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 the AUV for the treatment of the MPS-IIIA, also known as Sanfilippo Syndrome Type A. It is now my pleasure to turn the call over to Joshua Higa, Chief of Staff and Vice President of Investor Relations. Please go ahead.

The U.S. FDA approval of Fayuvi, the first-ever treatment for Sanfilippo syndrome Type A. We appreciate all of you making time to join us this afternoon to discuss this important milestone. A press release with details on this announcement is available on our website, along with an updated corporate presentation. Joining me today are Emil Kakkis, Chief Executive Officer and President; Eric Crombez, Chief Medical Officer; and Erik Harris, Chief Commercial Officer. Howard Horn, Chief Financial Officer, is also on the line for Q&A. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements. These statements involve risks and uncertainties, and actual results may differ materially. Please refer to the risk factors described in our SEC filings. And with that, I'll turn the call to Emil.

Thank you, Josh, and good afternoon, everyone. Earlier today, the FDA approved FAYUVI, the first-ever treatment for Sanfilippo syndrome Type A and our second gene therapy approval in less than a month. This milestone represents our sixth FDA approval overall and further established Ultragenyx is the leader in both rare disease medicine and gene therapy. Before we discuss in detailed significance of this achievement for our company and the MPS community I want to briefly acknowledge the recent outcome from our Phase III ASPIRE study for GTX-102 for Angeman syndrome. This was truly disappointing for the company and for the Angul community. We expect to provide a more comprehensive update by our next quarterly financial results call. We will address your questions on the annual results and our expense management plans in greater detail at that time. But for today, we're going to focus on the FAYUVI approval and what it means for children and families with Sanfilippo syndrome type A. Sanfilippo syndrome Type B is 1 of the most heartbreaking diseases I have encountered in my career, -- these children often appear healthy early in life, then my age is 2- to 6-year-old as the disease progresses, they gradually lose their ability to learn, to communicate and engage with the world around them. And after a period of hyperactivity and altered behavior of the children slow down as family watch skills disappear one by one, leading to a bedridden state. The children eventually die from this devastating disease usually of teenagers. Until now, families and clinicians have had to face this diagnosis without any approved treatment with the potential to stop or slow this inevitable decline. We're here today because parents, avocis clinicians, researchers and organizations across the broader MPS community used to accept that reality. They raised awareness, funded research, participating in clinical studies and never stop fighting for their children. Now thanks to their pre-severance. Families receiving a diagnose of Sanfilippo syndrome Type A can have hope that their children's future may look different. Ultragenyx was founded to pursue diseases that others overlooked and delivered treatments where none existed before. In 1 month, we've now achieved our consecutive gene therapy approval for 2 severe rare diseases demonstrating not only the strength of our science, but our ability to translate innovation into approved medicines for patients. Even though Ultragenyz was not originally working on Sanfilippo syndrome, we received a call from Abeona CEO, Vish Seshadri. When funding constraints arose despite positive clinical data, Abeona made the pivotal decision to outline the asset to Ultragenyx, ensuring this vein reach the finish line for patients. When we picked up the program, our team found a way to make it work relentlessly and courageously taking on the task make sure the Procon hand was able to treat kids and getting the program to a BLA filing. It has not been an easy road for us either, but we're gratified that all of this work has enabled us to bring forth the first approved treatment for Sanfilippo Type A. Developing new therapies is only 1 part of our mission. We've also believed that approval only matters that patients can actually obtain treatment, and we are committed to helping eligible families in the U.S. access FAYUVI as quickly as possible. We also know and have gotten urgent calls for treatment from families elsewhere in the world, also in great need, and we will work on finding a way to treat some patients globally while we seek approval in other regions. I'll now turn it to Eric Crombez to review the clinical data and Eric Harris to discuss our commercial launch preparations.

Thank you, Emel. Fayuvi is indicated for the treatment of neurologic manifestations of mucopolysaccharidosis Type 3A or Sanfilippo syndrome type A in pediatric patients with preserved neurodevelopmental function. As Emil noted, this is a rare and fatal liposomal storage disease that primarily affects the brain and is marked by neurodegeneration beginning in early childhood. The disease is caused by an enzymatic deficiency which results in the accumulation of heparan sulfate and progressive damage to the central nervous system. Fayuvi is a single-dose AAV9 gene therapy designed to directly address this underlying enzymatic deficiency. Conceptually, this gene therapy provides the ability to produce fully functioning enzyme in some cells in the brain to break down heparin these cells will then secrete the enzyme that can cross-correct other brain cells, resulting in a decrease in heparan sulfate substrate levels throughout the brain. The BLA was based on data from the Phase I/II/III Transfer A study and long-term follow-up demonstrating improvements in key developmental domains compared with natural history along with substantial and durable reductions in CSF heparan sulfate. Clinical data now extends to nearly 8 years of follow-up. -- a was generally well tolerated and maintained a favorable safety profile. The most frequently reported treatment-emergent adverse events for elevation in liver enzymes, which were mostly mild or moderate. While we originally submitted Pause for accelerated approval, the agency recognized the robustness of our clinical data package during the review and granted standard full approval rather than accelerated approval. Importantly, this approval covers the entire pediatric age range and reflects the deep understanding by the FDA of the unmet need for children and families affected by this disease. Over time, we expect that children will be diagnosed earlier through Newborn screening, enabling the option for early treatment prior to the accumulation of heparin sulfate and irreversible damage to the central nervous system. As well over therapies, we will monitor clinical trial patients and an additional cohort of commercially treated patients in our disease monitoring program through 10 years of follow-up. The totality of evidence generated throughout development gives us confidence in the potential of Fayuvi to meaningfully alter the course of this devastating the disease. With that, I'll turn the call over to Eric.

Thank you, Eric. First, I'd like to acknowledge where rare privilege it is to have the opportunity to launch new drugs in a month, impacting the lives of patients with significant unmet needs. The approach you heard me reference a few weeks ago, understanding the need of patients and caregivers first remains our guiding principle for the second launch. Families with children that live with Sanfilippo syndrome type A, understand that this disease is progressive and relentless. Every day matters to preserve precious neurologic function and each day without treatment risks the potential loss of critical skills and abilities. That understanding has shaped our preparation. We are fortunate that both Jim glycos and AUV fall within our inborn errors of metabolism franchise. So there are significant synergies between our preparations for both gene therapy launches. Based on extensive preapproval engagement with both Medicaid programs and leading commercial plans, it is clear that payers understand the devastating nature of Sanfilippo syndrome Type A and the importance of treating as soon as possible. Beyond the clinical impact, payers recognize that the lifetime cost of care forge out with Sanfilippo syndrome Type A who can spend years in a bid ridden state can exceed $8 million and that this burden grows as the disease advances. We set the U.S. per patient wholesale acquisition cost of Fayuvi at $3.95 million as the first and only onetime gene therapy treatment for this ultra-rare progressive and fatal neurodegenerative disease with the potential to slow or stack is irreversible decline. Consistent with our expectations for genglycos, we expect that access in the initial phase of launch for Fayuvi will flow through single-case agreements. Our OtraCare program has a proven history of helping patients and families navigate access to therapies and overcome potential barriers to care. As I shared at the approval of genglycos, we have expanded that offering to include dedicated gene therapy guys who will help families navigate insurance coverage, assist in obtaining treatment support and answer questions about treatment products. Treatment will be provided through a national network of qualified treatment centers selected for clinical expertise and experience in gene therapy administration. The network is highly synergistic with our footprint for genglycos with many centers planning to offer both treatments, a list of QTCs will be available on fayuvi.com once that website is live in the coming days. As with genglycos, we have established relationships with treating community with the treating community, like families, providers understand that the time is of the essence for these patients and approach treatment decisions with a strong sense of urgency. So we are expecting a fairly rapid request for treatment. Fayuvi is manufactured entirely within the U.S. at our gene therapy manufacturing facility in Bedford, Massachusetts and at Andelin Biosciences in Columbus, Ohio. We believe we have adequate commercial supply to meet initial demand and we'll continue our efforts to scale manufacturing over time. We expect that the commercial product will be ready to ship to QTCs in approximately 30 to 60 days, consistent with the expectations we shared for gynglycos. This is now our sixth commercial approval and second gene therapy launch. The infrastructure capabilities and experience we have built in commercializing rare disease therapies are highly applicable across our entire portfolio of approved medicines with purposeful alignment built into our approach for Fayuvi. We have been preparing for these 2 launches for months, and we are excited to begin delivering this treatment to patients. With that, I'll turn it over to Emil.

Thank you, Eric. This approval carries special personal meaning for me having worked on treatments for MPS diseases for more than 30 years. For the first time, family is affected by Sanfilippo syndrome Type A have an improved treatment option -- after years of advocacy, scientific innovation, unwavering determination from a remarkable community, we have reached a milestone that many ones believe might never come. Now the work begins to treat as many patients as we can as promptly as we can. Today's approval further values of vision we pursued since our founding of delivering first-ever medicines to patients with serious rare and ultra-rare diseases regardless of scientific or commercial complexity, the approvals of both Fayuvi and Genglacos demonstrates the strength of our platform, our ability to execute and our commitment to leading the future of rarity medicine. The company received a priority review voucher upon Fayuvi approval, just as we did for Jelco -- the final delivery of this therapy did not come without tremendous difficulties during its development, and we hope this approval will revitalize investment in other ultra-rare gene therapies. Therapy was developed by high-end food and Doug McCarty, during their tenures at Ohio State University, Nationwide Children Hospital and was licensed to Abeona. We thank Dr. Han Fu her laboratory, the development and leadership team at Abeona and so many patients, families and investors have worked tirelessly through so many obstacles over the many years to lead us to this moment of shared success. We're honored to stand alongside them, and we are committed to ensuring this approval is only the beginning. With that, we can open the line for questions. Operator, please provide the Q&A instructions.

[Operator Instructions] Our first question comes from Yigal Nochomovitz with Citi.

Great. Congratulations to meal and team. Very nice to see this. I guess I just wanted to probe a little bit more, if I may, on the label language with respect to preserved neurodevelopmental function. Can you just drill into that a little bit more? What does that mean? How is that exactly defined in terms of Bailey score or specific retained skills or just a physician caregiver judgment?

Yes. I think a good question, Yigal. And one of the really important piece of the story is to let doctors practice medicine. I think the FDA were very sensitive to the fact that there's a range of patients who might want to get treated, and they offered something more general about this. It doesn't say neurocognition, so it's not talking daily scores, a neurodevelopmental and what they're saying is they have some prefer function, meaning in our interpretation, if someone is bedridden and unresponsive that's someone who doesn't have reserve function. So it's leaving open the definition of what a doctor and parent wants to do with regard to a level of function. Some preserve function, meaning they're able to respond or have some some ability to participate in life. I think it's really important to not be Bailey is not part of it or part of the discussion. So I think the offered an open-ended view of it, but I think we'd all agree that someone who's at end-stage disease is not a good candidate for gene therapy. And the goal is treated as young as possible. So this issue is more of an issue at the start because as time goes on, we should be newborn screening and treating kids before their H2 Unifor age 1. And we have some kids treated at 6 months have done really well. And I think that's when we got to get to. So right now, they've offered something broad in terms of preserve neurodevelopment function and did not set any testing standards and what that means. And I think it was very thoughtful to the FDA, and I appreciate their thinking through of letting doctors and patients decide for themselves with the right decision on treatment.

Okay. Great. And if I could just do one follow-up for Howard or for you, Anil. Just could you comment on the time lines to monetize what the 2 PRVs, which are important for your cash position?

Well, I'll let Howard answer that one. Yes. Yigal, thanks Same answer is the last time. We will monetize both of them. We'll monetize the first 1 expeditiously. And the second one, when we think the time is right.

All right. Well, congratulations again.

I think is a good market for them. So we expect to be an important addition or cash position at the company puts it in a very good position.

Our next question comes from Anupam Rama with JPMorgan.

Congrats on the approval here. The press release talked about shipping to qualified centers in the next 30 to 60 days. Can you talk a little bit about how many centers of excellence we're talking about here that are equipped for infusions today and how that could grow over time?

Sure. I think Eric will probably Harriers can provide a little bit on that. Are you able to do that, Eric, on the numbers, but there's a few dozen of them already, but it's growing. Eric Harris, did you want to answer?

Yes, sure. There -- overall, there are about 120 or so centers that focus on these areas. But with regards to qualified treatment centers, we have over 25 under contract now, and they are growing daily. I get updates every -- almost every day, it seems like now with us adding another treatment center. And as consistent with what I said during the call, we expected to get to 40 or so by the end of quality of treatment centers by the end of the year, more than enough to meet the initial demand that we're expecting for both products. And both -- most of the sites are dual size for both Junglicose and for.

Congrats again on the approval, guys.

Your next question comes from Yaron Werber with TD Cowen.

, agents on the approval. It's an important day for patients. This is Steven Inovov your own. -- among the 3,000 to 5,000 patients that you've identified as prevalent within the Sanfilippo Type A community, what based on the neurodevelopmental stage, would you consider the pool that would be most accessible or most -- I suppose, the first logical treatment candidate for Fayuvi?And how many of those patients are identified and present at current qualified treatment centers?

Yes. So right now, we're aware of in the United States, around 300, 400 patients that are potentially within the range. With regard to the development function, obviously, you don't post that routinely, but about their patients. But generally, when patients reach the 10, 11 years old, they start to be at the end of their period for that become bedridden often as teenagers. So we're talking about patients generally are going to be younger than that in probably less than 10 or 11, more likely, the average age will be more like 5%. But we'd expect there might be patients up to age 10 that might be still in function. We haven't precisely put down the list yet, but there's a lot of patients to treat already around and -- our hope is to treat as many of the ones that are prevalent now and hopefully to enhance the diagnosis of the young ones where the most good can be done before H2 or really before age on -- but we don't have a precise number, but that gives at least enough idea for the U.S. right now.

Got it. And just to confirm that $300 million to $400 million within the range, that range you're referring to is the range of ages that you were just speaking of right?

Yes, it's about that. yes.

Congrats again.

Our next question comes from Maurice Raycroft with Jefferies.

Congrats on the update. For Eric's comment around the expectation for a request for treatment. Is there more color on that providing? What could initial demand look like? And is there more perspective on what that could be for what patient demand for 2026, maybe through 2027 look like?

Well, I'll let Eric answer the second, but we're generally not going to put out forecasted guidance on what's going to happen in the first 6 quarters, that's have been our habit. So we don't want to overstate and create an issue. We are going to work promptly to get as many as we can. We have enough treatment centers up and they continue to add them to service patients. So we do think that the drug is going to do well. That is we think that there's a higher sea treat we have product available, and we expect to do well. But right now, going to give any precise predictions on the ramp yet. But I realize that's a very important issue for gene therapy because there have been some ones that have done extremely well and some have done very poorly. I don't know, Eric Harris, is there any other color you would provide on that?

Nothing else to add at this particular time. But other than that there's very strong interest from patients and the patient community.

Got it. That's helpful. And maybe just one follow-up for the price. Do you expect that some payers are going to require an outcome space reimbursement arrangement? And what could that look like? Or is this something that you're offering proactively to payers?

I think we expect in May. I don't know, Eric, do you want to comment on the OBA.

We'll be prepared to engage payers regarding OBAs if that is something that we'll get them more comfortable with providing reimbursement. But we're not expecting to have to do that with the majority of the payers.

Your next question comes from Christian Kluska with Cantor.

congrats on this approval and appreciate you taking this program forward so that these patients now have an option. So I wanted to ask on patient identification efforts. I remember a couple of years ago at World, 1 of his themes was looking at different recognition features for different MPS patients to help identify it, and that was before this AI wave. So I'm curious if there are ways you can be creative about trying to find more patients.

Yes. I think there are -- I think the face recognition for Sanfilippo is probably the weakest feature because they have the least effect on the facial features, where for other MPS, there's much more bone effect and, therefore, more facial effect. The big thing really is the early screening for developmental delay, any development of lay or anything to help identify these cases before they've gone too long. And I think -- the challenge with that, of course, is that wants some development delay, that means they're already having some brain effect going on. The truth is that the best thing is to work on newborn screening and to get it advanced into numerous screening. There is already MPS 1 and 2 newborn screen or on the RUSP, we need to get this added. We have been supporting work to have the same type of enzyme assay that's used for those others to be SKUs for screening. We think that needs to get implemented. I think the rest process needs to change. The committee has come apart right now, but Secretary Kennedy has been nominating putting things on the list on his own without our advisory committee. We need to get this on that, and we need to get it implemented across the United States. So these kids are getting treated when they're like 6 months old, which I think will give us the best effect. There are some ways to screen symptomatically, but ultimately, it's got to be newer screening, we've got to press for it, and we're actively doing that

Your next question comes from Salveen Richard with Goldman Sachs.

This is Lydia on for Salveen. Congrats on the approval. Could you just speak to the overlap with the prescriber base with your existing commercial franchise and also the sales force that has been deployed for OpGen IPOs?

Certainly. There is a big overlap. The majority are medical gases that make diagnosis. And so there is a very large lab. And I can let in a moment, Eric wants to add a little more about that overlap. So Macrogen, which is what I'm trained as make the diagnosis commonly. There are some cases areas where pediatric neurologists might make the diagnosis for Sanfilippo where there might not be a medical genesis. So those are a couple of the specialties. I don't know if you have anything else to add, Eric Harris, on that.

Yes. And you asked a question about our current field team. As stated with the genglycos launch, this -- this falls right into our inner metabolism franchise. So the same team that has been calling on these centers for years now with -- for both NEVSEVI and DIJOVI -- we'll also continue to call on these same institutions, and we estimate probably 75% or more overlap. So this will be a highly leveraged franchise that has established relationships with many of these doctors already.