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

Great. Good afternoon, everybody. Thanks for joining us at the Bank of America Healthcare Conference. My name is Tazeen Ahmad. I'm one of the senior biotech analysts here at the bank. It's my pleasure to have our next presenting company, Ultragenyx, with us. Presenting this afternoon for Ultragenyx is Eric Crombez who is Chief Medical Officer. Eric, good afternoon. Thanks for joining us here in Vegas.

Yes. Thank you.

So maybe we can start off with a quick overview of Ultragenyx. Maybe tell us about the platform of the company and some of the important catalysts that are upcoming, and then we can go into more detail.

Yes, certainly founded as a rare disease company, and that is core to our mission, and I don't see us straying from that anytime soon or ever. But with the growth of the business, the growth of the pipeline over the many years, we've really kind of divided in 2 therapeutic areas. The company was founded with Mepsevii, which is a lysosomal storage disorder and an ERT there, and that really started the therapeutic area for inborn areas of metabolism, brought forward DOJOLVI there, which has been an important treatment for fatty acid oxidation defects and then really filled out that pipeline with the acquisition of Dimension Therapeutics, which brought me and our gene therapy pipeline into Ultragenyx 7 years ago. And that's one of our next key catalysts with GSD1a with Phase III data readout this quarter. So that's exciting and a long time coming. Next therapeutic area was bone, certainly, with Crysvita and the really great successful launch there which continues to gain momentum in finding patients, also approved for TIO. Next, following there from the clinical pipeline perspective is setrusumab for Osteogenesis Imperfecta. We recently announced that we finished enrollment in the 2 Phase III studies there. So that's an important data readout that could start as early as the end of year, beginning of next year and then rounding out with our neurotherapeutic area. Certainly, a really important program with Angelman there, but with bringing in the program for Abeona, the gene therapy for Sanfilippo that's also in late stage, moving towards approval. And then really looking forward to our next IND, probably likely being in CDD, which will be another central nervous system indication for gene therapy.

Okay. So maybe we can start in some detail with these programs that you've mentioned. I thought maybe we would start with OI today. Can you just remind us what the disease is and the standard of care right now and what you think -- or what Ultragenyx thinks this area of undermet need in that population might be?

Yes. Osteogenesis, so I think historically referred to as brittle bone disease, which is helpful from a descriptive basis because that's exactly what it is. These children have a mutated gene leading to defective collagen, which prevents the laying down of really strong dense bones. So these children really fracture very easily. We're looking at types 1, 3 and 4. Because Type 2 is so severe that it really is fatal prior to birth or right after birth. Some of these children, type 3s and 4s will have fractures that are recorded as happening during sleep, meaning that just the tension of rolling over in bed or shifting is enough force to break bones in those children. So certainly a tremendous amount of unmet medical need. Some people in some region are using bisphosphonates. There has been a number of clinical trials using bisphosphonates in Osteogenesis Imperfecta, most of them had negative results. So certainly, some improvement there, but tremendous unmet medical need left there.

So when you think about bisphosphonates and the patients that are on it, is there a subset that you think are particularly amenable to your treatment?

Yes. I mean I think I guess if left with the choice between bisphosphonates or nothing, I think a lot of people are going to give bisphosphonates a shot. And really how people talk about it and I think helps really understand what bisphosphonates can potentially do, it talks about locking in -- bone locking in your calcium there, really trying to help prevent the turning over of bone that we see just with normal growth and normal day-to-day turnover. But we're seeing a lot of those patients coming into our trial who are continuing to fracture on at least on an annualized basis. And certainly, if you're having them -- those types of fracture rates, I think, speaks to the unmet medical need. And with the data we put out last October, bringing that annualized fracture rate down to 0 overall, that's a really significant improvement in fracture rate and very much supported by bone mineral density by DEXA there. So really seeing the increase in density of bone leading to reduction in fractures. So I think very much supports the data we're seeing there.

Yes. On that data point that you presented earlier, it was 6 months' worth of data. And so I'm curious as to whether you think that's a good enough time period to be observing the effects of the drug on patients and what that durability could look like longer term?

Yes. I mean I think in some sense, I would say that it was really impressive results in that short period of time because what we're doing is trying to take out sclerostin, and sclerostin's job is to really maintain that balance between osteoblast at build bone and osteoclast at [ resorb ] bone. And by taking sclerostin with this fully human antibody, we are able to really allow more osteoblast to form and lay now new stronger bones. So to be able to see that kind of reduction in fracture rate in a 6-month period of time is impressive. That's the point in time we were at. That gave us the ability to make the decision on dose, really confirm endpoints and give us a go signal to the Phase III part of Orbit. So in that sense, yes, you could argue it's early, but it was really compelling data and enough data for us to move to Phase III.

Right. So before year-end, you are expecting to provide another update on OI. Can you just remind us what that is?

Yes. So we're looking at -- in Orbit is interesting because it was a Phase II/III study. And the benefit there was that allowed us to make the decision on dose and move seamlessly in the Phase III without stopping for end of Phase II and taking the time necessary to do that. So we have those original 24 patients that made up that data set. We released that data last October. Just by time on calendar, we're now looking at 6 months more a follow-up in all of those patients, giving you roughly a year in total, and that will be the data update coming later this year.

Okay. If you think about the importance of this update relative to what you already showed us, where would you put that?

Well, I think that's exactly -- so I think talking about time. I think it's really compelling data at 6 months, but you do want to see continued increases in bone mineral density. Certainly, we really want to get these patients towards normal bone mineral density. And we want to see that fracture rate, yes, coming down overall close to 0 as possible. But on an individual basis, we want to see all these patients really coming down to a very low annualized fracture rate.

And whatever results you see later this year, would you still have flexibility, if needed, to make changes to what you're doing in Phase III?

I mean I think the easy answer would be yes, but that's an open-label study. So I do have a pretty good line of sight into what's going on in that trial, everything -- it's consistent. I'm not seeing anything that would change my mind on what's going on with those Phase III trials. But again, with this type of disease that's driven by fractures, we're seeing that fracture rate come down. You're seeing the correlating bone mineral density. We have some biomarkers that also support this. It's a very tight clear story with a very clear mechanism of action with this antibody.

Is there a mild, medium and severe case of OI in terms of how patients are seen by doctors?

Yes. So definitely, Type 1 patients are your least severe. You will at the least severe end of the clinical spectrum we have patients who are probably rarely fracturing. But that still is really with a very modified, protected lifestyle. So these patients really limit what they do to prevent the type of trauma that could end up in our fracture. So I do think there's room for improvement there. But a typical Type 1 patient who's coming into our trial is still fracturing on at least an annualized basis. But moving to 3s and 4s, those are the children who are in wheelchairs, need walk devices. And that's one of those patients we talked about last October who was able to go from wheelchair to assisted walking device to playing on the playground to the point where his parents are like, you can't pick them out of a crowd now. So your 3s and 4s are definitely the more severe end of that spectrum.

But you are trying to enroll everybody into the study?

Types 1, 3s and 4s. We're not enrolling Type 2s because it's so severe and fatal prior to birth or right around birth. They're just very severe.

Okay. And then just remind us how many diagnosed patients there are in the U.S.?

So in the -- so we really talk about 60,000 patients in the territories that we will commercialize. And I think we always say 20%, 25% in the U.S. I had to phone a friend.

Thanks, Josh. And then if we had to ask you how many of those patients you can find immediately? Is there a way for you to find those patients easily?

Yes. No, I mean, absolutely because this isn't the type of rare disease where patients go on a really long diagnostic odyssey that's hard to diagnose because these kids are really fracturing at a rapid rate. You're having these x-rays to support it. It's a very clear phenotype. So it's not hard. It's not difficult to work through that differential diagnosis, and I would think most pediatricians do understand and understand this disease.

So then if we look forward to next milestones beyond the update that you've talked about for later this year, when do you think those are going to be?

Yes. So we originally, at the time -- because again, Orbit is a Phase II/III study. So we really were locking in and agreeing to that Phase III part of that study before we had started Phase II. And we had to design that study on the data we had available to us at that time, and that was the original study done by Mereo in adults and then really what we could collect through natural history and talking to people in the field. And then once we were able to collect that data in our Phase III part of that trial, we realized that these younger patients, the patients we were enrolling were fracturing at a much higher rate than adults. And then also with working with physicians and the patient community, really appreciating the underreporting of fractures. These parents will say, we fracture so often. We have all the splints, braces, casts, crutches to do what we need to do to manage fractures at home. So they know what type of trauma results in a fracture and they're treating a lot of these at home and not spending all the time in ERs waiting for x-rays and stuff. So with the higher fracture in children and then taking into account the underreporting of fractures happening clinically, we were able to take a fresh look at the Phase III part of that design, and that's really allowed us to look at that power calculation, realize we had really overpowered that trial, allowed us to come down in the number of patients we needed to enroll in Phase III and allowed us to introduce those 2 interim analysis we've been talking about with the first one with the potential to read out end of the year, beginning of next year. And then we did put in a second interim analysis a few months after that as well.

So to clarify, when you do take your first interim look at the data, will you only tell us if you're going to stop the study for overwhelming efficacy, meaning if early next year goes by, we don't hear anything, we're going to make the assumption that you're going to go for the full readout later?

Yes. So it's not a date on the calendar that will trigger the interim analysis. I mean, if you think about it, we need the group of patients that are randomized setrusumab to differentiate from those randomized to placebo. And it really is that fracture rate and the placebo arm and accumulating enough fractures to have success with the primary endpoint. So we do have an unblinded team that is walled off from the organization in really decision-making led by experts in OI. So they'll be looking at that data, and they only trigger communication to us as an organization if we achieve that primary endpoint. So we -- so we will know when there is success, and that's when, I guess, everyone else will find out as well soon thereafter.

Okay. So I think Emil has alluded to just make the assumption that we're going to go to the end of the study. What would good data at that time look like to you?

Yes. So we originally designed the study to go through 18 months of follow-up for all patients. So it would be the last patient up through 18 months. And again, I think we're really looking to see consistent results with what we saw at 6 months and that data firming up and holding true because with an overall -- the primary endpoint is annualized fracture rate AFR and with that coming down to 0, you can't do better than 0. So looking -- really looking to see that consistent reduction in fracture is then again supported by that really significant improvement in bone mineral density.

And so assuming that, that's positive, if you would file for approval, what type of infrastructure which you need to have that you don't currently have in order to market the drug because you do have Crysvita, which I think you market to the same physicians?

Exactly. And I think there's a real important synergy there, and that's why having these therapeutic areas and really focusing on bone within this group and having that experience with Crysvita and such good relationships with the community. And pretty much universally, all of the physicians who are using Crysvita also see patients with OI. And a lot of -- I mean all of them really, I think, universally are excited about setrusumab because they always say they have a lot more OI patients in clinic than they do have patients with XLH. So I think -- so a really great infrastructure already in place and ready to go.

Okay. And I guess one last question before I move on to the rest of the pipeline. What do you think is the part of setrusumab that makes doctors most excited?

I think this is one of those diseases. And I think with all of the great work we've collectively done with rare disease, you don't have a lot of these types of diseases that really have true high unmet medical need. Yes, there's bisphosphonates and, yes, they help to some degree. But these kids and adults are still fracturing and they're really trying to eliminate the amount of trauma that they're exposed to. So they're really not leading full active lives. They're really just leading this protective life that truly ends up into a very sedentary nonactive life. So I think if you can prevent these children and adults from fracturing and they can forget about this disease and go live their life, that's success.

So maybe let's talk about Wilson disease. You do -- we are expecting to see an update. I think it's scheduled for the middle of this year.

So second half of the year.

Second half of the year. What data should we be expecting to see?