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

Good afternoon, everybody, and thanks for continuing to join us at the Bank of America Health Care Conference. My next presenter is Ultragenyx, which, of course, focuses on several rare diseases. So in the next 30 minutes, we will have a conversation on a number of topics in the pipeline. And with me for this conversation will be Mardi Dier as well as Camille Bedrosian. Mardi and Camille, thanks for joining us. Good afternoon.

Yes, thanks for having us.

Thank you.

It is afternoon now in the West Coast to you. So maybe we can start off. You guys just reported the quarter recently. But for maybe the folks that are on who don't have as great of an understanding of Ultragenyx and its platforms, could you provide maybe like a couple of minutes overview of the company, and then we can go into more detailed questions after that.

Yes, that's great. I'll jump in here. Thanks, Tazeen. And doing Ultragenyx for a couple of minutes is hard. Are we good? Okay. So let me just start. So the company -- we're just about to celebrate our 11th anniversary, and I've only been there 6 months. I can say that what they've been able to accomplish in that amount of time is no short -- it's not short of just really impressive. And they -- we are now currently both a commercial company and have a very deep pipeline. And obviously, we're a leader in the rare and ultra-rare disease space. And we focus on really 3 broad -- generally 3 broad therapeutic areas. So we have products in the bone/endocrine space, the metabolic or inborn error and then also the CNS/muscle therapeutic areas. And what's also unique about Ultragenyx is that we are agnostic to the modalities of how these drugs are made. So we have a monoclonal antibody with biologics. We have a pretty significant gene therapy platform, which we can get into later in ASO, small molecules. And we just got our first IND accepted in our mRNA platform, which was technology that we in-licensed from our Arcturus. So just briefly then, so we do have our commercial products. Our lead product, Crysvita, is for the treatment of XLH. And it's been a fantastic launch for about 3.5 years in. We gave guidance this year for $180 million to $190 million that we'll recognize at Ultragenyx. And we also have a second program that launched last year, Dojolvi, for long-chain fatty acid oxidation disorder. And in its third quarter in, also is ahead of our internal projections, and we're really excited about the prospects for Dojolvi. And our third program for MS -- MPS VII, Mepsevii, is in the ultra-orphan space, and it continues to do well, too. And then really, really, like sort of the juice of the story beyond our commercial branch is our 6 clinical programs. Four of these are going to be late stage, and 3 of these will be in the gene therapy programs. So we have multiple Phase III starting this year. I'm sure we'll get into those. But 6 programs, including some very big indications, including Angelman and Wilson disease, I think will continue to drive value in the future.

Excellent. So maybe just a couple of minutes on the currently marketed products, Crysvita and Dojolvi, and they're both off to -- Crysvita [indiscernible]. But you guys have had the benefit, I think, of being able to prep for launches well ahead of time. And I think that's always been one of the things that people have liked about Ultragenyx as far as your rare disease -- traditional rare disease platform has gone. Now as COVID has impacted several of our covered companies, I'm just wondering to what extent you guys think that COVID has impacted the commercial business for Ultragenyx, if at all, just because you do have a unique business model?

Yes. Fair -- it's a very fair question and one we've gotten a lot and -- hard to say that COVID hasn't impacted absolutely everybody. But with Crysvita, in particular, we were pretty pleased with the way the team has been able to navigate in a COVID-driven world. So when we're looking at Crysvita, when we're talking about Crysvita revenues in the Ultragenyc territories, that includes North America and Latin America, primarily, right? So the European rights belong to KKI. And last year, for 2020, of course, we gave guidance at the beginning of the year, which was $125 million to $140 million pre-COVID, and we came in at the very top end of that range. And what you're seeing is with these patients with these XLH patients that we have provided programs and worked with the caregivers, that a lot of the injections are given at home. About 80% of the XLH patients get their Crysvita at home. And then we've also just been -- we were just able to pivot and navigate through COVID to make sure that patients stay on their drug. And we have extremely high compliance rates with Crysvita, extremely high. So when patients actually get on, they do want the drug and have found a way to get it. So we haven't had supply issues either or distribution problems and giving the drug to patients. So Crysvita finished the year strong and, of course, we gave guidance this year for the same regions in the $180 million to $190 million range. And of course, we take into consideration that the world is still somewhat uncertain. But again, that would show 30% to 37% growth over last year, and we just reiterated guidance last week. So we're feeling very good about our prospects, given what we know [Technical Difficulty]. Dojolvi, despite launching in the middle of COVID, has done quite well. So the all 80 patients that were on the study -- the pivotal study for approval, have converted to commercial products. And we continued to add individual prescribers. We're up to 215 prescribers at this point, and the start forms, I should say, and a fewer prescribers fed a number of individual prescribers, 215 start forms and less than that in terms of reimbursed product, but that's just because they're going through the system. So we're having a very high rate of conversion of start forms to reimburse product. And yes, our launch metrics, we're very excited about this program for Dojolvi. Given that we own it outright, every script of Dojolvi that gets filled is 2 of Crysvita. So it's a powerful leverage for us in terms of our P&L. So we're pretty excited about it. So, so far, so good.

Okay. Excellent. So let's roll it back and review pipeline program. I think the one that's most top of mind right now might be Angelman, although I would argue that [indiscernible] that people should be looking at. But let's start with Angelman. Can you just give us an update on where you are with the -- in your discussions with the agency in terms of getting the program restarted again? And what is the plan once the program restarts in terms of additional patients that may or may not be enrolled? And when data is due?

Okay. Camille, do you want me to start or do you want to...

Whatever you wish to do Mardi is fine.

Okay. Let me just give the high level that you didn't say, and then I'm sure there will be lots of questions on Angelman behind that. So we talked -- we gave pretty decent detail in our press release, in our earnings call last week. And we feel good about where we are with the agency. So we've had a lot -- this is the FDA. So we've had a lot of back and forth. We gave them what they wanted to see with respect to lifting the clinical hold so we can get back to treat patients. And we feel like we've answered all their questions and submitted for a formal meeting, which they granted. So with the FDA, we'll be having that meeting this quarter and hope to resume treating the patients thereafter. But we didn't just rely on our work with the FDA, Tazeen. We actually went outside of the U.S. as well into Europe, into one of the countries in Europe where we submitted. Actually, we had a pre-CTA meeting with this agency that went very well, and we had discussed that we had agreement in principle with them on the same protocol amendment and the same data package that we submitted with the FDA. So we feel like there's some wind in our sales with this European agency, and we submitted a CTA to them as well. And that, too, will -- those discussions will happen this quarter in addition to that with the FDA. And the third leg of the stool is in Canada, where we also submitted an amended CTA with the updated protocol and data. So we really think we have 3 attempts and feel pretty good about getting the studies up and moving. And Camille, maybe you want to go into the details of the amended protocols?

Sure. And thank you, Tazeen, for the question. Yes, Angelman is top of our mind as well. And as Mardi indicated, we have a 3-pronged approach to be able to either resume treatment for the 5 patients who've already received the drug, or to begin treating naive patients with GTX-102. And our approach is, first of all, we assessed and now understand, we believe, the genesis of the lower extremity weakness that was observed in all 5 patients who, by the way, have all seen resolution of the event completely, and we've demonstrated that by a number of measures and tests. And as well, the efficacy that was observed far -- lasted far longer actually than the time it took to resolve the events. So we realized, based on MRI studies, that the weakness is due to local irritation -- inflammation as a result of the lumbar injection of the ASO, which then, of course, travels up the spinal canal to the brain, CNS, where it is -- where its function is. So in the original trial, there was a very steep dose -- intrapatient dose escalation, 11 fold from the first dose of 3.3 mg up to 36. With each dose, monthly dose, there was an increase in the amount that was given. So we've realized that, that probably was a little bit too aggressive and we, furthermore, did see some activity -- clinical activity at the lowest doses. And so what we are going to do is be much more deliberate in our dosing in terms of starting low and staying low for at least 2 doses. So starting at 3.3, which was the starting dose, in individuals less than 8 years of age, smaller size, smaller spinal column and 5 mg in those 8 years and older. And dose monthly, but stay at that dose and assess and monitor along the way. The other aspect that we will implement is to help the drug travel up the spinal canal into the -- and circulate in the brain and dilute along the way. So Trendelenburg, took the patients so that head down, so that there's dilution and movement of the ASO of this canal to the circulation and give a flush, which will further dilute and propel the drug upward.

Okay. Now what are the possible scenarios of how this could turn out in terms of how you're looking at the program? If it's the case that you want to continue dosing the 5 patients that have been dosed so far, where does that go, versus adding patients versus, I don't know, maybe going back to the drawing board could be a potential outlining scenario? And I guess what would determine which of those would be most appealing for Ultragenyx?

I would say all of the above or at least the first 2 of the above for sure because we do believe we have a solution for the local inflammation that occurred at a dose threshold, if you will. So in the U.S., our goal, first and foremost, is to start redosing the first 5 patients. Each one of the patients, their families, is very eager to resume dosing given the efficacy that was observed during the initial part of the trial earlier -- early in 2020. So that would be an important aspect and that we would start in that -- with that approach in the U.S. Ex U.S., in Europe and Canada, we will be dosing naive patients, new patients, which also then give us the opportunity to reproduce the efficacy portion of what we saw in the first part of the Phase I/II study. Also, there's an option potentially for patients in the U.S. to go to Canada to get redosed, given their intense enthusiasm and desire to start dosing again.

Okay. Now if it's the case that they have to go to Canada to get redosed, how would that impact any kind of application for the U.S. in the future?

Oh, I would say that as we gather data from a safety perspective, first and foremost, because that is top of mind for all of us and including the FDA. Once we gather data in additional patients, I do believe that we -- the FDA would understand and be not only less hesitant, but be accepting of the approach. And we certainly would take this data to them for further discussion.

Okay. Got it. And so as we look ahead to the rest of the program, what should we expect in terms of how to define what's clinically meaningful in treating these patients? And how do we get a better sense of durability in the time frame that you're going to be studying these patients?

Sure. So in terms of what's clinically meaningful, we have looked across a number of domains. As you may understand, Angelman is very heterogeneous. Each patient presents with a unique set, unfortunately, of abnormalities across several domains. So there is a communication that is impacted. And in the patients we're studying, who have deletions, they don't speak. So one aspect that we're studying is expressive communication. It doesn't have to be speech, but as we reported, 2 of the 5 patients actually started speaking words that were appropriate for the conversation. And then there's receptive communication as well, understanding a request from someone. It's time to go eat dinner or whatever. So that will be an important element to monitor. In addition, there are motor effects, fine motor, so being able to use digits, eat and pick up small objects, as well as gross motor effects, better or more stable walking and upper extremity movement as well. There are others as well. Behavior in terms of a moderation of the hyperactivity so that an individual can sit and eat at the dinner table, and -- as an example. And there also are sleep disturbances, manifestation also of the behavior. And as well, some patients have seizures, although they are controlled with antiepileptics. And none of the patients in our trial have had seizures. But there are 5 domains that we study. And we have also developed and have studied and reported on a clinical global impression of improvement for Angelman syndrome that incorporated each of these domains and provided a score for each of these domains with an overall what is called CGI-I. So we are working on validating that as a potential, at least one aspect that we'll monitor and follow along. And then maybe there'll be an opportunity for our multi-domain responder index given the fact that not all patients exhibit all of the elements that I just described.

Okay. So of those 5 domains that you just talked to us about, are any of those subjective in any way?

Subjective?

In terms of how they are interpreted as like measuring motor symptoms might be quite cut and dry for the most part, but let's say, communication, how does one measure that exactly and any accuracy of that?

Yes. So there are a number of tools and scales that are used that sometimes overlap in terms of what they measure. And in this study, there are 3 sources of data regarding how the patients are assessed, one by the PI and their assessment, and the global impression of improvement is a physician assessment at the end of the day. There are also some of the tests that are done by -- like, for example, the Bayley, are done by a psychologist, so a separate individual who does the assessment. And as well, one of the assessments also was done by the caregiver, which could be considered somewhat more subjective. Having said that, we also are getting videos. And in COVID, it was really important to do as well. So -- and this opens up another dimension on how we can assess these patients. And with that, the videos can be assessed via totally independent, blinded individuals to give their read of what they're seeing.

Okay. Got it. So how are you thinking about what would be needed for size of a study in a pivotal program for something that doesn't really have anything approved, where people are still trying to understand, frankly, probably the disease itself? What do you think is the right size to run? And how easy do you think it will be to recruit patients on a go-forward basis?

Sure. So of course, it's a little bit early to be speculating too much, but we do. And I think it's implicit in your question that we do anticipate conducting a pivotal study, which will be randomized, placebo-controlled, blinded study for some of the reasons that we were discussing before. So we do expect it to be reasonable size so that we can understand, maybe low 3-digit like 100 or so patients randomized. And -- but again -- I'm sorry?

That's actually a pretty large-sized study. I mean Ultragenyx in the past has gotten things approved with like 20 patients, right, for ultra ultra-orphan indication. So...

Sure. So of course, Angelman is a much larger population. Unfortunately, there are about 60,000 individuals with Angelman in the developed world. So we do want to -- and it might -- we may not need to given the magnitude of the response that we've seen so far and if that's recapitulated in additional patients. In our -- the amended protocol, we'll study 12 patients less than 8, 12 patients 8 and older to start. And then we do expect to expand that program to enroll an additional 40 or 50 patients to get long-term safety and sustainability of the efficacy. So with those data, we may, indeed, to your point, Tazeen, not really need 100 patients. But we will want to do a pivotal randomized trial as well.

And are Angelman patients heterogeneous in the way that they manifest symptoms, say, for example, the way other rare diseases are like, I don't know, DMD, it seems to be at least somewhat age related?

Yes. So we're still learning about the Angelman and how it manifests and when it manifests, because some indicated to us that, well, once -- young children maybe will respond to an intervention. But once those individuals get older, you won't really see a response. In the 5 patients we've studied, they went from 5 years of age through 15 years of age, and we saw improvements in all. But to your point, it is heterogeneous. And again, I'll reiterate that not everyone manifests each of the signs and symptoms that I described, either at all or to the same extent as another. And that's why there are multiple ways of measuring it. The global impression of change -- of improvement is important. And as well, we are considering so that we can enroll a large -- a broad population of patients, i.e. not narrow it down to only patients who have A, B and C that we would use a multi-domain responder index as a way to assess the outcomes.

So in a way, this study could be used to filter what the best addressable patient population might be, just based on what you're saying, is you're going to examine this in a wide variety of patients. You might be able to deduce if there is, like, for example, an age point for which this is probably not the best treatment. Is that the right way of looking at it?

Actually, I would say the opposite. It gives us the opportunity to provide the drug should what we saw in the first 5 patients be recapitulated, provide the option for any patient with Angelman down the road. But again, the data will tell us where we are with it. And indeed, our -- as we generally do recognize in heterogeneity of rare diseases, our goal is to enroll a broad group of patients and to have the drug available for a broad group of individuals once approved. Look at our Mepsevii study. MPS VII is a very heterogeneous condition and a very, very rare disease, about 200 in the world. And we did a blinded start study, pivotal, 12 patients, but patients across the spectrum of manifestations of the disease. And using statistical analysis approaches, multi-domain responder index, we were able to hit statistical significance and of course, importantly, demonstrate the benefit of the drug.

Okay. Got it. We're just going to be ending our time together. So I just wanted to maybe ask one quick question. When should we receive clarity on what the path forward will be for Angelman? What's your latest guidance on that?

Right. So as we indicated in our call last week, we have been granted a meeting with the FDA, which will happen this quarter, second quarter. And we've submitted our application to the agency in Europe as well as an amendment to our open CTA in Canada. So we should be hearing and knowing midyear, early second half. And we'll certainly keep everyone updated to -- as to the outcomes.

Would you -- should we expect that you would wait for the minutes of that meeting before saying anything to investors or to the public?

I think, yes. I think that's generally always safe to assume.

You don't necessarily need to wait. So I just wanted to get your view on that. With that, thanks so much for your time. This has been super helpful to get caught up again. And there's so much more that we could talk about. We'll have to do it in another time. But thanks, Camille, thanks, Mardi, for your time and for participating in our conference this year.

Yes, thank you, Tazeen.

Thank you, Tazeen. Great to see you.

Yes, take care.