Ultragenyx Pharmaceutical Inc. ($RARE)

Good morning, everyone. I'm Joe Schwartz from the biopharma equity research team at Leerink Partners. It's my pleasure to host our chat with Ultragenyx. We have Eric Crombez , CMO of the company with us today. Thanks so much for joining us.

Great, and thanks for having me.

So maybe you can start us off with a brief overview of the company's recent events and your priorities for this year.

Sure thing. I'll start with our commercial success we've had led by Crysvita. So certainly, a lot of continued growth there. Great to see double-digit growth year-over-year, along with Crysvita seeing really great growth with Dojolvi and Evkeeza specifically and also having Mepsevii there in the background. So great background of commercial revenue there supporting everything we're doing on the pipeline. And then turning to the pipeline, obviously, a big focus on Angelman with the data readout in the second half of this year, but also really nice to see progress with our gene therapy pipeline. We've been working on this for quite a long time. And with our PDUFA date now in hand for GSDIa, getting Sanfilippo closely done behind that, and then obviously, not forgetting about OTC and Wilson there, a lot of depth in that clinical pipeline. And then again, with that maturity and getting these things across the finish line, launching into the commercial space, looking forward to the potential of bringing new things into the pipeline.

Great. Okay. Well, let's dive in. And I guess we'll start with Angelman. In the Phase III study, we noticed that the primary endpoint will be measured without caregiver input, which seems a bit different from the Phase I/II. Could you contextualize how caregiver input can influence Phase I/II study data? Is there any way that this might have inflated any of the responses that we're seeing? Or how do you think this nuance when going from Phase I/II to Phase III could influence results?

Yes. The change was really driven by the concern around placebo effect. So with Phase I/II, obviously, it's open label, everyone's on drug. They know they're being treated. Using caregiver input is how the Bayley design is, how it's standardly administered in all children. But going into a blinded study, obviously, the parents don't know if their children are being randomized to active treatment or sham control. Certainly, everyone wants their child randomized to active treatment. They want their children to be doing better and in a blinded setting, you really do have to think about placebo control. And the best way to control for that and it really does for me, control that is taking out that caregiver input. So that means when you're administering the Bayley in clinic with the standard Bayley with neurotropical children, if they will not do something in front of the assessor and the parent says, they reliably, consistently do this at home you can give them credit for this. Taking caregiver input out of it means they need to perform these test in front of the assessment in order to get credit for that. So really just trying to control that placebo effect to the best of our ability.

Okay. Interesting. And then in the Phase I/II, we saw an improvement in the Bayley cognition score of more than 10. Is this what you're hoping to see in the pivotal? I think the minimally clinical different value is around 5. So can you give us your thoughts on like how you're thinking about the magnitude of potential benefit that you need?

Yes. And I think, first, thinking about this statistically and what we need to hit statistical significance, I think it is best to go back to the slide. We presented at the FAST meeting a couple of meetings ago. Where we show change in cognition by Bayley-4, both by GSV and raw scores. We thought it was important to do this because GSV is the standard scoring for Bayley. That's what people are used to seeing and that allows for development to continue over time in an individual child and just really tracking that over time. The FDA, they don't like any type of modeling, any type of adjustments to score. So they always prefer raw scores. And that's the conversation we had really all along heading into Phase III. So it wasn't a surprise to us. We understood that, but we wanted to show that data side by side to show that whether you're doing it by GSV or by raw scores, the results are similar. They are comparable. We still achieve greater than 90% power. And then shifting to raw scores because that's what our primary endpoint is based on for Phase III we did see in treated patients a 10.9 difference change from baseline in those treated patients. And then when we're thinking about performance of our placebo group, we obviously go back to natural history. Naturally, history tells us that developmentally, it's a very flat curve. It's not 0, but it's very flat. So when we looked at the change in raw score from natural history, we actually gave that room to increase threefold when we were looking at how this could perform in a clinical trial, not because I expect it to be any different, but you have to allow for unexpected things to happen. So when we were powering our studies and originally coming up with 120 patients for the Aspire study, we were looking at that delta of 10.9 in actively controlled patients versus that 1.2 that 3x natural history in the placebo group. That's what drove that. Then shifting to clinical significance, and I think the best thing to look at is how we build cognition into the MDRI, the Multi-Domain Responder Index. And it really is the same as clinical significance, but the FDA has shifted in the field is kind of shifting to MSD's Meaningful Score Difference. It is the same thing as clinical significance. You have to set and agree to that, Meaningful Score Difference. So for cognition by Bayley-4 to say you have achieved clinical significance in the MDRI. It is a change of plus 5 that you mentioned earlier.

Okay. Super helpful. Thank you. So based on natural history data, it seems as though the standard deviation is greater for the raw scores versus the GSVs, so have you taken all of that into account in the power of the study?

Yes. No, I mean, absolutely. Again, there's kind of like what you expect if everything behaves in an ideal way, but then you have to give yourself a plus minus accepting that things don't always go in an ideal way and you just have to give yourself room there. So that's -- when we talk about -- and it was actually a question from one of the agencies in Europe is why are you overpowering the study? And our answer was it's neurology and if you ever want to overpower something you want to do it in neurology. So originally designed to enroll 120 patients. We over-enrolled 229 because there was such demand and we had a lot of patients in screening and for me, once they've committed to the study, they've signed consent, we want to get them through dosing. So that even helps from a powering perspective.

Very interesting. And I think MDRI could be considered more impactful as an endpoint because it captures more about the child's development. Has the FDA actually agreed that a win on the MDRI could support approval of Bayley-4 primary cognition is not met?

Yes. So it was great to see the progress with the FDA, with MDRI. We came to end of Phase II expecting to have another good conversation negotiation around that. And to be honest, they came to the table really kind of bought into the MDRI, what we were doing using at a second primary endpoint applying alpha to it. So you're right, it is a powerful tool because you're looking at scoring across all of the key domains, how you're really looking at thinking about development and allowing for variability in these children because again, it is neurology. And the FDA said, it is a straightforward tool. We're not doing sophisticated statistics where you can manipulate anything. It's a straightforward scoring system that you can always take a part put back together again, and they verbalized that back to us. We received a breakthrough designation. We had a breakthrough meeting. They confirmed because we wanted to clarify again that they understood, we're bringing forward the MDRI, we're bringing forward as a primary endpoint. We are applying alpha for this and making it a secondary endpoint and they confirm that they're on board with that.

Okay. Great. And how much was the dose that you selected for the pivotal trial based on the relationship you've seen in terms of knockdown and protein restoration and how much was potentially limited by the lower extremity safety signal? I think previously the company was dosing much higher than you are in the pivotal. So I'm just trying to understand that dynamic.

Yes. And I think to me and that's a little bit standard drug development, very true in this case. You're using your animal model data, and we did have data in nonhuman primates, and that's obviously a good model to inform your dosing strategy for your Phase I/II. The original dosing was done by genetics when they were running this program. And I think really does stress that you do want to start low and build up with dosing with your dose finding because if you get ahead of yourself, it can really set you back there. So once we brought that program in-house and restarted dose finding at a lower level, we did that experiment, and we enrolled 74 patients in that Phase I/II to make sure we understood dosing and what was the right dose to bring into Phase III. So I would say that the animal model data really informed our Phase I/II design, and then it was the clinical data coming out of the Phase I/II that drove the selection for Phase III.

Okay. Helpful. And I think the company has stated several times that GTX-102 is the most potent ASO and development for Angelman. Can you help us understand how this claim is informed. Is it based on preclinical data for ATS knockdown, mRNA or protein increases or all of the above?

Yes. So Emil, our CEO and I are both, we're both genetics. So we're used to thinking about it at the molecular level, and we're also at our core clinical development people. So yes, we are informed by what's going on in the research space. And again, it is important to understand that and inform everything. But we're really driven by decision-making on the clinical data. And again, with 74 patients worth of dating in the Phase II, we have a lot of clinical data. So that claim is really based on what we're seeing from that Phase I/II data set and then the doses we're using and seeing a really good effect from across all domains there.

Okay. I think there was a recent peer-reviewed paper, which outlined that for Locked Nucleic Acid ASOs, there might be a translation gap where almost 90% knockdown of the transcript was required to achieve only 50% protein restoration. And since GTX-102 leverages LNA chemistry, I'm wondering if you can remind us what level of knockdown and protein restoration you're achieving? And do you have a reason to believe that specific aspects to GTX-102 design could allow it to avoid any such translation issue?

Yes. So with a lot of these recent conversations and understand we're in a competitive space. There has been a lot of talk and conversation around this. And obviously, there's a third party coming into the mix here. So I actually went back to Scott Dindot, he was the scientist who started all of this work. He's been leading this work and he continues on and had another conversation around this. And really understanding the work we've done in nonhuman primates understanding the relatively newer work that's been done in some mouse models. We're in agreement. He isn't an agreement that you probably do want to have greater than 80% knockdown of that antisense molecule in order to achieve at least 50% expression from the paternal alleles. So we do agree with that kind of threshold, if you will, in our data that we did in-house show that we can achieve that.

Okay. And then do you have an idea of what amount of protein restoration is required to drive a clinical benefit in Angelman, how do you think about that? .

Yes. So again, I'm a clinician, I'm happy to go back to the experts and get their sense on this because this is what they've done, and they're much closer to it and know a lot more than what's published beyond in literature. And in talking to Scott that his thinking, our best thinking it's probably around 35% expression from that paternal allele or the maternal allele depending on what you're doing to have a really good effect there.

Okay. And then how does Aurora fit into the picture for GTX-102? And how has that study been enrolling? Can you walk us through the filing plan here and what your expectations are around the label?

Yes. So Aurora is our second Phase III study. It's important because it does round out that label there. And yes, that's important. But to me, in all sincerity, I think what can be very hard in rare disease is when you're studying subsets, and then you potentially have a label that excludes a group of patients there. So our Aspire study, our main Phase III study is still looking at patients with full deletions. That is the great majority of patients. But again, there are patients out there with missense mutations, uniparental disomy and imprinting, and we don't want to leave them behind. Everyone understands they can really benefit from this drug as well. So Aurora is a true basket study. So we're looking at younger, older patients and patients with those different mutations there. It is open label. It is going well. And the strategy there is really to do a straightforward extrapolation to Aspire. So establish comparable safety, get efficacy data that we can then bridge back to Aspire and ultimately have a full label for this drug.

Okay. Great. Maybe we can switch gears to DTX401. We really like this program. We sometimes call it a sleeper to investors. It was great to see the BLA accepted last month. How is that review going?

Yes. No, it is great, and it's great. And Sanfilippo and GSDIa want to have kind of been jocking to be our first gene therapy approval. With now having our PDUFA date in August in hand for GSDIa. I think it's there. It's going well. So we cleared our 2-month validation period. We received our PDUFA date. We're in that review period, where we're receiving our IRs, or Information Requests. So we're at it, and I'm looking forward to August.

Okay. Fingers crossed. The agencies been a bit of a stickler when it comes to CMC, especially when it comes to gene therapy. Can you talk about how you feel about where you are in your manufacturing and ability to address questions during the review? Given I think it's going to be your first gene therapy product and your first one manufactured in-house?

Yes. And I think that definitely brings the Sanfilippo gene therapy into the conversation as well because we are doing manufacturing for both of those products at our facility outside of the Boston, Cambridge area, and that's our manufacturing facility that we built from the ground up. So with manufacturing with the challenges everyone has had for a very long time, we thought it was important to bring that in-house, take control over that. And that has been a success on all levels from manufacturing to cost of goods to everything there. And we really like having control there. And ultimately, we want to bring all gene therapy manufacturing into that plant. So that's been helpful, but then also with doing manufacturing for Sanfilippo and GSDIa, they at the same facility that initial CRL, complete response letter did have pullover into GSD1a because any findings that was specific to the facility, not to the product itself would have applied equally. So that's why we took extra time with GSDIa. We made sure we had everything right, finished and complete for that initial filing for GSDIa. We really didn't take any risk there. We didn't way to perform anything or finish anything and try to negotiate doing that during the review period. And again, it was great to get through that 2-month validation period and be underway now.

Very helpful. So when we throw around the world, curative, people often get hung up on the durability of a treatment. I think here with GSDIa, we saw the efficacy of cornstarch reduction actually get better over time. How are you thinking about DTX401 duration? And does that give you confidence in the FDA review?

It does. And I think what's nice is, and I started with our gene therapy programs as part of Dimension Therapeutics. So I've been with these gene therapy programs from the beginning and anything with DTX in front of it means that you started that at dimension. So we've been doing this for a long time, and we can always go back to these Phase I/II patients who have been in trial for a very long time and showing really strong durability. And I think that was the question with liver-directed gene therapy is how often do your hepatocytes turnover? What is it going to be? And I think everyone had their thoughts there. I think we're seeing strong durability. We're seeing that the turnover hepatocytes maybe is not as fast as we thought, and we really are holding on to those transgenes. So I think with the total package there, including those Phase I/II patients and the durability we're seeing there makes a very strong case to the FDA.

Okay. Well, let's talk about the primary endpoint a little bit. On the one hand, cornstarch reduction is a great endpoint since we can easily conceptualize how impactful changes in it are to patients. But on the other hand, some people just wonder are you just swapping one thing for another, and how meaningful is it? Can you talk about some of the other end points such as glycemic control or any others that come to mind that can help us envision what DTX401 could mean for patients and caregivers?

Yes. And we almost kind of shorthand the way we talk about GSD1a and reduction in cornstarch because it's always been this concept that it's been the reduction of cornstarch in the context of maintaining good glucose control. So that was always fundamental what we're doing here. And yes, early on, and we've had this conversation, and I think we've made a lot of progress with the agencies, also with payers and reimbursers about understanding that, and it's not just a food product or something like that. And bringing in the patient groups to speak to the FDA was very compelling. We also did that in Europe, and that really showed the importance of this. And prior to really understanding that you could use raw cornstarch to be solely digested in your GI tract to give you 2 to 4 hours of glucose control took this from a universally fatal disease, and that's how we really thought about GSD1a in children is they didn't make it out of the pediatric age group to something that could be managed with the use of cornstarch. But again, that's cornstarch every 2 to 4 hours, including overnight, and they still were not doing well. They still had problems with their livers, problem with their kidneys, high cholesterol, high triglycerides. They were still having a lot of metabolic problems there. So they weren't thriving. They weren't doing as well as they could do. And obviously, with gene therapy, you're getting to the heart of this disease, and you're letting them for the first time, break down glycogen in the liver to produce glucose during times of fasting. And we've seen that as part of interviews that our formal part of the studies. We've seen that anecdotally where people feel like they can go back to work, they can travel, they can go away from home. Because they had this dependent on cornstarch and this fear if they were separated from it, that this would be life-threatening for them. So Yes, it's easy to think in a simplistic way about cornstarch, but it really was lifesaving for them. And the hypoglycemic episodes, particularly in pediatric patients can remain life threatening.

I get it, interesting. So can you remind us what the standard immunosuppression regimen was in the studies and how you expect this to be implemented in the real world, if it's approved? And what liver signal did you see?

Yes. So again, we started our gene therapy pipeline really focused on liver-directed gene therapy, and that was really when we started with these inborn errors of metabolism programs really looking to what was done with in the hemophilia space for gene therapy, and that was the use of steroids. Using for adult 60 per kilogram and then doing weight-based loading for pediatric patients. So for us in our Phase III, it's an 8-week bolus and then titration of cornstarch. If you have a rebound in LFTs, if you have prolonged LFTs, those steroids would be continued until your LFTs were in the normal range. And I think with the patients, we've dosed across our pipeline and what we've seen broadly with liver directed gene therapy in the E13 range. We saw that typical rise in LFTs that were always clinically silent, resolved with use of steroids and resolved without sequelae. And I think we understand this gene therapy, even administration needs expertise. These patients are complicated. They do need to be followed by people who understand this disease. And that means they're by and large in tertiary medical center. So we've started identifying those centers where we're going to be launching and doing this, and it's something they can steroid to something they can very easily handle.

Okay. So how do you view the commercial opportunity then for DTX401. And are there obvious early adopters and later adopters? Or is there another better way of thinking about that?

Yes. And I'm probably not always the best person to ask about uptake and penetration because being a clinician and being a geneticist and treating a lot of these patients, if you really have to take cornstarch every 2 to 4 hours, and GSD1a is one of the diseases where you have a very consistent phenotype. You don't see this broad spectrum with these mild patients who are roughly fine. These are really people who need cornstarch every 2 to 4 hours. So to me, if that's your lifelong regimen and having to deal with everything else that comes with that, then you will benefit from this gene therapy. So we talk about roughly 6,000 patients in the territory we cover 20%, 25% in the U.S. And for me, I think they will be very high penetrants there.

Okay. Interesting. So switching gears again to UX 111. This program has had a bit of a rocky path, but it seems like things are getting back on track. Can you give us your current sentiment and how optimistic you are that you can get it over the goal line?

Yes. So received our Complete Response Letter, our CRL for Sanfilippo. That was obviously a surprise to us. work closely with the FDA to understand and the FDA was very open to speaking with us to make sure we were able to satisfy that response. Unfortunately, we did receive that Incomplete Response Letter or our IRL there. And what that means is during the 2-week review period, validation period, in contrast to your 2-month validation period for an initial submission, they came to the determination that we had not completely answered all of their questions in the CRL. What was required to satisfy the IRL was more of things like SOPs, paperwork, things we could just satisfy in writing. I didn't have to run additional assays, didn't have to do assay work. didn't have to do any new work there. So that means we can easily satisfy it. If we were clear, they wanted this as part of the CRL, we could have provided that. So that means it's a very quick response timeline. Again, luckily, it's a 2-week validation period, not a 2-month validation. So I'm expecting to get through this and receive a PDUFA date and really have those approvals for GSDIa and in Sanfilippo very close to each other in the second half of this year.

And can you help us understand how well suited heparan sulfate as a biomarker that's reasonably likely to predict clinical benefit in MPS? Are there different ways in measuring it that are important or other nuances? Any reason to question, HS is an [ RLSE ]?

So I don't think there's any reason to question heparan sulfate here. And I think the academic community, treating community us and the industry. We all understand we'd like this and find the correlation to be very strong there. Obviously, we brought that along as originally as a basis for approval, I think what it comes down to is really what is your view on accelerated approval in the use of biomarkers generally not specific to heparan sulfate. So we think heparan sulfate is a great biomarker here. We think it could have been used for the basis of approval. Unfortunately, but a little bit fortunately, with the duration of time we've had working through this filing, we are coming up to achieving the original FDA request to have all patients reach their fifth birthday. And that was going to be their clinical outcome there. And that's with the idea that by natural history, these children by 5 years of age, are very neurodevelopmentally damage. And if these children are still doing well, you've shown that your drug is effective. Where we stand today and with our resubmission, the majority of patients in this trial have reached their fifth birthday. So we are really shifting away. And the FDA said this during our last review period that with the strength of our clinical data, we're really moving away from a biomarker accelerated approval to really looking at this as a clinical approval.

Okay. Great. So shifting to Wilson disease. We've seen a few interesting cuts of data from this program of yours? Now for the upcoming data with the new immunosuppressant regimen, what should we be looking for?

Yes. So we're taking the time to make sure we get Wilson right, and we really want to see the efficacy there to really differentiate to chelators. I think when you have a fairly effective treatment there that people will argue patients are somewhat happy with that you're really showing positive differentiation. You're doing something beyond that. And that's different than something with GSD1A. I guess there's cornstarch, but the highest unmet medical need emphasized with Sanfilippo there. So we've set a very clear bar for success. We want to see the majority of patients off a chelators doing well there. And then with going up in dose and using stronger immunomodulation, I think that's at least additive, if not synergistic there, with making sure in this additional cohort and then looking at the data in totality that we have the right dose to bring in to Phase III to have a successful commercialized product.

Okay. And what have you seen so far? And what do you hope -- or how do you hope that the next look compares?

Yes. So with our last data readout, we were very close to that bar of 50% of patients coming off of chelators. So we want to obviously see if we can do better than that. What's nice about Wilson in being a copper transporting disorder is you can look at copper in a lot of different ways. So you really can be confident in what you're seeing. And if you're really establishing the normal trafficking of copper, yes, we are measuring clinical endpoints. We're looking at neurologic outcomes, and that's important. But having those types of biomarkers separate as a basis of approval really helps with decision-making in Phase I/II.

Awesome. Thanks for all the insights, Eric. Really appreciate it.

Thank you.