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

My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. I'm happy to introduce our guest today, Emil Kakkis, the CEO of Ultragenyx. Thanks a lot for joining us today, Emil.

Thanks for having me, Maury.

And we're going to do a fireside chat discussion. So for those who may be new to the story, can you provide a 1-minute overview of Ultragenyx, your commercial products and your pipeline?

Yes. Ultragenyx is a rare -- a company focused on rare and ultra-rare disease, has been in business 12 years. We're a commercial company with 4 approved products that we're commercializing in the U.S., Canada, Latin America, Europe and, most recently, beginning in Japan. And we are focused on a number of different areas in the rare disease, including bone metabolic area with Crysvita, our largest commercial product and inborn errors like Mepsevii for MPS 7, Dojolvi as well for fatty acid oxidation defects among commercial products. And we did a deal for Evkeeza now a commercial product that's we're going to launch outside with Regeneron but outside the U.S. We have a portfolio of late-stage programs, 3 gene therapies an antibody for osteogenesis imperfecta, which was like a Crysvita follow on. And in addition to that, our big program of most interest is the Angelman program, an antisense oligonucleotide type arrangement syndrome, which I assume we'll be talking a lot about. So we're a diversified company, multiple different platforms and are trying to lead the future of rare disease medicine by developing better approaches to diagnosis, management, development, commercialization of rare disease therapeutics and are focused on the best therapeutic for each disease and to be a successful global commercial company.

Got it. Yes. I think that's a great intro. And since I've been covering the company, I think that messaging has been consistent with finding those drugs. And there's a lot of focus on your Angelman program, which has a key update expected soon in midyear. Are you providing any more granularity on timing for the readout? And can you say if this will be just a press release? Or will you also do a conference call?

We haven't provided more granularity other than to say we want to have a significant body of data, which would mean really the majority of the patients should have the Day 128 worth of data, I think, in the data set, so we can have full evaluations that occur to make the update meaningful. And so we want to make sure we have that much data. We'll have some information about the U.S. patients as well. And our expectation would be to do both a press release and a conference call for that event. And we said it would be Q2 or Q3. And I realize that's very loose, but that's the level of detail we're providing at this time.

Got it. Okay. And you've recently noted on your 1 quarter call that some patients have transitioned to maintenance dose. So that would imply improvements in at least 2 CGI domains. Do you believe the current dosing regimen can reach similar CGI efficacy level as you showed in the 5 initial patients that you treated? Or what kind of efficacy can we reasonably expect in the midyear update from the 12 U.K. and Canadian patients at Day 128?

Yes. So when patients get a maintenance dose, what it means is they've completed the 4 loading doses. It doesn't mean they necessarily hit 2 plus 2 domains. They complete 4 loading doses. Instead of continuing on a monthly regimen, we -- all the patients go to an every 3-month regimen. And during those every 3 months, they still can titrate up if they haven't hit their threshold yet. So I'd just be clear about that.

Got it. Okay. Okay. And for the update, I guess, what should -- what are expectations for the update for the U.K. and Canadian patients?

We expect to have is information on the Global Impression Scale score from the physician-based scoring, both for the overall score and for individual domain scores for the patients. In addition, we'll have data from the Bayley's and Vineland, which are psychologists administered, so a different person would be administering those 2. We'd have the ORCA test, which is a language test that the patient families would actually be scoring. And we'll have, in addition to that, verbatims other details from the responses so you can get a more clarity and color around what is it that's driving these number exchanges, what are people seeing and so to help people understand whether it's something that is real and supported. We had significant kinds of improvements before. We said the clinical activity we've been seeing is actually consistent with the pattern we've seen before. So that will give you some sense of the underpinnings of what those changes are about. With regard to objective data on the EEG, we'll have the EEG. But the data that we saw before, I think, that was most compelling was things around language, around motor, fine motor, gross motor and, I think, sleeping in certain cases. So I think that will end up being the focus again for what we talk about.

Got it. And for the U.S. patients that you report data on, can you talk a little bit more about what we can see?

Yes. There were 4 patients that were given 4 doses of 2 milligrams, and then there were 4 other patients who were just being monitored. I would look at that as like a lower dose cohort, so we can look for a dose response. What does that look like compared to the other patients? Just to say -- if you just monitor patients, do you see changes or what those changes are like. But we could see some changes in those patients because each kid seems to have a different degree of sensitivity to drugs. So that's what we'll get from the U.S. But that's part of our agreement with the FDA at this point. Our expectation is to take our safety data and efficacy data from ex U.S. and to work toward getting the U.S. protocol aligned and have a global single protocol going forward from this point.

Got it. And maybe jumping to that point, where are you at with the dose harmonization discussions in the U.S. and ex U.S.? And will you have clarity around that at the midyear update?

Well, we're hoping to have some clarity, but we're -- we don't really talk about what discussions we're having. But I do think that the FDA was looking for additional safety information, which we have. They've asked more information about immune response and immunological question, which we have, which show there are none, no immunological issues. So we feel like we've answered all the questions that are required. And therefore, we're expecting to be able to move forward.

Got it. And maybe going back to just based on animal data that you have, do you expect patients to continue to improve during the maintenance dosing phase of the site?

We do expect that patients will improve during the maintenance dose and because we're dosing every 3 months, which is a little faster than what the decay of the effect would be. So they should still be accumulating some drug and some effect. So once we've loaded them with 4 doses, the every 3-month dosing is a little faster than the decay time. So they should be maintained and potentially go -- they can titrate a little further if they still haven't reached their efficacy, which would help us just scope out more dose levels. So the design of every 3 months is in contrast to what we saw when we drew drug before, where the treatment effect lasted 5 months or longer for some of the patients. So it's clear that you probably can space out drug treatment longer than 3 months in the long run for maintenance. But in this time, we kept maintenance tighter just because we wanted to give ourselves a better chance of optimizing the final dose.

Got it. And you talked about some of the objective measures that you're collecting data on. Can you talk about the relationship between CGI and those objective measures and how strong it is?

Well, the CGI score, the overall one does look at multiple domains and kind of coming up with an overall score. But there's CGI also for each domain. So there's language, right? There would be behavior, fine motor, gross motor, sleep. And so like last time, there were CGI scores for each of those domains. And then we had the total score on them. So that's the way it works. If you look at, for example, the CGI score for the language domain, there are things that are valuing come up with that score. But that ties with the Bayley's receptive and expressive communication scores as a direct connection. The behavior then lines up with the Vineland, which has a lot of adaptive behavior. And the sleep is -- I don't remember now what we have for sleep, actually. The sleep is basically by report, but I don't think we have a special tool. But we'll be able to look at CGI score for sleep. Basically, for these kids in the sleep story, it's not like sleep apnea, where you have a rate of something. Basically, the kids are usually not -- some of the ones who have sleep problems will be not sleeping at all at night or staying up all night, right? So it's more a question of is that happening or they have stopped. And when we've seen this effect so far, when they have an improvement of sleep, they will start sleeping through the night, which is a huge deal. And if someone had told me that that's very subjective. I said, if you're a parent, it's not subjective. If your kids sleep through the night, you're testing that data point every night. Because when the kids stop sleeping, everyone's messed up. So these -- there are kids in the #5 in the first part, who is up every night for 3.5 hours, each parent taking turns doing this. So when the kid is sleeping through the night, it was like not subjective. That was like hard fact, kid is not waking. And so we think that kind of thing tells you something happening in the sleep. And I look at that as somewhat objective. People are not waking up in the night. It's not like he knew he was supposed to wake up or not based on whether you have the drug or not. So we feel that, that will be an interesting additional piece. By the way, sleep is a really big problem in a number of neurological disorders, and it actually impairs their function during the day. If you're not sleeping well, you're not functioning during the day either, right? So it has knock-on effects that are important. That's why it's one of the domains, besides the fact that parents would want it to be a domain.

Right. Right. So you've got some of these objective measures that are going to support some of the domains of CGI then? Okay.

And 3 different observers. You have an investigator, you have psychologists and you have the parent. So you have 3 different observers. But fundamentally, this is a proof of concept study. This is not a proof of -- we're not filing of this, right? So ultimately, we're going to have to do a randomized study. We'll have to have enough effect size. But what I can say from before, when you hit the right dose, the effect size is very substantial, well beyond a placebo and, I think, definitively achieve an effect. And [indiscernible] has talked about that publicly, including the last FAST meeting about the magnitude of effect. And the thing we didn't do and people caution is doing is that she had a lot of videos because the parents are saying in their videos what kids are doing, they couldn't do before, right? So she saw the videos and saw evidence of things like catching a ball or swimming and other things that they hadn't been able to do before that were quite compelling. At some point, I hope we could start sharing that.

Got it. Is that something you could share later this year potentially?

At some point.

Okay. Okay. And then for safety, you mentioned a little bit already on what FDA is looking for, for harmonization. Can you provide a general update on what you're seeing in the study? And do you see any differences based on dose levels being used in the United States versus U.K. and Canada? And then in addition to using the lower doses in the amended study, you're also using a CNS flush in the Trendelenburg. Have these risk mitigation steps all the SAE issue? Or is it still TBD?

Well, I think the altered administration strategy with Trendelenburg and flush clearly has, I think, eliminated the issue. If we got to a very high dose, it's possible we could still see something. But I think the idea of getting very localized drug impacting one part where the drug was first placed, I think that's gone away. And we haven't seen any of it. And we haven't seen any of the lower extremity weakness or any drug-related safety events at a point. So I feel very comfortable about safety, what we're seeing at this point. And in the U.S. patients, we can't talk really about the relative efficacy. That's we're going to talk about at the midyear, but -- so I can't really talk about that yet. But our expectation is that 2-milligram dose is on the lower end of the range. Some patients might respond to that lower end. But our probability of that being an optimal dose is low. But we accepted doing that in the U.S. to open the door and get started, get the protocol active and then update the FDA protocol with the ex U.S. information, which we can do now.

Got it. Okay. And where are you at -- or what is the likelihood of CGI being the primary endpoint for 102 pivotal studies? And when do you think you'll have alignment with FDA, what a pivotal would look like?

Well, CGI was accepted by -- CGI for Angelman syndrome that has a specific CGI with criteria for Angelman syndrome was accepted by FDA for the [ AVID ] program. I don't think CGIs are a great choice, though, because there's sort of relative change and they're not hard objective built end points but it's always there. It's a possibility because there's some precedent now. We think that some of the other endpoints that we're using could be used. But we -- our preference would be the multi-domain responder analysis where you use 5 domains that actually add up responders across 5 domains. It's a very powerful approach. My Head of Biometrics [ PK Ken ] and I have written a paper on this. We've talked with the FDA at a senior level about the top idea. They're intrigued. It's a much more powerful way of analyzing variable neurological diseases so that you can take all-comers, all different clinical phenotypes to capture benefit in whichever way area. I think Angelman is a perfect case for this. However, it's a new thing. Will FDA accept it? If the FDA don't accept it as primary, we'll make it secondary and we can keep CGI primary. Alternatively, I think the #1 area of importance is language. And we seem to see expressive or receptive language effects of what we've seen that are fundamental for families. So if we had to pick, we might go in that direction as well to do receptive-expressive language as a primary than alternative. I still think it's better to do multiple domains. I just think it's a better representation of truth.

Got it. And for size and scope of the study, anything you're saying on that at this point?

Yes. I think this is a big indication. So I think doing less than 100 patients for the trial would be not appropriate. I think you need to do more than that in a Phase III trial to assume it's going to be in the 100 to 150 patient range, both for power but also adequate safety exposure. When you have a population of 60,000 patients throughout the world, I think ICH guidelines suggest 100 patients should be treated at least. So idea would be at least 100 to 150, somewhere in that range, I think, would be a good size. I think we see a lot of patients very interested. So I don't think it would be a problem to find patients. With regard -- we think it will have to be a randomized trial. That would be my expectation, my preference, not because I like giving kids placebo intrathecally. But we have to think about the big picture with reimbursers and approvals around the world. And the truth is right now that anything that isn't randomized, placebo-controlled is under attack as not being valid in some way or another. So I would actually just rather do one randomized quality control study to prove that this is right. And then we'll support some of the other genetic indications by doing open-label work and some of the others. But having one solid quality randomized study to settle the issue for all time, I think, is the way to go.

Got it. And if you get CGI as the primary endpoint, do you think it would be a bigger study? Or if you got the multi-domain, could that make the study go faster? Any thoughts on that?

I think the size of the study can be driven more of safety than power and efficacy. So I don't think the CGI would change that. I think we'd be fine either way.

Okay. And then as reported at FAST '21, Roche had some updates from the Phase I/II program, which has a similar design with intra-patient dose escalation scheme in small steps and has dosed 8 cohorts across ages 1 through 12 year old. Can you simply describe how 102 is optimally designed for Angelman? And what are indicators that Roche's ASO may be less potent?

Well, we have limited data about it, but I'll explain what I do know. I think the animal data presented at the year before by Roche suggested that they needed 24 milligrams in order to knock down the antisense message, right? And we have shown that we can do that with about 1 milligram in the nonhuman primate. So suggesting was 1 milligram given 2 or 3 times. So we would suggest that we have something like 24 better potency. We know in the clinic, we are seeing effects. We have seen effects that under 20 milligrams, but I think they are above 200 milligrams in the clinic at this point. So there's some significant differences. So I think they've engineered a molecule that's safe. And I think the question is it's always about benefit/risk. And I think the molecule we have is extremely potent by sequences targeted and its structure. And we show that distributes very well in the monkey brain and gives us very good knockdown. So we have very good confidence of its potency and stability. And we think with the right administration strategy, we'll have a better potency. And we can achieve that with good safety. So Roche will see. I think they've delayed when their time is coming out with the response. I heard it was late '23, early '24 now. Ionis is another competing program. They certainly have tremendous amount of experience in designing all dose and chemistries. There's a lot of special tweaks and games that you can play with it. And we've seen all of them. We know about them. We are dealing with a particular sequence area where we think it's particularly potent. And we're using LNAs, locked nucleic acids, which are more potent but also potentially more toxic. I think that Ionis had said -- and I talked with Stan Crooke that they don't like those LNAs because they're more toxic. But in our hands, the LNAs for this sequence were much more potent, not more toxic. But the potency factor allowed us to achieve a lot of knockdown or very low doses. So we think that's an edge. And so in this case, the chemistry makes sense for this molecule. And we think the problem we had before was more about administration than it was about the algo itself.

Got it. So it sounds like from a competitive perspective, the other players are further behind. And from a technology standpoint, you think you could potentially be more potent than...

Yes. We're the best.

And so maybe shifting gears to your gene therapy programs. You recently acquired MPS IIIA gene therapy asset from Abeona. We know the program well based on our coverage of the company. But for those who are new to the story, can you walk us through how you see the deal as a good strategic fit for Ultragenyx?

Well, first of all, we weren't out looking for assets. But we've had a lot of companies bringing us things to pick up because of the situation in the market in general. I was very familiar with Abeona. I've actually informally consulted for them over time as an MPS expert. And their data at the top dose level, 17 patients is really excellent on heparan sulfate reduction. It was 80% reduction, very nice 2-year data on 17 patients. So it's actually a very sizable amount of data. The part that's hard is that if your older patients, they weren't -- their cognitive function wasn't being maintained. So people said the biomarker didn't predict. But the problem was that their brains are too far down the road. When you look at the kids under H2 with a higher DQs of 60 or better, those kids are tracking and maintaining their development, right? So I think the drug is working. I think they ran out of money and support for being able to do it. And they wanted someone who could finish it to take it. So they're able to give it to us for primarily just royalties and some sales milestones. And they've invested quite a lot in it. And I think they did a reasonable job with it. I think being MPS expert as a company and also knowing a lot about the biomarkers in CSF, I think we're going to be in a good position to try to press ahead. And I plan on pressing the FDA on pushing this program toward a filing earlier and to get that product out to patients.

Got it. And the press release for this update noted this could be your first approved gene therapy. And then for context, for those who are new to the story, Abeona has regulatory alignment for BLA submission in late '24 or early '25. I guess do you think that, that could actually happen before those time lines? Could you accelerate the filing for MPS IIIA? Or do you anticipate some delay for your other gene therapy programs?

Yes. I heard that with interesting implication with people. We're thinking about if we can press the agency on an earlier filing for this program than their plan, than the Abeona plan, our plan would be to try to file earlier based on the biomarker data and the early clinical data that we file early accelerated approval and then follow the patients. The FDA wanted them to follow their patients until they all became 5 years old. And it's like, why would you do that? Why -- if the drug is working well, there's all these kids around the world. And right now, we have some -- there are remaining drugs. We have parents in the U.K., Spain, others urgently trying to get their kids treated before the drug runs out. So the truth is that sitting and waiting is just not a good option. And unfortunately, what's happening right now, we're taking too long in gene therapy. We need to keep up the pace and put the pressure on. And I think this is a program to do it. This is a program that should get approved sooner. And we're going to press our case with the FDA, and that's what we're talking about.

Got it. Okay. And for your 2 pivotal programs for GSDIa and OTCD, what is your current time line estimates for BLA filing for those programs? And do you have alignment with regulators on how much follow-up data they would need from Phase I/II studies supplement for filing?

The GSDIa is the one program for Glycogen Storage Disease Type Ia is the one where we had a lot of patients. There's a lot of demand because it's an ongoing problem for patients. And so that's a program we made as a priority. The trial agreed to its 48 weeks, so it's a little shorter. Our goal is to try to get the study enrolled this year. It may end up being early next year, but that's the time frame. It's 48 weeks from there to data, Phase III and then 5 months to file, all right? That would be the kind of timing. We just need to get it enrolled. The whole world is still in a COVID haze. All the clinical sites everywhere just -- there's COVID on the brain everywhere. So it's just -- the malaise has not come out. So that's why we have to keep pushing sites, get going, get organized. A lot of them have lost staff. People retired because they got exhausted. It's just -- it's still out there. So that's one thing we'll -- we have to work through GSDIa and really all the trials. OTC, we pushed back a little bit because we had 4 programs going to pivotal at the same time. So we're at the stage a little bit. The OTC trial is getting set up. It hasn't started -- the [ Phase III ] hasn't started. The agreement are made. It's a 64-week study. It will start a little later. It will take a little longer to enroll because patients -- some of the patients are stable on their drug. They may not be as higher. They may be more reluctant to jump into gene therapy right off. But it'll take a little more time to enroll that one. And the Wilson has started enrolling patients already, and that's moving along. So -- and not on gene therapy would be osteogenesis imperfecta. And that has started enrolling and a really important program. It's not gene therapy, it's an antibody against Sclerostin and we think a really good follow-on product for Crysvita. We think it's -- I think it's going to be a first-line treatment for osteogenesis imperfecta. And I think that the biology and the mechanism of action are going to be really right on for [ OI ]. And so I really have high hopes for setrusumab.

Got it. So we're pretty much out of time. But for Wilson, I wanted to ask, do you expect on having data for that program by the end of this year, Phase I update and RP2D selection? And then just in closing out, if you want to highlight key catalysts ahead for the rest of this year?

Yes. So I don't think the Wilson data -- the Wilson is going to be enrolling. But we'll have to have 6 month's data. And it's a staggered start like one every few weeks based on the FDA's requirements. So we can't enroll at full speed. We have to enroll at one every step and so it's going to be a while to get the Phase I/II data. So the big catalyst of the year, midyear is Angelman. That data on that we'll have, we think some setrusumab data by the end of the year. It could be early next year, but Phase II data on setrusumab in young patients, which will give us more insight. We could have some Phase I data on the mRNA program. We'll also have certainly commercial updates and potentially any other deal updates going on.

Got it. Okay. Well, Emil, thanks so much for joining us today. It's great speaking with you.

Very good. Thanks.