Ultragenyx Pharmaceutical Inc. (RARE) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Ultragenyx' DTX301 Data Conference Call. [Operator Instructions] I would now like to hand the conference to your speaker today, Danielle Keatley, Senior Director of Investor Relations. Please go ahead, ma'am.

Thank you. Good afternoon, and welcome to the Ultragenyx conference call to discuss the results of the Phase I/II study of DTX301, our gene therapy for the treatment of OTC. We issued a press release earlier this afternoon detailing the data results. Slides to accompany this call are available through the webcast and can also be found on our website at ultragenyx.com. With me today are Emil Kakkis, Chief Executive Officer and President of Ultragenyx; and Shalini Sharp, Chief Financial Officer. I'd 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 quarterly report on Form 10-Q that was filed on November 6, 2019, 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 actual results could differ materially from those projected in any forward-looking statements. 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 relating to our business, see our periodic reports filed with the SEC. I'll now turn the call over to Emil.

Good afternoon, everyone, and thank you for joining us. Today, we announced positive data from the third dose cohort of the DTX301 study in ornithine transcarbamylase or OTC deficiency. We also released improved and longer-term data from the first 2 cohorts of the study. I'll briefly review these data and discuss next steps for the program. We'll then turn over the call to questions. In the third cohort at the 1e13 genome copies per kilogram dose, all 3 patients demonstrated response, and all 3 of these patients had higher disease severity baseline than the early responders. One of the Cohort 3 patients now at 52 weeks of follow-up as a complete responder since she's remained clinically and metabolically stable after discontinuing her ammonia scavenger medicine and liberalizing her diet to include more protein. A second more severely affected female patient at 24 weeks of follow-up has demonstrated response based on substantially improved ammonia control. This patient has not yet weaned off medication. Her restricted diet remains as steroids at this time. The third male potential responder has demonstrated significant improvement in ureagenesis. He's only been followed for 12 weeks. At this point, will require more follow-up past steroid treatment to determine the appropriate responder designation. Turning to the second cohort, a female Patient 6, who had a small increase in ureagenesis early in her course has now demonstrated a more robust response apparent at the 52-week assessment, and this response is confirmed then at 78 weeks of valuation. The previously disclosed complete responders in Cohort 1 and Cohort 2 also remain clinically and metabolically stable while off of all medications and diet restrictions now at 104 and 78 weeks, respectively. Finally, 3 complete responders have shown a sustained biochemical effect after discontinuing their alternate pathway medication liberalizing their diets. We'll continue to follow the other responders who are earlier in the course of treatment, and we'll work with investigators to determine if they can also discontinue ammonia scavenger medication and restricted diet. Now turning to the table on Slide 3 for more detail. So I'll provide more detail on the new data and starting with patient 6, the new responder in Cohort 2. The female patient has shown now a 218% improvement in ureagenesis from 20% of normal baseline to 61% at week 52. The rate of ureagenesis has maintained 64% of normal at week 78. In addition, she's shown a significant 74% reduction in pneumonia levels from well above the normal range and since treatment have fallen into the normal range beginning at week 6. She has started to taper alternate pathway medications and liberalized her diet. Moving to Cohort 3, where we have now 2 confirmed responders and a third potential responder. Patient 7 is a female complete responder. She demonstrated a clinically meaningful 79% change in rate of ureagenesis from a low 24% of normal baseline to the 51% to 64% range and staying at about 44% of normal at week 52. During this quarter -- this period, she reported feeling significantly better and discontinued for alternate pathway medications and liberalized her diet. She's remained clinically and metabolically stable without a rise in pneumonia. Patient 8 is a female responder. She has demonstrated a significant and consistent 90% reduction in ammonia levels from a very high 184 micromole per liter at baseline to the normal range by 6 weeks and maintained at a normal 19 micromole per liter at week 24. This patient had aberrant high baseline ureagenesis values inconsistent with her known severe clinical status to make her ureagenesis results uninterpretable. But very importantly, the investigator reported that this patient's family says, her health is the best it has ever been. We'll continue to follow this patient's ongoing response as she fully weans off her course of steroids and is valued for a reduction in her scavenger medications as well as dietary restriction. Patient 9 is a male responder. Still early in his course of 12 weeks after treatment. He's shown a 123% increase in the rate of ureagenesis from 25% of normal at baseline to 56% of normal at week 12, while still on a steroid taper. We expect that ureagenesis levels should rise after steroids are discontinued as observed in other patients in the study. This patient is still early in his treatment, and so he's not yet discontinued alternate pathway medication or liberalized his diet. His ammonia levels have remained in the normal range and response status will be confirmed after additional follow-up. Focusing on ammonia levels on Slide 4, all patients' study have shown significant decreases in ammonia or have maintained normal levels if their ammonia levels were initially well controlled. As shown here on Slide 4, we see that patient 6 and 8 have baseline ammonia levels well above the upper level of normal and sufficient to cause clinical issues. Following treatment, their ammonia levels fell to the normal range generally in 6 weeks. And patient -- and following treatment, their ammonia levels fell to the normal range by 6 weeks and Patient 7 has maintained normal levels and normal range even after discontinuing RAVICTI at week 6. And Patient 9 also remains in the normal range. Briefly turning to safety. As of the cutoff date of December 9, 2019, there've been no infusion-related adverse events and no treatment-related serious adverse events reported in the study. All adverse events have been grade 1 or 2. All 3 patients in Cohort 3 had mild clinically asymptomatic elevations in ALT levels potentially due to higher transgene expression with a higher dose. The observed ALT elevation is similar to what has been observed in other programs using AAV gene therapy. All 3 of the patients to Cohort 3 have been responding to reactive course of steroids and all remain clinically stable. Slide 6. In summary, we are encouraged by these recent data. We're seeing more uniform response among patients at the higher dose cohorts. 3 of the confirmed responders are female now indicating that the higher dose levels may be overcoming the greater potential innate immunity in females. We're now moving to a prophylactic steroid cohort at the same 1e13 dose. This decision is based on the benefit of prophylactic steroids that has been seen in other gene therapy studies as well as lab work that we conducted prior to the Cohort 3 data becoming available. We believe the prophylactic steroids could further enhance the level and consistency of expression that we have demonstrated in the study so far based on our own works and published work of others. We will begin enrollment in the first half of 2020, and the data are expected in the second half of 2020. Lastly, we are continuing our discussion with FDA about the potential Phase III study design. Ammonia is expected to be a primary endpoint based on direct feedback to date with ureagenesis as the measure of biologic activity that supports the decision for patients to discontinue alternate pathway medications or restricted diet. With that, I will turn the call over to Q&A. So operator, please provide the instructions for the Q&A portion of the call.

[Operator Instructions] Our first question comes from Yaron Werber with Cowen.

Okay. Great. And congrats on the nice data that's frankly, I wouldn't expect it this quickly to be at this level. So I guess the first question is as you now introduce steroids, Emil, to the next cohort, give us a sense -- I mean what are you sort of expecting? And then secondly, in terms of ammonia being the primary endpoint for a Phase III, is it based on a certain level of reduction of ammonia from baseline to be considered a responder? And do you need to show ureagenesis in those patients as well to then get approval?

Very good. So thanks, Yaron. From steroids, what's been seen in the past is an improved level of expression, but we're most interested in seeing a -- to improve the problems of expression within the liver, which we think would enhance the overall efficacy and particularly see more patients gain the maximum level of expression across their liver. And so the steroids should reduce innate immunity, which is why we think it would enhance the ability of the gene to get expressed. It also has the benefit of being easier to administer in the commercial setting than reactive steroids. We have to monitor patients every few days. So we think it has the practical reality of being a more appropriate commercial stage treatment strategy. So that's what we're expecting, improved prevalence of expression and perhaps an easier strategy going forward. For ammonia. The ammonia endpoint has been established from the FDA standpoint, from the approval of many products in the past were either reduction of ammonia or the maintenance of ammonia when changing from 1 drug to another as in the most recent RAVICTI approval compared to phenylbutyrate. We look at ammonia and it's really the toxic compound. And therefore, from the FDA standpoint, it's the clinically important variable. Ureagenesis, though, has allows us to look at patients who are on drugs and treatment who don't have normal ammonias, allow them to get gene therapy and come off their drugs and determine can they maintain their ammonias in control while on gene therapy alone without drugs or diet. And so there's 2 ways to look at this either as a reduction of ammonia or as maintenance ammonia after the crossover. RAVICTI, as you may remember, was -- showed the crossover from 1 drug to another in the maintenance of ammonia rather than the actual reduction in ammonia. So we're looking at both ways of looking at ammonia, and we'll verify that further by discussion with FDA. What we want to highlight to The Street was that ammonia is important from the FDA's view in how we assess this drug, and we've always believed ammonia is important. It is the toxic molecule. And we wanted to show you the ammonia data here, just to give you an idea particularly in Patients 6 and 8 of how profound the ammonia effect is and how it can happen fairly early on in the treatment course while the ureagenesis scoring is improving. And I think it tells you more about what the gene therapy is doing and changing the metabolic condition of these patients.

Our next question comes from Tazeen Ahmad with Bank of America.

Emil, I just wanted to get some clarity on how you're thinking about the expected time line for the start of Phase III. It seems you have an idea of what you want the trial design to be, so do you have a meeting already set up with FDA to discuss? And how should we think about the start times? And how long it would take to enroll such a study?

Well, we've had a couple of conversations with FDA already about this study. But we have not had the formal end of Phase II aesthetic meeting yet. We have a meeting upcoming, for further verifying the design of the program. Our expectation is that ammonia will be one of the primary endpoints from that data, and we're looking at how ureagenesis should be built in it and the type of patients to enroll. Our expectation is the study could be approximately 30 to 40 patients in a randomized study compared to placebo. The design though was not finalized and not agreed yet with agency, but that's the range of what we're considering. Right now we need to complete the steroid cohort, and we'd like to probably consider having an additional group of patients. If the steroid cohort proved to be beneficial, we probably would do an additional few patients. And then we would probably look at the FDA, see the FDA and end the Phase II formally after we see the steroid cohort information or somewhere around that time. So the time line for starting the Phase III is probably likely end of the year, early next year at this point because of the time to get through those patients and see their results come forward. But we are currently working on setting up the manufacturing, et cetera, to be ready to go as soon as we can. But that's roughly what the time line is looking like.

And are you going to be using commercial supply for that study?

Yes, our expectation is to use the commercial supply. Our commercial supply for this program is going to be based on the HEK suspension 29 -- okay, triple transaction type approach, which is commonly used. We have not converted this to a HeLa program at this point. So it's a HEK293 triple transaction suspension manufacturing that we developed.

Our next question comes from Maury Raycroft with Jefferies.

Congrats on the new data. Just wondering if you have any data on immunity that you've measured at this point that's giving you an idea of whether there's a common cause of immunogenicity? And then as a follow-up, I'm wondering if you have any thought on why the Cohort 2 responder was a delayed response? And were any adjustments made to improve responses in female patients?

Well, at this time, we don't have any immune response data to share. We haven't seen anything that we're not talking about that would suggest an issue. We're only seeing these mild elevations of transaminases, which we're managing and appear to be manageable with steroids. So we don't have any real evidence for that. And just to be clear, the OTC protein is a mitochondrial protein so it would get expressed and put in mitochondria. It's not expressed on the surface or secreted like other proteins where immunity is more of an issue. The patient that responded later, we saw an earlier increase in her ureagenesis. We just didn't know if it was meaningful or real. And then at 52 weeks, it end up being more and the 78 weeks was consistent. So she did appear to have responses somewhat later. We don't have a perfect explanation for why that is. It could be that females, because of their immunity, are having a delayed expression from the vector, but we don't have the pure evidence for that. What we'd look to see with steroids, is whether we would maybe accelerate the ability of the patients to start expressing earlier for some of them that may have had something slowing that expression up. But I would also point out that the males had a rise as they went over time, too, even if they had early activity. So it could be that the biology of this enzyme producing it is just takes time to accumulate in mitochondria over time and that accumulation is building over time and accumulating given the effect they need. In any case, if she was in the end our first female responder. And with the other 2 female responders, it gives us 3 female responders. So I think we can get past the issue now of getting a response in females, and we feel that dose is a factor and maybe steroids will help us accelerate and improve consistency, but we're feeling good about where we're at, at this point.

Our next question comes from Gena Wang with Barclays.

Also would like to add my congratulations as well. Emil, could you just remind us the definition of responder here in the context? And how that translates to the Phase III pivotal trial?

Well, we're looking at responders, the patients that have a significant rise in ureagenesis that is consistent in at least 2 assessments separated over time that are significantly improved over their baseline and screening values. That's basically what we're looking for. And so the -- what we're looking at in many of these patients is around a 40%, 50% increase in their abnormal over their baselines. It's the kind of thing we're seeing in these responders. And I think that clearly is based on the data we're seeing so far is sufficient to later translate into the ability to come off your drugs and come off diet. So we think that, that level of increase in ureagenesis is sufficient to be a responder. We're calling a complete responder, someone who actually does get off their meds and off their drugs, and that's just progressing through time to be able to do that. So that's our current view of what a responder is. A consistent repeated expression of increased ureagenesis, and we -- it seems to be around the 40%, 50% above their background level that is -- that we're seeing with the treatment at this point.

Okay. Great. And then given current data, will you have any thoughts, try to dose higher? Or you wanted to see the protein data first?

Well, we think the level we're getting is allowing patients to get off their drugs and diet. So we feel that this dose could be fine. And with maybe an additional benefit of the steroid, that should be well within a range to get patients to -- in a safe and in clinically effective dose. There are always issues going higher in any drug and gene therapy is the same. So we think that e13 dose seems like the right dose. But certainly, nothing precludes us from going higher if we had to. Safety has been very good. So at this point, we think e13 is getting us to the range. And now the steroids, I think, hopefully give us something that's more persistent, prevalent and perhaps even a little bit faster across the population. It has for other programs, so that's why we're considering that.

Our next question comes from Cory Kasimov with JPMorgan.

This is Gavin on for Cory. We just had a quick question, apologies if you answered this in your prepared remarks. But can you expand on the comments around Patient 8 specifically around the baseline ureagenesis?

Yes. Patient 8 was a patient with severe OTC deficiency. That is someone that has significant ammonia problems, clinical problems, which expects to have a low ureagenesis value, and she had very high levels it made no sense, and we were uncertain what that was. And yes, while ureagenesis was sort of unexplainable, her ammonias decreased dramatically because she had a very high level. 180 is a very high level. You and I would all be -- would be off kilter if we were in that level. You and I would be feeling really bad. And she went down consistently now for at least 3 assessments now over a period of months, down to the deep normal range. So 90% reduction. Her parents said she's feeling best ever. So clearly, clinically, she had a significant response and her ammonias went down. So something went off in her ureagenesis, and we just are just counting at this point since ammonia is far more important in this case, and her clinical condition improvement is consistent what her ammonia is telling us.

Our next question comes from Joon Lee with SunTrust.

Congrats on the significantly improved data at the higher dose. So my understanding is that the hope with the prophylactic steroid would be to eliminate the need for reactive steroids, but how confident are you that prophylactic steroids will fully cover the need for reactive steroid use? In other words, how late in the therapy the patients need any reactive steroids? If it was several weeks out, would the prophylactic steroid would have been -- would be sufficient to cover that, especially in light of some patients and especially from Cohort 2 responding much later. I'm just curious if that has to do with much -- some immune reaction later in the time point that's subsided.

Yes, thank you for the question. Well, the need for reactive steroids in general has been within the first few weeks through week 12 in general. There have been a few that were a little bit later. But the process of inducing the reaction is likely driven off the capsid that you've -- the dose of capsid and how that induces a cytokine response, which then kicks off this pattern of inflammatory mediators and inflammation process. We're feeling by nipping in the bud, preventing that from even getting started will help reduce anything happening throughout the course. I would also point out that the inflammatory response of cytokine releases is 1 part of the benefit of steroids. The other benefit is on reducing innate immunity within the each cell of the body, and that could help improve expression or reliability of expression of a broader number of liver cells. So we think there's an inflammatory suppression component, but there's also this enhancement of expression across the liver that we think would be beneficial. So those are the 2 things we're getting. We're also getting an easier regimen to apply. When we do that, we think for most patients that the 8 weeks of coverage that would occur with the dosing and the taper would cover the majority of patients. It doesn't mean we wouldn't use reactive. Someone had flaring later, but we think by shutting that down initially, keeping it -- keeping liver essentially cold and unreactive from the beginning will help reduce the potential for people flaring later once. Because the capsid should be gone and therefore, the true major instigator of the reaction should be cleared.

Our next question comes from Joseph Schwartz with SVB Leerink.

Great. Congrats as well. I was wondering what time point of evaluation you're thinking about using for Phase III, given the time course or kinetics of response that you observed so far? How long do you think you'll need to follow patients before you evaluate that?

Thanks, Joe. Right now, our expectation is to go 48 weeks for that response. Now that might mean a patient like Patient 7 -- Patient 6, excuse me, could be on the early side of their transformation to a response. But we believe the majority of patients should have declared themselves early enough that by 48 weeks' time, we should be able to evaluate them. So our intent right now is to do 48 weeks. Even Patient 6 that was late had an early rise. We just didn't know for sure whether it was real, so we didn't call it to you all because we weren't sure if it was good enough to be significant. And we -- it became more evident as time went on. But clinically, we think that for 48 weeks should be enough for the vast majority of patients to show us what they can do with the gene therapy.

Okay. And then how hard is it to enroll these trials based on your experience? And how selective do you think you need to be? Is the genetic variability in the mutation type of underlying OTC a consideration at all? Or is the treatment truly agnostic to the variability that I understand exists for the disorder?

Well, we -- given the number of patients out there in the OTC, we don't think that enrolling 40 should be hard to do. It will require a number of sites because it is gene therapy and the protocols will be more involved and not every patient's willing to go into that more involved story. We'd expect to enroll patients with more ammonia prop -- elevated ammonia than we had in this study. Because this study had more restrictions on ammonia, but we will allow more patients with higher ammonias, which will allow us to find more severe patients potentially, which I think are higher in need and would be more benefited by the treatment. So right now we're not really concerned about being able to enroll it. I think the question of male versus female is important. And I think the fact that we are seeing females responding at this dose is important because there are a lot of females, twice as many females as males in the population. And so having a good consistent response in females, I think, it greatly improves the ability to develop the study and enroll it.

Our next question comes from Laura Chico with Wedbush Securities.

Congratulations on the data. I guess kind of circling back to the level of response or the magnitude of response that people are having here in terms of the responders. Can you talk at all about what the mean protein intake is for people that are able to eat a more liberalized diet? And I guess thinking towards the Phase III study, understand you're focusing on ammonia as a primary endpoint. I'm just curious how you're thinking about other secondary endpoints? And I guess specifically, what measures might be useful to capture some of these quality of life benefits?

Very good. Thanks, Laura. The -- most patients on a restrictive protein diet with urea cycle defects have around 1 gram per kilo per day, which is an incredibly tight and restrictive diet. And many will take certain formulas that help them hit those -- that number. The restrictions that patients who are responders are achieving, and that's with people adding, let's say, 40%, 50% more abnormal ureagenesis to whatever ureagenesis they had, it seems to be allowing patients to get to more normal protein intake, which is many grams more than that. I don't have the exact grams what the patients are doing. But we know, even among the first couple of patients, they actually were eating steak or so. That would be many grams per kilo, but there is a wide range. I don't have a number for you, but it's many-fold more protein than current. And honestly, to change your life, you don't have to go to eat steak, but not having a 1 gram per kilo protein really helps you because it allows you to eat enough protein to avoid catabolism when you get sick. So when you have that low protein intake, it can drive the breakdown of more protein because catabolism was what gets these patients in trouble. So once you can get enough protein to avoid catabolism, you actually will -- it will actually make you less susceptible just because you actually have enough protein to keep your metabolism in the anabolic mode. So we're not concerned about that -- the protein intake. It appears that it's sufficient to change the lives of the patients. And that's with what we're talking about is a 40%, 50% of normal ammonia addition and on to whatever the patient had at that point. With regard to the secondary endpoint. Ammonia will be an important one, of course, and I said one of the primary. And the -- we are looking at cognitive function endpoints, and we haven't described all those yet for you, but we have an entire team here, the clinical outcome research valuation group, that builds endpoints, and we are including both cognitive and function and quality of life type measures into the study. The study is not a very large study so it's harder to capture. But we think if we had enough patients who had elevated ammonia and those ammonias decline, that we would expect to see some impact on their cognitive function or their quality of life. And we certainly have seen it in a few patients that have had that -- the life-changing effect on what they can do. So we are going to make sure to include that as part of the support for the value of the gene therapy once we get through the approval process.

Our next question comes from Yigal Nochomovitz with Citigroup.

This is Vanessa on for Yigal. I'm curious, looking at the 9 patients that's enrolled. Is there any difference in the disease course or the response to [ last 01 ] for the patients that had a decrease in ammonia levels versus those that just maintain the normal? Is this an accurate standpoint of the patient population? Or do you believe there are more patients out there that have been aberrantly high ammonia level?

Well, as we -- as I noted, the [ interpicture ] actually said that patients shouldn't have more than 100 ammonia. There was a limit on how high it could be to enter the study. So we were trying to get more patients that were stable. But when -- even when you're in a study that maybe less than 100, you -- people that are having moderately elevated ammonias can have waxing and waning ammonias, which is why some of the patients had a higher ammonias when we actually did the full-time 24-hour testing period. We think that there are probably more patients that have ammonia out there that are elevated, and we were selecting somewhat for more stable patients in this study. But there will be a significant fraction who are taking their meds, are highly compliant with their diet and are keeping their ammonias in the normal range, and they still would benefit from treatment. And that's why we have to manage how we look at benefiting someone who's heavily treated and controlled and as well as treating someone who's not well controlled. So both types of patients are out there. I think we would see a fair number of patients that have waxing and waning problems with ammonia control. And the ability to change that ammonia consistently to a pattern of normal should have clinical benefit. Within these patients, there's clearly some of the patients that had elevated ammonias. It may not be necessarily their clinical severity, but it could be that our compliance with treatment, in other words, so you could have -- you could be severe and complying and maybe getting by and doing okay with ammonia or you might be severe and unable to keep up, and therefore, you're in trouble. So it doesn't -- the ammonia by itself doesn't tell you how severe they are. It can -- it is a contributor to your understanding of severity, but it also depends on how compliant they are. So you have to combine all those things to understand what's going on in a patient. Their disease severity, their compliance with diet and drugs as well.

Understood. And then thinking about the Phase III which -- would you consider having a minimum baseline ammonia level for enrollment that you'll be able to show a difference -- a decrease while on treatment?

Well, I think that's an important question. The question is whether how we're going to assess ammonia as an endpoint. If we're looking at ammonia as a reduction superior for placebo, then having a minimum as you're suggesting would be 1 way to allow you to surely look at patients who are abnormal in order to show that reduction. That was 1 way of looking at it. The other way of looking at it, if you treat people who may have normal ammonia and show you can remove their drugs and show their ammonia is still maintained normal even after they remove drugs and diet. Another way of looking at it, which would be like Patient 1 or Patient 4 in the study. So we're kind of looking at ammonia in 2 different ways, and we need to kind of figure that out finally in working in our discussions with the regulators. But I think it could work in both populations. We just have to find the depth, how we're going to do that with the FDA. But whether it's by ammonia equivalency like RAVICTI or whether it's by superiority and reduction of ammonia in someone who's elevated even on meds, we think there's a straightforward way forward to get a Phase III design using ammonia.

Got it. And just want to squeeze in 1 more. Are you considering measuring expression levels in the liver via liver biopsy in the Phase III?

Well, no, we are not planning to do that. The problem with liver biopsies is you get a little piece of the surface of the liver. It's not even a very average sample. It's like -- it's not in near the core. It's not in the portal triaditis it's out in the periphery. It's not hard -- it's not clear how you'd make a lot of decisions off of that. The ureagenesis assay or the value of it is that it's like doing an in vivo enzyme assay. You're putting a substrate in and you're seeing what product comes out. So it's like doing a liver biopsy but for the whole liver and determining whether you're making enough urea. So that's what the ureagenesis has. It's supposed to be instead of doing biopsies because we think doing a bunch of biopsies will be hard on patients and might not be the greatest sample to tell you the right answer about what's going on in your patient.

Our next question comes from Josh Schimmer with Evercore ISI.

Seems fairly clear the value of a complete responder. How do you think about potentially capturing the magnitude and clinical relevance of a partial or incomplete responder? Either when it comes to liberalization of diet, a reduction of concomitant medications or some of the serum biomarkers?

Well, I think one of the things I'd be clear about, Josh, on the study is that a clear responder is someone who's had a response and been long enough responding for us to take them off their meds and diet. And some of the responders are early in their course, and they haven't had a chance to be challenged yet. So I'd just be clear that responders that we're talking about now could very well be complete responders once we get through enough time where we can. We've seen their ureagenesis up or their ammonias down, and now we're going to look at changing them and then verifying after removing those items that they're still doing well. So let me make that distinction. We think that improving ammonia control for patients who are having ammonia problems is by itself clinically meaningful. So whether they get rid of everything else or not, I think people who are availing ammonia, we think that alone would be a significant clinical response. The response we're seeing, though, I think, in most of the patients is in that 40% to 50% kind of normal range. And given that the patients with that kind of increase have been able to get off drugs and diet, I feel that most responders will convert to complete responders with time. And we'll have to end up seeing, Josh, if there are a few people who can't come off completely. But I don't think that would mean that there's less efficacy to them. So I just think that it's -- the degree of effect may not be as great in some. But right now, when we're looking at it, we're thinking that most people hitting that kind of increase should be able to get off their drugs and diet and change their lives.

Is there a threshold level of ammonia reduction that you would want to see to the count as at least the partial responder or if it turns out that not every patient can then fully wean off meds and liberalize diet?

Well, I would look -- we would be looking for 1 million reaching normal range. I mean if someone goes from 180 to 100, it's still abnormal. That's not really good enough to be considered a responder. The responders that we're seeing all of, they're looking at ammonia have gone well into the normal range. So if someone is still above the normal range, I think it's still not adequately treated, and I wouldn't call them a responder. So we'd expect from ammonia standpoint, they should be getting stably in the normal range, which is what we think is clinically beneficial. Going from 180 to 110 or something, I would say -- it's hard to say that, that is sufficient to be clinically meaningful by itself.

So as you ultimately pivot towards considering value-based reimbursement, then is that kind of that threshold that you're looking for? A fairly substantial effect, in the absence of it, you wouldn't declare there to be a clinical benefit?

Well, how we declare a benefit may not matter from a reimburser standpoint. They're going to declare what benefit they want. What I would say, practically speaking, if a patient gets their ammonia down or their ureagenesis up to the point that they don't need a very expensive scavenger drug and they can have an improved quality of life, and I think there's a reimbursement value. And that's what we're saying. We would like to see patients get off their drugs and diet. And I think that's a benefit to the reimburser of eliminating the costly scavenger meds as well as improving quality of life with their patients. So that's kind of the reimbursement story we're looking for currently. And trying to understand what would happen, is there a risk-sharing arrangement? Would there be an issue with someone who's partially treated? I think it's too early to make that discussion. I think when we get through Phase III, we'll figure out, Josh, whether that's an issue or whether it's not an issue at all.

Our next question comes from Chris Raymond with Piper Sandler.

This is Nicole Gabreski on for Chris. Congrats on the data. I guess I just had 1 quick question. So there's been a lot of thoughts about why females might not be responding to DTX301. So I guess I'm just wondering how your hypothesis has changed? Or maybe if it has changed at all now that you have female responders?

Well, our view originally was that females are known to have higher innate immunity, which means that you might need a higher dose to overcome that immunity, and that's what we've been saying. And so now we're showing that higher doses getting a few more responders. So we feel like that's consistent with what we said before. We think steroids could help make sure that we get consistent response across all females and even males. But so far, I think the response suggests that females may require a higher dose to be able to get to the effect that we're seeing. But -- so that's our conclusion at this point in time.

Our next question comes from Jeff Hung with Morgan Stanley.

So Emil, you mentioned that if the steroid is beneficial, you might look at a few more additional patients. So would it be more confirmatory with the same setup? Or are there any aspects that you might change to gain additional insights?

Well, it would mean if we do a cohort of 3 patients that's with steroids and show a nice effect that we'd want to do another 3 to have at least a group of 6 at that dose with steroids to just -- to get enough data to feel comfortable that were -- it's working the way we think. And I think making a decision of 3 for all-time for the future of the gene therapy is -- wouldn't be sensible. So we would do another 3 to make sure that we're -- the benefit we're seeing is real and it's consistent so we weren't planning to change other things.

Okay. Great. And then you talked about the innate immunity in women as well as reasons for using steroid prophylaxis. So do you have any expectations on how steroid prophylaxis might differ in a new one?

Well, I think steroid prophylaxis, from our understanding, should actually suppress innate immunity both for males and females. Females are maybe more an issue than males but it should have suppressed for both, which means the level of expression and the prevalence of liver cells within a liver of a patient expressing, we expect to go up, which we think would be beneficial. So it is a factor innate immunity, but it also will have benefits in both genders, and it would not be only to deal with the female side of the question. So we believe that the second important part is that reactive steroids is very hard to implement, and we think that this course might be more effective at improving expressions, more effective at suppressing inflammatory response, easier to apply in the course of setting.

Our next question comes from Yaron Werber with Cowen.

Great. Maybe just a quick follow-on. So Emil, just -- I'm looking at Patient 2 versus Patient 8. So they both have 90% roughly decrease in ammonia. You mentioned Patient 8 had an inconsistent ureagenesis because of such high initial ureagenesis that actually decreased. But -- so Patient 2 wasn't considered a responder, Patient 8 was, and you noted Patient 8 had some other clinical benefits as noted by the family. Why wasn't the Patient 2 considered a responder? I'm just trying to ascertain the differences between the 2 of them.

Well, I agree with you, Yaron. Patient 2 had an ammonia response and -- but it was extremely flat on ureagenesis, have like no reaction at all. The other one, their ureagenesis was made no sense. And it is a question. It says in our table that we're evaluating the ammonia response. It could be that they are showing a metabolic effect and the ureagenesis is just not reflecting that. So it could be that we should call them a responder. But at this point, we've decided just to say we're evaluating their response. The effect on Patient 8 we thought was coming from an even higher level down to a normal level. They were clinically severe and had a clinically profound result, which we didn't necessarily see in Patient 2. So it's a little harder to verify because ammonia can be variable too. So we like to see clinical confirmation, which tells you that they are having ammonia problems variably day-to-day as well as that 1 moment in time when we're doing the test. So that's why 8 was confirmed because of the clinical confirmation. And 2, right now, we see the ammonia response. We're going to see how that patient is doing. But a lot of times and we haven't heard much of a clinical change in that patient. So it may be that it's real, but it may be hard for us to tell what that means.

And so in the Phase III, is neurogenesis a secondary endpoint?

We haven't defined, for sure, which the endpoint will be, whether ureagenesis would be part of the primary or the secondary. It is a biologic activity. It's not a clinical endpoint in that regard, but it does help us in making decisions around the ability to remove their drugs and their diet safely without putting them at significant risk. So it has a role in the process of evaluating the efficacy of the gene therapy by itself though is not clinically meaningful. So we're fully still in discussion with FDA and it has not been settled yet exactly where ureagenesis will fall out.

Okay. And then maybe just a final follow-up. And then give us a sense on the dosing in younger patients and where are you in terms of having FDA buying? What do you need to do to move into younger ages?

Well, there's been a lot of interest in going to younger ages. And we are going to lower the age range in the Phase III from 18 to somewhere between 8 and 12. So the age range will be lower, and we have to get agreement with the regulatory authorities. But they have been very interested in us in going younger, by the way. We know, though, that the history of AAV suggests that if you treat patients well below age 8, the potential is they made to dilute out their treatment effect. So we're thinking about that and how we're designing this but we will lower in Phase III. And then we'll look at what other complementary or supplementary study we could do a younger age group because we think there is a lot of need in both. Europeans and U.S. have talked about the younger patients as another factor. And I think if you take someone who's 5 or 8 years old, it may be if their disease is severe enough and having trouble managing it on current standard of care, that who's going to worry about diluting when you're not doing well right now and you're losing brain. So there is a value into looking at younger patients, but we're lowering Phase III and then look at doing some more work to expand the age range below that.

Our next question comes from Adam Walsh with Stifel.

And let me add my congrats on the good data here. Emil, my question is regarding the Phase III clinical trial endpoint that you mentioned, the change in ammonia levels. And I'm curious, this is kind of an open-ended question, but you mentioned that for those patients that are on standard of care with normal levels, you might look to maintain them in the Phase III but you might also look at an actual decrease in the ammonia levels as well. It sounds like that's in flux or in discussion or will be in discussion with FDA. Which of those approaches would you prefer? And why?

Well, I think the key thing with something like gene therapy and it's -- where we'd expect to be expensive therapies to show benefit and profound benefit. Having patients that have more ammonia control and more ammonia problems does give us the potential to show more benefit and why we're beating the current standard of care. It's a little cleaner story from that standpoint. However, there are a lot of people who cannot -- who hate the drugs and are struggling with keeping on them who would benefit. So we don't want to just walk away from that situation as being not equivalent to clinical benefit and should have reimbursement implications if you're on your drug and you're taking them and they're quite expensive. So we think the value in both stories, I think that -- I think it's important as we get comfortable with the safety of the product in a Phase I/II that we can look at more significantly ill patients who might be more fragile, more at risk of ammonia decompensation as a population to start studying to show the real benefit of the treatment in changing urea and ammonia management. So we're going to look hard at that discussion and then discuss -- and work it out with FDA, but it just hasn't been resolved yet. But I think the best -- we want to make sure we're showing an important clinical benefit and control of ammonia through either reduction of it or changing their drug regimens required. And that's really the main goal of what we're trying to do.

That makes sense. If I could, I'll ask a quick follow-up to that. And that is just is the proportion of patients that are normal versus those that may have abnormal levels of ammonia? Are those groups of patients essentially equivalent in terms of size? And what I'm getting at is, if you look at the patients that need to show reduction, if those -- if that cohort of patients is smaller, that could have implications for enrollment timing. So any clarification there would help.

Well, 1 thing I'd point out to you is that all patients, even ones that have normal levels, can have abnormal levels at some point during their year. It's just depending if they got sick or they had a dietary scourging something the parent didn't know about or things. So the patients are varying, and it's a question of not are they a normal, abnormal, whether tend to be normal or abnormal. There are people who are more compliant, tend to be better, will still have bad days. So just to be clear, so it's not so distinctly 2 groups of people that are highly differentiated. It is a spectrum of people in terms of compliance and control. We don't think there would be a big problem in any kind of -- in terms of enrollment. And I think the other thing to think about -- have is the patients and the regions they're in and their accessibility to those drugs. So not everyone has accessibility to the perimeter of it -- the drugs, which are scavengers. In South America, for example, a lot of patients are not on anything, right? And so there are other regions where there's different, let's say, in management and care, a different degree of rigor being applied, whether we could actually enroll patients in those countries as well to help build the enrollment of a trial. And since we have good connections in South America, for example, and in Europe, we think this will be an international study. And we're not really concerned about finding enough patients to enroll especially as more and more data come out on how the drug is working and how people are feeling about it. I think that will help encourage people to move forward.

I am not showing any further questions at this time. I'd now like to turn the call back over to Danielle Keatley for closing remarks.

Thank you for joining us. We'll now conclude the call. A replay of the call will be available shortly. And if you have any additional questions, please contact us by phone or at [email protected]. Thank you for joining us.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.