Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) Q1 2023 Earnings Call Transcript

Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) Q1 2023 Earnings Call Transcript May 4, 2023

Operator: Good afternoon, and 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: 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: Thanks, Josh, and good afternoon, everyone. In the first part of the year, we made meaningful progress towards generating data from our key clinical programs. The Phase 2 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 begin and — we expect to begin dosing patients in the randomized placebo-controlled Phase 3 portion of the study. Based on the KOL feedback, we believe the Phase 3 should roll swiftly and move us that much closer to a potential therapy for patients with this bone disease. Similarly, with GTX-102 Phase 1/2 for Angelman, we have begun ex-U.S. dosing in the expansion cohorts.

Outside the U.S., we’ve seen 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 1/2 and can participate in a future Phase 3 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 on 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 in the prior year. Five years in the 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. And 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 want to acknowledge the work and dedication of our integrated Kyowa Kirin and Ultragenyx team 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 alter a rare disease. This year marks the 40th anniversary of the Orphan Drug Act. While it has been instrumental to progress in treating rare diseases has left ultrarare 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 treatment to offer hope and the path forward to the parents and families of these children. I’m fully supportive — 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 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 adviser. I also want to thank Camille for her passion and dedication to both Ultragenyx and the rare disease community.

She’s been instrumental in development of our clinical pipeline, and I’m grateful for our ongoing partnership going forward. Now I’ll turn the call over to Erik Harris to provide an update on our commercial efforts for the quarter.

Erik Harris: Thank you, Emil, and 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 cumulative 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 PDs. In the first quarter 2023, approximately 65% of the start forms represent in adult patients. And 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 are 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 it is common in this region, ordering patterns drive some quarter-to-quarter variability in revenue, but the underlying demand is continuing to grow.

Today, we are reaffirming the Crysvita guidance we issued at the beginning of the year, the range of $325 million to $340 million includes all regions in all forms of Crysvita revenue. More specifically, it includes Crysvita product revenue from Latin America and Turkey, the cash and noncash 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 health care providers writing at least one prescription for Dojolvi.

Our early efforts to educate health care 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 ensure 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 million to $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: 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 31, 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 noncash European royalty and other product revenue. Dojolvi revenue in the first quarter of 2023 was $14 million. Mepsevii revenue for the same time period was $8 million. Our total operating expenses for the quarter ended March 31, 2023 were $255 million, which includes R&D expenses of $166 million, SG&A expenses of $77 million and cost of sales of $12 million.

Operating expenses for the quarter include noncash 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 1/2 study and 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 in cash, 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’ll provide an update on our key clinical programs.

Eric Crombez: Thank you, Aaron, and 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 cohort, we have now advanced to enrolling and dosing patients and expansion cohorts, which are designed to verify the GTX-102 dose in treatment regimen that will be used in the Phase 3 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 3 dose and will have the ability to individually titrate as the 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. Now 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 college 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 osteoblast to mature into bone making cells and makes those cells increased bone production while also limiting the amount of bone resorption.

We are currently conducting a Phase 2 study that builds on the substantial data Mereo has generated, and we look forward to continuing the analysis and sharing the Phase 2 data. The Phase 2 data are expected to include percent 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 lumber spine bone mineral density. We plan to use this data to help inform Phase 3 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: 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 and pivotal study earlier this year. We’re now in the 48-week window, and we expect to share this Phase 3 data in the first half of 2024. UX701 for Wilson disease is enrolling patients and dose-finding stage. We expect this to complete in the second half of 2023 with data on safety, initial signs of connectivity expected in the first half of 2024. We’ve now dosed multiple patients in the DTX301 Phase 3 study and expect enrollment to pick up as more patients make it through the baseline screening period. Discussions with FDA on UX111 for Sanfilippo A syndrome are progressing, and we’re seeking a path to 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 2 portion of the study has been fully enrolled, and we expect to share these data, and the transition to Phase 3 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 we 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 2 programs with UX143 and GTX12 by establishing a broader network and investigators and study sites in more geographies, which will enable us to drive faster and more efficient Phase 3 studies. With that, let’s move on to your questions. Operator, please provide the Q&A instructions.

Q&A Session

Operator: Thank you. Our first question comes from Gena Wang with Barclays. You may proceed.

Gena Wang: Thank you for taking my questions. I have two questions. First one is for the osteogenesis imperfecta Phase 2 update. So what would you be looking for to inform you on optimal Phase 3 study design and related to the Phase 3 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. The $325 million to $340 million guidance for 2023. Was that before or after 30% U.S. royalty to OMS?

Emil Kakkis: 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 how we’re doing the royalty revenue. So on OI Phase 2, what are we looking for? We’re looking mainly in the Phase 2 portion simply to help us fine-tune the dosing. We know the drug works, and we know 20-milligram per kilo can work its 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 get — to achieve the same exposure to older kids. So that’s the primary purpose of it is just finding the dose number. The design is all set in the trial. And the question — second question you asked is two fracture 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 and 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. And the key thing to recognize also is the way we’ve designed the study is we will — we’re comparing placebo what 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 followed, how long the last patient should be studied. The total amount time exposure for the first patient could be 18 months or longer, and some of the last ones could be a year or it could be 18 months. And so the length of the trial will help be adjusted based on the interim look to determine 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. So our expectation is that the differential in bones will come relatively quickly as they did, for example, with XLH treatment. So the second part of the question is what is the forecast for Crysvita and the interpretation with regard to the OMERS royalty.

Aaron Olsen: The Crysvita guidance of $325 million to $340 million is before the OMERS royalty share. We continue to recognize all revenue, although a certain portion will be noncash with OMERS royalty share.

Emil Kakkis: This is the way the accounting needs to be done the royalty streams we have sold have a cap that come back to us and therefore, they looked at us that we are then recording and reporting noncash royalty income in addition to cash royalty income. I still think it also gives you a better apples-to-apples house picture of what the royalty is — I mean what the revenue is overall from the region, so you can compare year-to-year. Okay. Thank you.

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

Maury Raycroft: Hi, thanks for taking my questions. For the Angelman program, just wondering if you can elaborate more on the feedback you received? And then is the registrational path dependent on dose harmonization? Or can you get alignment on key design considerations ahead of the data update?

Emil Kakkis: Yes. I assume you’re talking Maury about the U.S. feedback just to…

Maury Raycroft: Yes, that’s correct.

Emil Kakkis: 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. But our goal here is to get the loading doses to be equalized in the regimen is close and 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 in loading and maintenance that we could run a Phase 3 trial of. But remember, this is — we’re talking about the Phase 2 section and from it, we would derive what our Phase 3 plan would be.

So I feel — I’m encouraged we should be able to get this figured out and get to a right dose. So on the registrational dose, yes. So the expectation is we’re going to have one dose globally for the load. But I will say one thing about dosing in rare disease in general, wells in Angelman. There really is no the dose. There is doses and the doses will have a range of responses always. Our expectation along with Angelman is that there will be some need for individual titration. And 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 3 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 2 those 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.

Operator: Thank you. Our next question comes from Dae Gon Ha with Stifel. You may proceed.

Dae Gon Ha: Great, good afternoon. Thanks for taking our question. 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. And does Romos recommend a one-year treatment duration have any implications on chronic therapy for setrusumab? Thanks so much.

Emil Kakkis: Yes. I actually think you’re — what you’re talking about in setrusumab data is if you look at P1NP, the peak of P1NP kind of goes down, and so it looks like you’re losing effect, but you’re not really. What’s happening is that you’re losing the synchronization of the response, it’s like a pebble and a pan, the beginning of the response is for a 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 on the curve now it’s going up. And the peak is less important than the area of the curve, right? So you have to think of it as a harmonic pattern, essentially. If you look at the bone marrow density data differently, you will see the bone marrow density 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 look continuous, and it was ongoing at a good clip even at the end of the year. So 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 marrow density indicates that there’s a strong reversal of the effect if you don’t continuously treat. And so our expectation is that we will need to continuously treat beyond one year. It is possible that, let’s say, after a couple of years or after achieving some level of bone marrow density that is sufficiently strong and normal that you could back into, let’s say, an every other month regimen or a maintenance regimen. And we’re going to continue to look at that as we go.

But right now, we think OI is different from osteoporosis. As you do need chronic therapy, there’s a stronger stimulus for absorption there and we need to counteract that with continuous exposure. And now everything we’ve seen from ASTEROID would tell us that continuous treatment will get you continuous bone production. And so we look at these disease being distinctly different for that reason.

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

Unidentified Analyst: Hi, thanks for taking the question. This is actually Malcolm Kuno on for Anupam. So 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: Well, in our own — I think the panel is really looking at whether they’re going to give them accelerated approval. The principal of accelerated approval may be at 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 support 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 their combination of biochemical endpoints and other clinical endpoints, whether it’s removal of their drugs or other outcomes, so our program is really not — none of the three — those three programs are dependent on excel approval at this point, and the endpoints are set for what would be expected to be standard approvals.

With regard to MPS IIIA and Sanfilippo program, there was an understanding about a clinical-based long-term follow-up approach to achieving filing. But we are evaluating that situation, the use of accelerated approval on heparins 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 will be highly predictive of good outcomes if you achieve a sufficient reduction in heparin sulfate. So there is maybe some meaning to that, but I would say it’s going to say more about Sarepta Duchenne than on whether MPS IIIA or other types of biomarker will get approved. But as a company, we’re supportive of using the center approval pathway in rare diseases, and we think that — we think that the FDA should not consider that to be a problem.

That 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.

Q::

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

Joon Lee: Thanks for taking our question. On the efficacy signal you’re seeing in the Angelman trial so far, what is your latest thinking in terms of approval endpoint? Is it still a CGI CAS or something different? And is that also part of your ongoing discussions with the FDA? Thank you.

Emil Kakkis: Yes. So I mean, what we have talked about before continues. I mean there’s both receptive and expressive communication are important, and we’re seeing improvements there. And I think we’re seeing improvements we’ve said before in sleep. And actually, several domains. So we see a lot of potential in any of these. But 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, the number of those domains are important, you could decide on any of them. But at this point, our discussions with the 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.

But right now, our focus on getting the Phase 2 open and understanding how to optimize our plan to open the study globally for the Phase 2 portion of the Angelman program.

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

Unidentified Analyst: 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: Yes. The study, just remind you, and I’ll let Eric touch on what we’re evaluating. The study is basically looking at three dose levels, right? So the study will look at three doses, I mean purposes part is to pick the most effective dose, which we’ll look at in a number of ways. But we have had a discussion with the FDA, and it’s a seamless design. That is a Phase 2 will lead right to the Phase 3, and we’ve had discussion and Eric touched on what our Phase 3 approach is for the primary endpoint?

Eric Crombez: Yes. Great. So I mean, fundamentally, Wilson disease is a disorder of copper metabolism. And we can measure that in many ways. Certainly with the clinical regulatory precedents that’s been established, that’s important for us to understand. So in addition to 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 on to 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.

So if we can show increases in stabilization of ceruloplasmin levels. That’s another way to show that this transgene is producing protein, and we’re establishing the normal trafficking of copper. So again, we’re looking to yes, correct the toxicity of free copper, which key later 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: Thank you. Our next question comes from on Yaron Werber with TD Cowen. You may proceed.

Yaron Werber: Yes. Great. I have an interrelated question on Angelman also. Can you just give us a little bit of a sense in the press release you mentioned 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. And 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: Yes. So remember, in the extension patients, they enter — there’s a load phase, and they were loaded at doses between really 3.5 to — 3.3 to 7.5 and then they’re on maintenance between 10 and 14. So all those patients on long-term therapy are getting Q3 therapy at 10 to 14 dosing, all right? But the loading dosing is starting is actually lower than that. That is the maintenance dosing during the maintenance period. So we haven’t said what the dosing is in our current Phase 2 expansion. We’ve decided to hold that information back. We have a plan based on what we’ve learned from the dosing so far, and we know that you can lower — we’ll load it a certain dose and maintain it — 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 tended to put out information on the efficacy. And so we’re working through what we’ll provide and when from both the long-term data and the expansion cohort separately.

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

Kristen Kluska: 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. I 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: Well, thank you. So commercially, one of the benefits having company with multiple approvals it does give us an opportunity to leverage that infrastructure. And while we had precedent in certain territories, Latin America, particularly long-term in Turkey currently. Globally, we have Dojolvi and Mepsevii. And 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. And so the Evkeeza sort of added another product to put in a launch mode ex U.S. One of the things that advantage of the rare disease, you can launch with relatively smaller teams of high-quality people that can get a lot done.

And that’s key important being efficient — capital efficient in how we do this. And 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. So I do think it sets up for what’s important to us and 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 the U.S. You really need to get pulling revenue from globally once you’ve done all the work to develop an approvable product.

And so that’s been our philosophy from the beginning. And I think it’s starting to pay off as we start to gain and grow revenue outside the U.S.

Kristen Kluska: Great. Thank you. And it 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: Well, we’ve got a lot of programs, probably more gene therapy programs in Phase 3 than anyone else. Is that true? I think there’s no one with more that I’m aware of. So — we also have a very strong Pinnacle PCL platform, and there’s some information on the platform out there 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 in primates and pigs. So 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. So that — there’s data on that as well at ASGCT. So we are busy there with all these technology and products that we’re working on.

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

Michael Riad: Hi, this is Michael Riad on for Jeff Hung. Thank you for taking our question. First one for GTX-102, what are you learning during the maintenance phase, especially for the nine patients who have 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. And I have a follow-up.

Emil Kakkis: Okay. I think one of the key things that learn from me is, first, 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, because if we were to have our — any safety event that happens a 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 threshold and given 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 more — even more interesting and important to understand is this is a development of the 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.

And so 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. So that’s what we’re learning from maintenance dosing, both long-term safety and the ability to get chronically dose drug and the fact that we can still — we can see progressive gains.

Michael Riad: That’s very helpful. Thank you. And then maybe just a quick follow-up. So for COSMIC, obviously, the clearest measure is going to be bone fracture rate, but 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: Well, sort of bone deformation is really tricky. We did that kind of work in XLH where you developed scales, you have readers and all that. The problem is not something that’s going to help us with the regulators. And while it may help patients to know, it’s kind of thing is harder to power. Now in 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, because we just do with people have very fragile bones, they also don’t feel good all the time. Even if they don’t have a fracture, they have microfracture, things that go on and make them feel bad that cause them to not be active, stay sedentary, et cetera. So we’ll be doing the kinds of quality of life and practical functioning assessments that will help support what the interpretation is on fractures.

But so I appreciate you need to — it’s not enough just to look at fractures, but to look at the total case of an XOI patient and learn more from them. And then we are doing that deformation as 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 want to do in post-marketing and particularly the most important thing really is to take a look at our one or two-year-old that we treat and to look how their bones are maintained versus deformed. I think if we strengthen their bones, that 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.

So we’ll look for that. But I don’t think that’s necessarily about the Phase 3. That will be something long-term. And it’s one of the main things we’ve got into this program because we want 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 a wheelchair, but actually walk and is it in chronic pain, but you can live a real life.

Operator: Our next question comes from Joel Beatty with Baird. You may proceed.

Joel Beatty: Great. Thanks for taking the question. For the GSD1a gene therapy, do you have agreement with FDA on the primary endpoint? And are there harder clinical endpoints that are being monitor that will be important for regulatory filing or commercialization?

Emil Kakkis: Yes, we do have agreement on that. We’re using the reduction in corn starch, while maintaining glucose control and that has been agreed to. But the clinical advocacy 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. But the primary endpoint in corn search reduction was agreed.

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

Unidentified Analyst: Hi, thanks for taking our question. This is Tommie on for Salveen. So 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? And 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: So on Angelman. Yes, 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. So it’s not only just dose and time 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 match 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. So 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? So that would be the second element of what we do.

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

Eric Crombez: Next question was on the timing of OTC enrollment and data expectations.

Emil Kakkis: Is that — you were on OTC, you’re talking about the gene therapy. Is that right?

Eric Crombez: Yes. It was.

Emil Kakkis: OTC. Okay. Well, our study is just — is enrolling now. It will depend how long, we put the GSD1 study as the primary driver on our gene therapy effort. And push back the OTC in terms of the effort and drive. It is enrolling now, and we plan to be international study and sites are open, and there’s growing interest. So it should be enrolling this year. But the timeline of that study is a little longer, because the study is 64 weeks, it’s not 48. So the timeline of the data would be 64 weeks after last patient gets enrolled. So that’s not — obviously, that means if we enroll even before the end of this year, the data will not be next year, I’ll end up being year after because of the longer time frame.

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

Unidentified Analyst: Hi, this is on for Debjit. We want to get your thoughts on the translatability of P1NP correlations to BMD in the setting of postmenopausal osteoporosis translated to pediatric individuals with OI.

Emil Kakkis: Okay. Well, we really don’t have to worry about osteoporosis, because 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. So we actually have 90 patients worth of day 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. The one — and so what’s interesting then is that how much P1NP you’re making is it really a measure of how much bone you’re laying down. But the way you respond at the beginning pretty much sets in motion a process which will generate bone marrow density.

So we’re pretty impressed how well they’re correlated. That said, we’re also measuring BMD in our dosing study. So we will actually have some data through six months in some patients for the Phase 2 study, which will allow us to directly confirm what our P1NP is telling us about dose with actual BMD data, too. So we’ll have a little bit more than just P1NP for our Phase 2 in terms of understanding how to optimize the dose for our Phase 3.

Unidentified Analyst: Thanks for that. in adults then translate to what you expect in the pediatric population? Is it sort of one-to-one?

Emil Kakkis: Well, one of the reasons to do the study is actually determine how the adult response with OI relates to the peds response. Our expectation, the fact that young patient will respond much more strongly that they have higher P1NP level to begin with, and they’ll love 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 want to look at exposure too. And 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 exposure, yes or no.

And if they are, then what is exposure needed at different doses — at different ages and do young patients need more drug? And so that would be the kind of tweaking that would help us assure that if the four-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. So that’s kind of the way we’re looking at it. Hopefully, that’s helpful.

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

Unidentified Analyst: Hi, thanks for taking our question. This is Julian on for Liisa. My question is on setrusumab. So I met you’ll provide some BMD data. So how many patients worth of data should we expect? And is there any correlation between bone marrow density and factor? If so, how strong is the correlation? Thank you.

Emil Kakkis: Yes. So 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 months data in BMD in this group. So the question you asked then follow-up was, does BMD predict fracture? I think in OI will from the ASTEROID study, they showed a trend at the high dose, which was look consistent, but there weren’t enough fractures in the adults to be able to have enough power to tell. So what we’re basing this on is the fact that the bones that are weak can be restored in strength very quickly and in the mechanism of how BMD increases with anti-sclerostin should be laying down on bone where it’s needed, where the bone is moving or where is unstable.

And so just the very mechanism alone means the BMD should predict well. When BMD hasn’t predicted is usually with anti-catabolic agents like this phosphates, where you’re just keeping bone wherever it is, but it may not be in the right place. So when you make bone and lay it down in the right places this mechanism the bone marrow density will predict improvement in strength, whereas if you just block bone absorption, 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. But 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 biphosphate, that wasn’t true, bone mass increased more than the bone strength did.

So I think there’s enough data to tell us that this mechanism will give us a bone marrow density that is effective in improving bone strength.

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

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.