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

Good afternoon, and welcome to the UX143 Phase II Data Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to Joshua Higa, Vice President and Head of Investor Relations.

Thank you. Earlier today, we issued a press release and updated slides in our corporate deck that outlined the positive results from the Phase II Orbit study in osteogenesis imperfecta, both of which you can find on our website at ultragenyx.com. Joining me today are Emil Kakkis, Chief Executive Officer and President; and Eric Crombez, Chief Medical Officer. I'd like to remind everyone that during today's call, we'll be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Please refer to the risk factors discussed in our latest SEC filings. I'll now turn the call over to Emil.

Good afternoon, everyone, and thank you for joining us today. We're excited to be sharing promising results from the Phase II portion of our Orbit study of setrusumab, also known as UX143 in osteogenesis imperfecta or OI. The data in the press release we issued earlier today show that treatment with setrusumab resulted in rapid induction of serum P1NP levels, which led to a rapid and substantial bone production in this patient group. These data have provided a clear direction to support dose selection and give us a lot of confidence as we move forward into the Phase III portion of the study. Before we go deeper into these results, I'll give you some context on the mechanism of action to help interpret the data we are presenting today. While it's commonly understood that osteogenesis imperfecta is a disease caused by mutated collagen, it's also assumed that you need to address the cause of defect to improve bone strength. But what is now evident from our preclinical and clinical data is that OI patients are making less bone than they should in response to their mutation, which may be the major cause of bone weakness and not so much the mutated collagen itself. What we've learned through preclinical data and the clinical data generated in ASTEROID is that an anabolic agent like setrusumab can normalize bone strength, despite the presence of the collagen mutation by restoring more normal bone production. This is possible because setrusumab stimulates osteoblast to mature into bone-making cells and cause those new bone cells to increase bone production in the specific areas where the bone is weak and under tension. It is a dual action combined with limiting resorption that uniquely addresses the body's maladaptive response to the defect of collagen. And why we believe setrusumab will improve bone strength in patients with OI is Setrusumab can rapidly increase bone production and lay down this new bone incisive weakness in the bone, there's a potential for a substantial impact on OI bone disease and fractures. I'll turn it over to Eric to go through the data. And then I'll provide the next steps with our Phase III program before opening it up to Q&A.

Thank you, Emil. I will provide an overview of the Orbit study and then get detail on the serum P1NP bone mineral density and safety data. Orbit is a Phase II/III study, evaluating setrusumab in pediatric and young adult patients with OI subtypes I, III and IV. The Phase II portion of the study was designed to select the dose of setrusumab to carry forward in our Phase III program by evaluating serum P1NP levels in patients treated with doses of 20- and 40-milligrams per kilogram on a monthly basis. We are also evaluating lumbar spine bone mineral density and have data through 3 months in the majority of patients. Serum P1NP is considered to be the most sensitive marker of bone formation. It is the N-terminal propeptide of procollagen and is released into circulation as new collagen is made during bone formation and increases when an individual is laying down new collagen, needed to form new bone. This interim data from the Phase II portion of the Orbit study show that treatment with setrusumab resulted in a statistically significant increase in P1NP levels in both dosing cohorts. P1NP levels peaked before the 1-month time point and again after the 2-month time point in both cohorts as expected. In the 20-milligram per kilogram cohort, there was a mean P1NP increase of 57% from baseline over the first month. The data show a dose response between the 20- and 40-milligram per kilogram dose levels but the differences were not considered clinically meaningful. At a dose of 20-milligrams per kilogram, the effect of setrusumab on increasing P1NP was approximately 80% of the effect achieved with a 40-milligram per kilogram dose. There was data from 4 patients on placebo at the 1-month time point, and we did not see a meaningful change in their P1NP levels. When we look at the data by age group and compare the pediatric and adolescent patients to the adult patients in both, the Orbit study and the previous Phase IIb ASTEROID study, there is a substantially greater effect seen in younger patients. The younger patients in Orbit had much higher baseline P1NP levels when compared to adults, which is normal and expected. When we adjust for this, there was an approximately eightfold increase in P1NP over 1 month in pediatric and young adult patients treated with setrusumab when compared to the adult OI patients. Turning now to the bone mineral density data. The increase in BMD observed in the Orbit study over the first 3 months was striking, substantial and consistent with a large increase in P1NP levels. 3 months of treatment with setrusumab resulted in a 9.4% increase from baseline in lumbar spine bone mineral density in the 20-milligram per kilogram cohort, which is equivalent to a large increase in Z-score of 0.65. This is a profound improvement within a relatively short period of time. Similarly, in the 40-milligram per kilogram cohort, which had a smaller number of patients, treatment resulted in a bone mineral density increase of 9.8%. What's remarkable here is that the same increase in lumbar spine bone mineral density observed in this younger patient population at 3 months took a full year to see similar results in the adult population. In the ASTEROID study, patients in the 20-milligram per kilogram dose cohort experienced a 4.5% increase in lumbar spine bone mineral density at 6 months and 9% at 12 months, which was statistically significant with a p-value less than 0.001. The dramatic lumbar spine bone mineral density improvements we've seen in children over the first 3 months show that growing bones are more dynamic, and we anticipate the potential for a greater effect in on formation and strength in these younger patients than maturing bones. Setrusumab has an acceptable safety profile with no treatment-related serious adverse events reported. Adverse events have been consistent with the anticipated safety profile for setrusumab based on the ASTEROID study where the drug was shown to be well tolerated. There have been no reported hypersensitivity reactions related to setrusumab. There were also no safety-related differences observed between dosing groups or age groups. The totality of the data demonstrates that setrusumab generated a clinically meaningful response in serum P1NP levels, and rapid and substantial bone production within the first 3 months of treatment across all treated patients. While there was a dose response observed between the 2 dosing cohorts, the vast majority of effect is achieved with a 20-milligram per kilogram dose. We've said previously that we would evaluate the 40-milligram per kilogram dose to assure ourselves that there is not a substantially greater benefit of increased bone production in OI affected children at the higher dose, and these results indicate that the difference is not clinically meaningful. As a result, the decision was made to bring the 20-milligram per kilogram dose forward into the Phase III program. In addition to these data, we are strongly encouraged by the early reports from our investigators, which show that the first few patients seemed to be feeling better and have shown improvements in bone health. We are not discussing fracture rates at this early time point because of the limited number of patients and events, but we are encouraged with how the patients are doing. We are excited to move forward now to evaluate the impact of setrusumab on annualized clinical fracture rates in the Phase III portion of the study. I'll now turn it back to Emil to review our upcoming milestones with this program.

Thank you, Eric. It's encouraging to see the bone-building effect of setrusumab that we expected based on a revised scientific understanding of this disease from our other research on OI as well as published nonclinical model studies. Both, early animal data and clinical data, [indiscernible] from the ASTEROID study give us great confidence in setrusumab's novel mechanism of action, and we believe this therapy has the potential to make a meaningful difference for people living with OI. The Phase III portion of the pivotal study in patients aged 5 to 25 years old, has begun screening patients and will evaluate setrusumab versus placebo on annualized clinical fracture rates. We anticipate announcing that we've begun dosing very soon. We often tend to launch the Phase III Cosmic study in patients aged 2 to 5 years in the next few months. The Cosmic study is an active control study versus IV bisphosphonate therapy, which is the current unapproved standard of care in children with OI. This study will evaluate the impact of the therapy on reduction on overall fractures, including morphometric vertical fractures. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

[Operator Instructions] Our first question comes from the line of Dae Gon Ha of Stifel.

Congrats on the update. Maybe a 2-part question, Emil. If we look at the data that we have today, are you able to disclose what the breakdown is in terms of your patients enrolled across the types I, III and IV? And I understand Eric was mentioning no discussion on fracture rates per se, but what about baseline fracture rates? Were there quite a meaningful diversion between patients enrolled, and will their P1NP and BMD responses differ based on those baseline characteristics?

Yes. Thanks for the question. We're not differentiating the type I, IIIs and IVs. There really wasn't a distinct difference in how they responded. And therefore, we don't -- there's not much purpose to going through that. We had broad representation in the program. And so I think I wouldn't -- right now, we haven't been able to say. With regard to baseline fracture differentials, there are more differences based on the age of patients rather than the type necessarily, but there is some variation, but I don't think that, that is going to be an important issue. I do think that we are seeing a broad representation of OI. But remember, we have [ includes ] criteria to assume that the patients have at least a couple of fractures in the last couple of years, which is enriching for a population of people that have higher fracture rates. And that will help keep us looking at patients who are in the most addressable population. So right now, I'd say that all of the types are responding, and we haven't noticed that differential that would be important to address.

Our next question comes from the line of Chris Raymond of Piper Sandler.

Just maybe if you can, Emil, maybe just talk about the decision to go forward with the lower dose. Safety was consistent. I know these are very close numbers, but you had a higher -- numerically higher BMD increase in the 40 mg per kg dose. Can you maybe expand a little bit on that decision to go for with 20 mg per kg? And then also, you may have talked about this in the past. I apologize if you have, but maybe walk through the follow-up protocol for these 24 patients? Will there be a later cut before we get the Phase III data?

Yes. Well, our view is this is like the 80-20 rule. That 20 mg dose gave us 80% of the effect. And biologically, I think it's always safer to operate within getting the majority effect at the lower dose. We have to double the amount of product given to get a relatively small increase. We have a lot of long-term safety data at 20. We feel very good about it. I think in our view, it got you the majority of the effect. And what we've said originally is we weren't going to do 40 unless there was a real reason to, and I don't think there is a real reason to. That doesn't mean somewhere down the road. We might individually or another way to look at higher doses in some patients. But I think right now, 20 look like a really good dose. Now the other thing I'd point out to you, Chris, is the rate of that effect at 20 was impressive at 3 months. So the truth is the difference in 20 and 40 could be how long it takes to get somewhere if there was a difference. But if we're getting to where we're seeing years with a treatment effect in only 3 months at 20, it feels like that's a very substantial rate. And therefore, we feel that we're -- it's going to put us in a good position to get a great response. And we felt it was no reason to take on the risk and the additional cost of doing 40 when there wasn't much there to get from it. So follow-up protocol. Yes, those 24 patients are still open label. The placebo patients have crossed over on the drug. So you'll just have open-label data going forward. And our plan will be to put out data as time goes on, and we'll continue to watch these patients over time and collect more information on them.

And just to clarify, will there be -- you're measuring fractures right in these patients, along with the long-term follow-up.

Yes. They are also measuring fractures as well as the biomarkers over time, yes. So there is potentially some data from how those patients are doing for fractures. What I would caution, though, is it's only 24 patients. However, we would put more information on fractures with enough time. Right now, we're talking about just a few months of times, it's not very long. And we think it would not -- we need to have -- give them more time to monitor them. However, we're encouraged with what doctors are telling us about bone health, so we feel good about that. It's just we're not ready to disclose where we're at on fractures yet, but we will put more information out of fracture in those patients as well.

Our next question comes from the line of Laura Chico of Wedbush.

I guess I had one related to kind of bone strength and bone pain. So I'm not sure if that was collected thus far, but any anecdotal information, Emil, that you can share with respect to any benefits there? And can you remind us how both of those metrics might be assessed beyond just fracture rates in Cosmic in Phase III?

Well, in humans, you can't really measure bone strength directly. What it was -- how it was measured in astride was using the Micro CT and the wrist. So it's -- the bone strength is implied by sort of an engineering analysis of the trabecular of the bone and assessing what the failure load would be. But no one actually puts people in a medieval [indiscernible] to see if their bones are going to break. But that's what you'd have to do to really get bone strength. For bone pain, we are looking at the [ Clive live ] questions. We haven't put any information out on those endpoints. Normally, you'd want to do longer. But I also say you normally want controlled data in order to make conclusions. But I'll reiterate that doctors feel the patient is doing really well. And so the general feeling on their bone health and how their feeling is very positive, so we're encouraged by that. But when we get controlled data on the bone health, bone pain, we'll talk more about those quality-of-life measures to get further down.

And I guess maybe just one question, if I could sneak that in. Will the quality-of-life assessments, these the secondary endpoints, how important are they in an approval or registration package?

Yes. I think any kind of quality life or patient report information is helpful to the agency, but they're pretty much going to rely on fractures. However, I think it's important for how the drug does that as patients desire for the drug. If patients feel better, feel good as some appear to be, I do think that bodes well that patients do want to get treated. And in our Crysvita program for XLH, how patients feel was part of the story of why it's launched well and done -- did well. It's not just their bones, they effect on how they're their health does matter. So I look at those and telling you more about how the drugs help patients and why they're going to want to get treated. To get approve with the FDA, I think the fractures are sufficiently clinically meaningful alone to justify approval.

Our next question comes from the line of Jeff Hung of Morgan Stanley.

Did you collect CTX data? And was that consistent with what you saw in ASTEROID? And then I have a follow-up.

We did collect the CTX data. We haven't put it out. It's reduced some, but it's a more variable measure. I don't -- we didn't think it was that meaningful or interesting to talk about, but it's not a major action of the drug, but it is similar to what we've seen before in terms of reducing. It's the P1NP though just was kind of the core crack of what we're looking for and what's the one that really moved things. But yes, it's responding as we'd expect.

Okay. And then I guess given the large increases in BMD in younger patients in the first 3 months that were similar to what was seen in adults in ASTEROID at 1 year. I guess is there any reason to believe that the 40 mg per kg might translate to a greater benefit over the 20 mg per kg on BMD at like longer time points, like a year out?

It's certainly possible, but the difference right now it doesn't seem to be that great. And I think in our view, you're accumulating bone at a certain rate. And the question is you need a slightly higher rate versus a somewhat lower rate. At this point, we don't think it was worth doing. And honestly, giving that much more drug for a small benefit kind of means ultimately when you get out there, people could -- might have just cut the dose in half and get near the same effect. So it -- I think that it's not prudent to go big for a small effect. But I hear your point. I think that the effect we're having is so large and so profound that I think most of the doctors actually feel that that's a good enough of effect, let that continue and accumulate over time, and that should do plenty for what we need. So we feel good about where this is at. But we'll keep our eye on this continuously as we move forward. And as I said, there may be opportunities to individualize dose downstream, but we think for a basic dose, a common dose, nominal dose that the 20 dose is very much a great dose for getting the effect we're looking for.

Our next question comes from the line of Anupam Rama of JPMorgan.

Two quick ones for me. Did you disclose the Z-score mean change from baseline for the 40 mg per kg dose? Sorry, if I missed it. And then, to what extent do you think the heterogeneity of some of the bone kinetics in ped patients and the small numbers in this study might have contributed to maybe not seeing that greater delta between the doses?

Yes. So we didn't put out the 40. It was, it's very similar, basically not really different from the 20 number. The 40 -- we had only 7 patients at 40, but there wasn't a significant difference. So you can see from the percent BMD, those numbers are related to each other. So they're nearly the same. So we didn't see that. With regard to age, we look carefully at the question to age and cut the data. We actually require certain weights to be in the study and ages, so we could have a distributed look. And we look across it. Clearly, the younger patients make more bone, but it's the same for both doses. It's not like there is a strong differential. Although when you give, a younger kids may turn over and have lower exposure, they still had a tremendous effect from the drug. And so based on the PK and other factors, we felt like the sensitivity of the young patients, the drug was very substantial and gave us the effect you need. So at this point, we didn't see any delta you'd say, at different ages that would have told us maybe there was a benefit. That was actually one of the things we were looking for. So we didn't see it. So part of the reason around the dose.

Our next question comes from the line of Joon Lee of Truist Securities.

So did you mention Micro FDA, a measure of bone strength? And just going back to the Phase II ASTEROID study, what is your understanding of why there was a higher annualized fracture rate in the 8 milligrams per kilo versus 2 milligrams?

Yes. So in terms of Micro CT, we didn't do the Micro CT in this study. The ASTEROID did the risk, the radius Micro CT, that's how they did the failure load. We didn't do Micro CT, required specialized equipment, and we want to have a broader group of patients. So we did not repeat that. Versus the 8 and the 2, when you're talking about small numbers, it's hard to know. What we can say between the 2 dose, which has a very modest or minimal effect on P1NP compared to the 20 dose, where there's a bigger differential, if you compare those 2 groups, you clearly see the trend to reduce fractures of 20 versus 2. I think that's a better comparison. It's a little more like treated, untreated. The 8 group is a little different, and I don't know, there's no real explanation, but the numbers are small. They did not enroll patients who had high fractures in the study, so the total number of fractures we're dealing with, it's not very many. This study will have more fractures, because we're actually requiring patients who have higher fracture rate to be in this study and it tend to have higher fractures.

I have a follow-up quickly. Given the differences in pediatric patients versus adults and BMD gains, you think these pediatric osteogenesis and protect patients will continue to reap the benefits of setrusumab as they get older?

Well, I think the adult patients do get a benefit, they actually showed a very nice improvement in bone strength. So I think they will get benefit. What we're saying is the speed of the benefit may take -- may go slower as they get older, but I think our hope is if you want to look at the long future is to take a 1-year old with OI and treat them and help their bone mineral density be toward normal and keep their bone structure, not have their vertebrae collapse, so they are not in a wheelchair and devastated physically and that they can grow and they would probably be on the drug chronically based on the ASTEROID data that is when you pull the drug, they usually seem to have loss of bone mineral density soon after, even with bisphosphonate use. So we would expect them to at some point maybe to go on a maintenance dose and be maintained on that dose longer term. And so that's the way we would look at this. But I don't think that, that issue is a concern. I think it's the rate of speed really rather than degree of effect.

Our next question comes from the line of Yigal Nochomovitz of Citi.

This is Carly on for Yigal. We were hoping you could just put a bit more context around how you expect the degree of improvement you're seeing on BMD could translate to fracture risk reduction. And I guess, in designing the Phase III, can you comment at all on what you've assumed in terms of powering on fracture risk reduction for that part of the study?

Yes. Very good. Well, I would just point out to you that at the nonclinical stage, this level of improvement in bone mineral density as well as the effect on its bone strength results in near-normal bone strength, if not normal bone strength. So there's the potential to take us there. And so we expect that to give us fracture reduction. We -- there was a trend in ASTEROID, in this study, we're saying we're certainly encouraged by the bone health results so far. For powering, we assumed that there -- that we would have -- the minimum would have 2 fractures in, but the idea was that we would have a 50% reduction effect rate compared to a 20% placebo rate, and that was how we powered the study which provided for -- to have a full power study to be 195 patients. The length of time followed can anywhere be from 1 to 2 years. We will do an interim assessment after early part of the study to try to assess how far apart, how fast they separate. Given the amount of benefit, the 9.4% within 3 months, we think that, that should be substantial enough to reduce fracture rate right away, because the bone is being laid precisely where the bone is weak, and that should strengthen the bone very quickly. So we'd expect that the fracture reduction should separate even within a few months. I'd point out to you that in prior studies of anti-sclerostin in osteoporosis that the fracture separation occurred by 6 months in adults who have very slow response rate. So if you imagine that we got a separate -- that we have bone mineral density changes of this magnitude to 3 months, we'd expect the fracture rates to be separating soon. And that's our impression that our powering is certainly more than enough to achieve success in the program.

Our next question comes from the line of Maury Raycroft of Jefferies.

First was a quick one. Just wanted to clarify how many pediatric patients versus adults you had in the Phase II. And then the second part was just if you can talk more about the Phase III enrollment expectations based on your Phase II experience and when you could potentially have data from the Phase III.

Okay. I actually don't off the top of my head the peds versus adult number, I'm not sure if Eric has it. I'll answer your second question, Eric, and maybe look to [indiscernible] to remind me. There were just a few adults, but I can't remember the exact number. I know we had the spread across the ages. So our plan on Phase III enrollment, one of the advantages of the Phase II, Phase III design is that all the sites and contracts are all done. And so we have -- the majority of sites are up, particularly in the U.S., but -- and so that will help us enroll fast. And we're going to work very hard on doing very rapid enrollment. The data we're putting out today will help us, because I think it will give doctors more confidence in the power of the drug and the importance of the study and the health of their patients, and we think will be important in recruiting going forward. So our expectation is that enrollment would move along quickly. Our hope is to finish this year, but we have to -- it's still 195 patients that are in a lot of countries. Once enrolled, we are going to look at an interim and to try to determine how long we have to follow patients. And that will help determine whether the last patient needs to be followed for 12 months or longer in order to get enough separation. If the reduction effect size is greater than 50% and the separation between the groups happens very quickly as the data would suggest, it would imply to me that there's the possibility of separating at 12 months. But the key here is the design of the interim was made to ensure that we're completing a successful trial as long enough to demonstrate the profound difference between these 2 groups, but our hope would be to do that. But if you assume at least a minimum year enrollment taking through the end of the year, you can imagine it's not -- it would probably not be in 24 unless the study ended early because -- at the interim. So that's where we stand at the moment. In the meantime, we would -- as requested, we would be probably putting out information on the Phase II patients and how they're doing as well.

And to answer your question, in the 20-milligram per kilogram cohort, 5 out of 14 patients were under 18 years of age. And in the 40-milligram per kilogram cohort, 8 of 10 patients were under 18 years of age.

Our next question comes from the line of Gena Wang of Barclays.

This is Eve on behalf of Gena. So we have a couple of questions. First is, what is the threshold of P1NP change translate into clinical benefit? More specifically, is the data of 57% sufficient to translate into the clinical benefit? And the second is, will the BMD score continue to improve over a longer follow-up? And lastly, I know you already shared a lot of information on Phase III design. Just wonder if you can add some more color on it.

Yes. So the 57% is on par with what we've seen before in ASTEROID for the adults. The difference being that, that 57% is on a higher baseline level that you see in children. That's why the change in P1NP in children is eightfold greater than the change you've seen in older patients. So there's a substantially more bone being made in the kids that were being made in the adults. So we -- the 57% is very clinically meaningful. And I think its validation has really come from the BMD data. If you look at the BMD data, the increase was 9.4% of 20, which is as good as you see in most -- in other bone disorders and treatments, and certainly double what has been seen before in OI as seen in the ASTEROID and in this study. So I think the BMD change of 9.4% or 9% in the ASTEROID study are double what they've seen with any other agent. So I do think that demonstrates that this is a potent mechanism. Obviously, the clinical proof will come from the fractures, but our impression is that these -- this level of change, 57% and 9.4% BMD alone is enough. Will the BMD continue to grow? I would expect the BMD to continue to accumulate. I don't know if it will be linear, but I expect it to continue to increase over time. And it could be over -- in some patients over time, there may be a point at which you've had enough BMD increase to strengthen the bones that you don't necessarily need to continue, and you might want to go do a maintenance dose. But at this point, some of these patients are several Z-scores below normal. So they have a ways to go yet to reach normal bone density, but the step-up of 0.65 Z-score in 3 months, I think is unprecedented in terms of an effect size for bone disease. So right now, we think this is a really solid result for showing the benefit. Now for Phase III design, we provided some color a moment ago. The point is to enroll 195 patients, 2:1 randomized to drug to placebo. We want to make sure we're having a definitive study that will allow us to commercialize the product globally and help manage both, regulators as well as reimbursers. So that's the nature of the design of the study. We set a minimum threshold of 50% for powering all of our expectations, and hope is that the reduction in fracture will be much higher than that. We are assuming a 20% of the placebo just as a matter of being care. Now these patients were on bisphosphonates before within 3 months of this treatment. So many of them will have bisphosphonates in their bones, but both groups will be weaning essentially of bisphosphonates during the trial. For the first year, bisphosphonates will be maintained likely to some degree, but it might be weaning by the second year out. But we think that effect should be similar for both groups and would allow us to do maybe even more effective comparison of setrusumab versus placebo as time goes on. But that's where we're at on the Phase III, we feel pretty comfortable we have a more than adequate size study to achieve significance.

Our next question comes from the line of Salveen Richter of Goldman Sachs, questions.

Congrats on the data. This is Tommie on for Salveen. So most of our questions were already answered. But just with this data here, how are you thinking about long-term safety with the accumulation over time? And is there any -- given that improvements were very rapid, is there any concern of too much acceleration here when you go into very young patients in Cosmic?

Yes. So I think it's a fair question. I think with regard to long-term safety, the data from 20 for a year in does looked very good. And I think that we have -- no one is treated longer than that, but we feel like the amount of effect we're seeing now, I think, is very important. But given the very low bone mineral density and bone mass in some of these kids, they think there's a fair distance before they would go and where bone accumulation would be an issue. What we have said is after the pivotal study, after maybe a couple of years of treatment, depending on the individual, it might be advantageous to move to a maintenance dosing where you don't really try to drive a higher bone mineral density but try to maintain. In the ASTEROID study, when they stopped dosing, they actually lost on bone mass despite bisphosphonates in some bones. And so it's pretty clear that a maintenance dosing might be needed at times, and we'll be looking at that as we go forward in these patients. And that might be essentially accumulating until you reach a bone strength or your bones are no longer fracturing. And then you want to maintain them at that bone mineral density, which we think will require chronic treatment. I don't think we're anywhere near the point of getting too much, but we, of course, are monitoring safety. One of the questions of going between 20 and 40 is, does doubling the dose give you an unknown safety effect? We think there's a lot more longer-term data, safe data at 20. Therefore, we think it's also a safer path to take and not take on the risk of -- an unknown risk of a much higher dose. So those are some of the decision-making we've made around picking 20 as the long-term treatment. But we'll keep our eye on the issue of how much BMD is being created, where patients are and come up with a maintenance regimen that might be individualized based on where each patient goes with regard to their bone density and fractures.

Our next question comes from the line of Yaron Werber of TD Cowen.

This is Brendan on for Yaron. Just a quick one from us. I know a lot has already been answered here. You have the slide and updated that kind of separating by age 5 to 12, 12 to 18 and 18 plus. We're actually just wondering if you're planning to stratify patients more or less in a balanced proportion across each of these for the Phase III, or if you're hoping to maybe skew a little bit younger based on the data you're seeing here? I guess the real question there is, do you need a certain number of per age group here to ensure a broad label? And then kind of similarly, based on the fatality of everything you're seeing, do you have a sense of how much better or even faster, you might expect efficacy in Cosmic to be in those younger patients?

Yes. So our goal in this study is to really -- our biggest [indiscernible] is enrolling the pediatric patients. We're including some adults in it, because we didn't want to run another separate-adult Phase III. It wasn't worth it to run another study just for adults. So we're including adults that have a high fracture rate. We're just trying to stratify and make sure we have distribution that someone doesn't enroll these adult patients only. It doesn't enroll in the younger ones. So the stratification will -- and our advice and size is to please they need to enroll the pediatric patients. The primary reason is the pediatrics patients have a lot more fractures and their bones are more responsive. The combination of those two things will give us a lot of power. So our preference would be to enroll in the younger, but we do want to stratify by age as well as fracture number. The fraction number should help us there. And the -- if we're doing the study, and we're talking about -- so for the labeling, I'm not concerned. We'll have enough patients at all the age groups. We are doing the other study though to enhance labeling down to age 2. And so 2 to 5 is in the Cosmic study. In that group, doctors were very reluctant, especially since they have a very high fracture rate to put little kids like that on placebo, because they can't complain of where their fractures are exactly or not very readily. It requires a different design. And so in this case, we couldn't put them on placebo. That's why it's randomized controlled against bisphosphonate. While bisphosphonate has a modest effect like about 20%, we expect the effect size for -- to them to be much higher. And because they have so many fractures, we should be able to differentiate those fracture reductions between bisphosphonates and setrusumab more readily in that population. I expect those patients to respond very quickly just as we've seen here, which means the separation and fracture rate should happen very rapidly. And so our hope would be the study could go along faster. It's a bit smaller study. You have a high fracture rate. And so if they enroll more quickly and ultimately respond more quickly, it's possible that trial could finish earlier than the other study. It would give us more data though in covering the age range as well as of ending the question about whether this is better than bisphosphonates. That would at least lay it out clearly for people this drug head-to-head is better than bisphosphonates, which would help us in Europe.

All right. Great. Maybe just one follow-up on that last point. Are you planning to kind of combine the 2 studies worth of data into one regulatory submission at the same time then, irrespective of when they go out?

Yes. We would always put both studies into one regulatory submission and the goal is having both done near the same time or at least one as early as possible. But yes, our plan will be to put both together in one package globally.

Our next question comes from the line of Joel Beatty of Baird.

What led to the decision to invest the Phase III at this time rather than waiting presumably just a little bit longer to see if a clear signal develops on the fracture rate in the 24 Phase II patients?

Well, first of all, I think with only 24 patients in Phase II, it would be very hard to wait on fractures. We wouldn't have the control group, and we don't think it's necessary, in our mind, but in everything we know, the bone mineral density data will predict fractures. Because of this disease mechanism and the treatment mechanism of anabolism, we're making more bone. So we don't need that confirmation. I think we've had adequate confirmation of that. Secondly, we really need enough time to be able to see the fractures and to have enough fractures to look at. So I don't think you can make a more clear decision by following 24 or longer. And our view was we had confidence in the potential here to move right to a controlled study setting where we would get credit instead of losing time, looking at a smaller subset and trying to figure things out. So I feel -- we feel very confident that this level of bone mineral density improvement should rapidly result in bone strength improvement and fracture differential. So I don't think there's a reason to wait longer at this time.

Our next question comes from of Joseph Schwartz of SVB Securities.

Congrats on the progress. The increases in P1NP and lumbar spine BMD, which we're seeing here are quite impressive. But given the statistics and the primary end point of specular volumetric BMD in the Phase II ASTEROID study were hampered by substantial variability across patients. I was wondering if you could talk about the consistency of effect that you're seeing on these biomarkers now? And then my second question is, is there any way to bring that subcu format of setrusumab to market? Or is an IV formulation simply required due to the volume and characteristics of the antibody?

Yes. I think with regard to the -- we're mentioning the lumbar vertebrae, which has more trabecular bone just because it's easier to measure bone accumulation, but the bone effect is the percent bone mineral density improvement, you see varies based on the type of bone, but that doesn't mean there's less bone strength change just because of the nature of the bone. So we're looking at lumbar just because it's easier to measure and more accurately. I think if you can look at Slide 20 in the deck, you can see the error bar is there for the 20 mg dose on bone mineral density. So you can see that it's a fairly narrow range. There are some variation going on there for sure, but we see a pretty reasonable standard effect. And I would think you could -- if you look at the standard deviation, you can kind of see that it's pretty consistent. And we would always expect some variation. There are 3 genetic types in a wide range of ages going on. So I would say, to get that error bar means that even with all that variation, we're seeing a good effect across these patients. So we feel comfortable that it's consistent enough to be confident going forward. With regard to a subcutaneous formulation, the 20 mg per kilo dose is a significant amount of protein. It may be hard to get it into a volume that you can do subcu. There are certainly methods for trying to do that, which we could consider. I think what would be -- if you're thinking about this from a standpoint of convenience, what I would suggest is that if we get through 1 to 2 years of bone mineral density improvement loading, that we may consider going to, for example, in every other month, IV infusion, which might be in the maintenance dosing based on the ASTEROID study every other or every 3 months, which will reduce the burden. The third thing I'd say is that we are expert at managing home care patients. So for many of our programs, we do home injection, home infusion. So -- and this drug has had very safe profile. So I would also say it could be set up to do home infusions for patients, which would take away the -- a little of the burden of going to the doctor and getting an infusion. And so we would have a number of ways to help maintain the steady-state maintenance of these patients in a manner that would be acceptable.

Our next question comes from the line of Liisa Bayko of Evercore.

Just a couple of questions for me. Congratulations on the data. First of all, Emil, can you, the idea of maintenance dosing, would you need to evaluate that as part of Phase III, and how would you do that? Is it something you need to kind of like figure out now? Or that would be kind of post marketing? Or how do you think about incorporating that into your design?

Well, I would look at means dosing as an extension -- open-label extension activity. I think you can readily do that, because first of all, we'll have shown that BMD predicts fracture outcome at that time, right? We'll be able to show the relationship, which I believe will be true in this disease state because of the mechanism of the drug. In that setting, we can then look at managing BMD on an individual on a maintenance basis and demonstrate that we're maintaining the BMD in patient who has improved fracture response that we can maintain that BMD through a maintenance regimen. So that would be something we do in the OLE, collect some data and propose. We still don't know enough about this drug. We didn't think any reason to build it into Phase III and make Phase III complicated. So let's get to Phase III, get the results. And we're going to keep our eye on what's going on in individuals and come up with the strategy and managing in the OLE. The OLE area of label extensions are very valuable in rare disease programs. We always take advantage of them to learn and adapt, whether it's titration of dosing, maintenance regimens, crossovers or other things you can do that help get another bite of the apple of a patient enrolled in the study and learn from them and ultimately set us up. So I don't think it would be hard to put some of these patients in open-label extension. If we have enough data to support the maintenance dosing strategy, we'll include it. If not, we could become a post-marketing label change.

Okay. That makes sense. And then can you relate the bone mineral density you're seeing here in the spine to what you might expect for long bone? Like how do you make that translation because for fracture is what you're looking at, then it's long bone that matters, right?

Generally, yes. I mean you can have other types of bone that are trabecular that also have fractures. Like if you had a vertebral fracture that hurt, that still counts as the fracture in the clinical fracture assessment. It's just what we can't do is morphometric fractures that are not clinically apparent, right? They have to be a clinically apparent fracture to be called clinical and then verify them. So on the long bones, the thing about the percent, if you look at the ASTEROID data, you would see like in the long shaft bone, the percent BMD increase looks less. But remember, it's bone being added to the outer surface of a tube. So you don't see a big BMD difference, but the -- even a fraction of a millimeter addition to the two has a great improvement on bone strength. So all I would say to you is you cannot look at the percent change on each bone type and make a conclusion that one is much stronger than other. I'd just be clear. So when we looked at the ASTEROID data, the long bone changes are very meaningful changes even though they're smaller, they're really the same. They're just detected differently by the way you do the method. Does that make sense to you? So I look at all that data showing a consistent effect on bone strengthening across all the bone types. And we think the trend that was being seen as the 20 mg dose was consistent with that back. But I would not expect a difference in the percent BMD change to translate in a difference in fracture risk. It's just a difference in the -- essentially the physical nature of the bone and how it gets measured.

Our next question comes from the line of Debjit Chattopadhyay of Guggenheim.

This is Robert on for Debjit. What was the percentage of patients who had over 10 micrograms per liter of P1NP?

Let's see the percentage. I don't have that number for you. The levels, I think, were very substantially higher than the levels that were disclosed under ASTEROID, I can say that to you. In the ASTEROID study, the levels of P1NP, it based on reality seen they had a 60-some percent increase, they're off a really long base. This base is higher than the induced level seen in adults, all right? That's the base. And so the levels are, as I said, were -- the [indiscernible] of the curve for the change was eightfold greater. So I don't have a number on percentage of patients, but I could tell you there's a lot more P1NP being made than you were seeing in the adult data.

And one follow-up from us. Is there a threshold for increase in lumbar spine BMD that correlates with decreased fracture rates?

I'm not familiar with any particular threshold. What I can say is if you look at all the clinical studies done with various agents that the 8% to 10% range has been associated with an improvement in fracture rates that exists. So just that much is enough to show a difference in fracture rate, if you look at all the other mechanisms of drug and outcome. So I think that the level we're achieving is already at the level required to show an improvement in fractures.

Our next question comes from the line of Kristen Kluska of Cantor Fitzgerald.

There was a comment in the press release striking observations on DXA scan. I know today was focused on the lumbar spine data, but curious if the physicians are looking beyond lumbar at this stage and continued follow-up as part of these comments in the PR?

Yes, we've spent lumbar because it's just the easiest one to measure accurately because of the amount of tubercular bone there. But the comment from the investigator was looking at the data he sees in his comment saying that the effects on DXA scans across the patient is striking in terms of what he's seen. And he's comparing to what he saw with bisphosphonates. So I think he was just capturing his views on who's having a bigger effect he's ever seen with bisphosphonates and is encouraged by them.

Any follow-up, Kristen, or is that it?

No, thank you.

Thank you. I would now like to turn the conference back to Joshua Higa for closing remarks. Sir?

Thank you. This concludes today's call. If there are additional questions, please contact us by phone or at [email protected]. Thank you for joining us.

Thank you for participating. You may now disconnect.