 2 to 7 which against bisphosphonate. So, we can you’ll be able to look at both sides of the story. But I feel confident that we’re in good position. The data that Amgen put out in BMD, at six months was about half what we achieved. That was at their highest dose that they tested in their dosing study. So right now, our data will look stronger than theirs, just based on that. So, so far we’re not right now we’re not concerned. With regard to the COSMIC, 60% is one of the factors. The real other important factor is how many fractures really are going. For example, if it was 1.5 fracture that would greatly help the ability in the control group to hit the endpoint.

If it’s 0.67 or less, then it might take more time. So, 0.67 is enough to hit it, but you need to have enough fractures. So that’s the other. Those two variables are synergistic and how they’re impact things. So, we wouldn’t we couldn’t say for sure. I think trying to handicap whether the first one is going to hit, it’s stringent. I think it’s a relatively lower possibility of hitting. But we wanted to open the door in case fractures were high and the reduction was high and we were already off scale, they wouldn’t keep going with those kids on placebo. And you can imagine, there’s people, children. So continuing placebo when they’re when you’ve already gone way past what’s required, I think that’s smart. So, and better for them the right thing to do.

Thank you.

Operator: Thank you. I’m showing no further questions in the queue. I would now like to turn the call back over to Joshua for closing remarks.

Joshua Higa: Thank you. This concludes today’s call. If there are additional questions, please contact us by phone or at ir@ultragenyx.com. Thank you for joining us.

Operator: Ladies and gentlemen, this concludes today’s conference call. [Operator Closing Remarks].