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

Right. Good morning, and thank you for joining us. I think Fifth Annual Guggenheim Genomic Medicines on Rare Disease Conference. I'm Debjit and my privilege to host Emil Kakkis, the CEO of Ultragenyx.

Thank you.

Thank you, Emil for being here. It's going to be a pretty interesting second half for you guys.

So maybe we can start with the upcoming catalysts and where the pipeline currently stands?

Sure. We will have a lot of data this year. We've been working on a number of programs. We have probably more late-stage programs and I think anyone in the rare disease world. Our first update probably coming ahead will be the data from the Phase II portion of the Phase II/III study for setrusumab in Osteogenesis Imperfecta that should come at midyear. We'll have data on 24 patients of 1 or 2 month's worth of data on their biomarker P1NP, which is the measure of how much bone they're producing. And we'll also have some data on bone marrow density for those who have been in the trial a little bit longer beginning last year, combination of the P1NP, the bone marrow density data, plus the pharmacokinetic data will allow us to optimize dosing for the pediatric portion of the study. We believe the 20-milligram dose is a fine dose for everyone, but from our experience than other experiences, the children often need a little bit more antibody to get the same exposure. And so we'll help fine-tune that dosing exposure. What you learn then is does the drug have an important impact on children? How much impact on P1NP and bone marrow density are we seeing? And how does that compare to the adults we've treated before. And you'll hear more about where we are set on moving into Phase III. We have set up all the sites in multiple countries and are getting patients lined up for the Phase III. And so we feel good about potential with setrusumab in Osteogenesis Imperfecta. That's a big first thing. The second thing is for GTX-102 would be late in the year, expansion study. We'll look at a larger number of patients loaded at higher doses, and we'll look at their outcome at 6 months and some of the patients may be shorter than that. But the idea would be to get enough patients at loaded at higher doses to give us a read on where we're going in Phase III in terms of endpoints and efficacy. After that would be our GSD 1 Phase III data, which will be in early '24 plus Wilson Stage 1 data as well.

Awesome. So let's start at a high level. And focus on the Angelman asset first. So there have been some interesting approvals of the FDA recently at the neurology division, right, FA and Rett. Given sort of degree of flexibility that we see at the agency. What do you need to see from them? Or what do they need to see from you on the Angelman asset?

Well, I think it's been interesting to see neurology in the last year because it's not only that, it's also the Amylyx, ALS drug. Remember, that was also another interesting. I think there's been some evolution of neurology regarding the way they're approaching things. Of course, Billy Dunn has left. Now there's a new acting chair who is of that group with Neuroscience Group. I think they've made good decisions on those drugs. And I think there is a sense of need for these neurology diseases that I think do set us up for Angelman. We've had good interaction with the FDA more recently on our program. And I think that the fact we've collected a fair amount of good data now from ex U.S., both safety and efficacy, I think it puts us in a good position to negotiate FDA to get the U.S. open as well. And I think that neurology is an area where there's been a lot of failures in the past, right, a lot of challenges. And I think we're seeing some opening up to the reality that some of these diseases are very difficult and that we're going to have to accommodate what it takes to get to a good outcome to a great outcome, which might be a good outcome to start with. But the Angelman program, the kind of date we're seeing, which is multiple domains of improvement in areas where you've never seen a drug improve anyone before. I'm talking about language function or motor function, fine motor behavior. These are very unusual areas for drugs and to see those kind of multi-domain improvements in the same patients, I think, is a meaningful thing. And I feel like we'll be able to move ahead and get that going in the U.S. And I feel like the day we'll get this year from the expansion in position in negotiating a reasonable Phase III and get that started next year.

So do you think the FDA is still matter to CGI-I-AS the primary endpoint? Or given the Bayley data that you have, which is pretty remarkable, there is room to move within those two?

No. Well, I've never really thought that CGI [indiscernible] worth really a good primary endpoint because it's a relative scale, it's not an absolute scale. And so it was allowed for [ Avid ], but I don't think it's actually an optimal choice. We are doing the scale, and we were using it primarily to help on an individual patient basis, look at titration of dosing. But to really get clinical benefit, you have to look at quantitative scale that you can calibrate against what does this amount of improvement mean for a patient, right? Where CGI scales don't quite anchor that well enough. So we think that a multi-domain assessment is the best, but I think the Bayley score, particularly expressive receptor indication, which are having very meaningful improvement, which is very unusual because I've never seen anything affect language function before in the drug, right? That's very special. But if you add that to substantial improvement in sleep disorder, sleep problems, and abnormal behavior problems and in addition, some fine motor and gross motor improvements. I think you're talking about a number of different scales that could feed into that. And the exact structure of the end points, we'll have a discussion with FDA. But my preference is to use a multi-domain type analysis to capture it all. But if they don't go for that, we'll be able to pick probably the language will be the most likely one because this is a top complaint for parents with Angelman syndrome. You imagine being able to call your child name, they don't listen to the name or they don't follow instructions. And then they are able now to hear their name and respond to you and follow instructions without being shown. This fundamental change of life at home, right? So these are the reasons why people are lining up to get in the study. These are things that are really important to people. I think we could certainly anchor on that as a primary. But I think all the domains happening in the same kid are a powerful result. And so we feel good we have efficacy that could take us to Phase IIIs now. We're just trying to optimize the amount of efficacy we get and the expansion will allow us to get enough data to help gain comfort on that.

Got it. Now the expansion cohorts, are you trying to sort of harmonize the doors across all the 3 regions before you get it up and running. So you get agreement from the FDA, I don't know, 7.5-milligram dose at the starting dose across the board?

We already initiated dosing ex U.S., and we've added a number of countries. So now it's not just 2 countries, we're going to be something in like 8 countries where the trial will be open. And so that's already started. Dosing started. Site initiation started. That's all happening. The U.S. will propose an approach and either it will match or it will be a variant, but we'll be able to get the U.S. started. If the protocols for the regimens are slightly different for the U.S., we'll just have 2 different regimens to watch and to -- between the 2 will choose if that -- if we end up with 2 slightly different regimens. But there's a lot of variables here. It's not just drug dose. It's the frequency dosing. It's the maintenance period, all these other variables. So I don't look at -- whatever comes out of the U.S. will give us another shot at understanding what the optimal outcome is. If we need to treat more patients to get enough data, then we'll do that because it's important to get it right. So the 40 patients is what we've been talking about. But if we had another regimen, we could add another group of patients to make sure we test out that regimen. But the FDA has been communicative with us, and we've had good engagement. So hopefully, we'll figure out soon about opening the U.S.

Got it. So is FDA still matter to a randomized study for approval or depending upon the quality of the data from the expansion cohorts, is there room for an accelerated approval given the recent flexibility?

I don't think there's going to be room for accelerated approval in this situation. The reason being that a lot of the end points are much more subjective. And I think that we're going to need a larger number of patients given the size of these populations. So we're not expecting to be able to move ahead. We've had some exciting data, but I'm expecting us to need a randomized study. I would also point out to you that it's not just getting through the right pathway ultimately, enough to get reimbursement. In these case reimbursement, having a randomized study is far more powerful type 1 data, right, which this will be important. And so you wouldn't want to hamper the long-term outcome of the product by not having the optimal type of data to get reimbursement, not just U.S. but globally for a disease this prevalent and for a drug that's important.

Got it. And the lower extremity weakness that you initially had, you've sort of largely navigated through that, except that you had 1 weird case who wasn't that severe. What did you learn from that? I mean scoliosis being a major impediment and won't be reflected going forward?

Yes. I think I'm saying that, that exception proved the rule, which is -- when we looked at MRI, he had a localized spot of inflammation right where the drug was given. So that was what we were avoiding with Trendelenburg. The fact he had it means the Trendelenburg didn't get applied well enough for him in his scoliosis situation. So I feel pretty comfortable that the method of mixing and distributing the drug will keep us safe and keep patients safe. We just have to make sure people had adhered to that carefully. So I don't think it's a case is a new risk. It's just something manageable. I would say he also reversed. And if you look at the patients who had the -- we have 3 patients who had the event before, more severe version of it, who are back on treatment and not having a problem, it does tell you that even if you have an advantage as it means a block to treatment, it just means you have to manage the regimen correctly. So I think what we learned about the event is actually, I think, a lot more manageable rather than an end to treatment.

Yes, there seems to be a dichotomy between how the treating physician sees these events versus the rest of us on the Street because when we talk to the docs, they don't think if you get those improvements, functional improvements and communication and behavior, this is a manageable event from their perspective.

Yes. I think that's true. While they're also seeing the patients trying to get in study. I mean, I'm getting like people find out I'm on Facebook. So I get a lot of patients on Facebook contacting me like I was in line with the study and I didn't get in, what happened. And so there's a lot of emotional energy here because this stuff is really important to family. So yes, I think -- now in the first time, and this is not something I would agree with, but one of the parents said, I'd rather have my kid in a wheelchair behaving well and talking then being the way he was before. That's kind of telling you how important it was to be able to communicate with your child and be able to interact. So it tells you the benefit risk that people see it is different, right, with the FDA. But the doctors are impressed with things. And so I think that's why you're hearing that. But it's manageable. We don't have to accept that compromise. We'll have to watch out for it, but I feel good about us being able to navigate around it, particularly because we've been dosing patients, a number of patients for a long time now at up to 10 to 14 in maintenance, not seeing the problem, right? But I tell you, you can repeatedly do this, it's not like everyone gets it eventually, right, at any dose, right? That's not true. So you can dose and avoid the problem. So to me, it means it's just a question of managing it well.

So if the expansion cohort comes out clean and you don't see the problem, do you have flexibility to take the dose higher? I mean obviously, you had gone up to 20 mg single dose before.

Well, certainly, we certainly do. We could go a bit higher. The question is how much efficacy, how much safety and how much time? I think our view is we want a good result right now. But we don't want to cause continued delays trying to get perfect, right? Because I think you can easily titrate people individually over time, but we want to get a good result. It's a meaningful clinical result to get the drug out on the market. And titrating further is something well within the range of acceptance, right? And we continue to work that. But I just wouldn't want to drag out this process for a very long time. I hope this year is essentially end the discussion or what's the adequate dosing can get a good effect to get approved and then continue to work from there.

So you did mention that the expansion cohorts have already started dosing patients ex U.S. Where did you start from a dosing perspective?

We haven't put out the details of it. We've decided to be more contained on how much disclosure we're providing. And -- but we are dosing higher than we did in the original cohorts last year of 4 and 5. But we've been seeing effect -- we've talked about last year in the middle of the year between the 5 and 10 range, we're seeing a good effect. So we're comfortable there, and we've said we've had 10 to 14 during maintenance phase, right? Those are dose ranges that are effective. So we're feeling good about where we are in the dosing, but we haven't put through the detail at this point.

Got it. Switching to the OI program. That dose data will come in first. Do you think there's going to be an ask for a comparative study versus bisphosphonates or ...

There wasn't an ask. They usually didn't ask for us, that was an option, but we decided to do it. And the reason was that in the really youngest patients, the doctors are uncomfortable not giving them any treatment. And even though bisphosphonates are off label, they don't want to treat them. But in our view, treating those really young ones is like where we can change the future for OI. Those are the ones where the fractures are very frequent and to form their bones in their life. So I don't want us to wait too long and so we're going to do a randomized control open-label, randomized against bisphosphonates, so that everyone gets treated. And therefore, we can put in the most sickest patients in that group. And because it's open label, we'll be able to see what's happening. Our expectation, though, is setrusumab will be substantially better than bisphosphonates because of its effect on improving bone mass and bone strength that are more powerful. And therefore, I think that, that study will also show then even if bisphosphonates are an off-label standard of care that we can show head-to-head what it looks like and answer that question, right, from regulators as well as reimbursers. So the 2 studies together, I think, give us a complete picture. And our expectation is to beat bisphosphonates readily and to show the improvements on symptoms and fractures as well in the randomized placebo-controlled study.

And when you talk about kids needing slightly higher doses, is that because of the sclerostin expression? Is that differential between younger and older individuals?

The difference is primarily in the metabolic rate for antibodies, how long they circulate and how long they get cleared. So if you look at all the antibody drugs, they tend to need higher doses in younger ones and in the XLH CRYSVITA's case, for example, the optimized dosing for kids was 1.6x the dosing for adults. So we already have experience in that. So it's been seen like that for multiple products. So it's more about monoclonal antibody clearance distribution than it is about sclerostin. We don't know about sclerostin but the trial is why I'll figure that out, right? We'll figure out what block gives you much -- how much antisclerostin effect and how much pharmacodynamic effect because what matters is pharmacodynamic effect, the actual concentration is irrelevant to what the pharmacodynamic effect is. So we'll look at concentration, look at pharmacodynamic effect and then calculate for modeling, what's the best dose response combination that we can look for.

And for insights into fracture rates, how long does the study have to be even in the current pediatric setting?

Well, in the current study, we're expecting between 12 and 24 months of time. Now it depends on the rate of fractures, but the way the study will be enrolled will have an interim assessment, while the study is rolling to look at the fracture rate and the differential, which will tell us how long the last patient that needs to be dosed in order to end the primary analysis. If this group separate more rapidly then -- and the fracture rate is high enough, then we may be able to end after 1 year. If the fracture rate is lower or the separation not is great, we'll have to go a little longer. That flexibility allows us to make sure we have a study that will demonstrate the difference. Now in osteoporosis, the fracture rate separated within 6 months, which is pretty fast. But I think in pediatrics, the fracture will separate within a few months that the patients will respond metabolically very quickly and their bone state improved very fast. If they separate very quickly, and there's enough fractures in the population that will help separate the groups very quickly. We've assumed a 50% reduction in the powering in fracture rate and the placebo or left over bisphosphonate activity is about 20%. So that's the separation rate, right, between the two.

And is there a threshold of P1NP activity, which correlates with fracture rates?

There is a -- the P1NP seems to predict bone marrow density improvement. So if you look at the 90 patients for the data at 2, 8 and 20, and you look at P1NP, you can correlate it with BMD, P1NP at 1 month correlated with BMD at 12 months. And the BMD production with setrusumab is like steady, it's like a straight line for the entire year. So whatever you turn on in that first month is happening consistently all year long. So we can use the P1NP at 1 month to help predict what we think BMD will look like at 1 year. When you look at the data we have, it's in our deck as well, we can show that the BMD improvement correlates with an estimated strength of bone as well. And it's dose dependent. It's one of the tables in our deck. So look at that, that method uses the wrist and the micro CT to look at the structure and estimate the strength of the bond based on the structure. It says -- it's not just the amount of bone, but where the bone is, and it showed statistically significant improvements in bone strength, correlate with BMD and correlate with P1NP. So they all tie together very well.

Got it. And then let's wrap up with your 2 gene therapy programs, GST and Wilsons. Gene therapy seems to have just completely fallen off people's radar over the last, call it, 2 years. What are you seeing that's going to sort of drive interest in that?

Well, it has slowed up. I think remember [indiscernible] really galvanized community that got approved very quickly and have found effect but we think a lot of these other drugs are having a profound effect and maybe it's not children who can't walk, they're walking, but it's a profound change of life to be able to greatly reduce the amount of starch you need to your glucose control is now endogenous or to change your copper metabolism or the other program change your ammonia metabolism. So we think it's maybe it's faded because of some safety events and some of the other programs in Duchenne programs, right, or in the MTM program. But I think the place we're at, we've had an excellent safety profile and liver targeted therapy, and we think we've seen good results. We also have the MPS III aging therapy, which we acquired from Abeona which is a little bit more gensmolike in terms of an IV dosing of AAV9, which also has shown a good effect on the biomarker as well as clinical. So I think the challenge right now is what is it going to take to get AV products approved, right? And I think we are doing randomized studies right now because that's what was asked that creates a higher burden, right? And I think that's created some of the issue. But the GSD1 trial is enrolled. Time line for data is in early 2024. And so we're -- I think we're on track with coming out with an important result for GSDIa. And Wilson Stage 1 is enrolling this year, and I hope it would be early '24 to have data on the dosing stage of that program and then head to Phase III. And OTC is starting to enroll its Phase III as well. We have a few kids now who essentially have been clear of ammonia control problems for several years now, 4 or 5 years now. So I also think durability has been one of those issues. I think the OTC did we have a is the first program we got it had 4 or 5 years of people not needing drugs or diet control, I think those are real cures. So I just think it's AAV gene therapy is working. And I think there are always going to be challenges, but I do think that we're in a good position among any company to be able to put forth a number of product approvals in the next while.

Well, wishing you the very best for the upcoming data events and thank you so much for your time today Emil.

Thank you, Debjit.

I appreciate it. Thank you.