Ultragenyx Pharmaceutical - Q1 2023

Transcript

Operator (participant)

Good afternoon, welcome to the Ultragenyx first quarter 2023 financial results conference call. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, you will have an opportunity to ask questions during the Q&A portion of the call. It is now my pleasure to turn the call over to Joshua Higa, Vice President and Head of Investor Relations.

Joshua Higa (VP of Investor Relations)

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, Eric Crombez, Chief Medical Officer, Aaron Olsen, Senior Vice President of Corporate Strategy and Finance, and Ted Huizenga, Chief Accounting 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 (CEO and President)

Thanks, Josh, and good afternoon, everyone. In the first part of the year, we made meaningful progress toward generating data from our key clinical programs. The phase II portion of the UX143 pivotal study for osteogenesis imperfecta is fully enrolled, and the team has begun analyzing the data in advance of the data release in mid-2023. Around that same time, we expect to begin dosing patients in the randomized placebo-controlled phase III portion of the study. Based on the KOL feedback, we believe the phase III should roll swiftly and move us that much closer to a potential therapy for patients with this bone disease. Similarly, with GTX-102, phase I/2 for Angelman, we have begun ex-U.S. dosing in the expansion cohorts. Outside the U.S., we've received positive feedback on our protocol and are activating multiple sites in Australia and across Europe.

This broadens the number of sites who have experience with GTX-102 to support conduct of the phase I and II and can participate in a future phase III study. In the U.S., we've had productive discussions with the FDA and look forward to possibly expanding dosing in the U.S. On the commercial side of the business, we continue to grow revenue and make progress with expanding access to our therapies around the world. In the first quarter of 2023, Crysvita revenue in Latin America grew 120% to $20 million compared to $9 million the prior year. Five years into launch, there are still meaningful opportunities for significant growth. We recently began the next chapter for Crysvita in North America with Kyowa Kirin assuming primary commercialization responsibilities for the program in the U.S. and Canada last week.

We will continue our joint commercial efforts in the U.S. through April 2024. Beyond that, we'll continue promoting this blockbuster therapy to medical geneticists. In the span of 10 years, Crysvita has moved through late-stage development with approvals in two rare genetic bone disorders and reached thousands of patients around the world. I wanna acknowledge the work and dedication of our integrated Kyowa Kirin and Ultragenyx teams in their commitment to the patient community and therefore their most recent efforts in planning for and achieving a smooth transition with patient experience as the top priority. I also want to briefly comment on the recent remarks made by Peter Marks proposing an Operation Warp Speed-type approach to ultra-rare disease. This year marks the 14th anniversary of the Orphan Drug Act. While it has been instrumental to progress in treating rare diseases, it's left ultra-rare diseases behind.

We have an opportunity right now to make progress across many life-threatening diseases afflicting infants and children for which there are currently no treatments to offer hope and a path forward to the parents and families of these children. I'm obviously very supportive of the agency providing clear framework that makes the accelerated approval pathway accessible to new therapies in ultra-rare genetic diseases, and I'm hopeful that the agency will work with the urgency required. Too many small companies with limited resources have had to halt promising programs. We greatly fear that we may lose the majority of these new treatments for ultra-rare diseases. I'm encouraged that the agency is showing receptivity and listening to the community. Before I turn the call over to Erik Harris, I'd like to welcome Eric Crombez to the call in his new position as Chief Medical Officer and Executive Vice President.

Eric has been a driving force on our gene therapy programs and has extensive experience with rare metabolic disorders. He and Camille have worked closely together for over five years on advancing our clinical programs, and it has been a seamless transition as she steps into her new role as a full-time strategic advisor. I also wanna thank Camille for her passion and dedication to both Ultragenyx and the rare disease community. She's been instrumental in developing our clinical pipeline, and I'm grateful for her ongoing partnership going forward. Now I'll turn the call over Erik Harris to provide an update on our commercial efforts for the quarter.

Erik Harris (EVP and Chief Commercial Officer)

Thank you, Emil. Good afternoon, everyone. In April 2018, we launched Crysvita in the U.S. with the hope of offering children and adults a breakthrough therapy targeting the underlying cause of their disease. In the five years since, we generated approximately $1.9 billion in accumulative top-line product sales, which is shared with our partner, KKC. Our patient find efforts have led to nearly 3,000 start forms and approximately 2,500 patients who have received reimbursed therapy. When we launched Crysvita, it was not well understood whether utilization by adults would be similar to peds. In the first quarter, 2023, approximately 65% of the start forms represented adult patients. Now they make up more than half, 55%, in fact, of all patients on reimbursed therapy.

This is one of the most important factors driving the success of this launch, and yet there is still plenty of opportunities to continue growing this franchise. The U.S. field and patient support teams have executed well against the goal of bringing this therapy to pediatric and adult patients with XLH and TIO. I am proud of their work establishing a strong and growing base that Kyowa Kirin, with support from our extended transition team, will be able to build on going forward. As we move on to the next phase, I would like to thank the relentless efforts from our North American team that led this to be a very successful rare disease launch. The team in Latin America has also made meaningful contributions to the overall success of Crysvita.

As a reminder, this region is not impacted by the KKC transition, and we will continue leading all the commercialization efforts. Our team continues to work country by country to obtain additional regulatory and reimbursement approvals. Most recently, Mexico was added to the growing list of countries where Crysvita has received a positive reimbursement opinion. The Mexican Health Technology Agency has recommended the reimbursement for the pediatric patient population, creating the opportunity for these patients to be treated with Crysvita. In the first quarter, 2021, there were approximately 120 patients on reimbursed therapy. Over the last two years, this has grown to approximately 350 patients, with the greatest acceleration happening in the last couple of quarters following pediatric reimbursement approval in Brazil.

As is common in this region, ordering patterns drive some quarter-to-quarter variability in revenue, the underlying demand is continuing to grow. Today, we are reaffirming that Crysvita guidance we issued at the beginning of the year. The range of $325-340 million includes all regions and all forms of Crysvita revenue. More specifically, it includes Crysvita product revenue from Latin America and Turkey, the cash and non-cash royalties from North America and Europe, and the collaboration profit share revenue prior to the transition. I'll now shift to Dojolvi. In the U.S., the leading indicators continue to show there is a real demand for this product from the patient community. In the first quarter, we added approximately 35 completed start forms to the top of the funnel, which is one of the strongest quarters we have had since launch.

As of the end of the quarter, there were approximately 400 patients on reimbursed therapy, with approximately 200 healthcare providers writing at least one prescription for Dojolvi. Our early efforts to educate healthcare providers on the benefits of the dose titration supported by our clinical studies have begun to pay off. We look forward to continuing these efforts to assure patients are able to achieve optimal dose titration. In Latin America, we are continuing to leverage our existing infrastructure to commercialize Dojolvi. Earlier this year, the first Brazilian patient navigated the injunction process to receive commercial therapy, and in Mexico, patients have begun receiving therapy through private insurance plans. We are continuing to work the authorities in Brazil, Mexico, and the other countries in the region to enable greater access to this important therapy.

Across Europe, the named patient and early access programs continue to drive demand for Dojolvi. As we have said before, France and Italy are leading the way, with more and more requests coming from Germany, Austria, and certain Middle East countries. Across all regions, we expect Dojolvi revenue to be between $65 million and $75 million, reaffirming the range we announced at the beginning of the year. We are also reaffirming our 2023 revenue, total revenue guidance issued in the beginning of the year with a range of $425-450 million. This range includes revenues for Crysvita and Dojolvi, our ultra-rare product, MEPSEVII, as well as our latest commercial product, Evkeeza. Before I hand it over to Aaron, I wanted to touch base on Evkeeza.

The European, Canadian, Japanese, and Latin American teams have made meaningful progress in their efforts to launch Evkeeza outside of the U.S. and have received strong feedback from the KOLs in those regions. Throughout the year, they will continue filing the various country applications that will support the commercial launches that are expected to begin in the second half of this year. With that, I'll turn the call to Aaron to share more details on the financial results for the quarter.

Aaron Olsen (SVP of Corporate Strategy and Finance)

Thanks, Erik. Earlier today, we issued a press release that included financial results for the quarter, which I will briefly summarize. Company revenue for the quarter ended March 31st, 2023, totaled $100 million. Crysvita revenue for the quarter was $76 million, which includes $50 million from North America, $20 million from Latin America, and $6 million in non-cash European royalty and other product revenue. Dojolvi revenue in the first quarter, 2023, was $14 million. MEPSEVII revenue for the same time period was $8 million. Our total operating expenses for the quarter ended March 31st, 2023, were $255 million, which includes R&D expenses of $166 million.

SG&A expenses of $77 million, cost of sales of $12 million. Operating expenses for the quarter include non-cash stock-based compensation of $32 million. In our press release issued today, we note that we have completed enrollment of the single ascending dose portion of the UX053 phase I and II study, that we have decided not to enroll patients in the multiple ascending dose cohorts at this time. This is part of the company's decision to focus greater resources on our later-stage programs and is not related to UX053 product safety. Similarly, we have deferred IND filings for certain early-stage programs that were initially planned for this year to conserve and focus resources. For the first quarter of 2023, net loss was $164 million or $2.33 per share.

We ended the quarter with approximately $750 million cash equivalents, and marketable securities. In the first quarter, there are certain uses of cash that do not repeat on a quarterly basis. This is primarily attributable to the payment of our annual employee bonuses. Additionally, Q1 2023 was our last full period of Crysvita commercial cost-sharing with Kyowa Kirin during the North America profit share period, and our funding of commercial support will be substantially reduced post-transition. We continue to expect 2023 net cash used in operations to be less than $400 million. Now I'll turn the call to Eric Crombez, who will provide an update on our key clinical programs.

Eric Crombez (Chief Medical Officer and EVP)

Thank you, Aaron. Good afternoon, everyone. Now I would like to provide brief updates on two of our key clinical programs, GTX-102 for the potential treatment of Angelman syndrome and UX143 for the potential treatment of osteogenesis imperfecta, before turning the call back to Emil to close out. As previously discussed, Angelman syndrome is a severe neurogenetic disorder with a broad spectrum of disease manifestations that affect multiple developmental domains. We have been treating patients with GTX-102 for several years and have seen encouraging dose and time-dependent clinical activity. In the first part of the study, we completed enrollment of patients in dose escalation cohorts. To date, there have been 14 patients with at least six months of exposure to GTX-102, including nine patients who have been on continuous therapy for more than one year.

Based on what we've seen in the dose escalation cohorts, we have now advanced to enrolling and dosing patients in expansion cohorts, which are designed to verify the GTX-102 dose and treatment regimen that will be used in the phase three study. Outside of the U.S., we plan to enroll approximately 40 patients in cohort A, patients between four and eight years old, and cohort B, patients between eight and 18 years of age. Patients in these cohorts will be dosed with what we expect to be the phase three dose and will have the ability to individually titrate as a way to optimize the clinical benefit. We expect to have the majority of patients enrolled in the coming months. In the U.S., discussions with the FDA are ongoing with the goal of harmonizing the dose strategy with the ex-U.S. protocol.

The three patients who were originally treated in the U.S. have begun redosing and continue to do well. We are encouraged that we are seeing clinical activity at these lower doses with a favorable safety profile. Turning to UX143 or setrusumab for the potential treatment of osteogenesis imperfecta. OI is a disease of mutated collagen and of abnormal bone metabolism. We believe that bone strength can be nearly normalized without directly correcting the underlying collagen defect. The anti-sclerostin mechanism of setrusumab provides a unique dual action to address the body's maladaptive response to the defective collagen. Setrusumab stimulates osteoblasts to mature into bone-making cells and makes those cells increase bone production while also limiting the amount of bone resorption.

We are currently conducting a phase II study that builds on the substantial data Ormus have generated, we look forward to continuing the analysis and sharing the phase II data. The phase II data are expected to include % change in serum P1NP and safety data for all patients. It is also expected to include changes in CTX and the available three and six-month lumbar spine bone mineral density. We plan to use this data to help inform phase III dosing and show that we are on the path towards making stronger bone and bringing forward a much-needed treatment for patients suffering with OI. I'll now turn the call back to Emil to highlight the key upcoming milestones and provide closing remarks.

Emil Kakkis (CEO and President)

Thank you, Eric. I'll summarize the key clinical catalysts before we open it up for Q&A. I'll start with our gene therapy programs. DTX401 for GSDIa dosed the last patient in pivotal study earlier this year. We're now in the 48-week window. We expect to share this phase III data in the first half of 2024. UX701 for Wilson disease is enrolling patients at dose-finding stage. We expect this to complete in the second half of 2023, with data on safety and initial signs of clinical activity expected in the first half of 2024. We've now dosed multiple patients in a DTX301 phase III study. We expect enrollment to pick up as more patients make it through the baseline screening period.

Discussion with FDA on UX111 for Sanfilippo syndrome type A are progressing. We're seeking a path toward an accelerated review for this program. We look forward to sharing more details with you when they are available. Moving to UX143 for osteogenesis imperfecta. The phase II portion study has been fully enrolled. We expect to share these data and the transition to phase III would be in mid-2023.

Separately, we're planning to initiate a young pediatric study that compares UX143 to bisphosphonates, assessing fracture rates in a younger patient population which have a much higher fracture frequency. This study is expected to begin later this quarter. Lastly, GTX-102 in Angelman syndrome. The long-term exposure and clinical activity Eric mentioned continue to support my belief we have a therapy that could change the future for Angelman syndrome. Our discussion with the FDA has been productive, and look forward to sharing our next data cut with you later this year. We're making a lot of progress in our key clinical programs early in the year.

We're also investing today in our phase II programs with UX143 and GTX-102 by establishing a broader network and investigators and study sites in more geographies, which will enable us to drive faster and more efficient phase III studies. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please limit yourself to one question and one follow-up. Our first question comes from Gena Wang with Barclays. You may proceed.

Gena Huidong Wang (Managing Director, Biotech Equity Research)

Thank you for taking my questions. I have two questions. First one is for the osteogenesis imperfecta phase II update. What would you be looking for to inform you on optimal phase III study design? Related to the phase III study design, will patient baseline with two fractures per year, would that be too low to show sufficient clinical benefit? My second question very quickly is more on the Crysvita guidance, $325-340 million guidance for 2023. Was that before or after 30% U.S. royalty to Ormus?

Emil Kakkis (CEO and President)

Very good. I'll go ahead and answer the OI particular question, and then I think the second part is really Aaron can answer the question on the how we're doing the royalty revenue. On OI phase II, what are we looking for? We're looking mainly the phase II portion is simply to help us fine-tune the dosing. We know the drug works, and we know 20 mg per kg can work as a dose. We're just trying to figure out whether the young patients might do better with a higher dose. We normally expect that the exposure might need a higher dose to achieve the same exposure as older kids. That's the primary purpose of it, is just finding the dose number. The design is all set in the trial.

The question, second question you asked is two fractures per year enough a threshold? Well, first of all, that's the minimum to enter the trial. The average patient will have a number of fractures, we've done the work on powering and the design of the trial with 195 patients should have plenty of power to detect the fracture change. The key thing to recognize also is the way we've designed the study is we will, we're comparing placebo. We are going to look at an interim look and look at how the groups are operating and decide how long the study should be follow, how long the last patient should be studied.

The total amount of time exposure for the first patient since could be 18 months or longer, and some of the last ones could be one year or could be 18 months. The length of the trial will help be adjusted based on the interim look to determine the, again, to provide reassurance we do have the power. Our expectation, though, is that when you treat kids with bone disease, they respond much more rapidly than adults. Our expectation is that the differential in bones will come relatively quickly as they did, for example, with XLH treatment. The second part of the question is what is the forecast for Crysvita and the interpretation with regard to the Ormus royalty?

Aaron Olsen (SVP of Corporate Strategy and Finance)

The Crysvita guidance of $325 million-$340 million is before the Ormus royalty share. We continue to recognize all revenue, although a certain portion will be non-cash, with Ormus royalty share.

This is the way the accounting needed to be done, is that the royalty streams we have sold are capped. They come back to us and therefore they're looked at as debt. We are then re-recording and reporting non-cash royalty income in addition to cash royalty income. I still think it also gives you a better apple-out picture of what the royalty is. I mean, what the revenue is overall from the region, so you can compare year to year.

Emil Kakkis (CEO and President)

Okay. Thank you.

Operator (participant)

Thank you. Our next question comes from Maury Raycroft with Jefferies. You may proceed.

Maury Raycroft (Equity Research Analyst)

Hi. Thanks for taking my questions. For the Angelman program, just wondering if you can elaborate more on the feedback you received. Is the registrational path dependent on dose harmonization, or can you get alignment on key design considerations ahead of the data update?

Emil Kakkis (CEO and President)

Yes. I assume you're talking, Maury, about the U.S. feedback, just to guess.

Maury Raycroft (Equity Research Analyst)

Yes. Yes, correct.

Emil Kakkis (CEO and President)

Good. Well, we won't really go through it in detail. What we said is productive, meaning we're having a good conversation that's practical and looking at the issues, but we don't really provide detailed feedback on how it's going, what's being said until we get to the end and make a decision. Our, our goal here is to get, to get the loading doses to be equalized and the regimens close. I think that we've said in the past we might try different regimens, slightly different regimens, but I would look to try to get a program that is a single path and loading and a maintenance that we could run a phase III trial off. Remember, we're talking about the phase II section, and from it, we would derive what our phase III plan would be. I feel...

I'm encouraged we should be able to get this figured out and get to a right dose. On the registrational dose, yes, so the expectation is we're gonna have one dose globally for the load. I will say one thing about dosing, in rare disease in general as well as in Angelman, there really is no the dose, there is doses, and the doses will have a range of responses always. Our expectation, though, in the long run with Angelman is that there will be some need for individual titration. We may prove the efficacy on a regular dose. There may be some individuals that need higher or can get by with less, and that will become part of it.

I'd point out, for example, the work we did on Kuvan for PKU, where we had one dose for the phase three study, and then individual patients kind of titrate to their need. I would just guide you to think that way. The goal here in phase two, though, is get to dose that we can load and have an important clinical effect in a large majority of patients and show the benefits of that treatment with the expectation in the long run that individuals may titrate to reach their optimal effect in their own particular situation.

Maury Raycroft (Equity Research Analyst)

Thank you.

Emil Kakkis (CEO and President)

Yes, go on. Mm-hmm.

Operator (participant)

Our next question comes from Dae Gon Ha with Stifel. You may proceed.

Dae Gon Ha (Director and Equity Research Analyst)

Great. Good afternoon. Thanks for taking our questions. I'll ask a question on setrusumab again. Emil, looking back at ASTEROID, the bone biomarker data that's been presented previously, wondering if you can comment on tachyphylaxis, if that's even appropriate. Does Romosozumab recommended one-year treatment duration have any implications on chronic therapy for setrusumab? Thanks so much.

Emil Kakkis (CEO and President)

Yeah. I actually think you're, What you're talking about in setrusumab ASTEROID data is if you look at P1NP, the peak of P1 kind of goes down, and so it looks like you're losing effect, but you're not really. What's happening is you're losing the synchronization of the response. It's like a pebble in a pond. The beginning of the response is a very sharp start, and then as each wave comes, it settles in. But if you look at the right dose, at the end of the year, you will see that you get a continuous steady P1NP areas in the curve now that's going up. The peak is less important than the area under the curve, right? You have to think of it as a, as a harmonic pattern, essentially.

If you look at the bone mineral density data differently, you will see the bone mineral density data is linearly going up continuously for the entire year at 20, not at eight. At eight, it was fading a little more at the end of the piece, but at 20, it looked continuous, and it was ongoing at a good clip, even at the end of the year. Our view is that for this disease, based on that information as well as the information from the withdrawal of setrusumab, the decline in bone mineral density indicates that there's a strong reversal of the effect if you don't continuously treat. Our expectation is that we will need to continuously treat beyond one year.

It is possible that, let's say, after a couple years or after achieving some level of bone mineral density that is sufficiently strong and normal, that you could back into, let's say, an every other month regimen or a maintenance regimen. We're gonna continue to look at that as we go. Right now, we think OI is different from osteoporosis, as you do need chronic therapy. There's a stronger stimulus for resorption there, and we need to counteract that with continuous exposure. Everything we've seen from the ASTEROID would tell us that continuous treatment will get you continuous bone production. We look at this disease as being distinctly different for that reason.

Operator (participant)

Thank you. Our next question comes from Anupam Rama with JPMorgan. You may proceed.

Malcolm Kuno (Research Analyst)

Hi. Thanks for taking the question. This is actually Malcolm Kuno on for Anupam. Looking ahead, is there anything that you would be looking for in Sarepta's AdCom panel next week that could read through to your broader gene therapy program?

Emil Kakkis (CEO and President)

You know, I think the panel's really looking at whether they're gonna give them accelerated approval. There's the principle of accelerated approval may be a test there and, in addition to the specifics about their particular trial. We think accelerated approval is really important in the rare genetic diseases, so we're supportive of approval. We don't think that approval will cause other treatments or better treatments to be not developed. We, in fact, think that an accelerated approval for that program will help further improvements in Duchenne Muscular Dystrophy be developed. I think the panel needs to understand that. From affecting our own programs, all of our programs have agreed upon endpoints with the FDA, and they're all really based on standard approvals, and they're a combination of biochemical endpoints and other clinical endpoints, whether it's removal of their drugs or other outcomes.

Our program is really not... None of those three programs are dependent on accelerated approval at this point, and the endpoints are set for what would be expected to be standard approval. With regard to MPS IIIA and the Sanfilippo program, there was an understanding about a clinical based long-term follow-up approach to achieving a filing. We are evaluating that situation, the use of accelerated approval and heparan sulfate biomarker. We think that's the right thing. We think that situation is true for a number of companies, and I think that a number of the companies have treatments that reduce heparan sulfate, and I think is will be highly predictive of good outcomes if you achieve a sufficient reduction in heparan sulfate.

There is maybe some meaning to that, I would say it's gonna say more about therapy Duchenne than on whether MPS IIIA or other types of biomarkers will get approved. As a company, we're supportive of using the accelerated approval pathway in rare diseases, and we think that the FDA should not consider that to be a problem. That it should be an opportunity to treat more rare diseases than we've been able to treat now that we have these novel precision medicine treatments available to us.

Malcolm Kuno (Research Analyst)

Great. Thank you.

Operator (participant)

Thank you. Our next question comes from Joon Lee with Truist Securities. You may proceed.

Joon Lee (Managing Director and Senior Biotech Analyst)

Hey, thanks for taking our questions. On the efficacy signal, you're seeing in the Angelman trial so far, what is your latest thinking in terms of approvable endpoints? Is it still CGI-I-AS or something different? Is that also part of your ongoing discussions with the FDA? Thank you.

Emil Kakkis (CEO and President)

Yeah. I mean, what we have talked about before continues, and there's both receptive and expressive communication are important, and we're seeing improvements there. I think we're seeing improvements, we said before, in sleep and actually several domains. We see a lot of potential in any of these. Since communication is important, and if we were pushed into picking one, we would pick the communication domain as being a unique and powerful one that's important to patients. In my view, though, a number of those domains are important. You could decide on any of them. At this point, our discussions with FDA have not gone into the endpoints. We've certainly touched on them. They understand what we're working on, and we expect to be able to get into that later this year with them.

Right now, our focus is on getting the phase II open and understanding how to optimize our plan to open the study globally for the phase II portion of the Angelman program.

Operator (participant)

Thank you. Our next question comes from Yigal Nochomovitz with Citi. You may proceed.

Carly Kenselaar (Equity Research Analyst, Biotech)

Hi, team. This is Carly on for Yigal. Thanks for taking our questions. We wanted to ask about the initial data for Wilson disease expected early next year. I guess can you help put into context what you plan to show and what you believe would constitute a positive outcome from that part of the study? Thank you.

Emil Kakkis (CEO and President)

Well, the study, just to remind you, I'll let Eric touch on what we're evaluating. The study is basically looking at three dose levels, right? The study will look at three doses, and the main purpose of this part is to pick the most effective dose level, which we'll look at a number of ways. We have had our discussion with the FDA, and it's a seamless design. That is, the phase II will lead right to the phase III. We've had discussion, and Eric touch on what our phase III approach is for the primary endpoint.

Eric Crombez (Chief Medical Officer and EVP)

Yeah. Great. I mean, fundamentally, Wilson disease is a disorder of copper metabolism, and we can measure that in many ways. You know, certainly with the clinical regulatory precedence that's been established, that's important for us to understand. In addition to, you know, kind of the, I guess, what I'll call typical ways to measure copper, we are also looking at an activity-based assay, which is measuring the actual loading of copper onto ceruloplasmin. That's important because the only way for that loading to take place is for the transgene to be producing that protein and for establishing the normal trafficking of copper. We will be also measuring ceruloplasmin levels themselves. If not bound to copper, ceruloplasmin is quickly broken down.

If we can show increases in stabilization of ceruloplasmin levels, that's another way to show that the transgene is producing protein and we're establishing the normal trafficking of copper. Again, we're looking to, yes, correct the toxicity of free copper, which chelators also do, but also correct the functional copper deficiency, meaning that without the loading of copper onto ceruloplasmin, you're having a functional deficiency in these cells and tissues that need copper as a cofactor for enzymes.

Operator (participant)

Thank you. Our next question comes from Yaron Werber with TD Cowen. You may proceed.

Yaron Werber (Managing Director, Senior Biotechnology Analyst)

Yeah. Great. I have an interrelated question on Angelman also. Can you just give us a little bit of a sense in the press release, it mentions 14 patients have had at least six months exposure and nine with more than a year. Is that at the 14 mg dose? Is that the only dose you're expanding right now, or are there two different doses? Secondly, when you're talking about next data update in the second half of this year, is that going to be really safety only, or do you expect to release some efficacy at that point as well? Thank you.

Emil Kakkis (CEO and President)

Yeah. Remember, in the extension patients, they enter, there's a load phase, and they were loaded doses between really 3.3 to 7 and a half. Then they were on maintenance between 10 and 14. All those patients on long-term therapy are getting Q3 therapy at 10 to 14 dosing. All right. The loading dosing is starting is actually lower than that. That is the maintenance dosing during the maintenance period. We haven't said what the dosing is in our current phase II expansion. We've decided to hold that information back.

We have a plan based on the, what we've learned from the dosing so far. We know you can lower it, we'll lower it at a certain dose and maintain at where it may rise to higher doses as we've seen in our other study, in the first part of the study. The data later in the year will not just be safety. Our intent is to put out information on the efficacy. We're working through what we'll provide and when from both the long-term data and the expansion cohort separately.

Operator (participant)

Thank you. Our next question comes from Kristen Kluska with Cantor Fitzgerald. You may proceed.

Kristen Kluska (Managing Director, Biotechnology Equity Research Analyst)

Hi, good afternoon. Just considering the late-stage nature and potential approval cadence around a number of your late-stage candidates in the next few years, wanted to ask how you're thinking about leveraging and building on some of your ex-U.S. and global footprint to address some of these markets where you maintain rights.

Emil Kakkis (CEO and President)

Well, thank you. Commercially, one of the benefits of having a company with multiple approvals, it does give us an opportunity to leverage that infrastructure. While we had Crysvita in certain territories, Latin America, particularly long-term, and Turkey currently, globally, we have Dojolvi and MEPSEVII. We brought in Evkeeza primarily because we felt we could leverage our global commercial footprint, more effectively by adding that, especially in this gap between several approvals we had and then the next approvals. The Evkeeza sort of added another product to put in a launch mode ex-U.S. One of the things, advantage of rare disease, you can launch with relatively smaller teams of high-quality people that can get a lot done, and that's key, important in being efficient, capital efficient in how we do this.

With the combination of products we have, we think we are able to leverage that. If you think about the setup now, having those, the three products globally and four products in South America, we're well set up then to be able to launch several new products, whether metabolic disease or expanding into neurologic disease. I do think it sets up what's important to us. A real principle for Ultragenyx from the beginning was that to optimally commercialize and gain value, you really need to commercialize globally. You can't just do U.S. You really need to get pull in revenue from globally once you've done all the work to develop an approvable product. That's been our philosophy from the beginning. I think it's starting to pay off as we start to gain and grow revenue outside the U.S.

Kristen Kluska (Managing Director, Biotechnology Equity Research Analyst)

Great. Thank you. Looks like you have a pretty significant presence at ASGCT this year. Wondering if there's anything in particular you think we should be focusing on? Thanks again.

Emil Kakkis (CEO and President)

Well, we've got a lot of programs, probably more gene therapy programs in phase III than anyone else. Is that true? I think there's no one with more that I'm aware of. We also have a very strong Pinnacle PCL platform, and there's some information on the platform out there as well, as well as about our new program, UX055, which is a CDKL5 Intrathecal gene therapy, which has some very exciting data in animal models and even non-human primates and pigs. We feel good about our innovations and how to enhance delivery to the brain for AAV9 gene therapy, and that one will be coming to an IND. There's data on that as well at ASGCT. We are busy there with all the technology and products that we're working on.

Operator (participant)

Thank you. Our next question comes from Jeffrey Hung with Morgan Stanley. You may proceed.

Michael Riad (Biotech Equity Research Analyst)

Hi, this is Michael Riad on for Jeffrey Hung. Thank you for taking our questions. First one for GTX-102, what are you learning during the maintenance phase, especially for the nine patients who've been on for one year plus? The further out you go, has there been any evidence to suggest patients are building tolerance and can benefit from dose escalation? Thanks. I have a follow-up.

Emil Kakkis (CEO and President)

Okay. I think one of the key things to learn from me, and it's worth certainly mentioned long-term safety. The fact we're dosing so many kids chronically at these dose levels is a very important piece of the story. If we were to have any safety event, that happens no matter how much drug you give, just needs a certain amount of drug to be accumulated, then you might have a problem at some point in time. The fact you can give the drug below a threshold and give it this way that you can do that means the drug can be given long-term and chronically, which we think is important. The thing that's even more interesting and important to understand is this is a developmental disease, and once we turn on their ability to develop, it doesn't mean they develop instantly.

They have to start developing, whether it's language or other things, it takes some time. What we've said is we're seeing time and dose-dependent improvements, meaning as we watch, people are gaining ground and improving, and we feel like that gives us some confidence that we're working in a dose range that can be effective and that can change the future of these patients. That's what we're learning from maintenance dosing, both long-term safety and the ability to chronically dose the drug and the fact that we can still see progressive gains.

Michael Riad (Biotech Equity Research Analyst)

That's very helpful. Thank you. Then maybe just a quick follow-up. For Cosmic, obviously, the clearest measure is gonna be bone fracture rate. What about bone deformation and pain? It seems that these would be clinically meaningful for these patients. Is there any ability to measure bone deformation in these patients? Thanks so much.

Emil Kakkis (CEO and President)

Sort of bone deformation is really tricky. We, you know, we did that kind of work in XLH, where you develop scales, and you have readers and all that. The problem is it's not something that's gonna help us with the regulators, and while it may help patients to know, it's kind of thing is harder to power. Now with regard to pain and quality of life, those are being measured in the trial. We're certainly measuring their pain, but also chronic functional activity 'cause what you have to do when people have very fragile bones, they also don't feel good all the time. Even if they don't have a fracture, they have microfractures, things that go on and make them feel bad, that cause them to not be active, stay sedentary, etc.

We'll be doing the kinds of quality of life and practical functioning assessments that will help support what the interpretation is on fractures. I appreciate you need to. It's not enough just to look at fractures, but to look at the total case of an ex-OI patient and learn more from them, and then we are doing that. Deformation, though, is one thing. We'll look at the X-rays and see them, but we haven't formally went about a way to assess that. I do think that's something you would probably wanna do in post-marketing, and particularly, the most important thing really is to take a look at our one or two-year-olds that we treat and to look how their bones are maintained versus deformed.

I think if we strengthen their bones, then when they're four or five years old, they could be dramatically different from what you'd see in someone who didn't have the right bone strength, who had fractures for several years instead. We'll look forward to that, but I don't think that's necessarily about the phase III. That'll be something long-term, it's one of the main things we've got into this program is because we wanted to be able to change the future of these patients, and we think starting young before their bodies are destroyed will be a great place to change their future in a kid that doesn't end up in a wheelchair but actually walks and isn't in chronic pain, but actually can live a real life.

Operator (participant)

Thank you. Our next question comes from Joel Beatty with Baird. You may proceed.

Joel Beatty (Biotechnology Equity Research Analyst)

Great. Thanks for taking the question. For the GSDIa gene therapy, do you have agreement with FDA on the primary endpoint? Are there harder clinical endpoints that are being monitored that will be important for regulatory filing or commercialization?

Emil Kakkis (CEO and President)

We do have agreement on that. We're using the reduction in corn starch, while maintaining glucose control, and that has been agreed to. The clinical efficacy will not be just based on the primary endpoint alone. There will be other secondary endpoints that will be looked at as part of the clinical meaningfulness assessment. The primary endpoint, corn starch reduction, was agreed.

Joel Beatty (Biotechnology Equity Research Analyst)

Good.

Operator (participant)

Thank you. Our next question comes from Salveen Richter with Goldman Sachs. You may proceed.

Tommy Lau (Global Market Analyst)

Hi, thanks for taking our question. This is Tommy on for Salveen. To follow up on the Angelman question, how are you thinking about the interpretability of this update in terms of efficacy? Maybe any details on months of exposure, range of doses and cohorts would be helpful here. On OTC, can you just comment on the pace of enrollment and any headwinds or tailwinds there and when we could see data from this program? Thank you.

Emil Kakkis (CEO and President)

On Angelman, yeah, what we've heard and that we need to do is make sure when we put out efficacy data, that we're putting it in proper context. It's not only just dose and time of exposure, but how does this compare to a comparable patient from natural history and maybe to do a propensity score type analysis where you compare matched natural history patients to your patients to help create greater confidence around the difference between the treated patients we're doing and what you normally see in these patients. We intend to do that. The other thing is to calibrate the magnitude of change. How big is that change? What does the score mean clinically? Is it clinically meaningful? That would be the second element of what we do.

We'll also, for those patients of the original 5 that have been redosed, we can certainly compare their results to how they did before, and that will probably help give you some sense. We are sensitive to the issue, which is to make sure we're providing you the proper context, interpret the efficacy data effectively compared to what you would expect for these patients.

Tommy Lau (Global Market Analyst)

Next question was on the timings of OTC enrollment and data expectations.

Emil Kakkis (CEO and President)

You were on OTC, you're talking about the gene therapy? Is that right? Yeah.

Tommy Lau (Global Market Analyst)

Yeah, it was.

Emil Kakkis (CEO and President)

OTC. Okay. Well, that study is enrolling now. It will depend how long. We put the GSD 1 study as the primary drive of, on our gene therapy effort and, pushed back the OTC in terms of the effort and drive. It is enrolling now. We plan to be an international study. The sites are open, and there's growing interest, it should be enrolling this year. The timeline of that study is a little longer because the study is 64 weeks, it's not 48. The timeline of the data would be 64 weeks after the last patient gets enrolled. That's not. Obviously, that means if we enroll even before the end of this year, the data will not be next year. It'll end up being the year after because of the longer timeframe.

Operator (participant)

Thank you. Our next question comes from Debjit Chattopadhyay with Guggenheim. You may proceed.

Ry Forseth (Biotechnology Equity Research Associate)

Hi, this is Ry Forseth on for Debjit. We wanna get your thoughts on the translatability of P1NP correlations to BMD in the setting of post-menopausal osteoporosis, translated to pediatric individuals with OI.

Emil Kakkis (CEO and President)

Okay. Well, we really don't have to worry about osteopetrosis 'cause there is enough ASTEROID data from P1NP and BMD. There were 90 patients at three dose levels that had different doses of different P1NP responses and different BMD responses. We actually have 90 patients worth of data to show the correlation. What was found is that P1NP at one month is highly predictive what you see at one year in these patients, and that there clearly was a dose dependent on P1NP and that translate later. What's interesting then is that how much P1NP you're making is really a measure of how much bone you're laying down. The way you respond at the beginning pretty much sets in play, in motion a process which will generate bone mineral density. We're pretty impressed how well they're correlated.

That said, we're also measuring BMD in our dosing study. We will actually have some data through six months in some patients for the phase II study, which will allow us to directly confirm what our P1P is telling us about dose with actual BMD data too. We'll have a little bit more than just P1P for our phase II in terms of understanding how to optimize the dose for our phase III.

Ry Forseth (Biotechnology Equity Research Associate)

Thanks for that. In adults translate to what you expect in the pediatric population. Is it sort of one to one?

Emil Kakkis (CEO and President)

Well, one of the reasons to do the study is to actually determine how the adult response with OI relates to the pedes response. Our expectation, in fact, that young patients will respond much more strongly, that they have higher P1NP level to begin with, and they'll have a far larger surge because their bones are metabolically more active. The real other question is, because younger patients have faster metabolism, they could clear the antibody faster, and so we'd wanna look at exposure too. So we'll look at how exposure correlates with P1NP, and then we'll look at how exposure relates to age of the patient. The combination of that will tell us, do young patients, are they equally sensitive to adults at the same exposures? Yes or no. If they are, what is the exposure needed at different doses, at different ages?

Do young patients need more drug? That would be the kind of tweaking that would help us assure that if, you know, if the 4-year-old really needed more antibody than the 12-year-old, that we can make that adjustment and give them the optimal benefit of the drug. That's kind of the way we're looking at it. Hopefully, that's helpful.

Operator (participant)

Thank you. Our next question comes from Liisa Bayko with Evercore. You may proceed.

Speaker 18

Hi. Thanks for taking our question. This is Jamie on for Liisa. My question's on setrusumab. In that year, you'll provide some BMD data. How many patient worth of data should we expect? Is there any correlation between bone mineral density and fracture weight? If so, how strong is the correlation? Thank you.

Emil Kakkis (CEO and President)

Yeah. We have 24 patients enrolled in the study, and we'd expect to have P1NP data on all of them. We'll have variable amounts of BMD data, depending how long ago they were enrolled. We'll have some six-month data and probably more three-month data in BMD in this group. The question you asked then follow-up was, does BMD predict fracture? I think in OI it will. From the ASTEROID study, they showed a trend at the high dose, which was, looked consistent, but there weren't enough fractures in the adults to be able to have enough power to tell.

What we're basing this on is the fact that the bones that are weak can be restored in strength very quickly, and the mechanism of how BMD increases with anti-sclerostin should be laying down bone where it's needed, where the bone is moving or where it's unstable. Just the very mechanism alone means the BMD should predict well. When BMD hasn't predicted, it's usually with catabolic, anti-catabolic agents like bisphosphonates, where you're just keeping bone wherever it is, but it may not be in the right place. When you make bone and lay it down in the right place as this mechanism, the bone mineral density will predict improvement in strength. Whereas if you just block bone resorption, you end up bone somewhere, but it may not be in the right place, and that's why there's been some discrepancy in the past.

Anabolic agent like this, we feel the bone strength will correlate. It did well in the animal models. That bone mass correlate very well with bone strength improvement, whereas bisphosphonates, that wasn't true. Bone mass increased more than the bone strength did. I think there's enough data to tell us that this mechanism will give us a bone mineral density that is effective in improving bone strength.

Operator (participant)

Thank you. This concludes the Q&A session. I'd now like to turn the call back over to Joshua Higa for any closing remarks.

Joshua Higa (VP of Investor Relations)

Thank you. This concludes today's call. If there are additional questions, please contact us by phone or at [email protected]. Thank you for joining us.

Operator (participant)

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.