Ultragenyx Pharmaceutical Inc. Q4 FY2023 Earnings Call

Good afternoon, and welcome to the Ultragenyx Fourth Quarter and Full Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, you will have an opportunity to ask questions during the Q&A portion of the call. It is now my pleasure to turn the call to Joshua Higa, Vice President of Investor Relations.

Thank you. We have issued a press release detailing our financial results, which you can find on our website at ultragenyx.com. Joining me on this call are Emil Kakkis, Chief Executive Officer and President, Erik Harris, Chief Commercial Officer, Howard Horn, Chief Financial Officer, and Eric Crombez, Chief Medical Officer. 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 latest SEC filings. I'll now turn the call over to Emil.

Thanks, Josh, and good afternoon, everyone. In 2023, we generated significant momentum across our commercial and clinical programs that have set us up for Catalyst bridge 2024. On the commercial front, we progressed international regulatory and reimbursement negotiations across our marketed products, continuing to add to new approvals and positive reimbursement decisions. This geographic expansion, along with growing demand in our existing markets, puts us in a position to maintain our trajectory of robust year-over-year growth. On the clinical side, we released new data on our key programs in 2023 and successfully advanced enrollment of our priority programs that can accelerate value creation for our company this year and in the coming years. At our Analyst Day in October, we shared exciting data from three programs that all will have additional data catalysts in 2024. On UX 143 for osteogenesis imperfecta, the interim Phase II data showed substantial increases in bone real density and Z score after just six months of treatment. This led to a 67% reduction in analyzed fractures, with 20 of the 24 patients showing no radiographically confirmed fractures at six months. On GTX-102 for Angelman syndrome, data from the long-term extension cohorts Phase I/II study demonstrated clinically meaningful improvements across multiple neuro-developmental domains, including cognition, receptive communication, growth motors, behavior and fleet. These data show we can repeatedly dose GTX-102 for much longer than one year with an acceptable safety profile. On UX701 for Wilson disease, the data we presented showed four of five patients in the lowest dose cohort have begun tapering their standard of care, including two who are completely off chelators and/or zinc therapy. While still early for the UX701 program, we are encouraged by the data we have observed. Our momentum is continuing into 2024 with multiple clinical development updates. Last week, GTX-102 was granted priority medicine or PRIME designation by the European Medical authority based on the positive early clinical data from the long-term extension cohorts and the potential of GTX-102 to address the unmet need for our treatment in this disease. The clinical data we've shared, along with positive U.S. and European regulatory interactions give us confidence that we will be able to navigate the development path for this program. For UX-111 in San Filippo A syndrome, we released Phase III data last week from the extension of newly treated patients at the WORLD Symposium Annual Research Meeting in San Diego. The results we shared demonstrated treatment with UX-111 resulted in rapid and sustained decreased levels of heparan sulfate in the cerebrospinal fluid, and the sustained reductions in CSF heparan sulfate exposure over time was correlated with improved long-term cognitive development. Our discussions on an accelerated approval pathway with the FDA are ongoing, and we continue to believe there's a strong case to be made in this program. Looking ahead, we are entering 2024 in a robust financial position with $777 million on the balance sheet, including proceeds from our equity offering in Q4 that raised $326 million. We're also continuing to focus our spend and resources on the key clinical programs that will drive value for our company in the coming months. Our Chief Medical Officer, Eric Crombez will provide more of these updates in his section. There's a lot to look forward to as we continue our efforts to lead the future of rare disease medicines. Now I'll turn the call over to our Chief Commercial Officer, Erik Harris, to provide an update on our commercial efforts last year that led to a 20% revenue growth in 2023.

Thank you, Emil, and good afternoon, everyone. I'll start with Crysvita's performance in North America. I want to remind everyone that on April 27, 2023, we successfully transitioned the promotion of Crysvita in the U.S. to Kyowa Kirin and that Crysvita will continue to generate growing revenue for our company. During the transition period, the Ultragenyx field team continued to find patients from community physicians while introducing key accounts to Kyowa Kirin field teams. Our patient support services team supported the transition of patients from the Ultragenyx hub to the Kyowa Kirin hub to ensure continuity of treatment and reimbursement. In 2023, the smooth transition and additional field resourcing helped support the growing demand for Crysvita in the U.S. and Canada. In fact, there were approximately 500 start forms generated in 2023 from a continually growing base of unique prescribers and patients on reimbursed therapy. The success we saw in 2023 has led us to further amend our agreement with Kyowa Kirin that will allow our experienced field team from Ultragenyx to continue to support Crysvita in the U.S. through this year with a robust demand from 2023, a fully transitioned patient support services hub and the support of Ultragenyx's focused field team, we feel confident that 2024 will be another strong year for Crysvita in North America. Shifting to Crysvita in Latin America, we finished the year with over 500 new patients on reimbursed therapy, which included approximately 50 new patients who began commercial therapy in Q4 of 2023. Over the course of the year, we added approximately 200 patients to our growing base of patients on commercial therapy. While most of the current demand in Latin America is driven by pediatric patients, we are seeing an increasing uptake in adult patients across the region, reflecting a similar pattern that we saw in North America. In Latin America, we expect quarter-to-quarter variability in revenue driven by uneven ordering patterns but remain confident in the underlying demand growth for our products. These combined efforts across our global organization generated 2023 Crysvita revenue of $328 million, which is a 17% increase compared to 2022. For Dojolvi in the U.S. and Canada, the demand for start forms remains strong. In 2023, we added approximately 115 start forms and 95 patients on reimbursed therapy, resulting in over 470 reimbursed patients in the U.S. since launch. The number of prescribers continues to grow, adding approximately 40 new prescribers in 2023. In Latin America, we are making steady progress in finding patients despite the lack of newborn screening in the region while expanding access for Dojolvi to more patients. Most recently in Mexico, Dojolvi was approved by the HCA for inclusion in the National Medicine Compendium, which is an important step toward increasing reimbursed patients in 2024. Across the EMEA region, Dojolvi is driven by named patient sales requests as we continue to deepen the awareness of LC-FAOD with key stakeholders through our medical teams. Though the majority of current requests are coming from France, we are seeing increased demand throughout Europe and the Middle East. In 2023, the teams generated $71 million in Dojolvi revenue, which is 27% growth compared to 2022. Lastly, on Evkeeza, we continue progressing steadily across our launch markets in EMEA, Canada and Japan. In EMEA, European HTAs have provided infusion with positive clinical recommendations and we are working through the reimbursement processes. On December 18, we received approval from the European Commission for an expanded indication for Evkeeza in children aged five years and older with HOFH. This approval further validates the drug's clinical value and expands the addressable patient population in the EMEA region. In Canada, both HTA bodies, CIS and NS have provided positive clinical recommendations for Evkeeza. The team is preparing to accelerate the public reimbursement process with the Canadian authorities in the coming months. In the meantime, we are working to get private payers on board to expedite reimbursement. The initial uptake on the start forms has been steady since Health Canada's approval. In Japan, we received regulatory approval on January 18 and pricing discussions are underway with Japanese authorities. Following reimbursement approval, we expect to launch Evkeeza in Japan next quarter. The team is busy educating the physicians on the Evkeeza label and identifying appropriate patients who could benefit from the treatment. Building on the success in 2023, we expect continued strong performance across our portfolio in 2024. Crysvita will continue to drive the majority of the revenue followed by Dojolvi and Evkeeza. With that, I'll turn the call to Howard to share more details on our financial results and 2024 guidance.

Thanks, Erik, and good afternoon, everyone. I'll focus on full-year corporate financials since we just covered our individual product performance. Starting with total revenue, for 2023, we reported $434 million, representing 20% growth over 2022. Total operating expenses for the year were $1 billion, which included R&D expenses of $648 million, SG&A expenses of $310 million and cost of sales of $45 million. Operating expenses included non-cash stock-based compensation of $135 million. For the year, net loss was $607 million or $8.25 per share. As of December 31, we had $777 million in cash, cash equivalents and marketable securities. In 2023, net cash used in operations was $475 million, which was higher than forecasted due to the timing of when certain receipts and payments landed around year-end. Our 2024 net cash used in operations is expected to be less than $400 million, which is consistent with the guidance we provided last month. We are also reaffirming the 2024 revenue guidance ranges we stated last month. Total revenue is expected to be between $500 million and $530 million, which represents 15% to 22% growth versus 2023. Crysvita revenue is expected to be between $375 million and $400 million, which includes all regions and all forms of Crysvita revenue to Ultragenyx. Specifically, it includes Crysvita product revenue from Latin America and Turkey and the cash and non-cash royalties from North America and Europe. Our Crysvita guidance range represents 14% to 22% growth versus 2023. Dojolvi revenue is expected to be between $75 million and $80 million, which represents 6% to 13% growth versus 2023. Our Dojolvi projections represent a blend of faster growth in countries where we commercialize and lower growth in countries where we respond to named patient requests. With that, I'll turn the call to our CMO, Eric Crombez, who will provide an update on our key clinical data readouts expected this year.

Thank you, Howard, and good afternoon, everyone. In addition to the UX-111 Phase III data that we presented at the WORLD Symposium last week, we have a number of important clinical data readouts planned for 2024. These include GTX-102 expansion cohort data to be presented mid-first half, DTX401 Phase III data in the second quarter, then UX701 dose-finding data, and finally, UX-143 longer-term follow-up data from the Phase II part of the ongoing Phase II/III study. For UX-143, there is also the potential for the Phase III study to read out pivotal data from the first interim analysis around the end of the year. We have set a strict p-value of 0.001 for un-blinding for this first interim analysis. This means that the alpha spent is effectively zero while providing the opportunity to end the study early if the data are compelling and the primary endpoint is met. We have also built in a second interim and final analysis for the study that would occur in 2025. Regardless of the timing, the reduction in the annualized fracture rate that we saw in the Phase II study and shared at ASBMR last year gives us confidence that we will see a clinically meaningful and statistically significant reduction in the clinical fracture rate in the Phase III study. Shifting now to the two near-term data readouts for GTX-102 and DTX401, I'll start with GTX-102 for the potential treatment of Angelman syndrome and the Phase II expansion cohort data that we expect to share in the next few months. The first part of the study included a dose escalation stage to understand initial safety and efficacy. Last October, at our Analyst Day event in New York, we disclosed longer-term extension data demonstrating clinically meaningful improvements across multiple domains for the patients in these extension cohorts. We also showed the first-ever developmental milestones that many of these patients have achieved to highlight the clinical meaningfulness of these changes. Earlier last year, we began dosing a larger number of patients in expansion cohorts to further study the dose regimen that we intend to evaluate in a Phase III trial. These expansion cohorts include higher loading doses, and enrollment was completed at the end of last year with 53 patients enrolled globally. The upcoming expansion cohort data in mid-first half of this year will focus on the 20-plus patients who have been on therapy for at least 170 days. We intend to present safety and efficacy data in a similar format to what was shown at Analyst Day, specifically showing domain by domain changes with comparisons to natural history. With higher loading doses and a greater number of patients, we expect to verify the meaningful efficacy that was presented at Analyst Day. These data will inform dose selection and evaluation period for the Phase III study. Our discussions with the FDA on Phase III planning continue to go well, and we anticipate that the expansion data will support an end of Phase II meeting in mid-2024, which will enable Phase III study startup later in 2024. The next near-term data readout is for DTX401 and our investigational gene therapy for the treatment of glycogen storage disease type Ia. We have one of the largest late-stage gene therapy pipelines, and this will be our first Phase III data readout. All of the patients in the Phase I/II demonstrated a clinically meaningful response to DTX401 that has proven durable with the earliest treated patients entering their fifth year of follow-up. In the randomized, placebo-controlled Phase III study, we expect to see patients with clinically meaningful and statistically significant reductions in cornstarch therapy. We expect to unblind and share top line data from the DTX401 Phase III study in the second quarter of this year. I'll now turn the call back to Emil to provide some closing remarks.

Thank you, Eric. We've made incredible progress across the clinical pipeline, which sets us up for a number of data catalysts this year. I'll close by summarizing those catalysts, so everyone gets a better sense of what to expect. As Eric mentioned, in the next few months, we'll share the expansion cohort data from the GTX-102 Phase II study. This is expected to be followed by the top line Phase III DTX401 data in the second quarter. Next, we plan on sharing the UX701 for Wilson disease Stage one data in mid-2024. This will be data from the three dose escalation cohorts that recently dosed the last patient. Closing with UX-143 for osteogenesis imperfecta, we expect to share longer-term Phase II data in the second half of the year. Enrollment in the Phase III studies is going well, and we are on track to complete enrollment with approximately 150 patients in the Orbit study around the end of the first quarter. The compact study is also enrolling well and is on track to enroll approximately 50 patients or more around the same time or just after. 2024 is an important year for Ultragenyx. We'll continue expanding global access to our commercial products, bringing these important therapies to more and more patients. It is expected to generate more than $500 million in revenue and support our path toward profitability. We also expect to share meaningful updates from four of our later stage clinical programs, making this one of the most data-rich years in our company's history. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

Our first question will come from the line of Gena Wang with Barclays.

I have one question regarding the GTX-102 in Angelman and one for setrusumab. So for GTX-102, you received the PRIME designation. What is the early feedback regarding the approval path and Phase III trial design? And have you met with the FDA also regarding the Phase III trial design? And for setrusumab, how will long-term Phase II data in the second half of '24 inform the first interim for obvious Phase III before year-end '24.

Thanks, Gena, for your question. The PRIME designation was simply a presentation of the data we have gathered so far and acknowledged the closure of the data we observed. We haven't finalized a Phase III plan with the European authorities yet, that's still to come. As for the FDA, the PRIME designation won't impact their process. We've started discussions with the FDA, and those conversations are going well. We're progressing nicely and feel confident in developing a plan once we have our Phase II data at the end of Phase II. We're optimistic about the discussions and believe there's a clear path to finalize our Phase III plan. We plan to conduct the Phase III trial with around 100 to 120 patients using a randomized double-blind design, and the FDA is aware of this. This is a conventional design, and I don't anticipate any issues with European authorities either. As we progress, we'll finalize the Phase III endpoint while we collect all the necessary data. Regarding setrusumab, the Phase I data will provide more insights into the fracture reduction rate over a longer duration. Previous findings indicated very few fractures after 5 to 7 months of treatment, and now with more patients treated over a longer period, we'll gain a clearer understanding of the level of reduction. This will help us assess the maximum effect on fracture reduction we may achieve. Since the fracture reduction estimate is already at 67%, we are positioned well for a potentially positive interim analysis. This will rely on patient variability, but that level of efficacy or greater could allow us to conclude the study sooner, provided we see significant results. We could have favorable findings that don’t meet the standard, leading to another interim analysis and final results in 2025. We're feeling very optimistic about setrusumab and the way forward. The Phase II data will help us gauge its effectiveness and clarify the future path.

One moment for our next question. And that will come from the line of Maury Raycroft with Jefferies.

Based on the totality of your Angelman data so far, including data from your natural history longitudinal study. As you think about a Phase III design, do you have a sense of what the optimal timeframe is to assess efficacy and what age group could show maximum benefits?

Yes. So if you look at the study data we put out last year at Analyst Day, we've continued to gain ground over time. So it looks like going a little longer, like day 170 is early. If you look at day 254, the data looks much stronger. Our view is it could be anywhere from around day 254 to day 330. Somewhere in that range is the likely time frame we would do the study. Obviously, the longer it is, that means the more time on placebo. It gives more time for separation of the groups, but it's somewhere in that time frame. And the Phase II data will help us try to figure out what's the right number. I'd want to do the study not a long longer than it needs to be meaningful for found results. In terms of age, I think right now, our plan is to continue with the same age range we're using in the Phase II, the 4- to 17-year-old early on, people thought only young patients would respond, but we've been seeing good responses in older kids too. So I don't think we should limit that in order to get the best efficacy. I think we conclude that whole group of four to 17 in our Phase III design. Our expectation though is to do a separate study, an open-label study to help look at younger kids, potentially older kids and the other genetic types to fill out the data set. With the main Phase III study, we expect to be 4- to 17-year-old and be somewhere between 250 days to 330 days long.

And one moment for our next question. And that will come from the line of Anupam Rama with JPMorgan.

Maybe just a quick one for me. What was the feedback on the 111 program MPS III program update at WORLD? And where are you there with the FDA discussions in terms of what are the push-pull levers here on like an accelerated approval process in meeting.

Well, in the meeting, we had really positive feedback from people because I think the extended data is continuing to show good developmental progression among the longer treated patients. That's consistent with the heparan sulfate and being predictive of good clinical outcomes. And so we're encouraged and there's been a number of people using the HF marker and showing similar predictive value. FDA has been going on for a while. I think Peter Marks has been very encouraged with the idea that we should be moving with the biomarker than the workshops planned organized by Reagan Udall on February 21. That will look at heparan sulfate across multiple programs. We feel the data there should encourage the FDA to take the stand of accepting heparan sulfate as a reasonably likely to predict clinical benefit marker and start doing solid approvals in the MPS brain disease area, which if it happens, I believe will help us move forward in other rare genetic disorders, particularly those that affect the brain. So I think we're encouraged about the progress forward on the workshop, the data we released, and the data others have released told us that we have a handle on how to treat MPS disease and particularly MPS-IIIA and that's a good thing because there hasn't been a single treatment for MPS brain disease approved to date.

Thank you. One moment for our next question. And that will come from the line of Tazeen Ahmad with Bank of America.

Sorry for the background noise. I have a couple just on 701 for Wilson. You've changed the readout timeline. I think originally it was first half, and now you're saying it's mid-2024. Is that just nomenclature or was there a reason for a slight time shift? And then I guess going back to Angelman, a question that we've been getting a lot of recently is regarding the composite endpoint that we've talked about that includes measures such as Bailey and CGI. Have you had detailed discussions with the FDA on using that composite endpoint? And I think the main question around that comes from the potential of a competitor to have their own Angelman data around the same time as yours. And how that might affect the FDA's viewpoint of using a more traditional endpoint?

Okay. So the timeline for Wilson has pushed out due to the last patient role. We enrolled the last patient cohort just early this year. We want to give them enough time, at least six months to kind of have an opportunity to titrate their chelators, get through the whole treatment process and titrate chelators. So it's slightly different from where we had it but not meaningfully. So that's the timing. We want to make sure to give patients enough time to be able to get off their chelators if they can. So that's the basic story there. With GTX-102, we've had discussions on both MDI and other ways of looking at the endpoints with the FDA. I think they're open to various ways of looking, and they have shown a lot of flexibility in many ways. Whether we do MDRI now will be just a question of whether we want to press our case on using something novel or whether we should stick to picking a traditional single endpoint or two endpoints for the primary. But we're still working through that with the FDA. I think it's been good. But I'm not really worried about the competitor. Honestly, our efficacy will be the driver of what we do. I don't think a competitor is going to change the outcome on the endpoints. They are behind us at this point. I think our efficacy data has not been impressive. So at this point, I think our future is all in our hands. Honestly, I think we have some of the best team in developing endpoints, methodology around it and support for it. Nothing in our conversations with the FDA suggests that they're listening to anyone else, particularly in this. They seem to be willing and able and ready to work with us on a final solution on the endpoint.

Thank you. One moment for our next question. And that will come from the line of Dae Gon Ha with Stifel.

I'll just ask two on GSD1a. I guess the first one is, Emil, can you shed some more insights on the cornstarch reduction. So we've heard from some doctors that sleeping through the night is also as important, if not more important, than the reduction itself. So when you think about the outcome here, what do you consider a clinically meaningful level of cornstarch reduction? And what data will you provide to address the sleeping aspect for the physicians? And then kind of sticking with GSD1a, can you talk about the training and monitoring of these investigators to ensure the cornstarch reduction is done appropriately versus just slower than expected out of caution?

I'll deal with the first question, then maybe Eric, you could deal with the second question about the training of the sites and so forth. So we haven't set a minimum threshold of change for cornstarch because we agree with you that what is probably more important than the actual reduction is whether the patients are critically dependent on cornstarch to survive. Because the problem with cornstarch is not taking cornstarch. The problem is that each patient lives each day with a gun to its head thinking, if I forget to take cornstarch, I could die, which is a horrible burden to live with every three hours. What we know from our Phase I/II study is that many patients were able to have no cornstarch at night and their glucose levels were maintained. They did not drop to zero. They were maintained and supported. So what data will we have? Well, we're looking at primary clinical significance and cornstarch reduction. We'll also look at the number of cornstarch administrations they take, whether they're taking at night. We'll have tedious glucose monitoring, which allows us to monitor glucose control during the night, which will also be something we'll be looking at. So in addition to the cornstarch, you will hear about the other characterization of the cornstarch dependency, which I think are an important part of the story. It's an important part of why the amount of reduction we're seeing is transformative for patients, where they feel like they can go out of the house and exercise without feeling that they're going to get hypoglycemic and drop somewhere. We've had many patients tell us they feel safe now that that's not going to happen to them. Many don't take starch at night and sleep through the night. I think those are all aspects of what will come out with the Phase III data to help provide the clinical meaningful argument in addition to the quantitative around cornstarch reduction. Now Eric, maybe you can provide a little more on the training and how we're doing this with sites.

Yes. To your point, the training and monitoring is very important here. We really did want to rely on our study teams, principal investigators who gained a lot of experience during the Phase III part of this program to continue on as trial sites for the Phase III. Because of the double-blind nature of the Phase III study, we also wanted to build an independent group of expert physicians, truly the biggest experts in GSD1a who aren't participating in clinical trial sites to work with the sites and guide them to make sure we're doing this consistently and safely.

One moment for our next question, and that will come from the line of Joon Lee with Truist Securities.

This is Mahdi on for Joon. I have two questions. Could you please provide some clarification on the patient mix that you are envisioning for Phase III, would you exclude UPD patients or like patients with prior experience with ASOs? And the other question is on setrusumab, what gives you confidence that a potential chronic dosing would be on the label for this treatment?

Yes, you are referring to GTX-102. For the gene types, we will focus on the deletion type, which comprises 70% of the patients. The UPD patients will not be included in the randomized controlled Phase III trial. Our plan is to conduct a basket study with a cohort of those patients in an open-label format to assess efficacy and support labeling, but they will not be part of Phase III since we do not include genetic types we haven't studied in Phase II. The Phase III will exclusively involve deletion type patients, who are the most severe cases. By showing improvement in these patients, we can better establish efficacy with smaller studies for the other types. There have been inquiries from patients who previously participated in the Roche program. However, it's complicated, especially for those who experienced safety events with another ASO when considering entry into a Phase III study, which we do not intend to pursue. We will explore options to provide access for these patients in the future, but we need to finalize our safety and efficacy strategies for those complexities. There is definitely interest from patients to cross over at this time. Please remind me of your last question regarding which program?

I believe it's chronic dosing for osteogenesis imperfecta.

Chronic dosing for osteogenesis imperfecta. Okay. Why do we believe we can get chronic dosing? Well, we know that you probably need it. First of all, osteoporosis and osteogenesis imperfecta are very different diseases. They are particularly different in the age of the patients, the state of their bone and the biology of their bone disease. What we know from the asteroid study that was conducted shows that when they took them off setrusumab and put them on just bisphosphonates, they were losing bone real density, and their bones were turning back around the direction they gained. It's clear that you need chronic dosing. What we know now from treating patients chronically because we had, including one kid that we showed you months of treatment who continues to gain ground and do better and better. So everything we said in the OI indication, their bones are different, and particularly they're younger and they have an induction effect from their genetic disease that makes them different. By stimulating, we're able to maintain their bone density or increase it further. We do believe there may be a point at which we need to move to maintenance dosing where you don't need to make their bones more dense. At that point, we'll look at going into a less frequent maintenance dosing regimen.

And one moment for our next question. And that will come from the line of Yaron Werber with Cowen.

This is Brendan on for Yaron. First, just another quick one on San Filippo. I understand talks with the FDA are still ongoing. But just wondering when you think you might know and be able to make a decision on timing for regulatory filing and whether based on how those talks are going, you expect that could happen this year. And then just really quickly on GSD1a. I wanted to see how soon after the Q2 readout you expect to be able to file. Has the FDA given you confirmation on how long they want you to follow these patients after that primary endpoint, just to understand durability or what have you, just before you get that submitted?

For MPS IIIA, the upcoming workshop is expected to be a significant milestone. After this, we anticipate having an indication in the first half of the year regarding the potential to file based on biomarker data. While we have gathered nearly enough clinical data for a submission based solely on that, we believe it's more valuable to pursue approval through the biomarker approach, and we should have clarity on this in the first half. The workshop serves as a crucial point, but a follow-up meeting with the review division will further clarify our path forward for MPS IIIA. We believe that securing accelerated approval will benefit both our efforts and the broader field by enabling treatment for more ultra-rare diseases. Regarding GSD1a, we haven’t set a timeline for filing yet. We plan to bring manufacturing in-house, which will take some time and is an essential step. We will need to engage with the FDA to gain a clearer understanding of their expectations for the various submission packages, including the CMC package. This will influence our next steps. If our data is positive, which we expect, we will diligently work towards filing as soon as possible within the parameters I've outlined.

One moment for our next question. And that will come from the line of Kristen Kluska with Cantor Fitzgerald.

So with the Phase II setrusumab data guided for the second half of the year, I think that puts you at a mean of at least 1.5 years' worth of follow-up. I wanted to ask if there's anything that you're going to be looking for beyond fracture prevention, which, of course, is the essential goal. But then also to your comments earlier about chronic dosing. What do you think about in OI and chronic dosing in general, if there could be further improvement or even preventing further impact as it relates to some of the other features of OI such as the deformities of bone structure, et cetera?

Yes. So you're right. I think we're probably in that range of 1.5 years. If you could say like the patient we described had 17 months treatment. He wasn't using a wheelchair anymore, and he's running around and playing. I think that's what we're hoping for: to look at those secondary clinical signs that not only a reduction of fractures, but that people feel better, are more active, and still not having fractures. We're going to look for that clinical meaningful side of the story as well in those patients. Our thinking, and this relates to the maintenance dosing, is that if we improve the bone density sufficiently to stop having fractures and reduce the number of fractures, we expect two things to happen. We should be able to go to maintenance dosing where we give setrusumab every two or three months. That allows us to maintain the bone density that they have and not lose it. We would also expect that when you stop having fractures, you will stop having progressive deformity, particularly in the spinal column. The spinal column degeneration is the most devastating part of OI, particularly type three and four. Those in wheelchairs have devastating lives. Preventing the vertebral fractures would hopefully prevent the deformity of their spines, the decline in spinal function, and the risk of becoming wheelchair-bound. Those are the kind of things that can change the future. It's partly why we're running the COSMIC study in the 2- to 4-year-olds to capture that result. When we head to a filing for approval, we want to establish a new standard of care: treating OI patients with setrusumab at a young age to help prevent deformities going forward. I hope that gives you some insight into what you're looking for beyond fracture prevention.

One moment for our next question. And that will come from the line of Salveen Richter with Goldman Sachs.

This is Lidia on for Salveen. So we just have one on UX701. Could you just help us frame the clinical update expected this year, specifically around how much proof of concept we could expect here?

Yes. So the concept — the information you're going to get are five patients at three doses, right? It's still a relatively small set to data. What we'd be looking to see is can we eliminate the need in at least some patients for chelators? Can we remove their chelators and still maintain urinary copper? That is, can we replace the chelators? The second thing is can we restore copper distribution? The gene therapy can exceed what you obtain with chelators. We didn't get into the Wilson gene therapy business just to replace chelators. We got in there because we think you can have a more profound beneficial treatment that restores copper distribution as well as detoxification. We'd want to be able to show that both of those things are happening. If we can show that both of those are happening, patients at the optimal dose is done with safety, it sets us up for immediately rolling a Phase III study at that dose and regimen that will allow us to potentially work with the disease. The stronger the benefit of the copper distribution on their outcomes, the more likely the drug will become adopted by a larger fraction of Wilson patients. If we're great at moving the toxicity, it could be beneficial for the 20% to 30% of the patients who are not tolerant of chelators. Our expectation is that we could see more beneficial outcomes than might be imagined, given what's known about chelators. That will give us at least the framing of those two aspects of Wilson Disease. But remember, there's only five patients per group, so we cannot expect to have definitive clinical outcome results in that grouping to tell us the answer. But with the Phase III study following that, we'd have enough patients in there to start to say something more about the clinical meaningfulness or the secondary neurologic effects, otherwise, that you might obtain by having the restoration of copper distribution.

One moment for our next question. And that will come from the line of Yigal Nochomovitz with Citi.

This is Ashu Kumar on for Yigal. I had a follow-up on the earlier Angelman discussion. I guess as you're thinking through the various scenarios between a more novel endpoint for Phase III versus a more traditional endpoint. I'm curious how you think the expansion data you're planning on sharing with you might capture the potential for a more novel endpoint. If you lean towards the more novel end of the spectrum and you take that to regulators, is there maybe potential that you need to generate additional data beyond this expansion cohort to submit before you start the Phase III? I'm just curious how you're thinking about that.

Yes. Well, our focus — I mean, I think our focus in terms of endpoint choice is going to be the main ones we've already shown that we've tested before and we're adding to. We're not necessarily expecting brand new endpoints to come out. It will depend primarily on what we see. The thing that will happen in the study though is that we'll get a large number of patients loaded the same way, right, which we haven't had, which will give us a better or more precise estimate of the change we see and have it be more reliable, not wishful thinking, but to see a large number of patients showing a very similar pattern of results. Our goal expectations are from the endpoints we've talked about: five domains. Daily was for three of those domains and two other endpoints for behavior and sleep. Those are going to be the core five domains that we're going to be working with. I don't really think there's going to be a point where we're going to start fresh with a new endpoint and restart over. That's not something we need to do. We think we have enough data among the ones we know to come up with a good conclusion and structurally present the endpoints in a way that gives us the best insight on how the drug works and gets regulatory agreement. We wouldn't want to start off fresh with new discussions. We believe we'll have enough to make that conclusion with the agency.

One moment for our next question. And that will come from the line of Jeff Hung with Morgan Stanley.

For UX-111, you mentioned that you've collected almost enough clinical data to file off the clinical data alone. What length of long-term follow-up do you need to accurately measure potential for improved development with sustained HS normalization? How should we think about the time course for development?

Well, this is one of the areas for discussion with the agency. Originally, they had told Abeona and in our discussions had a requirement to see at least patients reach age five years. However, we've been able to show that between 24 months and 60 months, in that period, there is the most rapid decline normally in natural history. If you look at the estimated yearly change in development and the trajectory of development, you can readily distinguish patients during that period. We have a number of patients now who have already gone past 60 months or five years. Between 48 and 60, there are a number of others who are also showing good development. We think the combination of those patients may be enough clinically to demonstrate the benefit, which was part of that update. We're working to understand in our new analysis. We showed on this estimated yearly change in relationship to area on the curve exposure helps provide better insight into how to understand trajectory of elements over time. We think this means we can interpret better what's happening between, say, three months of age and 60 months of age to know what the trajectory of a patient with sample looks like versus someone who is untreated, in comparison to someone who has adequate heparan sulfate reduction. Those will be what we're pressing for with the FDA. Even just patients from 48 to 60 months, a minimum of 48 to 60 months, we already have clinical data saying the drug is effective. That's another way for us to go forward, but far more valuable to get an accelerated approval to include all the data and all the patients, accepting the minimum treatment data is simply evidence toward the reasonably likely predict standard.

One moment for our next question. And that will come from the line of Joseph Schwartz with Leerink.

This is Will on for Joe today. So just a quick follow-up on Angelman. Previously, it was noted that you expect to see more of an effect compared to the prior data cut, given the higher doses in the expansion cohort. I want to make sure that this is still the expectation. Also for Angelman, we often hear that these patients are constantly gaining skills and there may be some increased hope in the community, which could lead to a placebo response. What strategies can help mitigate a potential response in a pivotal trial?

Thank you. So our expectation is that loading at higher doses should accelerate the improvement relative to what we've seen. We haven't changed our view on that. The things I'd say is, remember that in the Phase II data we showed you from extension, we went all the way out to 500 days of treatment, right? The magnitude effect you see at 500 days is not going to be the same as you see at 170 days. We do expect that the higher loading dose should allow us to verify that we're seeing a real effect. Regarding the placebo response, the longer-term data already show you that it’s not a placebo response because they continue to gain ground. The placebo effect doesn't go on forever. It occurs for a while, then people eventually recognize something is not happening. However, be able to see linear continued gains over time is clearly beyond what you would see with the placebo effect. In the Phase III, though, you have to be cautious about what you're thinking. What if people are optimistic? What we are doing is using third-party psychologist evaluators for the key endpoints, such as the Bailey. These third-party evaluators are looking at the kids doing things. While the patient report may have some impact, they are assessing the actual capabilities of the kids. This helps provide some objectivity that we are seeing the kids actually improve and it’s not just wishful thinking. Our expectation is to have a large enough effect and population of patients to be able to power past a placebo effect. Additionally, the longer time frame we’re targeting, which might be 250 days or 230 days, should be well past the typical window for a placebo response. When you look at how many domains are improving in patients, they end up showing improvements in two to five domains. It will become evident to people who is responding and who is not. We’ve been thinking a lot about this issue and do think that the negative effects, length, and time are factors that will help reduce the risk of a placebo response impacting the results of that study.

One moment for our next question. And that will come from the line of Jack Allen with Baird.

I have two quick ones. First of all, for the commercial products, namely Dojolvi and Crysvita. I know there's some seasonality in the fourth-quarter numbers. But when you analyze out the fourth-quarter numbers, it seems like you're already at the lower end of guidance. I was hoping you could provide some more color as it relates to how we should think about the growth of those two products over the course of 2024. And then on GSD1a, any thoughts on your early market research here. Is there a subset of patients that are more severe that could be asked to really adopt a gene therapy here?

Okay. So with Dojolvi and Crysvita, guidance is always an art form, but our view is that we're continuing to see something close to 20% growth. Dojolvi may be a little slower because some of the territories have less commercial activity. I think Eric made that clear. We're in the territories where we're commercializing, and we continue to expect to see this 20% growth rate. I don't think there are any issues with this. We're navigating guidance and giving the Street numbers we feel confident in achieving. Looking at this 20% growth rate should be seen as excellent. The lumpiness of the fourth quarter has been a recurring theme. It is what it is. This occurs sometimes, and I think ultimately, it is what it is. The seasonality can fluctuate when it comes to demand in Latin America, but we'll eventually smooth it out with guidance that makes sense. I feel good about the guidance we have, and 20% growth rate should be seen as excellent. With regard to GSD1a, 81% of the patients have severe genotype or non-like genotype, right? So the vast majority of patients are severe. There are some milder cases, but the majority are severe. The population is more homogeneous in that regard than many of our gene therapy diseases that we study. At this point, I would look at most of the patients being highly dependent on starch, having severe phenotypes, and they are likely in the greatest need and the most danger from that disease in terms of crashing and dying suddenly.

One moment for our next question. And that will come from the line of Ed Arce with H.C. Wainwright.

Good afternoon. This is Thomas here asking a couple of questions for Ed. So just for GTX-102 and Angelman, how many patients are currently in the expansion cohort? Can you tell us what are some of the longest durations that these patients have in the Phase III study? And also, what are some additional endpoints that investors can focus on compared to the previous days?

I heard the extension cohort. You're asking about how long they go out. By the time we get to the end of Phase II, we'll have patients who have had two years of treatment probably, somewhere between a year to two years of exposure for all those patients. We have a good chunk of patients who are already beyond day 504 at the Analyst Day meeting. I think that shows that chronically exposed accumulating drug doses are not going to cause safety problems in this disease. That's an important part of the safety profile we can do these treatments without any issues. Restate your second question because I didn't quite catch that.

I think the second question was about additional endpoints that they should consider beyond perhaps what we've already discussed at Analyst Day.

I see. Well, we have a lot of different ones we're looking at. The ones we talked about, the Bailey or either the Angelman severity assessment for behavior or sleep or an alternative behavior or sleep scale could be used. Those are two alternatives in the scales we've used before. We didn't have them in the most recent extension data. We'll get a little more information on those alternative ways of measuring it. I would say the discussions with the FDA, they were highly flexible with us on our endpoint options. They showed great collaborative flexibility and not rigidity. With regard to choosing those endpoints. So within our existing data set, we can even just pull out questions, for example, and hone in on those questions and use those for particular for behavior sleep. Our goal would not be to go with new things we haven't seen before, but to look at what we have and pull out the best data sources that are sensitive to the change and are clinically meaningful for patients in coming up with those agents, but there won't be brand new things you've never seen or that we don't have any data on.

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Joshua Higa for any closing remarks.

Thank you. This concludes today's call. If there are additional questions, please contact us by phone or at ir@ultragenyx.com. Thank you for joining us.

Thank you all for participating. This concludes today's program. You may now disconnect.