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

Good afternoon, and welcome to the Ultragenyx Pharmaceutical Conference Call to discuss the U.S. Food and Drug Administration approval of GENGLYCOS known as DTX401 for the treatment of glycogen storage disease type 1a or GSD1a. [Operator Instructions] And it is now my pleasure to turn the call over to Joshua Higa, Chief of Staff and Vice President of Investor Relations. Thank you, Joshua. Please go ahead.

Thank you, and good afternoon, everyone. We appreciate you all for making time to join us on such short notice to discuss this important day for Ultragenyx. The press release we issued announcing the approval of GENGLYCOS is available on our website at ultragenyx.com. Joining me on today's call are Emil Kakkis, Chief Executive Officer and President; Eric Crombez, Chief Medical Officer; Erik Harris, Chief Commercial Officer; and Howard Horn, Chief Financial Officer. Before we begin, I'd like to remind everyone that during today's call, we will 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 SEC filings. And with that, I'll turn the call over to Emil.

Thank you, Josh, and good afternoon, everyone. Today is an important day for Ultragenyx and for the GSDIa community. Earlier today, the FDA approved GENGLYCOS, marking Ultragenyx's first gene therapy approval and the fifth approved medicine in our company's history. It is also the first ever FDA-approved treatment designed to address the underlying cause of glycogen storage disease type 1a, representing exactly the type of breakthrough therapy Ultragenyx was built to deliver. This is a day that thousands of people living with GSDIa in the United States and elsewhere and the families and clinicians who care for them have hoped and advocated and thought for over the years. Until today, the only thing standing between a person living with GSD1a and a life-threatening episode of hypoglycemia was cornstarch taken as a slurry every 3 to 4 hours around the clock, day and night. Now there's an additional treatment with the potential to reduce their dependence on cornstarch and ease the constant burden of care that defines their lives. We're grateful to everyone across the GSDI community who helped make this today possible, and we want to especially thank the patients and families who are participating in our clinical trials. As a reminder, our randomized placebo-controlled Phase III study met its primary endpoint with a statistically significant reduction in daily cornstarch intake and was also positive in multiple secondary endpoints. Late during the review, the agency decided to consider cornstarch reduction as a surrogate endpoint and so approved GENGLYCOS by accelerated approval pathway. The FDA requested additional evidence to confirm this reduction associated with clinical benefit and improved fasting tolerance over time. We agreed to generate that data through enhancements to our existing disease monitoring program or DMP. And Eric will share some additional details of our post-marketing program when he walks through our clinical data. Ultragenyx has created to lead the future of rare disease medicine, and that vision goes beyond the moment of approval and into our conduct as a commercial company. We're committed to helping patients access the treatments they need and reduce financial barriers that may stand in their way. GENGLYCOS extends that leadership into gene therapy, and it does so as a medicine we manufacture end-to-end entirely in-house at our gene therapy manufacturing facility in Bedford, Massachusetts. With that, I'll turn the call over to Eric Crombez and Erik Harris to walk you through our data and launch plans. And finally, Howard Horn to comment on the PRV and our expectations for launch.

Thank you, Emil. The approval of GENGLYCOS fulfills our commitment to provide the first therapy that directly targets the root cause of GSDIa. The reduced reliance on cornstarch demonstrates this liver-directed gene therapy's capability to deliver the necessary transgene to enable patients' livers to break down glycogen and to produce glucose during fasting or metabolic stress. This ability to regulate glucose levels has alleviated the disease burden and mitigated the risk of severe or life-threatening hypoglycemia for these patients. GENGLYCOS indicated for the treatment of adult and pediatric patients, 8 years of age and older with glycogen storage disease Type 1a who do not have antibodies to AAV8. The BLA was based on data from our Phase III randomized, double-blind, placebo-controlled study, which enrolled 46 patients aged 8 years and older. Results from the Phase III study showed that patients treated with GENGLYCOS reduced daily cornstarch requirements compared to placebo while maintaining glycemic control. GENGLYCOS was well tolerated with an acceptable safety profile. The most common treatment-related events were transient elevations in liver enzymes that were generally nonserious and managed with a prophylactic corticosteroid regimen. The results across the entirety of the clinical development program, which encompasses data on 52 treated patients over 8 years of follow-up speaks to both the magnitude and to the durability of effect of this gene therapy. In regard to the post-marketing requirements that Emil referenced, we will collect 2 years of data from 50 commercially treated patients through enhancements to our existing disease monitoring program, evaluating daily cornstarch intake and time to hypoglycemia in a controlled fasting challenge. We will also follow 20 untreated patients who have AAV8 antibodies over the same time period as the control group. Unlike the Phase III study, this DMP evaluation will be performed in the open-label setting with patients and the physicians receiving real-time glucose measurements. We believe that this will allow for greater cornstarch reduction and improved metabolic control compared to what can be achieved in a blinded study without real-time glucose information available to patients. As a reminder, the use of a DMP is the strategy that we have used for 4 prior approvals as the sole and comprehensive evaluation of all of our treatments in the post-marketing setting. The GSDIa DMP will collect 10 years of treatment data across clinical study participants and new commercially treated patients. This DMP is already active and enrolling clinical trial patients as they cross over from the Phase III study to long-term follow-up. With that, I'll hand it to Eric to discuss how we are bringing GENGLYCOS to patients.

Thank you, Eric. As we have approached each launch in our portfolio, our guiding principle has been to start with understanding the needs of the patients and caregivers. The repeated success of this approach has informed our preparation. Supporting patients is at the center of our work. Our UltraCare program has an established track record of helping patients and families successfully navigate access to our approved therapy. Treatment with gene therapy is a multistep process. So we have adapted our offering with that reality in mind. We have established a new dedicated role called UltraCare Gene Therapy Guides, who will help patients navigate insurance coverage, assist in obtaining treatment support and answer questions about the treatment process. In coordination with providers, treatment will be delivered through a national network of qualified treatment centers, institutions with specialized expertise and training to safely administer gene therapy. We selected our network of centers based on clinical experience with GSDIa and gene therapy administration as well as for a geographic footprint that is rightsized for anticipated demand while minimizing travel burden for patients and their families. Our teams are being deployed immediately upon this approval to train teams at QTCs on the final label and we'll continue to onboard and train centers to ensure medical readiness on a rolling basis as contracts are finalized. A list of QTCs will be available on genglycos.com once that website is live in the coming days. As we've mentioned previously, there is roughly 75% overlap in GSDIa providers with the treating community we know well for Mepsevii and Dojolvi. Our commercial organization is already in the field and able to leverage established trusted relationships with key providers. Shifting to payers. Our work to lay the foundation for quality coverage has been extensive with numerous interactions across state Medicaids and large national payers. Consistently, payers appreciate the severity of GSDIa and associated unmet needs. We are also encouraged that they recognize a reduction in cornstarch dependence as a clinically meaningful endpoint that represents the potential to deliver substantial impact for patients, caregivers and their families. We have set the U.S. per patient wholesale acquisition cost of GENGLYCOS at $2.7 million, reflecting its potential to reduce patients' reliance on cornstarch and enable better metabolic control of glucose. As Emil emphasized at the outset, we have a strong commitment and track record of supporting patients and families in helping to access our approved medicines, and that approach will extend to gene therapy. Consistent with what's been observed for other newly approved gene therapies, we expect access will flow through single case agreements in the initial phase of launch. We are familiar with an experience in this pathway. So we stand ready to help patients and providers in navigating the process. GENGLYCOS is manufactured entirely in-house at our gene therapy manufacturing facility in Bedford, Massachusetts. We have existing commercial inventory to meet anticipated demand and we'll continue to scale production as the launch continues. I'll close by reminding you, this is our fifth commercial launch in rare disease. We are leaders in navigating or in some cases, building complex paths from product to patient. Our team brings the experience, agility and most importantly, the commitment for patients as we deliver our first gene therapy in the commercial setting. With that, I'll turn to Howard to touch on launch expectations.

Thank you, Erik. Consistent with our practice, we plan to provide revenue guidance once we have sufficient visibility into market dynamics, which historically has been approximately 6 quarters after launch. In the interim, we look forward to updating you on metrics such as how our QTC network is growing and ultimately, the number of patients that have been treated. With clear urgency to treat supporting patient demand and our highly leveraged commercial model, we expect GENGLYCOS will make an important contribution to our profitability. Additionally, I can confirm that Ultragenyx received a priority review voucher with GENGLYCOS' approval. We plan to monetize the PRV to bolster our balance sheet and support our path to profitability. With that, I'll turn it back to Emil to close.

Thank you, Howard. Developing first-ever treatments for rare and ultra-rare disease is why we exist as a company and because we believe we have a responsibility to put the best available science to work for patients and families who are too often left behind. Our teams are prepared to bring a new treatment option for GSDIa to patients that need it. The key characteristic of successful gene therapy launches is related to the urgency of the disease. And GSDIa is an urgent disease with round-the-clock demands on patients every day and night without holiday or break. A gene therapy designed to deliver the missing enzyme is the ideal way to address this severe ultra-rare genetic disease. We look forward to updating you on our progress. In closing, I want to pause again to reflect the enormity of this milestone. It's a first for us, for our gene therapy manufacturing facility and most importantly, for the GSDIa community. After 50 years of cornstarch as the only available option for patients and their families, it's extraordinarily meaningful to be able to take advantage of the science that exists to deliver an option designed to directly treat the underlying cause of their disease. This approval reflects the work of a remarkable team spanning many years and organizations. We are deeply grateful to the original team from Dimension Therapeutics who worked on the program and to Janice Chou, who did some of the early research at NIH. We're also thankful to Dr. David Weinstein, whose scientific leadership laid critical groundwork and whose support and was involved in the early clinical trial. We must also thank the patients and families and PIs, investigators who made our clinical studies possible and the myriad of Ultragenyx employees throughout the company who supported this program through development and across the finish line. The collective commitment and perseverance have transformed a scientific vision into a new therapy option for patients. Operator, please provide the Q&A instructions.

[Operator Instructions] And the first question comes from the line of Anupam Rama with JPMorgan.

Congrats on the approval. Really cool to see. Can you walk us through the segmenting of this GSDIa market? What portion of patients are treated at sort of medical genetics centers of excellence? And how are you defining the various call points here?

Yes. No, it's an interesting question. The majority of the patients are treated by medical genetics patients, doctors. That's where they usually get diagnosed and usually where they're managed, although there are some endocrinologists that do manage the patients. But as I think Eric mentioned, we have about 75% overlap with the doctors we're already seeing. So it's a pretty -- we leverage our commercial footprint pretty well right now, and we're not really concerned about it. We also have our patient find program, which will go out and find patients who may not be at the centers where we're operating in to discover where they are and help bring them into the fold or add new QTC centers or call points. But right now, we think the majority will be within our catchment area, and we'll always be looking to find those other patients as well. But I do think we can leverage our investment in the field that we've been building over the last few years.

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

Let me add that this is really a terrific milestone. Congrats on this. This is years and years of work. I have maybe just a couple of questions. The first one, Emil, you mentioned [indiscernible] inventory and the confirmatory work as part of the DMP, is that going to be under commercial settings? Or is that going to be under as a clinical study protocol? And then finally, just remind us, this is a big milestone or a derisker for the MPS IIIA program [indiscernible] and what's the overlap?

Yes. So with regard to the inventory, we have asked to cover the launch and what -- the confirmatory 50 patients are commercial patients treated commercially. And as we're treating commercial patients, if we find some patients who have antibodies to AAV8 are not -- can't qualify for treatment, we'll include some of those 20 of those to be in the control group. So we'll conduct that through our DMP program, but they are commercial patients, revenue-generating patients. That allows us to do a larger program and allows us to get more data, and that was, we think, a better way to go. It's a high-quality, fully sponsored trial, though, all of our DMP programs, we don't do registries. We all do DMP for all post-marketing. And it's our way of solving the question of how to get high-quality post-marketing data and put the money where it means something where you can do something with it. In regard to what it means for MPS-IIIA, the GSDIa is fill finished and produced at the same Bedford plant where 111 is also fill-finish. So there's overlap in the facilities. We can't speak yet to comments about the 111 review, which is ongoing. But the plant is approved now to do fill-finish for GSDIa. So obviously, that has some read-through on the process and conditions that are required to get approval for fill-finish that overlap with the 111 program.

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

It's Ross on for Kristen. Congrats on the approval. Really curious if you guys could provide any color as it relates to kind of the treatment center capacity. And also, how many treatment centers do you expect to have online by the year-end and in 2027?

I'll put a few high-level comments and if Erik wants to give a little bit more color on the number. Our goal with the treatment center is to set up enough centers to be able to accommodate all patients we need, but we also kind of expect that we're going to have to continue adding. We've done a lot of work in building up the network. And we haven't put out the exact number. But Erik, you can provide maybe a little more of where we are on building QTCs?

Yes. Well, I won't give out the exact number. We feel confident we have a sufficient number of QTCs under contract now and expect that to expand very quickly now following approval and with the potential to double by the end of the year. So we'll be able to meet the initial demand. And as I also stated, we'll continue to add treatment centers as demand grows.

And the next question comes from the line of Yigal Nochomovitz with Citigroup.

Congratulations as well on the approval. I just wanted to ask what triggers the full approval? Do you have to wait for the 2 years for the safety and efficacy data from the 50 patients and 20 control? Or does the FDA also want to see some additional duration because you mentioned that you're going to be following these patients for a total of 10 years. And then also, if you could please comment just what percent of the population do you expect would be positive for AAV8 antibodies?

So the commitment to complete 2 years of data for the conversion approval into study endpoints we have studied, the number of doses of cornstarch as well as the time to hypoglycemia between 70 and 54. So those are endpoints we've evaluated. So we are comfortable with that evaluation. But we're going to do it now in open-label treatment format, which will allow the treatment to be implemented, let's say, in a more real-world setting, those 2 years of that. We will follow patients for 10 years as part of our commitment we do in all of our programs. It's not part of the confirmatory program, right? It's part of our general commitment. And gene therapies in general, have a longer lead time in monitoring for safety in any case. But we as a company commit to investing in these longer-term programs as part of our commitment to these -- the rare disease community. Regarding the percent of the population, it's varied. It's maybe 1/4 of the patients, but it's around that range. It varies in different areas and regions. So I don't want to give you a precise number, but it's around that range. and we expect it to be similar now. So that's where we are at the current moment.

And the next question comes from the line of Ellie Merle with Barclays.

This is Tejas on for Ellie. Could you just remind us about the plans and timelines for ex U.S.? And then with about 3/4 of that population outside the U.S., how do you see that dollar opportunity shaping up relative to the U.S. given all the different pricing and reimbursement dynamics there?

Tejas, could you give me the first part of your question? I missed something. It just broke up a little bit. The first part of your question again?

Sorry, just on the latest timelines and expectations for ex U.S. approval and then the relative size of the opportunity.

Okay. Yes. So we do expect to commercialize elsewhere. And we think that we're within the worldwide price bandwidth has been successful for other programs. I think it depends on the level of urgency of the disease, in fact, whether we're successful elsewhere. We haven't put out an exact timing. We are planning and we will be filing and have filed in other territories. The commercial value in U.S. relative to the rest of world, we usually consider the rest of the world as being a larger fraction of the total market. But in gene therapy, that may not be true. The pricing may be have more pressures, and we're going to have to work through that. But we actually think there's already been some price standards set that are above even where we are with this particular ultra-rare disease. And we think we have excellent randomized control data to support it. And so we believe we're going to find a place to be able to commercialize and make substantial revenue ex U.S. as well as U.S. So we're not looking at this as a pure U.S. play. We think we're going to look at it globally. And we certainly have operations in Europe, Latin America, Japan as well as support of distributorships in other regions like Middle East, et cetera. So we've gotten inquiries from around the world for this disease and getting treated. So I expect there will be demand and important supply and contribution to our future revenue.

The next question comes from the line of Salveen Richter with Goldman Sachs.

This is Lydia on for Salveen. Congrats on the approval. Could you just speak to when you expect GENGLYCOS to be commercially available and your expectation for the shape of the early launch curve here? And just the timeline for when patients initially engage with their health care provider to actually getting the treatment?

Yes. So we would expect it to be available within 30 to 60 days from that time frame. There is a process where FDA also releases and that process is ongoing. And -- but we are putting the last pieces together, but we're -- it should be relatively soon. We haven't put forward launch curve or the revenue expectations. We just -- we don't like to do that because we think there is urgent need and a number of patients that want to get treated. But rather than project out, we're going to let the market work and then provide some updates on that. And the last item was about the doctors. Is that right?

Just the timeline from the initial interaction to actually when the treatment would occur.

I see. Well, we don't know you mean how long it takes to have a start form and turn that into a treatment event that -- I'd expect in the beginning, it's all going to be operating off of exceptions, right, of case-by-case exceptions. I don't know, Erik, if that's something you'd want to touch on a little bit here about that process between start form to getting treatment implemented?