Ultragenyx Pharmaceutical - Q4 2023

Transcript

Operator (participant)

Good afternoon, and welcome to the Ultragenyx Q4 and Full Year 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 to Joshua Higa, Vice President 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; Eric 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 (CEO and President)

Thanks, Josh, and good afternoon, everyone. In 2023, we generated significant momentum across our commercial and clinical programs that have set us up for a catalyst-rich 2024. On the commercial front, we progressed international regulatory and reimbursement negotiations across our marketed products, continuing to add to new approvals and positive reimbursement decisions. This geographic expansion, along with growing demand in our existing markets, put us in position to maintain our trajectory of robust year-over-year growth. On the clinical side, we released new data on our key programs in 2023 and successfully advanced enrollment of our priority programs that can accelerate value creation for our company this year and in the coming years. At our Analyst Day in October, we shared exciting data from three programs that all will have additional data catalysts in 2024.

On UX143 for osteogenesis imperfecta, the interim Phase II data showed rapid and substantial increases in bone mineral density and Z-score after just six months of treatment. This led to a 67% reduction in annualized fracture rate, with 20 of the 24 patients showing no radiographically confirmed fractures at six months. On GTX-102 for Angelman syndrome, data from the long-term extension cohorts in the Phase I/II study demonstrated clinically meaningful improvements across multiple neurodevelopmental domains, including cognition, receptive communication, gross motor, behavior, and sleep. These data show we can repeatedly dose GTX-102 for much longer than one year with acceptable safety profile. On UX701 for Wilson disease, the data we presented showed four of five patients in the lowest dose cohort had begun tapering their standard of care, including two who were completely off chelators and/or zinc therapy.

While it's still early for the UX701 program, we are encouraged by the data we have observed. Our momentum is continuing into 2024 with multiple clinical development updates. Last week, GTX-102 was granted Priority Medicine, or PRIME, designation by the European Medicines Agency based on the positive early clinical data from the long-term extension cohorts and the potential of GTX-102 to address the unmet need for a treatment in this disease. The clinical data we've shared with the Street, along with positive U.S. and European regulatory interactions, give us confidence that we will be able to navigate the development path for this program. For UX111 in Sanfilippo A syndrome, we released phase III data last week from extension and newly treated patients at the WORLDSymposium Annual Research Meeting in San Diego.

The results we shared demonstrated treatment with UX111 resulted in rapid and sustained decreased levels of heparan sulfate in the cerebrospinal fluid, and the sustained reductions in CSF heparan sulfate exposure over time was correlated with improved long-term cognitive development. Our discussions on accelerated approval pathway with the FDA are ongoing, and we continue to believe there's a strong case to be made in this program. Looking ahead, we are entering 2024 in a robust financial position with $777 million on the balance sheet, including proceeds from our equity offering in Q4 that raised $326 million. We're also continuing to focus our spend and resources on the key clinical programs that will drive value for our company, many of which will be sharing data in the coming months.

Our Chief Medical Officer, Eric Crombez, will review more of these updates in his section. There's a lot to look forward to as we continue our efforts to lead the future of rare disease medicine. Now I'll turn the call over to our Chief Commercial Officer, Eric Harris, to provide an update on our commercial efforts last year that led to a 20% revenue growth in 2023.

Erik Harris (Chief Commercial Officer)

Thank you, Emil, and good afternoon, everyone. I'll start with Crysvita's performance in North America. I want to remind everyone that on April 27, 2023, we successfully transitioned the promotion of Crysvita in the U.S. to Kyowa Kirin, and that Crysvita will continue to generate growing revenue for our company. During the transition period, the Ultragenyx field team continued to find patients from community physicians while introducing key accounts to Kyowa Kirin field teams. Our patient support services team supported the transition of patients from the Ultragenyx hub to the Kyowa Kirin hub to ensure continuity of treatment and reimbursement. In 2023, the smooth transition and additional field resourcing helped support the growing demand for Crysvita in the U.S. and Canada. In fact, there were approximately 500 start forms generated in 2023 from a continually growing base of unique prescribers and patients on reimbursed therapy.

The success we saw in 2023 has led us to further amend our agreement with Kyowa Kirin, that will allow our experienced field team from Ultragenyx to continue to support Crysvita in the U.S. through this year. With a robust demand from 2023, a fully transitioned patient support services hub, and the support of Ultragenyx's focused field team, we feel confident that 2024 will be another strong year for Crysvita in North America. Shifting to Crysvita in Latin America, we finished the year with over 500 patients on reimbursed therapy, which included approximately 50 new patients who began commercial therapy in Q4 of 2023. Over the course of the year, we added approximately 200 new patients to our growing base of patients on commercial therapy.

While most of the current demand in Latin America is driven by pediatric patients, we are seeing an increasing uptake in adult patients across the region, reflecting a similar pattern that we saw in North America. In Latin America, we expect quarter-to-quarter variability in revenue, driven by uneven ordering patterns, but remain confident in the underlying demand growth for our products. These combined efforts across our global organization generated 2023 Crysvita revenue of $328 million, which is a 17% increase compared to 2022. For Dojolvi in the U.S. and Canada, the demand for start forms remains strong. In 2023, we added approximately 115 start forms and 95 patients on reimbursed therapy, resulting in over 470 reimbursed patients in the U.S. since launch.

The number of prescribers continued to grow, adding approximately 40 new prescribers in 2023. In Latin America, we are making steady progress in finding patients despite the lack of newborn screening in the region, while expanding access for Dojolvi to more patients. Most recently, in Mexico, Dojolvi was approved by the HTA for inclusion in the National Medicine Compendium, which is an important step toward increasing reimbursed patients in 2024. Across the EMEIA region, Dojolvi is driven by named patient sales requests as we continue to deepen the awareness of LCFAOD with key stakeholders through our medical teams. Though the majority of current requests are coming from France, we are seeing an increased demand throughout Europe and the Middle East. In 2023, the teams generated $71 million in Dojolvi revenue, which is 27% growth compared to 2022.

Lastly, on Evkeeza, we continue progressing steadily across our launch markets in EMEIA, Canada, and Japan. In EMEIA, European HTAs have provided Evkeeza with positive clinical recommendations, and we are working through the reimbursement processes. On December 18th, we received approval from the European Commission for an expanded indication for Evkeeza in children aged five years and older with HoFH. This approval further validates the drug's clinical value and expands the addressable patient population in the EMEIA region. In Canada, both HTA bodies, CADTH and INESSS, have provided positive clinical recommendations for Evkeeza. The team is preparing to accelerate the public reimbursement process with the Canadian authorities in the coming months. In the meantime, we are working to get private payers on board to expedite reimbursement. The initial uptake on the start forms has been steady since Health Canada's approval.

In Japan, we received regulatory approval on January 18, and pricing discussions are underway with Japanese authorities. Following reimbursement approval, we expect to launch Evkeeza in Japan next quarter. The team is busy educating the physicians on the Evkeeza label and identifying appropriate patients who could benefit from the treatment. Building on the success of 2023, we expect continued strong performance across our portfolio in 2024. Crysvita will continue to drive the majority of the revenue, followed by Dojolvi and Evkeeza. With that, I'll turn the call to Howard to share more details on our financial results and 2024 guidance.

Howard Horn (CFO)

Thanks, Eric, and good afternoon, everyone. I'll focus on full-year corporate financials since we just covered our individual product performance. Starting with total revenue, for 2023, we reported $434 million, representing 20% growth over 2022. Total operating expenses for the year were $1 billion, which included R&D expenses of $648 million, SG&A expenses of $310 million, and cost of sales of $45 million. Operating expenses included non-cash stock-based compensation of $135 million. For the year, net loss was $607 million, or $8.25 per share. As of December 31, we had $777 million in cash, cash equivalents, and marketable securities. In 2023, net cash used in operations was $475 million....

which was higher than forecasted due to timing of when certain receipts and payments landed around year-end. Our 2024 net cash used in operations is expected to be less than $400 million, which is consistent with the guidance we provided last month. We are also reaffirming the 2024 revenue guidance ranges we stated last month. Total revenue is expected to be between $500 million-$530 million, which represents 15%-22% growth versus 2023. Crysvita revenue is expected to be between $375 million-$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%-22% growth versus 2023.

Dojolvi revenue is expected to be between $75 million and $80 million, which represents 3%-13% growth—excuse me, 6%-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 named patient requests. With that, I'll turn the call to our CMO, Eric Crombez, who will provide an update on our key clinical data readouts expected this year.

Eric Crombez (Chief Medical Officer)

Thank you, Howard, and good afternoon, everyone. In addition to the UX111 phase III data that we presented at the WORLDSymposium last week, we have a number of important clinical data readouts planned for 2024. These include GTX-102 expansion cohort data to be presented mid-first half, DTX-401 phase III data in the Q2, then UX701 dose-finding data, and finally, UX143 longer-term follow-up data from the phase II part of the ongoing phase II/III study. For UX143, there is also the potential for the phase III study to read out pivotal data from the first interim analysis around the end of the year. We have set a strict p-value of 0.001 for unblinding for this first interim analysis.

This means that the alpha spend is effectively zero while providing the opportunity to end the study early if the data are compelling and the primary endpoint is met. We have also built in a second interim and final analysis for this study that would occur in 2025. Regardless of the timing, the reduction in the annualized fracture rate that we saw in the phase II study and shared at ASBMR last year, gives us confidence that we will see a clinically meaningful and statistically significant reduction in clinical fracture rate in the phase III study. Shifting now to the two near-term data readouts for GTX-102 and DTX-401. I'll start with GTX-102 for the potential treatment of Angelman syndrome and the phase II expansion cohort data that we expect to share in the next few months.

The first part of the study included a dose escalation stage to understand initial safety and efficacy. Last October, at our Analyst Day event in New York, we disclosed longer-term extension data demonstrating clinically meaningful improvements across multiple domains for the patients in these extension cohorts. We also showed the first-ever developmental milestones that many of these patients have achieved to highlight the clinical meaningfulness of these changes. Earlier last year, we began dosing a larger number of patients in expansion cohorts to further study the dose regimen that we intend to evaluate in a Phase III trial. These expansion cohorts include higher loading doses, and enrollment was completed at the end of last year, with 53 patients enrolled globally. The upcoming expansion cohort data in mid-first half of this year will focus on the 20+ patients who have been on therapy for at least 170 days.

We intend to present safety and efficacy data in a similar format to what was shown at Analyst Day, specifically showing domain-by-domain changes with comparisons to natural history. With higher loading doses and a greater number of patients, we expect to verify the meaningful efficacy that was presented at Analyst Day. These data will inform dose selection and evaluation period for the phase III study. Our discussions with the FDA on phase III planning continue to go well, and we anticipate that the expansion data will support an end-of-phase II meeting in mid-2024, which would enable phase III study start up later in 2024. The next near-term data readout is for DTX-401, our investigational gene therapy for the treatment of glycogen storage disease type 1A. We have one of the largest late-stage gene therapy pipelines, and this will be our first phase III data readout.

All of the patients in the phase I/II demonstrated a clinically meaningful response to DTX-401 that has proven durable, with the earliest treated patients entering their fifth year of follow-up. In the randomized, placebo-controlled phase III study, we expect to see patients with clinically meaningful and statistically significant reductions in cornstarch therapy. We expect to unblind and share top-line data from the DTX-401 phase III study in the Q2 of this year. I'll now turn the call back to Emil to provide some closing remarks.

Emil Kakkis (CEO and President)

Thank you, Eric. We've made incredible progress across the clinical pipeline, which sets us up for a number of data catalysts this year. I'll close by summarizing those catalysts so everyone can get a better sense of what to expect.

As Eric mentioned, the next few months, we'll share the expansion cohort data from the GTX-102 phase II study. This is expected to be followed by the top line phase III DTX-401 data in the Q2. Next, we plan on sharing the UX701 for Wilson disease stage one data in mid-2024. This will be data from the three-dose escalation course that recently dosed the last patient. Closing with UX143 for osteogenesis imperfecta, we expect to share longer-term phase II data in the second half of the year. Enrollment in the phase III studies is going well, and we are on track to complete enrollment with approximately 150 patients in the ORBIT study around the end of the Q1.

The COSMIC study is also enrolling well and is on track to enroll approximately 50 patients or more around the same time or just after. 2024 is an important year for Ultragenyx. We'll continue expanding global access to our commercial products, bringing these important therapies to more and more patients. It's expected to generate more than $500 million in revenue and support our path toward profitability. We also expect to share meaningful data updates from four of our later-stage clinical programs, making this one of the most data-rich years in our company's history. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

Operator (participant)

Thank you. To ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, press star one, one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Gena Wang with Barclays. Your line is open.

Gena Wang (Managing Director of Biotech Equity Research)

Thank you for taking my questions. I have one question regarding the GTX-102 in Angelman and one for setrusumab. So, for GTX-102, you received the PRIME designation. What is the early feedback regarding approval path and the phase III trial design? And have you met with the FDA also regarding the phase III trial design? And for setrusumab, how will long-term phase II data in the second half 2024 inform the first interim for ORBIT phase III before year-end 2024?

Emil Kakkis (CEO and President)

Very good. Thanks, Gena, for the questions. So the PRIME designation was just a presentation of the data that we've seen so far, and basically, I recognize the close of data we saw. We have not settled on a phase III plan with the European authorities. That's something to become. With regard to the FDA, the PRIME designation will have no influence on the FDA. We have initiated our conversations with FDA. We've had good discussions. We're making good progress, and we feel comfortable about putting together a plan when we have our phase II data in hand, when we meet them with end of phase II. But we're encouraged by the discussion and think there's a way forward in terms of finalizing a plan for phase III.

We have said, just for reference, that we're planning the phase III to be around 100-120 patients in a randomized, double-blind trial design, and the FDA knows that, and I think that's a traditional design. I don't think there should be any problem with European authorities either, with that basic design. So we'll get the phase II endpoint... I mean, phase III endpoint settled as we move through getting all the data. With the setrusumab phase II data will tell us a little more about the fracture reduction rate over a longer period of time. It appeared from before there were very few fractures after the, you know, five, six, seventth month of treatment, and we'll get a lot more patients now out further to give us a good sense of the, the level of reduction over longer periods of time.

That will help us understand the true maximum effect that we might see on fracture reduction. Since the fracture reduction is up already at the 67% estimate rate, that puts us in good position to potentially have a positive interim. It will depend on the variation we see in patients, but we felt that that level of efficacy and any higher efficacy would put us in position of potentially being able to end the study sooner if we have profound, highly statistical significant results. We could have a very good result, though, and still not hit that standard, and we'll have another interim and final in 2025. So we're very encouraged about setrusumab and the path forward. The phase II data should help us see how great it is and understand a little bit more about the path forward.

Operator (participant)

Thank you. One moment for our next question. That will come from the line of Maury Raycroft with Jefferies. Your line is open.

Maury Raycroft (Equity Research)

Hi, thanks for taking my questions. Based on the totality of your Angelman data so far, including data from your natural history longitudinal study, as you think about a phase II design, do you have a sense of what the optimal timeframe is to assess efficacy and what age group could show maximum benefits?

Emil Kakkis (CEO and President)

Yeah. So if you look at the study data we put out last year at Analyst Day, we've continued to gain ground over time, right? So it looks like going a little longer, like day 170 is early, and if you look at day 254, the data looks much stronger. And our view is this could be anywhere from around day 254 to day 330. Somewhere in that range is the likely timeframe we would do the study. Obviously, the longer it is, that means the more time on placebo. It gives more time for separation of the groups, but it's somewhere in that time frame, time frame, and the phase II data will help us try to figure out what's the right number.

I'd want to do the study not a lot longer than it needs to be to show meaningful, profound results. In terms of age, I think right now our plan is to continue with the same age range we're using in the phase II, the four to 17-year-old. You know, early on, people thought only the young patients would respond, but we've been seeing good responses in older kids, too. So I don't think that should limit. We shouldn't need to limit phase III in order to get the best efficacy. I think we can include that whole group, four to 17, and in our phase III design. Our expectation, though, is to do a separate study, an open label study, to help look at younger kids, potentially older kids, and the other genetic types to fill out the data set.

The main phase III study, we expect to be four to 17-year-old and be somewhere between 250-330 days long.

Maury Raycroft (Equity Research)

Got it. Okay, thank you.

Operator (participant)

One moment for our next question. That will come from the line of Anupam Rama with JPMorgan. Your line is open.

Anupam Rama (Managing Director and Senior Equity Research)

Hey, guys, thanks so much for taking the question. Maybe just a quick one for me. What was the feedback on the UX111 program, MPS III program update at WORLDSymposium, and where are you there with the FDA discussions in terms of what are the push-pull levers here on, like, an emerging accelerated approval process emerging?

Emil Kakkis (CEO and President)

Well, in the meeting there, we had really positive feedback from people because I think the extended data is continuing to show good developmental progression among the longer-treated patients. That's consistent with the heparan sulfate and being predictive of good clinical outcomes. And so we're encouraged, and there's been a number of people using the HS marker and showing similar predictive value. Our discussion with FDA has been have been going on for a while. I think Peter Marks has been very encouraged with the idea that we should be moving with biomarkers, and a workshop's planned, organized by Reagan-Udall, February twenty-first, which will look at heparan sulfate across multiple programs.

We feel the data there should encourage the FDA to take the stand of accepting heparan sulfate as a reasonably likely to predict a benefit, clinical benefit marker and start doing accelerated approvals in the MPS brain disease area, which, if it happens, I believe will help us move forward in other rare genetic disorders, particularly that affect the brain. So I think we're encouraged about the progress forward of the workshop. The data we've released, the data others have released, tell us that we have a handle on how to treat MPS disease and particularly MPS IIIA, and that's a good thing because there hasn't been a single treatment for MPS brain disease approved to date.

Operator (participant)

Thank you. One moment for our next question. That will come from the line of Tazeen Ahmad with Bank of America. Your line is open.

Tazeen Ahmad (Analyst)

Hi, thanks for taking my question. Sorry for the background noise. I have a couple just on, on 701 for Wilson. You've changed the readout timeline. I think originally it was first half, and now you're saying it's mid-2024. Is just that, is that just nomenclature, or is there a reason for a slight, time shift? And then, I guess going back to, to Angelman, a question that we've been getting a lot of recently is with relation to the composite endpoint that we've talked about that includes, measures, including Bayley and CGI. But have you had detailed discussions with FDA on using that composite endpoint?

I think the main question around that is coming from the potential of a competitor to have their own Angelman data around the same time as yours and how that might affect the FDA's viewpoint of using a more traditional endpoint. Thanks.

Emil Kakkis (CEO and President)

Okay, so the timeline in Wilson is dependent on the last patient enrolled. We enrolled the last patient, cohort three, just earlier this year. We want to give them enough time, at least six months, to kind of have an opportunity to titrate their chelators, you know, get through the whole treatment process and titrate chelators. So it's slightly off from, different from where we have, but not meaningfully. So that's the timing. We want to make sure to give patients enough time to be able to get off their chelators if they can. So that's the basic story there. With GTX-102, we've had discussions on both MDRI and other ways of looking at the endpoints of the FDA, and I think they're open to various ways of looking, and I think they showed a lot of flexibility in many ways.

Whether we do MR, MDRI now will be just a question whether we want to press our case on using something novel or whether we should stick to picking a traditional single endpoint or two endpoints for the primary. But we're still working through that with FDA. I think it's been good, but I'm not really worried about the competitor. Honestly, our efficacy will be the driver of what we do. I, I don't think that their, a competitor is going to change the outcome on the endpoints. They are far behind us at this point, and I think the efficacy data they put out has not been impressive. So, at this point, I think our future is all in our hands, and honestly, I think we have some of the best team in developing endpoints, methodology around it and support for it.

Nothing in our conversations with the FDA suggests that they're listening to anyone else, particularly in this. They seem to be willing and able and ready to work with us on a final solution on the endpoint.

Operator (participant)

Thank you. One moment for our next question, and that will come from the line of Dae Gon Ha with Stifel. Your line is open.

Dae Gon Ha (Director and Equity Research Analyst)

Great. Good afternoon. Thanks for taking our questions. I'll just ask two on GSD1a. I guess the first one is, Emil, can you shed some more insights on the cornstarch reduction? So we've heard from some docs that sleeping through the night is also as important, if not more important than the reduction itself. So when you think about the outcome here, what do you consider a clinically meaningful level of cornstarch reduction? And what data will you provide to address the sleeping aspect, for the physicians? And then kind of sticking with GSD1a, can you talk about the training and monitoring of these investigators to ensure the cornstarch reduction is done appropriately versus just slower than expected out of caution? Thanks so much.

Emil Kakkis (CEO and President)

Good. I'll deal with the first question, then maybe, Eric, you could deal with the second question about the training of the site, so forth. So we haven't set a minimum threshold of change for cornstarch because we agree with you that what is probably more important than the actual reduction, is whether the patients are critically dependent on cornstarch to survive. Because the problem with cornstarch is not taking cornstarch, the problem is that each patient lives each day with a gun to his head, thinking, "If I forget to make cornstarch, I could die." That is a horrible burden to live with and have to take something every three hours. So what we know from our phase I/II study is that patients, many patients were able to have no cornstarch at night, and their glucoses were maintained. They did not drop to zero.

They were maintained and supported. So what data will we have? Well, we're looking at primary endpoint, clinical and statistical significance of cornstarch reduction. We'll also look at the number of cornstarch administrations they take, whether they're taking it at night. We'll have continuous glucose monitoring, which allows us to monitor glucose control during the night, which will also be something we'll be looking at. So in addition to the cornstarch, you'll hear about the other characterization of the cornstarch dependency, which I think are important part of the story. And it's an important part why the amount of reduction we're seeing is transformative for patients where they feel like they can go out of the house and exercise without feeling that they're going to get hypoglycemia, and drop somewhere.

And we've had many patients tell us they feel safe now that that's not going to happen to them, and many who don't take starch at night and sleep through the night. So I think those are all aspects of what will come out with the phase III data to help provide the clinical meaningfulness argument, in addition to the quantitatives around cornstarch reduction. Now, Eric, maybe you can provide a little more on the training and how we're doing this with sites.

Eric Crombez (Chief Medical Officer)

Yeah, to your point, the training and monitoring is very important here. We really did want to rely on our study teams, principal investigators, who gained a lot of experience during the phase I/II part of this program, to continue on as trial sites for the phase III. Because of the double-blind nature of the phase III study, we also wanted to build an independent group of expert physicians, truly the biggest experts in GSD1a, who aren't participating in clinical trial sites, to really work with the sites and guide them to make sure we're doing this consistently and safely.

Operator (participant)

One moment for our next question. That will come from the line of Joon Lee with Truist Securities. Your line is open.

Medhi Goudarzi (Biotech Equity Research Analyst)

Hi, good afternoon. This is Mehdi on for Joon. I have two questions. Could you please provide some clarification on the patient mix that you are envisioning for phase III? Would you exclude, you know, UPD patients, or like patients with prior experience with ASOs? And the other question is on setrusumab. What gives you confidence that a potential chronic dosing would be on the label for this treatment? Thank you.

Emil Kakkis (CEO and President)

Yeah. So you're speaking of GTX-102, correct?

Medhi Goudarzi (Biotech Equity Research Analyst)

Yeah.

Emil Kakkis (CEO and President)

So for the genotypes, we're going to stick to the genotypes we have been studying, which is the deletion type, which is 70% of the patients. The UPD and missense patients wouldn't be in the randomized control phase III, but our intent is to provide a basket study where we'll look at a cohort of those type patients, open label, to help look at their efficacy and provide support for conclusion on the label. But they won't be part of phase III, because we, as a habit and method within the company, we don't expand genetic types or types of patients we haven't treated, if we haven't studied them already in phase II. So the phase III will be all deletion type.

Since those are the most severe patients, improving benefit in the most severe patients, I think, puts us on path to be able to support efficacy with smaller studies to deal with the other types. Now, patients who had prior experience, for example, patients have been in the Roche program. We've had a number of Roche patients inquire. The challenge is very complicating right now, particularly for those that had safety events in another ASO, to drop into a phase III study. It's not something we would do. We're going to look at ways, what we can do to look at access for those patients going forward in our program. We just haven't done it yet. We still have to work out our safety and efficacy before we take on those complexities, but there's certainly patients interested in crossing over at this point in time.

Remind me, the last question you had was on which program?

Eric Crombez (Chief Medical Officer)

I believe it was on chronic dosing for OI.

Emil Kakkis (CEO and President)

Chronic dosing for OI. Okay. Why do we believe we can get chronic dosing? Well, we, we know that you probably need it. First of all, osteoporosis and osteogenesis imperfecta are very different diseases. They're very different diseases, particularly the age of the patients, the state of their bone, and the biology of their bone disease. What we know from the Orbit study that was conducted by Mereo is that when they took them off the setrusumab and put them on just bisphosphonates, they were losing bone mineral density. Their bones were turning back around the direction they gained. It's clear that you need chronic dosing. What we know now from treating patients chronically, 'cause we had, including one kid that we showed you 17 months of treatment, is they continue to gain ground and do better and better.

So everything we said in the OI indication, their bones are different, and particularly, they're younger and they have an induction effect from their genetic disease that makes them different. By stimulating, we're able to maintain their bone mineral density or grow it further. And what we do believe, there may be a point at which we need to move to maintenance dosing, where you don't need to make their bones more dense. At that point, we'll look at going into a less frequent maintenance dosing regimen.

Operator (participant)

One moment for our next question. That will come from the line of Yaron Werber with TD Cowen. Your line is open.

Brendan Smith (Biotechnology Equity Research Analyst)

Great, thanks. This is Brendan on for Yaron. First, just another quick one on Sanfilippo. I understand talks with the FDA are still ongoing, but just wondering when you think you might know and be able to make a decision on timing to regulatory filing and whether, you know, based on how those talks are going, you expect that could happen this year? And then just really quickly on GSD1a, I wanted to see how soon after the Q2 data readout you expect to be able to file. Has FDA given you really any confirmation on how long they want you to follow these patients after that primary endpoint, just to understand durability or what have you, just before you get that submitted? Thanks very much.

Emil Kakkis (CEO and President)

Very good. Good, so for MPS IIIA, the workshop coming up, I think will be important touch point, and I'd expect that after that, I would assume this first half will have a read on whether we could file off of the biomarker-based data. I will tell you that we've collected almost enough clinical data to be able to file off clinical data alone. However, we think it's more meaningful to be able to get an accelerated approval on the biomarker, but we should know this first half, the workshop being an important moment, but the follow-up meeting that may occur with the review division then will let us know what our path is. Either way, we can find a way forward for MPS IIIA.

We just think it's better for the field, both us and the field, if we are able to get accelerated approval and open the door now to treating more ultra-rare diseases. For GSD1a readout, we haven't put a timeline for filing. We have noted our plan to bring the manufacturing in-house, which will require some time, but we are, that will be an important part of what we have to do. But we'll have to go and meet with FDA to understand from a pre-BLA meeting more precisely what is expected in all the different packages, the CMC package and the rest of it. And so, that will help determine what happens. But, you know, we're if the data are positive, which we expect, you know, we'll be working to move toward a filing as diligently as we can, given the parameters I've stated.

Operator (participant)

One moment for our next question. That will come from the line of Kristin Kluska with Cantor Fitzgerald. Your line is open.

Kristen Kluska (Equity Research Analyst)

Hi, everyone. Thanks for taking my questions. So with the phase II setrusumab data guided for the second half of the year, I think that puts you at mean of at least a year and a half worth of follow-up. So I wanted to ask if there's anything that you're going to be looking for beyond fracture prevention, which, of course, is the essential goal, but then also to your comments earlier about chronic dosing. What do you think about in OI and chronic dosing in general, if there could be further improvement or even preventing further impact as it relates to some of the other features of OI, such as the deformities, the bone structure, et cetera? Thank you.

Emil Kakkis (CEO and President)

Yeah. So you're right. I think that we're probably in that range of 1.5 years, and if you could see, like, the patient we described that had 17 months of treatment, you know, he wasn't using wheelchair anymore, and he's running around and playing. I think that's kind of what we're hoping for, is to look at those secondary clinical signs that not only a reduction of fractures, but people feel better, are more active and still not having fractures. So we're gonna look for that clinically meaningful side of the story as well in those patients. Our thinking, and this relates to the maintenance dosing, is that if we improve the bone mineral density sufficiently so that they stop having fractures, have very few fractures, then we expect two things to happen.

We should be able to go to maintenance dosing, where we give setrusumab every two or three months. It allows us to maintain the bone mineral density that they have and not lose ground. But we'd also expect that when you stop having fractures, you will stop having progressive deformity, and in particularly the place we're most interested in is in the spinal column. The spinal column degeneration is absolutely the most devastating part of OI, particularly type 3s and 4s, the ones that end up in wheelchairs, whose lives are you know devastated. Preventing the vertebral fractures, which we hope to be able to see at that point in time, would be the kind of thing that would prevent the deformity of their spines, the decline in spinal function and the becoming wheelchair-bound.

Those are the kind of things which are, you know, can change the future. It's partly why we're running the COSMIC study in the two to 4-year-olds to try to capture that result. So when we head to a filing for approval,... we can establish a new standard for care that you need to be treating OI patients with setrusumab at a young age to help prevent the deformities going forward. So hopefully, the COSMIC study will add to that question that you've asked about changing deformities. If you could do that, it could be that you could stop OI type 3, unfortunately, ending wheelchair-bound, and what a terrific result that would be, and it's what we think is possible with what we've seen so far.

Operator (participant)

One moment for our next question. That will come from the line of Salveen Richter with Goldman Sachs. Your line is open.

Lidia Rachkova (VP)

Hi, this is Lidia on for Salveen. Thanks so much for taking our question. We just have one on UX701. Could you just help us frame the clinical update expected this year, specifically around how much proof of concept we could expect here? Thanks so much.

Emil Kakkis (CEO and President)

Yeah. So the proof of concept, the information you're gonna get are five patients at three doses, right? So it's still a relatively small set of data. What we'd be looking to see is, can we eliminate the need in at least some patients for chelators, that is, we can remove their chelators and still maintain urinary copper, that is, we can replace the chelators. The second thing, can we restore copper distribution? That is the place where the gene therapy can exceed what you obtain with chelators. Because we didn't get into the Wilson gene therapy business just to replace chelators, just to get rid of a treatment. We got in there because we think you can have a more profound beneficial treatment that restores copper distribution as well as detoxification.

So we'd want to be able to show that both those things are happening. If we can show that both those are happening, patients at the optimal dose and done with safety, it sets us up for immediately rolling a phase III study at that dose and regimen that will allow us then to potentially, you know, redose. The stronger the benefit of the copper distribution on their outcomes, then the more likely the drug will become adopted by a larger fraction of Wilson patients. If it's, we're great at removing the toxicity, and then it could be the 23% of the patients that are not tolerating chelators very well, that it would be beneficial.

Our expectation, though, is it could be more beneficial than you might imagine, given what's known about chelators, and that will open the door to having a larger fraction of Wilson patients that would respond. So it will give us at least the beginning framing of those two aspects of the Wilson disease. But remember, it's only five patients per group, so we cannot expect to have definitive clinical outcomes results in that grouping to tell us the answer. But with a phase I study following that, we'd have enough patients in there to start to say something more about the clinical meaningfulness or the secondary neurologic effects, otherwise, that you might obtain by having restoration of copper distribution.

Operator (participant)

One moment for our next question. That will come from the line of Yigal Nochomovitz with Citi. Your line is open.

Ashu Kumar (TTS Cross Border Fund Transfer Product Manager)

Hi, team, this is Ashu Kumar on for Yigal. Thanks for taking my question. I had a follow-up on an earlier Angelman discussion. I guess, as you're thinking through the various scenarios, between a more novel endpoint for phase III versus a more traditional endpoint, I'm curious how you think the expansion data you're planning on sharing with us here might capture, you know, the potential for a more novel endpoint. And if you lean towards the more novel end of the spectrum, you know, and you take that to regulators, is there maybe potential that you need to generate additional data beyond this expansion cohort to submit before you start the phase III? I'm just curious, how are you thinking about that. Thanks.

Emil Kakkis (CEO and President)

Yeah, well, our focus, I mean, I think our focus in terms of endpoint choice, I mean, the main ones we've already shown that we've tested before and we're adding to, are, we're not necessarily expecting brand-new endpoints to come out, but so we'll be dependent primarily on what we see. The thing that will happen in the study, though, is that we'll get a large number of patients loaded the same way, right? Which we haven't had, which will give us a better or more precise estimate of the change we see and have it be more reliable, not, not wishful thinking, but to see a large number of patients showing a very similar pattern or result. Our goal expectations are from the endpoints. We've talked about five domains, which the Bayley was for three of those domains and two other endpoints for the behavior and sleep.

Those are gonna be the core five domains that we're gonna be working with. There will be other assessments for fine motor and expressive communication, but the five we've talked about will be the main drivers. So I don't really think there's gonna be a point where we're gonna start fresh with a new endpoint and restart over. That's not something we need to do. We think we have enough data among the ones we know to come up with a good conclusion and structure the endpoints in a way that gives us the best insight in how the drug works and gets you know, regulatory agreement. But we would certainly wouldn't want to start off fresh and restart the discussion. We do believe we'll have enough to make that conclusion with the agency.

Operator (participant)

One moment for our next question. That will come from the line of Jeff Hung with Morgan Stanley. Your line is open.

Jeff Hung (Equity Research Analyst of Biotechnology)

Thanks for taking my question. For UX111, you mentioned that you've collected almost enough clinical data to file off the clinical data alone. What length of long-term follow-up do you need to accurately measure potential for improved development with sustained HS normalization? How should we think about the time course for developmental?

Emil Kakkis (CEO and President)

Well, this is one of the areas for discussion with the agency. Originally, they had told Abeona, and in our discussions, had a requirement to see at least patients reach age five years. However, we've been able to show that that between 24 months and 60 months, in that period, there is the most rapid decline normally in natural history. That if you look at the estimated yearly change in development and the trajectory of development, you can readily distinguish patients during that period. We have a number of patients now that have already gone past 60 months or five years, but between 48 and 60, there are a number of others that are also showing good development. We think the combination of those patients may be already enough clinically to demonstrate the benefit, which was part of that update.

But we're working to understand, in our new analysis, we showed, and this estimated yearly change and its relationship to area under the curve exposure, helps provide better insight into how to understand trajectory of development over time. And we think this means we can interpret better what's happening between, let's say, 30 months of age and 60 months of age, to know what is the trajectory of a patient with Sanfilippo that's untreated, and what's the trajectory of someone who has adequate heparan sulfate reduction. And so those will be what we'll be pressing for. But even just patients from 48-60 months, a minimum of 48-60 months, we already have clinical data saying the drug is effective.

So it is another way for us to go forward, but still far more valuable to get an accelerated approval to include all the data and all the patients, and accept the 48-60 minimum treatment data as simply evidence toward the reasonably likely to predict standard.

Operator (participant)

One moment for our next question. That will come from the line of Joseph Schwartz with Leerink. Your line is open.

Joe Schwartz (Senior Managing Director of Rare Diseases)

Hi, all. Thanks for taking our questions. This is Will on for Joe today. So just two quickly from us, both on Angelman. So previously, it was noted that you expect to see more of an effect as compared to the prior data cut, given the higher doses in the expansion cohort. So I just wanted to make sure that this is still the expectation. And then also for Angelman, we often hear that these patients are constantly gaining skills, and there may be some increased hope in the community, which could lead to a placebo response. So just wondering what strategies can help mitigate a potential response in a pivotal trial. Thank you.

Emil Kakkis (CEO and President)

Thank you. So our expectation that loading at higher doses, that the improvement should be accelerated relative to what we've seen, we haven't changed our view on that. The thing I would say is, remember that in the phase II data we showed you from Extension, we went all the way out to 500 days of treatment, right? So the magnitude effect you see at 500 days is not going to be the same that you're going to see at 170 days. But we do expect that the higher load dose and the large number of patients, it should make us allow us to verify that we're seeing a real effect. Now, with regard to the placebo response, I think the longer-term data already show you that there's, it's not a placebo response because they continue to gain ground.

The placebo effect doesn't go on forever. It goes on for a while, then people eventually recognize something's not happening. But to be able to see linear or continued gain of ground over time is clearly beyond what you would see with a placebo effect. In a phase III, though, you have to worry what you're thinking, "Well, what if people are optimistic?" What we are doing in a lot of the key endpoints, use third-party, third-party psychologist evaluators, like for the Bayley. The third-party evaluator is looking at the kid doing things. While a patient report may have some impact, they are looking for the kid to do things, so that helps provide some objectivity that we're seeing the kid actually do things, and it's not just wishful thinking.

That said, our expectation is to have a large enough effect and a large enough population of patients to be able to power past a placebo effect. In addition, the longer timeframe we've been talking about, which is maybe 250 days or 330 days, should be well past the normal window of what placebo would be. I think when you look at how many domains are improving in patients, 2-5 domains improvement in most of the patients, it will become evident to people who's responding, who's not responding. And so the issue you raised is certainly one of importance, and we've been thinking a lot about it. But I do think the magnitude effect, the length of time, are factors which will help reduce the risk of a placebo response, clipping or comparing the results of that study.

Operator (participant)

One moment for our next question. That will come from the line of Jack Allen with Baird. Your line is open.

Jack Allen (BIotech Senior Research Analyst)

All right. Thank you so much for taking the questions. I have two quick ones. The first of which has to do with the commercial products, namely Dojolvi and Crysvita. I know there's some seasonality in the Q4 numbers, but when you analyze out the Q4 numbers, it seems like you're already at the lower end of guidance. I was hoping you'd provide some more color as it relates to how we should think about the growth of those two products over the course of 2024. And then on GSD1a, any thoughts on your early market research here? Is there a subset of patients that are more severe that could be asked to early adopt a gene therapy here?

Emil Kakkis (CEO and President)

That's for GSD1a?

Jack Allen (BIotech Senior Research Analyst)

Yes.

Emil Kakkis (CEO and President)

Okay. So with Dojolvi and Crysvita, you know, guidance is always, you know, an art form, but our view is that we're continuing to see something close to 20% growth. Dojolvi may be a little slower because some of the territories we just have, we're responding to named patient sales. I think Eric made that clear. We're in the territories that we're commercializing, we're continuing to see the 20% growth rate. I don't think there is any issue with this. We're trying our best to navigate guidance and give the street numbers we feel confident in achieving. And I think looking at 20% growth rate, I think is still excellent growth rate. So the lumpiness, Q4s and Q-- in these patterns with Latin America have been a recurring theme. It is what it is.

I think ultimately, it's just, it swings up and down. I think Q4 tends to be higher. There's some buying before the winter months and before the new year. But it's just something that we're always gonna have to manage overall. So you have to, we have to smooth it out and come up with guidance that makes sense. But I feel good about the guidance we have, and 20% growth rate should be excellent. With regard to GSD1a, 81% of the patients have severe genotype or null-like genotype, right? 81%. So it's the vast majority of patients are severe. There are some milder, but majority are severe. And so we'd look at the population being more homogeneous in that regard than many of our gene therapy disease that we study.

At this point, I would look at most of the patients being highly dependent on starch, having very severe phenotype and probably in the greatest need and the most danger from that disease in terms of crashing and dying suddenly.

Operator (participant)

One moment for our next question. That will come from the line of Ed Arce with H.C. Wainwright. Your line is open.

Thomas Yip (Research Associate)

Hi, good afternoon, everyone. This is Thomas Yip asking a couple questions for Ed. Thank you for taking my questions. So just for GTX-102 and Angelman, among the 20 patients in the expansion cohort, can you tell us what are some of the longest treatment duration that these patients have been in the Phase I/II study? And also, what are some additional endpoints that investors can focus on compared to the previous data set? Thank you.

Emil Kakkis (CEO and President)

I heard the extension cohort. You're asking from the ones we presented, how long they go out. By the time we get to end of phase II, you know, we'll have patients that have had two years of treatment, probably, but it'll be somewhere between a year to two years of treatment of exposure for all those patients. So quite a long time. And we have patients, a good chunk of patients were already beyond age, day 504 at the Analyst Day meeting. So I think actually that's a good, shows you that chronically exposed, accumulating drug doses are not gonna cause a safety problem in this disease. So I think that's an important part of the safety profile that we can keep doing these treatments and not have an issue. Restate your second question, because I didn't quite catch it.

Joshua Higa (VP of Investor Relations)

I think the second question was about, additional endpoints that they should be considering. Beyond perhaps what we've already discussed at Analyst Day.

Emil Kakkis (CEO and President)

I see. Well, we have a lot of different ones we're looking at, but I think the ones we talked about, the Bayley are the score, the either the Angelman severity assessment for behavior or, or sleep, or an alternative behavior or sleep scale could be used. Those are two alternatives. They're scales we've used before. We've seen them before. We just haven't, we haven't, didn't include—we didn't have them in the most recent extension data. So we'll get a little more information on those alternative ways of doing it. I would say to you, in our discussion with the FDA, they were highly flexible to us, calling out questions and just pulling up, like, a few key questions on those endpoints and relying on those for an endpoint.

They were, I think, showed great collaborative flexibility and not rigidity with regard to choosing those endpoints. And so within our existing data set, we can even just pull out questions, for example, and hone in on those questions and use those for particular for behavior or sleep. So our goal would be not to go with new things we haven't seen before, but to look at what we have and pull out the best data sources that are sensitive to the change and are clinically meaningful for patients in coming up with those identities. But there won't be brand new things you've never seen or that we don't have any data on.

Operator (participant)

Thank you. I'm showing no further questions in the queue at this time. I would 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 all for participating. This concludes today's program. You may now disconnect.