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

Hi, everybody, good afternoon, and once again welcome back to the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the senior SMID biotech analysts here at the bank. Our next presenting company is Ultragenyx. Sitting with me are 2 really knowledgeable women, Camille and Mardi. I'll let you both introduce yourselves, and then maybe Camille, you can give us -- or Mardi rather, you can give us an overview of the company and then both of you can participate in some more specific Q&A that we have lined up, if that works.

Sounds great. Thank you.

You want to start?

Okay. Sure. Hi, everyone. I'm Camille Bedrosian. I'm the Chief Medical Officer at Ultragenyx. Nice to see you all.

And I'm Mardi Dier, Chief Financial Officer of Ultragenyx. I've been here about 18 months, 18 exciting months, and happy to be here. And let me just jump in, right. Thanks, Tazeen, for the invite and to be here today. Ultragenyx is -- we have a lot going on, right? So we have a big commercial pipeline with 3 products in 4 indications, as well as our development clinical pipeline, where we have 6 assets, 4 of them in late-stage clinical trials. So it's a good place to be for us right now. Our late product, Crysvita. We just reported earnings last week with total revenues of $79 million, almost $80 million across the 3 programs, Crysvita and Dojolvi, which we launched about 6 quarters ago, and Mepsevii as well, which is our ultra-rare disease in MPS 7. Crysvita treated XLH patients and we sell product not only in North America, including Canada and the U.S., but have a big presence in Latin America as well. And we did talk about the growth of Crysvita in Latin America, really gaining some traction there. We also have, like I said, 6 clinical programs. We span multiple modalities in multiple disease states. We're agnostic in terms of how we treat patients, whether it's gene therapy, ASOs, small molecule, biologics, and our clinical trial span gene therapy programs, like I said, one for GSDIa, OTC as well as Wilson disease. And we also have another late-stage program with a biologic with osteogenesis imperfecta that we in-licensed a year plus ago from Mereo. And I think what we're all very excited about is the work that we're doing with our partner, GeneTx, in the field of Angelman Syndrome. So we've started a Phase I/II study that I know Camille is going to talk a lot about in treating patients with Angelman syndrome with our ASO called GXT-102 (sic) [ GTX-102 ]. And finally, our balance sheet is very strong. We have no debt and lots of cash. We have over $800 million in cash, which will get us through a number of key milestones moving forward. So we're in pretty good shape with lots of execution going on throughout 2022.

Okay. So there's a lot going on at the company.

Yes.

Are both commercial and pipeline at the same time. I think that's important for people to -- I don't think people always appreciate that part, that you already have rooms to commercial on some of the products.

Yes. I should mention with Crysvita in particular, we have guidance of revenue next year of $250 million to $260 million. So it's not insubstantial, so it's a big and growing product.

Okay. With that said, the current, I think, focus of attention is on one particular pipeline program, and that's for Angelman's. So maybe Camille, can you just walk us through the recent history of that program and where you are now with it?

Sure. Sure. Thank you, Tazeen. Appreciate that. Yes. And as Mardi mentioned, we are very enthusiastic and excited about our program in ASO GTX-102, which I may just call 102 for purposes of this discussion for patients with Angelman Syndrome. To give you a sense of, first, what is Angelman Syndrome. It's a neurogenetic developmental disorder that results from silencing in the neurons in the brain only of the paternal UBE3A gene, which is a chaperone cleanup gene, if you will, in the brain. How does that happen? That happens because, for some reason nature decided that it would be kind of interesting to have transcribe an antisense molecule to block expression of the paternal allele for UBE3A, and only the maternal allele is expressed, and that happens for all of us, only in the brain. Patients with Angelman Syndrome, however, have an abnormal maternal allele, so their UBE3A protein doesn't work, either because of mutation or because the gene, there's a second paternal allele instead of a maternal or what we're studying and so far exclusively studying is a deletion in that maternal allele. So the UBE3A gene is not expressed. The consequence is a rather heterogeneous neurogenetic disorder, very serious, because patients with these deletions do not speak, they have abnormal gait with falling. Some don't walk. They not only don't speak, but they don't necessarily receive information to be able to follow commands or work, and they have very disruptive sleep patterns, only sleep a couple hours a night, very hyperactive with abnormal behaviors and disruptive behaviors. So as Mardi said, we have a partnership with a small company called GeneTx that work with the scientists to develop an antisense oligo to block the transcription of that antisense so that the paternal allele will express the UBE3A protein and the patients with -- their concept was the patients then will be able to develop. So we have a program ongoing. We treated patients late 2019, 2020 during the pandemic, 5 original patients where the dosing of this antisense oligo was actually increased very rapidly within each patient at the request of the FDA, based on early nonhuman primate data that suggested that we needed a certain amount of drug to be able to block the antisense. So we were seeing quite dramatic effects that we were -- very unexpected, very early on in the dosing where 2 of the 5 patients who were treated actually began speaking words in context. However, along with that, we also experienced or the patients experienced lower extremity weakness. And when the first patient experienced that, we stopped dosing all the patients to better understand the etiology. And during that time, we worked with the FDA to and did some additional studies to understand the etiology. Our hypothesis was and is today that the lower extremity weakness is due to irritation in the nerve roots by local high concentrations of the ASO. And we figured out that we should modify the way we dose and the way we dose escalate, which we presented. And in fact both the U.K. and Canadian health authorities agreed with our approach to have gradual dose escalation within patients and also do what we could to minimize the settling of the ASO in the lower back region. So patients are put in Trendelenburg, that is their head is facing down to help the ASO go to the brain, but also mix in the CSF and also flush to dilute and mix the ASO as well. So we're in the midst, excuse me, of dosing patients in the U.K., Canada. We're seeing some very encouraging early signs of clinical efficacy. And most importantly, no lower extremity weakness in any of the patients as we're gradually going up in dose.

Okay. So can you just remind us what doses are being looked at in the U.K. and Canada and what's been looked at so far in the U.S.?

U.S., of course. And they are different, that's why Tazeen asked about that. So we started -- we have 2 cohorts in U.K., Canada based on age. And why? Because the CSF volume is different in younger patients versus older patients. And the spinal column is different height as well. So contrary to what's usually done with intrathecal medication, we didn't do one flat dose for all. Lower age cohort starting at 3.3. That was the dose at which we started in the original 5 patients also. And for the older patients, we started at 5 milligrams. And the dose escalation is very gradual, 3.3, another dose of 3.3. And then there is an assessment called clinical global impression of improvement, Angelman Syndrome, looking at several domains that are important in Angelman Syndrome. If a threshold, which I can go into a bit later, is not quite there, then the dose is increased very nominally to 5 milligrams for the younger patients, 7.5 or the older patients. In the U.S., the FDA did not quite agree with that approach, but they did allow us to go back into the clinic with GTX-102, would start at a very, very, very low dose, 2 milligrams. The rationale being that the fifth patient in our original 5 had 1 dose of 20 milligrams, had remarkable improvements, including speaking words but also after about 30 days develop lower extremity weakness. So they said, well, go tenfold lower than when you saw that effect. And so in the U.S., we're dosing patients at 2 milligrams flat dose. Again, monthly loading doses and then on to maintenance every quarter for patients in that cohort. And we have a comparator arm as well, which the FDA requested we do to follow then and see how they do relative to those who are receiving treatment.

Okay. So for this 2 mg that you're using in the U.S. now, those original 5 patients, correct me if I'm wrong, I think you went as high as 36.

You're absolutely correct, yes.

So what is it that you're trying to glean from the 2 mg data? Do they think that it is going or show, or do you think it's going to show a signal of efficacy?

So I can't read the minds of the FDA because it was disappointing to us that they didn't allow us to use the measures that we proposed based on our hypothesis for the reason for the lower extremity weakness. 2 milligrams is low. That's not to say that given the variability and the heterogeneity of the population that we may see some early anecdotal evidence of efficacy. We're only treating the younger patients with the 2 milligrams, 4 to less than 8 years of age. But ultimately, we would prefer to be using the dose regimen that we have been in the U.K., Canada. We believe very strongly and the data that we've generated over time does confirm for us that the lower extremity weakness is high local concentrations of the ASO, causing irritation. MRI data are consistent with that hypothesis as well. And the fact that we haven't seen it since, although we're still inching our way up in terms of dose, but the flush and the Trendelenburg helped to move the ASO away. That's not possible in the U.S., the FDA did not want us to do that. And they also believe perhaps that there's an immune component, although with all the repeat dosing that we've had and many of the patients in U.K., Canada received 5 doses already. And if there were an immune response, an immune component to what we saw, we believe we would have seen some evidence of lower-extremity weakness, and we have not seen anything.

So have you gotten to the highest dose in the U.K. and Canada?

So it's iterative, right? So the physicians can increase the dose for the patients as long as the CGI data indicate that while there may be improvement, which as we -- as I believe I said, we do see early signs of clinical activity and improvement, consistent with what we saw in the early days, original 5. So they're still dose-escalating. And as long as it's safe, they can. Now we do have a ceiling of 14 milligrams in the U.K., Canada, and we've not gotten there yet.

Okay. Now so when you complete looking at the 2 mg for the U.S. and, let's say, up to 14 mg in U.K., Canada, you're presumably going to take that data and show it to FDA?

Yes, I imagine that, yes.

Happen in the middle of the year?

Yes. So we do intend to take the data that we've generated in U.K., Canada as well as the additional analysis we've done with the help of the original 5 patients to rule out some of the alternative hypothesis for the lower extremity weakness. And we'll take the totality of the data in the coming months. I can't say exactly when at this point, but that is certainly our goal and our goal ultimately to harmonize the approach across those 3 countries.

So I think what sometimes can be a little unclear for investors is how does the FDA look at data for the higher doses, which are not studied in U.S. patients and make a decision about presumably letting you dose higher going forward, let's say, in your pivotal program? And how are they going to meet that connection?

Right. So what we intend to do even before we get to the pivotal is to study additional cohorts of patients. We were thinking about this as a possibility starting at somewhat higher doses and then come to a decision on what the best dose regimen is for patients at both age groups and expand. We are considering expanding the cohorts so that we study over a period of time the dose regimen we intend to take forward for the pivotal. It gives us an opportunity to study those patients over a long term, to have long-term safety data. And with those data, they'll still be in process. It's still an evolving program. It'll still be in process. But it will be at that point that we -- as we're doing that, we'll have some plans for a pivotal design, take those to the FDA. And so we will have some foundational information for them as well as the other health authorities because we won't just do the study in the U.S. or -- I'm sorry to interrupt, or conversely we'll maybe do it outside the U.S. if the U.S. is not -- doesn't want to proceed with us.

I see. And how would that -- that second scenario, if you proceed with non-U.S. patients, is there a concern that when you do come to apply for approval in the U.S. that you won't have had experience with the U.S. patients?

Right, right. Yes, right. So our goal always is for all our programs and all the drugs that we develop and commercialize is to have as much access for patients as possible. So that certainly is not our first or second choice. And our goal is to take the data that we're generating at some point to the FDA and work with them. And it may take longer, it may take shorter to be able to come to a harmonization.

Yes. So I think another point of frustration with investors is that it seems to have taken quite a bit of time just to get to at this point. Given the under-met need, given that there's really nothing available, correct me if I'm wrong…

You're absolutely right…

What do you think is the reason why there doesn't at least seem to be more of a sense of urgency in terms of timelines for FDA to kind of coordinate with you and communicate with the company. Could something around COVID be an issue here? Or is there just something else?

So it's certainly -- first of all, the -- first, the original 5 patients were dosed during COVID, but the early days of COVID. And what we've seen is we've activated centers in Canada and U.K., is that the centers are kind of getting their sea legs again in doing research. And so that's taken longer than any of us would like to do, but the sites are active, and there's a lot of enthusiasm and eagerness. And what's also very important is that additional physicians are now treating patients with GTX-102 and observing and analyzing the results. FDA, I can't speak for their -- we certainly have a sense of urgency. And that's actually why when the FDA was taking a while, we said we must move this program forward, and that's why we actually initially went across the border into Canada and across the seas to the U.K.

So as you sit here now, how should we be thinking about when we should expect to hear updates about this program?

Sure. So as we've indicated a few times now over the course of a few months, we will be providing an interim update on the program midyear. And what does that mean? Yes, it means whatever data we have from the U.K., Canada, from the U.S., we will present. It won't be necessarily complete data, but it will be data and it will be the totality of data that we have and what we know as of that point what we know.

So that would include efficacy at whatever dose you've tested…

Correct. And certainly the safety, which is just reaffirming. We also did say that if there were -- was a safety event, we would disclose it immediately. So that's important to note also. And again, to say once more that we had no safety events. But we will provide the safety, we'll provide the efficacy, we'll provide where we are with dosing a little bit more potentially on what our thoughts are and considerations are for various scenarios for planning going forward.

Right. Okay. And so when you do provide that update, will you first provide that update to FDA and then make it public? Or will you just kind of divulge it when it comes in?

Well, we do communicate, but we'll communicate as we said, to all of you, midyear, and we'll consider the best time at which to discuss with the FDA.

Okay. And so when you do reach out to the FDA presumably set up -- I don't know what type of meeting would that be? Is there a name for that?

Yes, there is. It's called a Type C meeting.

Type C meeting.

Yes, yes.

And you set up that Type C meeting. And what are the potential scenarios you see coming out of the Type C meeting?

Goodness. I didn't bring my crystal ball, Tazeen. I don't know.

I don't know either. That's why we're asking you that.

I know. I know. So first of all, there are a few steps here. One is to harmonize the way we're dosing. And that would be the first step. So we may go back and forth, they may like one aspect, they may not like another. And there'll be a dialogue. And most importantly, I do hope that there is a sense of collaboration and working together for the best for the patients. And just as we agreed to the 4 comparator patients, whatever will allow us to get back with the dosing that we believe is -- will be best for the patients from a benefit risk perspective, we'll do. And then down the road, we'll probably have another meeting with them as we plan for our pivotal study.

Okay. So it's difficult to really predict. But do you think you would have a sense for what the pivotal study will look like this calendar year or sign off from the agency at this calendar year.

That's tough to say because it somewhat depends on where we are with the other discussions, but we'll know by next year, mid next year is certainly where we are, and we want to move this as quickly as possible. So we'll be doing a number of things, Tazeen, in parallel as we always do. So we'll have a better sense of that as we cross midyear and our interim update as well as where we are in the second half of the year.

I'm just going to clarify, Camille, that we did say on the call that our goal is to start the Phase III in 2023. So we'll be working towards the end of the year to understand how that looks. Whether we have an end of Phase II meeting and everything signed off, that's not the question, but certainly a structure so that we can start in 2023. We'll be closer to that.

Yes, absolutely.

And then how are you interacting with the European regulators in parallel? And would you want like to have harmony between the 2 agencies? Or what if one agency has a different plan in mind versus the other?

Yes. So generally, we do work and harmonize our pivotal studies, just as we do for the pivotal studies we're conducting now. If there may or may not be some minor differences, although what we've noted in our interactions so far, at least with MHRA, because they're no longer EU, MHRA and Canada is that there is a receptiveness to our approach, and we'll also be taking them the data package and our plan. And we'll also meet with Europe, of course, and maybe other agencies as well.

Okay. And then maybe to round off this particular topic. What does the competitive landscape look like, right? So current options are limited, but other companies are pursuing their own ASO approaches. How are you thinking about the size of this market? And where you think Ultragenyx can be differentiated from the others?

Sure, sure. So there are 2 other ASO programs at the moment for Angelman. We don't know much about the programs. We do know, though, about the target of the ASOs in the other programs. And they're in different regions of chromosome 15 in the UBE3A region than the ASO GTX-102. And we are very, very enthusiastic and very confident in the target that our ASO has. Based on all the scientific work that Scott Dindot has done, given his deep understanding of chromosome 15 blocking the antisense transcription right at the start and covering introns as well as exons to be able to stop that transcription and allow expression of the paternal UBE3A. So that's good. We don't know where the other programs are. We know Roche is dosing patients. I believe Ionis just began this year. So that's a time difference. We've not heard any data, but we're confident in our program. And we're very excited about our program. And to Mardi's point earlier, we're eager to get going as quickly as possible, safely, of course. So we are finding ways to work in parallel and ensuring that we move for [ Ag ] quickly with it. So we do believe that this molecule GTX-102, based on what the original 5 patients showed, based on what we're seeing now, based on what we understand about the biology, that it will be quite profound and were very helpful for patients with Angelman.

Okay. Great. So we look forward to that…

Okay. All right. Yes. Thank you. Thanks.

And then maybe let's switch back to commercial for a few minutes. So Mardi, just a follow-up on the Crysvita guide that you provided for this year, the $250 million to $260 million. What are the factors that you take into account when you provide this type of guidance, especially since we still have some variables that we don't normally deal with, like -- is COVID still going to be a driver? And as the year is progressing, is there room for revision of that number? And what are going to be the main drivers for that? And maybe a similar question for how you think of Dojolvi.

We look back to the last couple of years, both of which had impact from COVID. And we gave guidance and we maintained guidance throughout the year. And actually, both years came out right on top of guidance. So we feel like we have a pretty good lens on how we look at XLH patients, this is a rare disease, right? So it's we can predict with some certainty how our year is going to look. There's always variability. There's some lumpiness of course that we see coming out of Latin America countries, et cetera. But we feel very good about our guidance as we have in the past 2 years. This first quarter we were very close to plan, our internal plan for Crysvita. I was a little below consensus. But again, we address that by saying if you look at the pattern of sales throughout each year, you see a little seasonality in the first quarter. Remember, 1 week difference can make a pretty big impact on the actual revenues, that we see that pick up in terms of a percentage of total sales in the second half. So we feel strong about that. It's all about patient find. We're finding those patients. Our percentage of adult patients versus peds is starting to grow. We're over 50% in adults. And we have a big effort in finding those patients out in the community with the families with the heritage of XLH, et cetera. So things are going extremely well. North America and in LatAm. With Dojolvi too I think we're 6, 7 quarters into our launch, and we still see continued growth, continued quarter-over-quarter growth. Very happy about the number of new prescribers and the number of new patients that are on the therapeutic. And the forecast, the guidance that we gave for Dojolvi is $55 million to $65 million for the year. And same thing. Of course, we all saw the impact of COVID first quarter and certainly, at the end of last year. We're coming out of that just a little bit. But again, we reconfirm guidance and feel strong about that going into the rest of the year.

Okay. And then maybe like a final question about your Regeneron collaboration. Why does it make sense to take on Evkeeza right now?

Yes. Well, first of all, Evkeeza for HoFH patients, the data that they produced was really stellar. Right? Really, really interesting data coming out of the studies run by Regeneron. And they were looking for an ex U.S. partner. We have an infrastructure ex U.S. that we want to continue to build and fill programs. And this was a nice gap in our pipeline where we could put a commercial product that was already approved in ex U.S. into the pipeline, use our infrastructure so the actual -- the leverage was great. It's a small product. It's probably 2,000 to 5,000 patients ex U.S. But again, our return in showing with the operational leverage, we'll see -- we'll be cash flow positive with this program within 2 years. In terms of how we launch it, it's approved, but now we're going through all the reimbursement steps in various countries outside of the U.S., that will take most of 2022. So we do see the start of revenue to start -- we'll launch in 2023. But we're really excited about putting this in the pipeline. And it's the right product for the right time for our European infrastructure.

Great. With that, we're out of time. So I want to say thank you, Camille.

Thanks, Tazeen, yes.

And thank you, Mardi for coming over to our conference this year. Thanks, everybody, who listened, and thanks, everybody, who participated.

All right. Thank you very much.

Thank you, Tazeen. Nice to see you.