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Edited Transcript of RARE.OQ earnings conference call or presentation 27-Oct-20 9:00pm GMT

·60 min read

Q3 2020 Ultragenyx Pharmaceutical Inc Earnings Call Novato Oct 28, 2020 (Thomson StreetEvents) -- Edited Transcript of Ultragenyx Pharmaceutical Inc earnings conference call or presentation Tuesday, October 27, 2020 at 9:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Camille L. Bedrosian Ultragenyx Pharmaceutical Inc. - Chief Medical Officer & Executive VP * Emil D. Kakkis Ultragenyx Pharmaceutical Inc. - President, CEO & Director * Erik Harris Ultragenyx Pharmaceutical Inc. - Executive VP & Chief Commercial Officer * Joshua Higa Ultragenyx Pharmaceutical Inc. - Director of IR & Corporate Communications * Mardi C. Dier Ultragenyx Pharmaceutical Inc. - Executive VP & CFO * Shalini Sharp Ultragenyx Pharmaceutical Inc. - EVP of Finance ================================================================================ Conference Call Participants ================================================================================ * Arlinda Anna Lee Canaccord Genuity Corp., Research Division - Analyst * Brendan Smith Cowen and Company, LLC, Research Division - Research Analyst * Christopher Joseph Raymond Piper Sandler & Co., Research Division - MD & Senior Research Analyst * Cory William Kasimov JPMorgan Chase & Co, Research Division - Senior Biotechnology Analyst * Huidong Wang Barclays Bank PLC, Research Division - Research Analyst * Jeff Hung Morgan Stanley, Research Division - Equity Analyst * Joon So Lee Truist Securities, Inc., Research Division - VP * Kenneth Shields Wedbush Securities Inc., Research Division - Research Analyst * Maurice Thomas Raycroft Jefferies LLC, Research Division - Equity Analyst * Salveen Jaswal Richter Goldman Sachs Group, Inc., Research Division - VP * Samantha Lynn Semenkow Citigroup Inc., Research Division - Senior Associate * Tazeen Ahmad BofA Merrill Lynch, Research Division - VP ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to the Ultragenyx Third Quarter 2020 Financial Results and Corporate Update. (Operator Instructions) Please be advised that today's conference may be recorded. (Operator Instructions) I would now like to hand the conference over to your host, Joshua Higa. Sir, please go ahead. -------------------------------------------------------------------------------- Joshua Higa, Ultragenyx Pharmaceutical Inc. - Director of IR & Corporate Communications [2] -------------------------------------------------------------------------------- Good afternoon. And welcome to the Ultragenyx Financial Results and Corporate Conference Call for the Third Quarter 2020. We have issued a press release detailing our financial results, which you can find on our website at ultragenyx.com. I'm Joshua Higa, Director of Investor Relations. Joining me on this call are Emil Kakkis, Chief Executive Officer and President; Camille Bedrosian, Chief Medical Officer; Erik Harris, Chief Commercial Officer; and Mardi Dier, our Chief Financial Officer, who joined the company a couple of weeks ago. Shalini Sharp, Executive Vice President for Finance, is also on and will be available if needed for Q&A at the end of the scripted portion of this call. I would like to remind investors that this call will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the types of statements identified as forward-looking in our 2019 annual report on Form 10-K that was filed on February 14, 2020; our quarterly report on Form 10-Q that we filed today; and our subsequent periodic reports filed with the SEC, which will all be available on our website in the Investors section. These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties, including many that are beyond our control. Please note that the actual results could differ materially from those projected in any forward-looking statement. For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements as well as risks related to our business, please see our periodic reports filed with the SEC. I'll now turn the call over to Emil. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Good afternoon, and thank you, everyone, for joining us on today's call. It's been a busy week, quarter and year for Ultragenyx. This matches the fundamental part of my philosophy for the company, which is a relentless focus on execution. I'm proud at how productive the company has been throughout the year across all facets of our diverse business. Regular team and development teams have gotten 2 two new approvals in 2 weeks in June. Commercial team and all the people supporting the products have rapidly and successfully launched those products to patients in need, while still growing Crysvita in XLH and improving our annual guidance despite the global impact of COVID. The clinical team are internally and jointly working with our partner, GeneTx, has delivered a series of positive updates on our gene therapy programs and now the Angelman program. And the business development team brought in the new gene therapy program for Duchenne on top of the gene therapy technology partnership announced with Daiichi Sankyo in March. We've been firing on all cylinders, and we'll provide updates on all of this progress on the call today. Starting with our commercial programs, which provide a stable source of growth that underpins the rest of our development. Crysvita continues to perform strongly and is now bolstered by the additional tumor-reduced osteomalacia indication. In the first quarter of launch, Crysvita is off to a strong start in its first quarter, which is encouraging. We received start firms and a large number of prescribers for patients in our trials but also those naive to Dojolvi. This speaks to the unmet need for those living with LC-FAOD and to the strong relationships that we have with physicians and the major treatment centers. Moving to our strategic collaboration with Solid Biosciences. Last week, we announced that we're developing a new gene therapy for the treatment of Duchenne Muscular Dystrophy, or DMD. While there are other Duchenne programs that are far more advanced, this was a unique opportunity to combine Solid's technology with our technology and 2 like-minded companies to create a next-generation gene therapy for this disease. We will combine Solid's best-in-class microdystrophin with its potential ability to enhance blood flow to working muscles with our novel capsid, which has an excellent immune profile and is produced by a high-quality 2,000-liter HeLa cell and produces [HeLa] manufacturing process. We believe this could be a differentiated therapy for Duchenne that we will seek to achieve global accessibility. We look forward to collaborating with Solid to bringing new treatment forward rapidly, and we'll continue to update you on the progress coming out of the collaboration in the coming quarters. Moving to Angelman. Yesterday, we announced positive interim data from the ongoing Phase I/II study of the investigational product GTX-102 in Angelman syndrome, which is a part of the collaboration with GeneTx Biotherapeutics. GTX-102 is the first antisense oligonucleotide program for Angelman to reach the clinic and is based on the extraordinary science from Dr. Scott Dindot supported by GeneTx. In our update, all 5 patients of the first patients treated in the study have shown substantial improvements in the clinical Global Impression Scale, or CGI, tailored for some of the key domains of Angelman with a mean change score of 2.4. The positive clinical effects is supported by other endpoints and remarkable reports of changes provided by the characteristics of patients treated with GTX-102. These include 2 patients going from being nonverbal their entire lives with difficult to communicating to now using multiple words, while others are beginning to use signs, gestures and augmentative communication devices for the first time. Some patients adopted independent capabilities such as using a fork to feed themselves for the first time. Others are learning to swim on their own, and other reports include the ability to follow commands, focus on tasks, respond by name and sleep through the night. Not only were these changes profound, but they began rapidly often after just a few weeks or a few months of treatment and in some patients, after the lowest dose. In part is due to these reportedly unprecedented changes, all families have indicated a desire to continue in the study. Turning to safety. All 5 patients at the highest doses had a serious adverse event, or SAE, of lower extremity weakness, with an elevation of protein in the CSF and now -- which have now completely resolved. We believe the SAE is related to local inflammation in the region of the intrathecal administration of GTX-102. This lower extremity weakness was not observed at the lower doses in the study, where we also saw clinically meaningful responses. We believe the impact of GTX2 (sic) [GTX-102] is manageable with changes in dose and administration strategy. And so we expect to resume enrollment and dosing once we get an amendment filed and agreed to with the FDA. We are very excited about what we're seeing as are the patients' families who are hearing about these results for the first time yesterday. We plan to provide additional data on these patients at the FAST Summit in December and additional safety and efficacy data on the program in 2021. Looking at these 2 recent developments, both Duchenne and Angelman, are very significant diseases, both in terms of unmet need and prevalence. They're aligned with our company's strategy of developing therapies for rare disease, where there is a great -- greatest need, and we'll leverage our various modalities and platforms to create the best treatment options for patients. Now before I turn the call over to Mardi, I'd like to start first by thanking Shalini Sharp for joining us on one last conference call, all the way from New Zealand. Shalini Sharp has been with me from the early days of the company and has been a greatly valued friend, colleague and a superb CFO. She has been instrumental in building RARE to where it is today, and it could not be here without her contribution throughout that time, the ups and downs in all the financings and all the work with many of you on the phone call. We certainly wish her the best going forward, but I just want her to know that her legacy and contribution to the company will remain with us at RARE forever. And with that, I hand the call over to Shalini. -------------------------------------------------------------------------------- Shalini Sharp, Ultragenyx Pharmaceutical Inc. - EVP of Finance [4] -------------------------------------------------------------------------------- Well, thank you so much, Emil, and good afternoon to everybody. I am delighted to join you all for our last quarterly conference call. I'd like to take this opportunity to thank Emil, the executive team, the finance team, the IT team and the rest of the Ultragenyx team for the extraordinary experience that I have had working here. I could not be more proud of this company, its mission to serve patients above all and its ability to effectively execute on this mission every day. I'd also like to thank you all, our analysts and our investors for your support of Ultragenyx over these past years. And with that, I'm very pleased to introduce you to our new CFO, Mardi Dier. You will be in excellent hands with Mardi, and I'll now turn the call over to her to walk you through the financials for the quarter. -------------------------------------------------------------------------------- Mardi C. Dier, Ultragenyx Pharmaceutical Inc. - Executive VP & CFO [5] -------------------------------------------------------------------------------- Well, thank you, Shalini, and I am very excited to be joining Ultragenyx during its next stage of growth in helping patients with rare diseases. Shalini has been a critical part of building a fantastic team, one that I know already will make this a very smooth transition. So thank you, Shalini. So today, we issued a press release that included a financial update, which I will briefly summarize. Total company revenue for the first 9 months of 2020 totaled $179.5 million, representing 163% growth over the same period in 2019. This includes revenue from Crysvita in Ultragenyx territories of $98.5 million, a 91% growth over 2019; and combined revenue from Mepsevii and Dojolvi totaling $18.3 million or a 78% increase compared to 2019. Total revenue for the 3 months ending September 30, 2020, was $81.5 million. For the quarter ended September 30, 2020, Crysvita revenue in the Ultragenyx territory was $37.3 million. This included $34.1 million in collaboration revenue in the North America profit share territory and net product sales in other regions of $3.3 million. Total royalty revenue related to the sales of Crysvita in the European territory was $3.3 million. Mepsevii product revenue for the third quarter of 2020 was $4.1 million. We expect these revenues may modestly increase over time, but we do not expect there to be significant growth. In the initial quarter after receiving U.S. FDA approval, worldwide revenue from Dojolvi was $3.9 million. This includes named patient sales and U.S. product sales. We also recognized $32.9 million of revenue related to the collaboration and license agreement with Daiichi Sankyo that was executed in March 2020. The majority of revenue from this agreement will be recognized as work is performed on the technology transfer to Daiichi. They will be recognized based on progress towards completion, not straight line, and we expect the majority of this work to be completed by the end of 2021. Our total operating expenses were $131.8 million for the third quarter 2020, which includes research and development expenses of $87.3 million and SG&A expense of $42.1 million. We expect our R&D costs to continue increasing over time as we advance additional product candidates from preclinical development into early and pivotal clinical studies. We also expect SG&A to modestly increase over the coming quarters as we support the expansion of our existing commercial programs and the launch of Dojolvi for LC-FAOD and Crysvita for TIO. We expect the split of R&D versus SG&A expense to remain fairly consistent. In the third quarter of 2020, we reported a net loss of $68.8 million or $1.13 per share, basic and diluted. This compares to a net loss of $113 million or $1.96 per share, basic and diluted, for the third quarter of 2019. The net loss for the third quarter of 2020 includes $11.5 million unrealized loss from the fair value adjustment on the investment in the Arcturus equity. This also includes $8.6 million in noncash interest expense on the liability related to the sale of future royalties. For the first 9 months of 2020, net cash used in operations were $69.8 million compared to $273.3 million for the same period in 2019. We ended the third quarter 2020 with $765.5 million in cash, cash equivalents and available-for-sale investments. I would now like to turn the call to Erik who will provide an update on our commercial performance for the quarter and an update on our guidance range for Crysvita. -------------------------------------------------------------------------------- Erik Harris, Ultragenyx Pharmaceutical Inc. - Executive VP & Chief Commercial Officer [6] -------------------------------------------------------------------------------- Thank you, Mardi. In the third quarter, Crysvita continued to deliver meaningful revenue growth. The team also launched Dojolvi for patients with long-chain fatty acid occupation disorders and Crysvita for tumor-induced osteomalacia. Our third product, Mepsevii, continues to provide a meaningful therapy to patients with MPS 7 and ultra-rare diseases. I would like to begin by providing an update on the Dojolvi launch, which is going very well. Dojolvi was approved in June by the U.S. FDA and was launched on July 22 for the treatment of all forms of LC-FAOD with a molecularly confirmed diagnosis across the 2,500 to 3,000 pediatric and adult patients in the U.S. As of the end of the third quarter, we have received approximately 120 start forms from approximately 60 unique prescribers. All 80 of the clinical trial and compassionate use patients have been converted to commercial therapy with many successfully navigating reimbursement. And approximately 30% of all start forms are for patients who are naive to prior Dojolvi therapy. The team has made significant progress on the reimbursement front in the first few months after being approved. This has led to more than 60 patients on reimbursed commercial therapy. The payer mix is approximately 70% commercial and 30% government. Some payers put formal policies in place, but most are approving Dojolvi on an exception basis during their new-to-market coverage guidelines. We continue to work closely with commercial and government payers to ensure that Dojolvi is accessible to all LC-FAOD patients, as indicated by the broad FDA label. Dojolvi has a pharmacy benefit, and [its administration] process does take time as various payers establish their coverage policies. Looking forward, we will continue leveraging our established commercial infrastructure along with the fewer than 10 incremental hires we added to support the Dojolvi launch. Over time, we expect revenue from Dojolvi in the U.S. to gradually build as the launch gains even more attraction. Outside of the United States, Dojolvi has been submitted for approval with Anvisa in Brazil and has been submitted to Health Canada after being granted priority review. The discussions with EU regulators are ongoing. And with the U.S. approval, patients in other European and Latin American countries are now able to access Dojolvi through named patient programs. These programs have been meaningful -- have been a meaningful way for patients in France and Italy to gain access to this important therapy. I would like to reiterate our commitment to broad access. During these regulatory discussions and review phases, requests for named patient access will continue to be supported in all relevant countries. We continue to expect named patient sales to make up the bulk of Dojolvi sales in 2020. Moving next to Crysvita, which was approved last quarter by the FDA for a second indication, the treatment of FGF23-related hypophosphatemia in tumor-induced osteomalacia or TIO. We estimate there to be between 500 and 1,000 TIO patients in the U.S., with 50% having unresectable tumors. The launch for this indication has gone well, as we have been able to successfully leverage our existing infrastructure and relationships with physicians to ensure the small patient population is able to receive this important therapy. Now turning more broadly to Crysvita for XLH. We have been able to maintain continuity of care for just about all patients on treatment. We continue to adapt to the COVID situation by shifting more resources to digital initiatives, along with virtual personal promotions and limited in-person meetings more recently. We are also starting to see increasing success of finding more patients, leading to growth in new start forms and reimbursed patients. In Latin America, a strong patient community (inaudible) continue to drive a lot of awareness and demand for Crysvita. In Brazil, the region's largest market, we are seeing a steadily growing number of injunctions that are being granted and funded by both the state and federal governments. Similarly, in Colombia and Argentina, the number of patients on reimbursed named patient treatment have increased. Over time, we expect Latin America to provide a more meaningful contribution to revenue as the launch of this region progresses. Recall at the beginning of the year, pre-COVID, we established a range of $125 million to $140 million for Crysvita revenue in Ultragenyx territories. On our second quarter call, we maintained this range as we continue to evaluate the impact of the pandemic and our team's ability to execute. Based on recent trends, we are raising the lower end of our guidance to $130 million, bringing the revised range to $130 million to $140 million. While there is still some uncertainty related to COVID as we enter the winter season and its long-term impact on Crysvita revenue, we are confident the strategies and tactics we have put in place will allow us to close out the year within this range. At peak, we continue to believe Crysvita has the potential to be a blockbuster as it will be a significant rare disease treatment for patients with XLH and TIO around the world. With that, I'll turn the call over to Camille who will provide an update on the gene therapy clinical programs. -------------------------------------------------------------------------------- Camille L. Bedrosian, Ultragenyx Pharmaceutical Inc. - Chief Medical Officer & Executive VP [7] -------------------------------------------------------------------------------- Thank you, Erik, and good afternoon, everyone. Emil provided the encouraging update on our Angelman syndrome program, and I will review progress with our other clinical stage programs. Starting with DTX301, our gene therapy program for the treatment of ornithine transcarbamylase deficiency, or OTC. OTC is the most common of urea cycle disorders caused by an inability to detoxify ammonia into urea. And patients with OTC can experience metabolic crises that could result in neurological complications, hospitalizations and coma. It also sometimes results in death. Data from our ongoing Phase I/II study demonstrate durable and clinically meaningful responses to DTX301. Importantly, these improvements have continued after patients discontinued their previous alternative pathway, medications and liberalized their diets. For DTX301, a fourth cohort of 3 patients at the 1x10^13 genome copies per kilogram dose is ongoing using prophylactic steroids. We expect data by the end of 2020. We are also continuing Phase III planning and discussions with the FDA and plan to start the Phase III study in 2021. Moving to DTX401 for glycogen storage disease type Ia. GSDIa is a life-threatening disease that requires patients to take cornstarch every 3 to 4 hours to avoid severe hypoglycemia, long-term complications and potentially, death. Results from the Phase I/II study so far show that DTX401 is changing the lives of these patients who are showing improved glucose metabolism with significant reduction in and less reliance on cornstarch. Prior to gene therapy, these levels of cornstarch reduction would have put these patients at risk for death. Safety has been acceptable to date with any transaminase elevations managed by reactive steroids. In addition to following the first 3 cohorts for longer-term data, we also are enrolling a fourth cohort of 3 patients using a prophylactic steroid regimen at the same 6x10^12 genome copies per kilogram dose level. This decision is based on the value of preventing standardized use of steroids rather than reactive monitoring and treatment presents in the commercial setting. The timing of this cohort will not impact the initiation of the Phase III study. We are moving forward with planning our Phase III study for DTX401. Following meetings with the FDA and finalization of the study design, we plan to initiate the study in the first half of 2021. With these updates, I will now turn the call back to Emil. Thank you very much. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [8] -------------------------------------------------------------------------------- Thank you, Camille. Now adding to Erik's summary on our commercial programs, have been very strong through 2020, and we are in a unique position with this robust commercial business that has 3 products simultaneously in the growth phase of launch. On top of that, we have a gene therapy platform that has delivered positive clinical results in 2020 across 3 diseases, but also continues to be a source of new pipeline opportunities and new partnerships. Next up will be Wilson disease gene therapy, which is a larger rare disease and will be the first program internally to leverage the scalability of our HeLa manufacturing platform that is vital for larger patient populations. And behind that, we have other large indications moving ahead. This includes the newly announced Duchenne program, which is a competitive space but one that we believe we are uniquely able to bring forward. And beyond the gene therapy space, we have the exciting Angelman data from yesterday that supports that we have a potent molecule in that disease, and we have a plan in place to work through the safety issues to advance this product forward for this large and severe disease. Over the last couple of years, we've gone from a clinical stage biotech to a diversified commercial rare disease leader. With a number of large opportunities ahead of us, we will continue executing across all facets of our business with our dedicated employees across the globe and a strong balance sheet and growing revenue. Let's move on to your questions. Operator, please provide the instructions for the Q&A portion of the call. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from the line of Yaron Werber of Cowen. -------------------------------------------------------------------------------- Brendan Smith, Cowen and Company, LLC, Research Division - Research Analyst [2] -------------------------------------------------------------------------------- This is Brendan on for you Yaron. And congrats again on the progress. Just a couple of quick ones from us. I guess first on DMD. As you mentioned, there are obviously a few players already in motion here. And I totally understand it's very early in the process. But can you just give us maybe a little bit of a sense of how you kind of plan to be differentiated in your approach maybe mechanistically, or if it's really a matter of your capsid versus the other ones out there? And then just really quickly on the data from the gene therapy prophylactic steroid cohorts. I know you mentioned we could potentially get data from the OTC by year-end. Just kind of wondering about timing for the GSDIa patients -------------------------------------------------------------------------------- Erik Harris, Ultragenyx Pharmaceutical Inc. - Executive VP & Chief Commercial Officer [3] -------------------------------------------------------------------------------- Very good. Well, when I look at the Duchenne program, there are several aspects of differentiation. One is the not binding microdystrophin from Solid. The second is the capsid we've used, which has very -- an excellent immune profile. And third is the ability to produce these AAV in a mammalian large-scale system, which we've been using now for 2 programs very successfully and produce a high-quality AAV. High-quality and many features, which are achievable with the producer selling approach is more difficult to do with transaction approach. We think with those 3 areas, we are differentiated. And combine that with the skills both companies have in the space, I think we have an opportunity to bring something special for Duchenne patients and to bring a program forward that can become accessible globally, not just in the U.S. So that's, I think, how I would answer that question. On the prophylactic steroid timing, we are dosing patients in both groups. We will have some data on them this year. And -- but neither program does the steroid cohort interfere with the initiation of Phase III. Both programs will plan to have the prophylactic steroid approach built into the program, but it's just helpful to us before we start Phase III to have done some patients and shown how it looks good. So the Phase III planning continues for both in prophylactic steroid data. We'll provide some data this year on those patients. -------------------------------------------------------------------------------- Operator [4] -------------------------------------------------------------------------------- Our next question comes from Chris Raymond of Piper Sandler. -------------------------------------------------------------------------------- Christopher Joseph Raymond, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [5] -------------------------------------------------------------------------------- Also on the DMD program. Emil, there's a hypothesis surrounding gene therapy in DMD where muscles aren't able to be transduced maybe as efficiently as they would normally because of the damage that's caused by the actual disease. I guess -- I'm sure you've looked at this closely. Is there a way to address that clinically? Or do you have any thoughts on that? And then also, maybe sort of a question on just execution on the program that you have specifically. Can you remind us how long it takes to establish a HeLa producer cell line? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [6] -------------------------------------------------------------------------------- Sure. So on Duchenne, and really, we're familiar with a lot of different muscle diseases. Muscle even without injury, by the way, is very difficult to deliver particulates or large molecules in general. They have very tight [sensory], and capillary is a difficult, just delivery of products. It's designed that way, so you don't create big, swollen muscles when you exercise. It's designed to control fluid flow. And that creates challenges by delivering. We're highly aware of the issue, and we have ways that we're approaching on how to improve it. The issue being damaged or not. I think that the -- that is certainly another part of the story. But we are looking at ways to help improve that. And I won't say any more of it at this point in time, but we're aware of the challenge and the challenge in muscle in general. With regard to producer cell lines, using the automated approaches we have created at the company and processes that we've established, generally, we can identify a high-quality, stable clone within originally about 6 months of time. That would be a clone that we -- that can survive growth to 2,000 liters, maintain stable incorporation and can produce high titers of AAV vector. The process -- the automation allows us to actually screen a large number of clones and help identify a stable and high-producing clone. The combination of those approaches gives us the power then to create a manufacturing platform that has hyper-reproducibility, high quality and to do it in a way that's, and from a long-term commercial standpoint, reproducible at the 2,000-liter scale. -------------------------------------------------------------------------------- Operator [7] -------------------------------------------------------------------------------- Our next question comes from the line of Maury Raycroft of Jefferies. -------------------------------------------------------------------------------- Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [8] -------------------------------------------------------------------------------- For Dojolvi, just wondering for the 30% naive patients, if you can talk more about those patients and their demographics, including age. And can you comment if the naive patients represent a bolus or more of a natural update of getting patients on treatment? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [9] -------------------------------------------------------------------------------- Well, we haven't really described in detail what are the exact ages of the patients. I think they're across the spectrum. And there have been newborns, of course, identified and put on drug as well. But in general, it's a spectrum of patients. And obviously, it's early on launch, and I don't think we can say if it's a bolus or steady yet because we're just talking about a quarter of work. But we believe from the response we're getting [from] -- from physicians out there and the number of prescribers, which is now already 60, there's clearly a broad interest in the product, and we'd expect this to continue seeing start forms generated the exact (technical difficulty) bolus, but I think that we are going to have to watch and wait on how it moves forward. -------------------------------------------------------------------------------- Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [10] -------------------------------------------------------------------------------- Got it. Okay. And then for Angelman. I guess besides the natural history data out there, is there good existing efficacy data to contextualize what you're seeing in Angelman based on the time points and the age range? And along these lines, is it possible to reconcile or convert data on the CGI IAS versus the more general CGI scale? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [11] -------------------------------------------------------------------------------- Well, certainly, I can try to provide some help for you. When you look at natural history data in Angelman patients, they generally gained some ground until, I think, around 2 or 3 years of age. And from there on, they're relatively flat, and they don't really change much over time. They're pretty flat. So the changes we're seeing are not something that's seen. People deletions are nonverbal. And by the way, all deletion patients are nonverbal. They never become verbal. And so to have patients becoming verbal in easing words is highly unusual. And regardless of what CGI or any other score you could make up, the fact that patients are talking, learning their names, responding in instructions and using other forms of communication are -- is something unique and different and valuable in and of itself because communication problems are the #1 family-reported need that affects them and their life with the patient. With regard to the CGI, the global score is -- involves looking at all the domains and just creating a summation of the physician's view. But then each domain has particular areas that they look at in making the score for each CGI. It's not really that different from any other CGI. It's just that it is based on particular problems that patients with Angelman have inside each domain. I would say to you, in general, people do not see changes in Angelman on any score, including CGI, and there is some data on what the placebo effect might be in CGI. But I think the kind of magnitude we're seeing, which was a main change for 2.4, which means basically half between much improved and very much improved is a very strong [explorer] that's passed anything possible with natural history by far. And for families with the disease, absolutely unique and compelling. So we're comfortable with the potency, and we'll put out more data at the December FAST meeting and on the details of information that support the CGI data. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- Our next question comes from Gena Wang of Barclays. -------------------------------------------------------------------------------- Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [13] -------------------------------------------------------------------------------- First, I wanted to say to Shalini, it has been great working with you for the past 5, 6 years, and my best wishes to your next journey. And Mardi, we are looking forward to working with you. So I have 2 sets of questions. First one is the Dojolvi. So is it fair to assume majority of the patients right now on drug is a teen and adult, let's say, 70% to 80% are teen and adult? And also, how many ex-U. S. patients right now on the main patient access program? And my second question is regarding the DMD gene therapy. I know you've mentioned that you could file R&D within 1 year. So what additional preparation -- I mean, can you give additional color on all the preparation you need to do for the R&D, including -- such as the CMC, potency effi? And also, do you need FDA inspection in order for you to start? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [14] -------------------------------------------------------------------------------- Well, thanks, Gena. That's quite a few questions. I don't know if you want to say anything, Shalini? No? Okay. -------------------------------------------------------------------------------- Shalini Sharp, Ultragenyx Pharmaceutical Inc. - EVP of Finance [15] -------------------------------------------------------------------------------- Just thank you, Gena, to you and your team, and really enjoyed working with you all as well. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [16] -------------------------------------------------------------------------------- Very good. So with Dojolvi, the thing to understand about dosing is that the patients in the first 4 or 5 years of life have increasing amount of drug usage, but once you get to about 5, 6, 7, 8 years old, then it's a very flat curve. And so patients from school age to adults are getting very similar amounts of drug, which we estimated is after adjustment for gross to net and compliance of around 130,000 a year. So what might matter is how many very young patients we have, but we have -- we're probably not going to be putting out that much delineation at this point in time. I don't know if you want anything else, Erik, on this issue of patients on Dojolvi? -------------------------------------------------------------------------------- Erik Harris, Ultragenyx Pharmaceutical Inc. - Executive VP & Chief Commercial Officer [17] -------------------------------------------------------------------------------- Nothing else to add to that. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [18] -------------------------------------------------------------------------------- All right. I think the other question you asked was how many patients were on named patient ex U.S.? Yes. -------------------------------------------------------------------------------- Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [19] -------------------------------------------------------------------------------- That's it. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [20] -------------------------------------------------------------------------------- Yes, on the French [HU] program, it's a little less than 50 patients, I think, are on the FAOD in France. In Italy, it's a handful of patients, but because of the approval in the U.S., we are able to respond to named patient requests in more countries now. So we expect that potentially to grow, although not dramatically. The U.S. revenue is certainly going to grow, we think, significantly as we move forward in the launch. Last question was on IND for Wilson. So so far, the program has gone... -------------------------------------------------------------------------------- Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [21] -------------------------------------------------------------------------------- [For DMD.] -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [22] -------------------------------------------------------------------------------- With DMD, did you say? I'm sorry, yes. -------------------------------------------------------------------------------- Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [23] -------------------------------------------------------------------------------- Yes, for both Wilson and the DMD. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [24] -------------------------------------------------------------------------------- Okay. Well, for Wilson, let's start with Wilson. And I guess you added that. For Wilson, we have completed making the drug substance at scale, and it runs well in the HeLa platform. We made a lot of product. We're in the test release phase of that program. And that requires a lot of analytical methods and so forth, that's ongoing. There is some nonclinical work going in and those pieces are coming together. And we should be on track to file at the end of the year, the IND, and our expectation is as long as there's no more COVID-related shutdowns of labs or other things going on than we should, if there are some problems with that, then we could find ourselves somewhat delayed. But overall, the process has gone well, and we've been working and have the clinical development plan put together for the program. So on Duchenne, with the other program, it's at a beginning stage. We are in the process of making the production system, which is the HeLa producer cell line system, and we're also going to be testing a number of other factors in the design. So it will take some months to get through that process. Then we have to do the scale-up and so forth, which will take some time. We haven't said a time frame, but I wanted to be clear, it's certainly well more in a year for us to be able to get the manufacturing and nonclinical work put together. So it's not an immediate -- it's not an immediate event. We want to get it right. If we're coming in at this point after other parties are already in the clinic, we want to come in and nail it with a very high-quality system and quality production as well as a good strategy administration that will optimize the treatment effect. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- Our next question comes from the line of Tazeen Ahmad of Bank of America. -------------------------------------------------------------------------------- Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [26] -------------------------------------------------------------------------------- Emil, I just wanted to get your thoughts on where you are in reaching commercial supply scale for both DTX401 and 301 programs? And more specifically, have you completed any necessary potency assays for the FDA? And then I have a follow-up. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [27] -------------------------------------------------------------------------------- Yes. Well, we've been dealing with the potency assay across the program -- across all the programs and have an understanding with the agency of how we're managing that for all the programs. They have been talking to us about this for a while, so it's not a new thing. And I think it's pretty clear to them that in entering Phase III, they want to see a potency assay as part of each manufacturing process and on lot release. And their point is they want to make absolutely sure that we're giving potent vector. We have a number of -- the guidance allows for a matrix on multiple assays. We have multiple, but they definitely want one that looks at the active protein story. And we'll have those in place for those programs. -------------------------------------------------------------------------------- Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [28] -------------------------------------------------------------------------------- Okay. And then can you just give us a little bit more background on what led to the decision to add a prophylactic steroid cohort to the DTX401 program? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [29] -------------------------------------------------------------------------------- Well, it was actually -- the DTX401 plan was sort of there. We just hadn't talked about it as much. We -- in cohort 3, we used steroids a little earlier. We set the trigger for initiation steroids a little bit earlier. It looked like we got a better effect at controlling the -- any inflammatory response from the liver. And the sense was it -- with the safety of parent doing that, we decided we would look at moving the steroids up even a little bit earlier on in the process, and we think that would just, practically speaking, become a lot easier in the commercial setting and would help us get ahead of any inflammation that might get going. So it's basically learnings from cohort 3, but it was actually in the plan. And with the data, the way it looks from our third cohort, it seemed prudent to do that as well. It doesn't affect us. We have product available and we could treat another 3. I will tell you the other benefit, of course, for having 12 patients here and 12 patients in the other program, is that while the number of patients that we treat -- that are successfully treated, certainly can help us with the long-term durability argument because they will be on treatment far ahead of the Phase III program. And that, as you know, is going to become an important piece at getting -- moving forward in a filing approval process is to ensure that we have enough durability. And so having a few extra is probably helpful in that. So we'll be exploring that. We're already enrolling patients in it, and I think it just adds to the story for how to treat in an efficient way when you're in the commercial setting. -------------------------------------------------------------------------------- Operator [30] -------------------------------------------------------------------------------- Our next question comes from the line of Yigal Nochomovitz of Citi. -------------------------------------------------------------------------------- Samantha Lynn Semenkow, Citigroup Inc., Research Division - Senior Associate [31] -------------------------------------------------------------------------------- This is Samantha on for Yigal. Just first on the Crysvita guidance revision. Is that incremental $5 million on the lower end related to the expectations for the TIO launch? Or is that related to the increase and the identification of new XLH patients that you mentioned in your prepared remarks? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [32] -------------------------------------------------------------------------------- Well, the guidance we put out at the beginning of the year did assume that TIO would get approved launch. So it was -- the guidance we put out was for all Crysvita sales for the year. And so we've moved up the lower end of the guidance because our revenue is actually guiding into the higher part of the guidance, so that was simply a tightening up the predictions for TheStreet. I don't know, Erik, if you had any other thoughts on the guidance that you want to provide? -------------------------------------------------------------------------------- Erik Harris, Ultragenyx Pharmaceutical Inc. - Executive VP & Chief Commercial Officer [33] -------------------------------------------------------------------------------- Yes. I would just say, just to build on my remarks earlier, so far, less than 1% of existing patients have been impacted as a result of the COVID pandemic. And while we're seeing growth rates that are trending back toward pre-COVID levels, they're not there yet but are trending in the right direction. And I think that's a result of the team is continuing to find innovative ways to educate providers and patients through virtual meetings and in live meetings we're allowed according to safety protocols. And more offices are opening up and seeing more patients in clinic. So we're encouraged by the rebound that we're seeing. -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [34] -------------------------------------------------------------------------------- Great. Thanks, Erik. So I don't -- I mean, the bottom line, not TIO, really, the maintenance of the base off of COVID has kept us in game and the launch has continued, and we're able to tighten up our focus and remove the bottom end of the guidance range. I think that's good news for the Crysvita franchise. -------------------------------------------------------------------------------- Samantha Lynn Semenkow, Citigroup Inc., Research Division - Senior Associate [35] -------------------------------------------------------------------------------- Okay. Great. And then just a follow-up from the DMD question. Once you get this construct into the clinic, how quickly do you think you can advance into a pivotal trial? Do you think you'll be able to use the safety data that you've generated for 401 and 301 to, sort of, advance that a little bit faster maybe than some of your other gene therapy programs? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [36] -------------------------------------------------------------------------------- Well, I think we would be able to understand from those programs, the safety profile, but more importantly, the dosing range effect. But I think the truth is in Duchenne, the dosing is quite different. The safety will be quite different. So there's a little bit less than we can leverage upon. I think the manufacturing might be helpful, particularly the Hem A program, which is HeLa-produced, would give us some -- would provide us some advantage. So I don't think I would say it's necessary those programs alone. I think the biggest advantage would come through in understanding the likely dose range we need to achieve and being able to design -- and the biomarker endpoints involved as well as clinical endpoints and being able to design a seamless design trial, which would take us through the dosing phase as well as the randomized phase more rapidly, which is the approach we're going to take with Wilson. I think that type of design, which has been promoted by CBER and Peter Marks, I think is possible when you know enough about the disease to know the endpoints and the measures you want to make, then you can kind of predict a plan and just settle the dosing and move right into Phase III without having a gap. That would be one of the ways we can shorten the time line after we get to the clinic. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- Our next question comes from the line of Cory Kasimov of JPMorgan. -------------------------------------------------------------------------------- Cory William Kasimov, JPMorgan Chase & Co, Research Division - Senior Biotechnology Analyst [38] -------------------------------------------------------------------------------- Two questions for me as well. First, on UX701 in Wilson's. Can you just give some insight into how you're thinking about initial clinical studies and what the duration of follow-up might look like there? And then my second question is just a follow-up on DTX401 for GSDIa. And with your comment that the new prophylactic steroid cohort that you're evaluating now won't impact the timing of Phase III, does that mean you would start Phase III and amend the protocol if necessary or just take an early look and build a prophylactic steroid kind of regimen into that? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [39] -------------------------------------------------------------------------------- Okay. So the first question is around UX701, which is the gene therapy for Wilson disease, the clinical studies. Our plan in the clinical studies is to do a significantly larger stay than what we did in the others, but it will be -- there will be 3 cohort groups that will be exploring dose. And then with that dose information, we'll essentially go straight into the Phase III design and one seamless design. And so we're getting -- we're going to be seeking approval on doing a single seamless design, where you go through dosing and go right to the pivotal design. The reason that's possible is that the agreement on primary endpoint is on a -- biomarker-based primary endpoint is doable because of the history of approvals in Duchenne. And therefore, we think we can set up and operate a program straight through in one shot. So that will help it. The study length, look, I think the FDA is very clear that they want to make sure there's sufficient durability in the program. The patients from the early dose cohorts would probably end up having close to a year or more time on drug than the Phase III component patients. But we haven't fully nailed down what exactly the amount of length of time is. But our expectation based on design is to have a 48-week blinded study. How much extension data we'll need? We'll need to discuss with the agency at some point in time. But our plan is [740], we plan to study for the core efficacy and safety determination. So with the 401 prophylactic steroid question, we're primarily looking to see that we can keep inflammation down in the first few weeks and that, that effect is sufficient to allow us to get the good cornstarch reduction. So we only need a few weeks of data in order to know how the steroids are working for us. So that's what we've been looking for. Last time in the third cohort, what we did with steroids that were as soon as they change from baseline, which really meant it was only like a couple of weeks in from the treatment. And so now we're just starting a little bit earlier. So it's really not that fundamentally different from where we are. It's just a little bit earlier. And we look to see that it's safe. It doesn't have any issues with the GSDI patients. And as long as that happens the first week, we'll know. Our plan though is to submit the protocol with the new proposed steroid regimens that way. If we had an issue in the steroid cohort, yes, we could then amend the protocol and back away from that, but I doubt that we will, and I think it's probably the best way forward. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- Our next question comes from the line of Salveen Richter of Goldman Sachs. -------------------------------------------------------------------------------- Salveen Jaswal Richter, Goldman Sachs Group, Inc., Research Division - VP [41] -------------------------------------------------------------------------------- Shalini, it's been great working with you, and enjoy the break. And Mardi, congratulations on joining Ultragenyx. Emil, I was just wondering if you could update us with where you stand with regard to optimizing the HeLa platform to create this third-generation process? And how you intend to layer this HeLa manufacturing into your pipeline, particularly with Wilson? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [42] -------------------------------------------------------------------------------- Right. So the Wilson program is produced with the HeLa, we call 2.0 version of the process. However, we've already created HeLa 3.0 versions from that version. And we don't have, at this point, time or need to cross over to it, but we could at some point in time. But right now we'll head to the clinic with the 2.0 version, which is already very productive and certainly providing more than enough product. The HeLa 3.0 level of productivity improvements, which are some patent additional changes we're making, which were presented at the ASGCT. Those change, I think, will particularly be valuable for the Duchenne program because where you really need that much higher productivity, therefore, is a real big win for that. And with those changes, we can get the productivity up several fold, even higher and reach levels that will really enable the ability at 2,000-liter scale to produce enough product to treat many patients for every run. So we're looking at HeLa 3.0 really coming into play there. The process though, making a 3.0 version can be done with any existing HeLa producer cell line. We can actually take existing line and turn it into the 3.0 version. So we could certainly go back. We haven't done it for Wilson, we can go through the other programs and do that as well. Going forward, we'd look to see the HeLa 3.0 version as being the right version, but we're still finishing the development of that. And Duchenne will give us a chance to optimize it for human use. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- Our next question comes from Laura Chico of Wedbush Securities. -------------------------------------------------------------------------------- Kenneth Shields, Wedbush Securities Inc., Research Division - Research Analyst [44] -------------------------------------------------------------------------------- This is Ken Shields on for Laura Chico. So one for Mardi, what drew you to the opportunity? And how should we think about capital allocation and financing strategy and Ultragenyx has benefited from recent transactions. So what should we anticipate as we look ahead? -------------------------------------------------------------------------------- Mardi C. Dier, Ultragenyx Pharmaceutical Inc. - Executive VP & CFO [45] -------------------------------------------------------------------------------- Yes. Great, great. Thanks for the question. And it's a pretty easy decision to join Ultragenyx, and I think you heard a lot about it on the call. I think the team has guided the company in such a great way to get to this point, but they've certainly planned for their next phase of growth. And I'm pretty honored to be part of the team now and to help them achieve that. In terms of capital allocation, I think the company has done a fantastic job, frankly, to be here, if you look at our cash balance at the end of last year and the cash balance today, it's pretty darn close to the same number. And particularly the last 2 deals that brought in capital, non-equity dilutive in nature were the Royalty Pharma -- Royalty deal last December. And then, of course, the Daiichi deal, which we've talked about today, together, bringing in well over $500 million into the company. So that's fantastic. So the company is in a really strong cash position. We did announce, of course, the Solid deal recently. But with that deal and sort of our base business going forward, we have cash that takes us into 2023. But I want to highlight that we're on a growth path. So we like deals that look quite solid. And I want to highlight the GeneTx purchase option as well. For the Angelman program, which we have the option to purchase that company for $125 million after some period of time after Phase II data. So we're in great position, but we are very active as well, and we look forward to the next steps. -------------------------------------------------------------------------------- Kenneth Shields, Wedbush Securities Inc., Research Division - Research Analyst [46] -------------------------------------------------------------------------------- And maybe just one more. So on Angelman syndrome, how do you think about the competitive landscape and the potential for a CRISPR-based therapy versus an ASO strategy? I think there was a recent publication that came out. And in light of your interim data, just wondering if you could apply an IND potential for gene editing disease? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [47] -------------------------------------------------------------------------------- Thank you. Well, for the Angelman disease, fortunately, for Angelman patients, there's a lot of people working on strategies right now. And there are a lot of very interesting strategies out there. So they certainly all have potential. We ticked ASO, by the way, particularly because we felt it was more likely to be superior than gene therapy or even a CRISPR-type approach. The ASO can just -- and then particularly, ASO distributes well to the whole brain induces the expression in a wide ray of neurons across the brain, which we think is really important in this disease state. Whereas gene therapy now even in the -- in primate or in humans is still getting a small fraction of the total neurons. And while that can work in something like SMA, it may not work in disease that has very complex neuronal communications. I think gene editing is going to be extremely challenging, the brain getting an adequate and effective expression in enough neurons to actually have the impact you desire. And keep in mind, it's only the neurons that are imprinted, the other cells are not imprinted. So if you gene correct non-neuronal cells, you're -- that's actually may not be what you want to do. So it's -- biology is complicated. I would say, having looked at all, our view was ASOs was the best strategy. It turned on the paternal chromosome, which was there. It allows that expression to occur in a regulated fashion, and it does it in a wide variety of neurons. And I think that's still going to be hard to beat. Even so, there are more ASOs out there than us. So there's Roche, Biogen and Ionis, both very capable firms with a lot of expertise. We picked the GeneTx program to get involved because we felt they had a superior understanding of the RNA regulation and that the science, which was, we think, superior and it's basically more evolved in understanding regarding how to knock down the RNA and their oligo, I think, is substantially more potent than others that were tried in the laboratory. So we're excited about that oligo. And I actually think it's still going to be the best strategy, and it will be hard to match, I think, with other strategies. -------------------------------------------------------------------------------- Operator [48] -------------------------------------------------------------------------------- Our next question comes from Jeff Hung of Morgan Stanley. -------------------------------------------------------------------------------- Jeff Hung, Morgan Stanley, Research Division - Equity Analyst [49] -------------------------------------------------------------------------------- Best wishes to Shalini. Just to clarify on the guidance, if I'm looking at this right, the midpoint of the range implies approximately flat sequential growth for fourth quarter, Crysvita sales in Ultragenyx territories. You mentioned outstanding uncertainty due to COVID. So is that the main driver? Or is it conservatism? Or are there any other potential factors that we should be thinking about for the fourth quarter? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [50] -------------------------------------------------------------------------------- Well, I think there are probably a lot of factors like how about the widely discussed COVID surge ongoing out there? Erik, do you want to touch on the question, which is really how the guidance relates to what's happening? What are the risks to the guidance maybe going forward and what the changes were? Is that about right, Jeff? -------------------------------------------------------------------------------- Jeff Hung, Morgan Stanley, Research Division - Equity Analyst [51] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Erik Harris, Ultragenyx Pharmaceutical Inc. - Executive VP & Chief Commercial Officer [52] -------------------------------------------------------------------------------- Yes. As I stated, we are encouraged by the rebound that we're seeing. But there is still a great deal of uncertainty as to when the market will fully open to pre-COVID levels. So it creates some challenges with forecasting as you think about -- as we move in -- close out the year and move into 2021. -------------------------------------------------------------------------------- Operator [53] -------------------------------------------------------------------------------- Our next question comes from Joon Lee of Truist Securities. -------------------------------------------------------------------------------- Joon So Lee, Truist Securities, Inc., Research Division - VP [54] -------------------------------------------------------------------------------- Congrats on the strong quarter. On GTX-102 for Angelman's, you use IVIg to treat some of the patients, which implies IGG response. Yet you said on the call yesterday, I believe, that IgG to albumin were not altered. So can you just tell us a little bit more about what the nature of the new response was? And then my second question is, based on the MRI, the reaction, as you described, appear to be very localized. But my question is, what was the greatest extent of the spread of the inflammation in the patient -- in any patient, actually? Just trying to assess the potential to spread to other, I might call, levels maybe a little bit more of the [body functions]? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [55] -------------------------------------------------------------------------------- Sure. So the use of IVIg or steroids was done more reactively as the patient symptoms. It was not actually based on a known hemological situation that we thought IVIg would work. It was just looking parallel to some other conditions, not because there was any rational basis. It was used. It's not clear the IVIg and steroids are actually having effect. We were just using -- including them for completeness, but it does not indicate that there's an Immunoglobulin based, and we have no evidence for that at this point. Regard to localized, we said lumbosacral, but actually lumbosacral was the largest extent, and that was in the smallest patients. That's where it extended to the lumbar region. But in the bigger patients is really almost in the fecal region only. So it was actually smaller. The biggest region was up to the lumbar and it did not include thoracic levels for higher levels. So we don't think it would spread. We think it appears to be the region where the drug sits immediately after administration. Without Trendelenburg, if it's small patients, it would fill up a little more than a big patient where it only fill up the bottom part. So we think that the Trendelenburg, which hopefully tip the cup over and have all the stuff pour to the top, is what we're -- we think will change things. And we're adding a flush of additional artificial CSF after the dosing to help wash out the drug from the lumbosacral region, which we think would both produce the local effect and help promote the movement. The thing once the drug moves north and flows, it will mix now with CSF up in the spinal cord mix and dilute. And when it reaches the cisterna magna, there's almost a pumping mixing action that goes on with the -- So if you sit there long enough, the drug should move out of there and mix more efficiently and not fit in any one place. So that's why we believe we can alter the distribution. It's not a new thing. Trendelenburg and these actions are commonly used and other intrathecal drugs. And I've been personally doing research in intrathecal therapy for 20 years. So it's an area -- I'm quite familiar with them. These are very simple new things you can do at alter. And that's why we're very confident we can manage this, and it will not become an issue. -------------------------------------------------------------------------------- Joon So Lee, Truist Securities, Inc., Research Division - VP [56] -------------------------------------------------------------------------------- And just a follow-up question. Were there other ASO therapies that led to some localized inflammation or reactions that was resolved with Trendelenburg? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [57] -------------------------------------------------------------------------------- Well, there are other ASO therapies that clearly cause meningeal irritation and elevated CSF protein. So multiple ones have -- in the clinic have shown that. So that's definitely true. So the Trendelenburg can be used in any situation. I don't know, but I can't speak to the clinical judgment of other people and what they do or don't do. But Trendelenburg is widely used in intrathecal therapies as a way to take the heavier drug solution and move it toward the brain where it needs to work. -------------------------------------------------------------------------------- Operator [58] -------------------------------------------------------------------------------- Our next question comes from Arlinda Lee of Canaccord. -------------------------------------------------------------------------------- Arlinda Anna Lee, Canaccord Genuity Corp., Research Division - Analyst [59] -------------------------------------------------------------------------------- Maybe a quick one on Dojolvi. Can you provide an update on what's going on in the discussions with the regulatory agencies? And then maybe more involved on the HeLa efficiencies, you've mentioned that you're now in version 3.0. I'm wondering if you're looking to further enhance improvements there. And can you talk about how you think about the HeLa program and your appetite for additional collaborations and additional indications you'd be interested in going into? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [60] -------------------------------------------------------------------------------- Thank you. So on Dojolvi regulatory, we've -- just to update, we have filed in Canada under priority review. We filed in Brazil, in addition. And so those are the 2 that are in play. In Europe, we're having discussions because we need to get a pediatric investigational plan, and then we're having ongoing sessions. So no filing plan yet for Europe. So that's where we are in the reg agencies. With the U.S. approval, though, we can do named patient sales in many places where the requests come to us. And we can fulfill those requests. With regard to HeLa 3.0, the new version is some alterations, which help generate more productivity and are really substantial and very important. And so the team led by Sam Wadsworth is, of course, tuning, looking on what's next and are continuing adding to the platform and building its value. And I think these changes are the kind of things that happened in the early days of monoclonal antibodies that whoever controlled the creation of large-scale, cost-efficient system for monoclonal antibodies started, kind of, owning the field and ending up partnering and gaining a lot of ground. Now we believe there are additional collaborations possible, whether for indications we would develop or ones for which we would provide the technology in an agreement as we did with Daiichi Sankyo. We're looking at those kind of arrangements. We would -- the deal with Daiichi Sankyo also involves a lot of tech transfer and a lot of effort. But on the spectrum, we could do another deal as extensive as that. Or other deals, which the technology is licensed for particular indications. And we're open to a variety of avenues. And if we've created the largest mammalian system and high-quality system for AAV manufacture, it's coming to us to make it available and work with companies and putting more products in play. The Duchenne story just became one that we could take advantage of ourselves as an area of muscle that we're pretty knowledgeable about and -- for which solid as a partner was available to help bring third Duchenne particular knowledge to the fourth, especially their microdystrophin. We certainly would look at other deals of a similar type where we would supply our technology and pick up another product where the unique, scalable and large-scale production and high tighter productivity of the HeLa platform, which could be a distinct advantage, so particularly then in high-dose indications. So we are looking at those, and Sam will continually ask for investment in further versions of the platform. I guarantee it. -------------------------------------------------------------------------------- Operator [61] -------------------------------------------------------------------------------- Our next question comes from Vincent Chen of Bernstein. -------------------------------------------------------------------------------- Unidentified Analyst, [62] -------------------------------------------------------------------------------- I have a couple of science questions on Angelman's and DMD. Starting with Angelman's. I was wondering if you could provide some more color on what you think the mechanism is for the potential inflammation seen and what findings or observations support this hypothesis? Is this something that you think is likely to be an effect common to simply RNA dose intrathecally above a certain dose? Or is this something that may be related to certain RNA molecules or certain RNA applications? And then for DMD and the solid collaboration, I'd be curious what is your thinking around what causes the complement-related side effects that saw -- have seen previously, are these likely to be related to the use of a longer half-life vector like AAV9? And do you think a program using your capsid would be potentially less susceptible? -------------------------------------------------------------------------------- Emil D. Kakkis, Ultragenyx Pharmaceutical Inc. - President, CEO & Director [63] -------------------------------------------------------------------------------- Sure. So in the Angelman story, the mechanism of the inflammation, we think, is probably very distinctive from the mechanism of the action of the drug. All ASOs can help toxicity apply to cells and its culture. And Stan Crooke from Ionis has published some very elegant paper showing that, showing how ASO of various kinds combine certain proteins and lead to toxicity. And so that idea of ASOs positive toxicity as a class is pretty well-established in many different oligos. So it's not something very new. The issue of meningeal inflammation for protein in CSF is also widely observed. We don't think the mechanism has anything to do with the mechanisms of oligo and RNA. It has really to do with a local cell toxicity relating to too much oligo present and being taken up. That's why we believe it's primarily an issue of getting the concentration and the contact time down locally. What we know and the data supports this is that we have looked in our nonhuman primates. And we know that in those non-primates, not without Trendelenburg and done the same way as we're doing in human, we do see very high concentrations in the local tissues. They hadn't been associated with a problem in the nonhuman primate. The concentration in the brain are lower than what you see in locally applied drug. But now in humans, that isn't a problem. And so therefore, we're having to take action, but it hasn't caused this problem in nonhuman primate. So we know the concentration is higher there. We know from in vitro work by a number of laboratories that oligos at high concentration can cause its localized toxicity. So we think in a simple manner, just lowering the exposure level in the local and trying to reduce that inflammation. I think it's something that's completely manageable and not a fundamental type toxicity that's related to -- the actual drug action is related to a local toxicity of just too much drug in the locally applied space. So we feel, have something very differentiated from what the drug does and therefore, very manageable, and I feel confident we'll get it managed. Now with regard to Duchenne, both Pfizer and -- the Pfizer program and Solid's program have had compliment activation, appears to be antibody-related complement activation. This could be due to longer exposure time with AAV9, which lasts longer. The Sarepta program, to the extent they've disclosed, and this appears to have -- not have this particular problem, we know that AAV8-related vector is clearly a little bit quicker, and that may be a factor. We have an AAV8 variant that is -- has a very good ammonium profile and which we think has a good potential of being an optimum product. We know it delivers to muscle. And therefore, we feel confident it's a good choice from its immune profile standpoint, its faster clearance from the circulation to be a good option to combine with the really best-in-class microdystrophin that Solid has. And for Solid, this gives them another way to win. They've got their current product. It could do well, and they could be fine and figure out the issues they've had. This also gives them another way to work with us and another upside potential for Duchenne patients. I like deals that get 2 winners, put together something that will create a common goal and combine the best technology there that's out there and have done that type of deal in the past. And I think it was a kind of deal that can work. Duchenne is a very big indication. There's a lot of room here, and I think it's a lot of room for doing better. And we think the platform we have and the distros and combined with some learnings and intelligent approach, could provide a very good option for treating Duchenne. We're behind everyone else, but I think we can be better. -------------------------------------------------------------------------------- Operator [64] -------------------------------------------------------------------------------- At this time, I'd like to turn the call back over to Joshua Higa for closing remarks. Sir? -------------------------------------------------------------------------------- Joshua Higa, Ultragenyx Pharmaceutical Inc. - Director of IR & Corporate Communications [65] -------------------------------------------------------------------------------- Thank you. This concludes today's call. If there are any additional questions, please contact us by phone or at ir@ultragenyx.com. Thank you for joining us. -------------------------------------------------------------------------------- Operator [66] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for participating. You may now disconnect.