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

Good afternoon. My name is Gena Wang. I'm SMID Cap biotech analyst at Barclays. Welcome to our second virtual Global Healthcare Conference. First, I wish everyone stay healthy. And I would like to thank all the participants, investors, companies and especially our event team and corporate access team who made this virtual health care conference possible. And with that, I would like to introduce, our next presenting company is Ultragenyx. With us today, we have Emil Kakkis, Chief Executive Officer. Also, we have Mardi Dier, Chief Financial Officer, with us. I will hand over to you, Emil, for a brief overview of the company.

Thanks, Gena, and happy to be here with you today. Ultragenyx has had a great 2020, even though it was a terrible 2020 overall for the world. But in our 10th year, we managed to now have 4 approvals, 2 of them last year and earned a moat of increasing revenue generation with $271 million reported revenue last year and really 3 different products growing in revenue over the coming years. And I think that's the special result of our work in developing rare disease products very efficiently and quickly and also now in commercializing. With that base of commercial growth moving forward and the recent good results of Dojolvi, particularly its most recent launch, puts us in a good position to generate additional revenue and cash from our operation. Our development engine has had a substantial growth in the last couple of years. We brought in gene therapy programs. And 2 of those, OTC and GSDI, are now entering Phase III studies this year. Our third one, Wilson, which we just are bringing in the clinic, has an IND in active and now also entering its 2-stage pivotal seamless design Phase III study. That will put 3 gene therapies in essentially pivotal studies beginning of this year. In addition to that, we've added some additional pipeline with a product for osteogenesis imperfecta and a deal we did in December with Mereo, and that's a monoclonal antibody that will be used to treat osteogenesis imperfecta and improve their bone strength. And it's one of the key problems in OI is that their bones are weak because of excessive remodeling, and that drug should help improve bone strength. That program is in an indication in OI that's even bigger than XLH based on our KOL feedback and puts us in good position with the pivotal study we expect to start this year. That would make 4 pivotal studies that are initiating this year. In addition to that, we filed an IND for our first mRNA, LNP, done in partnership with Arcturus. That program is basically an mRNA designed to express an enzyme called debrancher enzyme, which is deficient in glycogen storage disease type III. And that will start in the clinic in a Phase I/II type trial. In addition to that, we have a partnership on Angelman syndrome with GeneTx, and that program put out exciting data last year. We also have a significant safety event. We're currently working through with the FDA on what it would take to get redosing begun. And we're also opening up sites outside the U.S. And we still expect to get the study enrolling patients this first half and treating, getting data from those patients in the second half. We're confident in our understanding of what's happening, and we need to work with the FDA further on getting that straight. But if you put that all together, 6 development programs, a burgeoning commercial franchise, and I think we've put ourselves up in good position for the future. Among all those programs then, we have 4 larger programs, larger than some of the others we've worked on in the past, including, of course, the OI program we just talked about, the Angelman program we've mentioned before. But in addition to that, the Wilson gene therapy and another program I haven't mentioned yet, which is the Duchenne gene therapy. With 4 larger programs and a combination of a very full and rich pipeline, I think we're in good position to be both rapidly growing the company but also one that's able to execute development across a number of modes in a wide variety of rare disease indications. So it's been a good 10 years, Gena, and I think we're looking forward to a good 2021.

Thank you. So maybe I will start with Angelman syndrome. This is the program, the very exciting program, given also the unmet medical need there, also the large commercial opportunity there. So you mentioned that GeneTx received additional questions regarding -- after they submit the package to the FDA. So if you can give a little bit more color what those additional requests from FDA and what additional protocol amendment they've done to resubmission to the FDA. So if you can give a little bit more color on the process now in...

Sure. Well, there have been some rounds of discussions with them. I think the key thing, what I would say, is that the FDA is still interested in deeper understanding of the event themselves, what happened, the condition of the patient currently, have they resolved. So a lot of the work is really focused on that at this point rather than on the next steps with them. And I think they just want to get a deeper understanding of the nature of the event so that they can make a better judgment on what they want to do. We understand what we are seeing, and we think that this is really a regional inflammatory reaction to the drug. And that by adjusting the dosing regimen, we think we can avoid that problem. I do think that, that is a reasonable solution and an appropriate one. And we are looking at -- and we will plan to put open studies outside the U.S. as well. And we expect to be able to get started in the U.S., ex-U.S. or both here in the first half. We won't really comment in more detail about the specifics because we don't generally talk about the back-and-forth in detail with the agency. We just need to try to respond to their requests and continue to work with them on finding a way forward with the program. I think we can. I think just it will take more work. And in any case, we can get the program started ex-U.S. And in our own history, Gena, we've -- I've taken programs outside the U.S. 3 times already and got them approved in the U.S. So it's not an unusual thing. We did it with Mepsevii, you may not know. But it was done with Brineura and Vimizim also. And so for us, time is key, and we manage time. And if another authority can get us moving forward, we'll do that and continue. But I'm confident we'll get this back into the U.S. and going. We just need to work through the issues we have and meet the FDA's requests.

So Emil, can you give a little bit more color? You're saying ex-U.S. Does that mean the U.S. actually will be -- it could take additional time? And then when you say the resume dosing in the first half this year, that taking into consideration possible delay in the U.S., and then you will have to go through ex-U.S., if you can give a little bit more color? And then if you go to ex-U.S., can you give more color how you would do that? Have you already discussed with the ex-U.S. regulatory [ agency ]?

Well, remember, even in December, we talked about ex-U.S. and opening up sites. We've -- from the beginning. So any time you're managing a situation like this, you always want to open up options on how to move forward because managing the time line is key to this whole business that we're in, biotech. We already had a CTA open in [ Canada ]. That was already open. We just need to amend the protocol there. So we've already been discussing with the other authorities. So we think that we can take this amended protocol and package and file and get other CTAs or other -- open up in other regulatory areas and allow us to proceed with the next stage of the program. We'll run U.S. along as fast as we can, but it will not get held up by the U.S. if there's any more delay. But -- so we expect to be back in the U.S., if the U.S. didn't allow for moving back in the U.S. after we get more data ex-U.S., which is what we've done in other programs when it became necessary. So we'll continue to work with the FDA to get an answer, but I think that we're confident we have a good answer. And the ex-U.S. will give us a way to keep moving forward and not lose time.

So for the ex-U.S., if Canada has CTA, can you actually -- that will be independent from the U.S., right? You can actually start now if you wanted to do the clinical trials. So any plan there or have you already started? And then also, based on the learning you have now from the current trial, like how would you say the protocol -- like how would you start to the trial in Canada? And beyond Canada, what other region you have for the CTA filing?

Yes. So in Canada, we had filed the original protocol. So we will need to file the amended, the new version of the protocol and do that and get that going. We are bringing the new version in the other areas. We haven't disclosed -- we don't usually like to disclose the early-stage regulatory things, but we will look at one or more other countries other than Canada where we think there is a high-quality regulatory environment and where there is a high-quality academic environment that can run studies in Angelman. And there's a number of countries that have that and can meet that requirement. And so we would expect Canada plus some other countries to get involved. And we'd want to get enough countries going to be able to enroll the first part of the study, which is 12 patients, but then also be able to expand the number of patients on drug, if we figure out the dose, it's safe, and it works and where they get significant benefit. So we can have a big enough data set before we enter Phase III. In the U.S., we also have 5 patients who are on drug, and they had tremendous benefit. They lasted 4 to 5 months, some more than 6 months. But their effect has waned. And so they want to get dosed. In those patients, we need to get back on track on the U.S. to get them dosed. They all want to get dosed. They're anxious to get started, and it's certainly disappointing to have to see patients lose these amazing results that we're having because it's something that they thought we'd never see. And frankly, in my whole 25-plus years in the industry, I've never seen improvements in developmental parameters to the extent we saw in the program. So we're dedicated to getting those patients treated, and we're not going to let them down.

Okay. So for the ex-U.S., so you say Canada has original filing. So if you just sort of walk me through, how does that work in terms -- if you want to -- in your location in Canada? And then other parts of the world, do you have to create a CTA first and then you submit the protocol and then you start clinical trial? Would that be the process for that?

Yes. Well, in Canada, we just need to submit the amended protocol and get whatever ethics approvals we need for the center where we're at. So it's a relatively straightforward process. We've had that in play from the beginning. So it's moving along. For ex-U.S., usually, it's preferred to do a pre-CTA meeting. But I won't comment on what we have done or not done yet. But in that meeting, you'll get a read from the authority whether there's issues or not, right, with the plan. That includes the efficacy and safety information we have already. And so then we would file the CTA. Depending on the country, there can be steps like ethics approvals and other things. But usually, when you file a CTA, you're going to file a full protocol, along with the backup information about the CMC and the rest of the [indiscernible], et cetera. So you file the whole thing together. But that should enable you then to open up sites at anywhere in the country once the CTA is active. So our focus really is one additional one right now. We could open a second one if we needed to. I think we can get it all done in one country. We don't really need 2 more than one country but -- because the beginning of the study is not that big. But -- and there are a lot of patients, and a lot of patients are anxious to get started. So -- but a couple of countries just gives us better breadth to get this done. And so we're feeling in good shape to be able to do that. And Gena, I can't give you any more details on the timing of the steps and pieces. But I'm saying to you that we're committed to getting the study started again here in the first half, getting the data in the second half.

Perfect. Okay. And then if you resume the dosing, can you walk us through how you will start and at what dose? And how would you dose escalating again? And what could be the dosing measure, if you could give a little bit more color?

So Gena, you're talking about the 5 patients that were treated before, is that what you mean, those 5?

The 5 patients -- or like the 5 patients who were in the U.S., if you started in Canada, so how would you stop? Maybe 2 parts to the question...

Yes. I'll start with new patients. I'll start with new, and then I would talk about the old. So on the new protocol for new patients, starting dose for the first time, our plan is to start the under age 8 with the low dose of 3.3, and the older above 8 was 5. Because there is a difference in CSF volume, and that difference, the 3.3 and the 5, give us the appropriate differential to allow us to have more similar concentrations in the younger, smaller kids and the older bigger kids. And that's just based on the experience we've had with these 5. From there, the patients will get 2 doses, and then we'll monitor safety and efficacy. If they don't have enough efficacy and don't have a safety issue, then they -- both groups could step up for the next dose, for dose #3 and #4 to a next dose level, which is one step higher, all right? So it's -- and we haven't put the details of it. But the steps go between 3. Ultimately, it will -- the cap is at 14. But there are multiple steps in there. So we'll dose the lower ones in the next step and the other ones at the next step if there's safety and there's not substantial efficacy. We define substantial efficacy as being improvement -- or much improved or very much improved and at least 2 domains using the CGI. Now that's -- what that means, Gena, is we're looking for efficacy that's on par with what we saw before, right? That's what we're saying. We're going to look for that level of efficacy to stop titrating. So if -- after the fourth dose, then they would go into an every 3-month regimen. And in every 3 months, we would potentially titrate their drug, [ some possible ], if they haven't achieved the safety. If they have achieved the efficacy threshold, [ see them either ] have safety, then they can continue at the same dose they were at before. Based on the data we have so far, including one patient at 20 that achieved very good effect for 5 months plus, we believe that even a 3 to 5 dose repeated 4x would get us very close to the total loaded drug that you get from 1 dose of 20. Does that make sense to you, in terms of efficacy? So -- and then a bigger kid, starting at 5 and going up, should be able to get a bit more drug. And I think with the small doses and loading, we can avoid the local -- with the local impact, we believe, and accumulate enough drug in the CNS to get the clinical benefit that we're looking for. Now that's a proposal ex-U.S. and how we're moving ahead there. In the U.S., the 5 patients that had drug, we'll have to negotiate how we restart them. We plan to do them similarly. But obviously, we'll need to renegotiate what the safe path is and that we can get agreement on with FDA.

So Emil, what is the loading dose occupancy? The gap, is it monthly?

Loading dose, in the 3 to 4 doses in the beginning, are at once a month. And then we shift every 3 months. And our view is if after 4 doses, we're still not where the efficacy we want to be, we're spreading it out a little bit longer and making step-ups just because we're getting to a higher dose, and we want to give enough time between doses if there's any effect to allow it to fade, if there's an effect in the -- I'm sorry, in the safety area. So it just gives us a way to do it more safely. In the long run, based on the effect and the response of these kids, it could be -- the maintenance dosing is -- could be every 4 months, 4 or 5 months possibly. But for this early phase, we're going every 3 months to try to allow us to continue to titrate drug if we haven't achieved. Now our hope would be based on what we've seen that after 4 doses, whether a step-up or none or not, we would have loaded them with enough drug to see the effects we were seeing. So that is our hope. But again, we want to leave it open to going a little higher if it turned out we needed to.

Okay. And regarding the safety, why is -- based on the prior experience, how soon the [indiscernible] after the dose is -- so will this be monthly spaced out? Would that be sufficient?

Well, if you talk about the dose that really induced an effect that had a problem, it was really within a few weeks of that dose that -- when the patients got into a problem, including the patient 5 with 20, within a few weeks of the dose that caused a problem, that the problem arrived. But it wasn't immediately, right? It took a little time. And so this is why we're doing 2 doses at each dose level, is to give ourselves a longer period of time to see the effect before ramping to the next dose to really verify the safety of that dose through enough time in order -- before we ramp. So it's just a slower course. And one other thing I should point out, Gena, we are individually titrating, dynamic -- what we call dynamic dosing. Dynamic dosing means each patient will assess for their efficacy and safety and titrate. In the past, the dosing was forced titration, regardless of what's happening with the patient, right? So if you had dynamic dosing, if you'd seen by 10th dose that the patient was already having a big effect, you might have -- you would have held there at 10 and not go up, right? But when you have the forced titration, it pushed you into a dose level that caused a tolerance problem. I see that's a fundamental issue about the design. And unfortunately, the agency pushed the company to go up quickly like this. That wasn't the actual plan that GeneTx had. And unfortunately, that led to what -- heading to our nontolerated dose. So the truth is that they had a better plan, which was going to go slower. And if they had done that, it would have probably kept them in a better place. But it's just the nature of drug development. We're all trying to figure things out for the first time. But I think that a dynamic dosing plan on an individual basis will allow us to discover what's the dose that works and is safe each patient. And then after we look at enough of those patients, we can make a conclusion. Is there a common dose? Or is it every patient needs a slightly different dose? And in neurology, by the way, Gena, a lot of drugs need individualized dosing, right? That's not a mystery. A lot of drugs in neurology are just -- they're just more complicated and need a little bit. So we're going to give ourselves a chance to learn by having this dynamic dosing. At the end of the day, it could be that all the patients are really at the same dose and it's a safe dose, and we're fine. And if it's that simple, that would be great. But if we have a size- or age-related differential that we have to manage, then it's easy enough to do.

Okay. I'm just thinking about how, given the previous -- the dynamic dosing, individual titration actually could be, if nothing happened and if it is safe, it could be expedited, the process. But on the other hand, you will actually have additional delays. So will it be better to just do like traditional titrations, one patient, one dose, and you move to the next patient? So then you have a consistent understanding of, if that patient only on that dose, then what the safety would then look like and then you look to the next patient? Would that be better actually to help you understand or address the regulatory concern about safety?

I don't know what you mean by what you're saying that. The truth is that when you do a dose titration with the dynamic model, you're simply starting it at a safe place. But you will go to whatever dose you have to go to for that patient that's safe and effective. So it doesn't put a cap on where you go, but starting each patient at a different dose level creates more noise. It would be better to start at the same dose level and titrate to the right dose because it allows you to gain more experience at a certain dose level. And the dose level we're planning is a dose level that appeared to have an effect already. So it's not like it's the dose that's nothing. So if you're worried about spending a lot of time in a dose that doesn't do anything, well, that's how we got into this trouble, by the way. It was that feeling. So we're going the other way this time. We're going to play safe, and we're doing a dose that does work. And honestly, the other thing that's really important, Gena, to understand is that it's not like one dose by itself tells you the answer. So in the nonhuman primate, when you do one dose versus 4 doses, you get a different answer of the same dose. So at one dose of 1 milligram in the monkey didn't have much effect, but 4 doses of 1 milligram showed a very nice profound effect almost as good as 5 milligrams, right? So what we learned from that is that there's a cumulation effect that's really important in this particular disease. Therefore, if you're making too many decisions off of one dose and too quickly jumping ahead, you'll miss out on what we think needs to be a loading process. And it could very well be the 3.3 given 4 times in a row will get you almost much drugs as you get from 20, and that will be all you need. And that we just need to stay below the threshold that causes the event. And so I'd want us to go slower here, take our time. When we learn from the first 12, by the way, Gena, we learn what works and we have one extension and we get comfortable, we'll then expand the cohort, which will start at the new dose that we've decided is safe. Does that make sense to you?

Yes.

So you learn in the first group, and then you confirm by expanding the cohort at the new dose, right, right off the bat, without having to go back to the titration. So that will allow us then to see if we -- if that -- to essentially test that dose for what we would do in Phase III. And if it turned out you had to go from 3 to 5 or something or 7, and that was a good dose, then we could start at 7 and see from straight up at that level, do we get the level of cumulation and then maintain the safety that we require. And so that would be a way maybe to we get the -- to accelerate the -- hitting the right dose. But I think we need to spend the time to learn first, Gena, before we expand. And -- but once we expand, we can enroll a larger number of patients to get a lot more data and set ourselves up then for a successful Phase III.

Okay. So you had said that you got a little delay when you started ex-U.S. And how do you come back to the U.S.? Would that be just pivotal study in global [indiscernible] in the U.S.?

Well, the -- yes. If we do the 12 patients and get good data and show it's safe, we'll bring that data back to the agency at that point, if we're not already starting and allow the expansion. And that expansion I talked about, the cohort, we can then open that up in the U.S., for example. That would be one way to bring it back to the U.S. We just need to get 12 patients treated to show that it's safe in getting efficacy. And if we can get that done, we'll come back to the U.S. And data -- clinical data will trump all other things. So if you have clinical data, you'll come back and it will be a good position to discuss the steps. I do think we can get through the FDA before then, but I think we also have to think about those 5 patients. And I don't want to keep them off drug for that long. So we're going to work -- patients want us to, and I've had people contacting me about -- on their behalf. So they're anxious to get going.

Okay. Okay. And we are running out of time. But I wanted to quickly ask about the Wilson disease since you also presented data later this year.

Sure.

And so what kind of end point you would be testing for the interim analysis to decide the final dose?

Right. So we'll be looking at -- the way the design of the program is, is there is -- I believe there was 9 for each cohort, 6 on drug, 3 placebo, right? So we'll have 18 patients with data, and we'll have 9 patients that are placebo patients, right? What we'll be looking at is the urinary copper reduction that would show that we're now detoxifying copper through the bile and not through the urine, right? There's less copper coming out in the -- out of the liver into the bloodstream. And we're going to look at ceruloplasmin, copper-loaded ceruloplasmin, to indicate that transporter is loading ceruloplasmin at the copper level as ceruloplasmin comes up. That gives us a really nice marker of 2 functions, right? The urinary copper and the other gives us the 2 aspects of the transporter and that, combined with other factors like how are they tolerating reduction in their chelators, et cetera, will -- and safety, give us a sense of the combination of factors. But it's not any one thing. There will be a group looking at a set of data to come up with the interpretation of the safety/efficacy balance. It's very likely, if all the doses are safe, that the ceruloplasmin level, which will be the thing that's most important in terms of getting up, will -- or at least will -- they'll take the most work to get up, will probably become important. But we want to make sure that all these things are improved. But -- so it will be basically a group of factors that will help determine the dosing decision.

Great. Well, thank you very much. We're running out of time. We'll keep our fingers crossed for the Angelman program. And hopefully, we will hear good news soon. Okay. Thank you, guys.

Thanks, Gena.

All right. Thank you, Gena.

Bye-bye.

Have a good one. Bye-bye.