Ultragenyx Pharmaceutical Inc. Q1 FY2024 Earnings Call

Good afternoon, and welcome to the Ultragenyx First Quarter 2024 Financial Results Conference 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. This is the year that we're harvesting the exciting results of multiple years of focused execution across our key clinical programs, and we've shared a lot of meaningful data already this year. At the WORLDSymposium meeting in February, we presented positive biomarker and long-term cognition data from our UX111 gene therapy in Sanfilippo syndrome. The data showed the treatment resulted in rapid and sustained reduction of CSF heparin sulfate and that this was correlated with improved long-term cognitive development. We also participated in a workshop on the heparan sulfate biomarker hosted by the Reagan-Udall Foundation. This workshop brought together FDA representatives, patient advocates, scientists, and industry leaders to discuss the overwhelming body of data supporting the use of CSF heparan sulfate as a biomarker to enable accelerated approval in neuronopathic MPS diseases. The support of Peter Marks and the FDA in recognizing this biomarker as a surrogate endpoint to support cell approval would be a profound benefit for the MPS communities and companies working on these diseases and really to all companies working on gene therapies and other types of precision medicines. Shifting to Setrusumab. Just this week, we announced that we've completed enrollment in our Phase 2/3 Orbit study and our Phase 3 Cosmic study in Osteogenesis Imperfecta. The Phase 2 data presented late last year was clearly compelling for the study investigators that led to accelerated interest in enrollment in the program. And 2 weeks ago, we announced strong positive interim data from the Phase 1/2 study of GTX-102 in Angelman Syndrome. The interim data we shared confirmed in a larger body of data that GTX-102 can fundamentally change the development trajectory of Angelman patients. Importantly, the magnitude of effect across all domains and expansion cohorts was found to be similar or greater than what we observed previously with the dose escalation cohorts. Ongoing treatment with GTX-102 resulted in continuous and sustained improvement in these patients as evidenced by the long-term data in the dose escalation cohorts. And we have demonstrated the safety profile can be successfully managed. This Phase 1/2 study is evaluating the most severe Angelman syndrome patients, those with genetic deletions where there's typically no improvement on the Bayley Scale. This has been observed in both natural history and placebo-controlled studies. For example, our recent Angelman clinical study after 1 year, their placebo group showed only a 0.8 point improvement in Bayley-III cognition score. What we saw in our study was a 5-point improvement in the Bayley-4 score, beginning as early as day 170 in the dose expansion cohorts and almost doubled that at 1 year in the dose escalation cohorts. We also saw that this improvement continued through day 758 in the dose escalation cohorts. The maximum change we observed with the Bayley was further supported in multiple other assessments, including Angelman severity assessments and the aberrant behavior checklist. The improvements in the domain of sleep in behavior or hyperactivity at day 170 were better than what we saw after a year or more in the prior cohorts. Families also talked about their kids being calmer, more attentive, more aware of the world around them. This allowed greater independence across multiple facets of development like eating, sleeping, and mobility. The improvement of cognition and motor function really came across the videos that we showed on April 15 call. The patient was able to solve puzzles and navigate more challenging walking paths, which provide a small real-world sample of the significant changes we're seeing in the charts and graphs. The combination of improvements across cognition, receptor communication, and motor function provides a real sense of the potentially transformative nature of this therapy. Multi-domain Responder Index or MDRI also resonate with physicians and families. The MDRI brings all the domains of movement across the study population together and is a great way to look at change across the individual patients for a heterogeneous patient group. MDRI analysis across the 4 domains of cognition, receptive communication, behavior, and fleet resulted in a statistically significant median improvement in 2 domains across all cohorts at this early time point of day 170. Further, the majority of the patients in the expansion cohorts achieved improvements in at least 2 and up to all 4 domains. Importantly, the data we presented show that GTX-102 has a tolerable safety profile. Lower extremity weakness is now a rare, well-understood transient that occurred in 2 out of 53 patients, and extended cohorts have completed the loading phase. Both patients were in cohort A and B and no events observed in cohort C through E. The events were classified as mild and moderate and all resolved quickly with the patient remaining in the study. Six earlier patients with this safety issue from the beginning of the study are all on chronic dosing and received multiple doses without any issues. Given our understanding of this issue and recent feedback from regulators, we are comfortable that the current safety profile is acceptable and manageable, and we'll continue providing routine safety updates along with our efficacy updates. We've heard strong enthusiasm from KOLs over the past couple of weeks, including those reviewed by our analysts, some of you might be on the call. The treating physicians expressed comfort with the safety profile and the route of administration for this patient population and a broad agreement that treatment with GTX-102 resulted in clearly meaningful efficacy in these patients, where you just don't typically see any improvements. With all this put together, we have a strong product candidate in plan for Phase 3 development. We're confident this product candidate has the potential to transform treatment for patients with Angelman syndrome. Now I'll turn the call over to our Chief Commercial Officer, Erik Harris, to provide an update on our commercial efforts that led to another successful quarter.

Thank you, Emil, and good afternoon, everyone. I'll start with Crysvita's performance in North America. I want to remind everyone that Kyowa Kirin has been responsible for driving Crysvita's revenue in North America since the transition in April of last year. We have continued to augment their efforts through additional field support to ensure a smooth transition, maintain patient continuity, and help them generate additional start forms. The demand for Crysvita in the U.S. remained strong in Q1 2024. Approximately 60% of the start forms came from adult patients prescribed by community physicians, resulting in nearly 70 new prescribers in the quarter. This is encouraging, given adult penetration is in the low 20s, and this implies Crysvita has ample room to continue growing. As is typical, this quarter had some seasonality as patients worked through the reauthorization process with their insurance providers at the beginning of the year. We are confident in our full-year U.S. revenue projections given the strength of the underlying demand. Shifting to Crysvita in Latin America, where we lead commercialization. Our team delivered another successful quarter in LatAm by adding approximately 50 new patients to Crysvita totaling over 550 patients on reimbursed therapy since launch. While Brazil drove more than 60% of Crysvita's LatAm revenue in Q1 2024, we also saw a significant uptick from Argentina and Mexico. We are particularly excited about Mexico, the second largest market in LatAm, which recently cleared all pediatric and adult reimbursement hurdles. IMSS, Mexico's largest payer, approved Crysvita for pediatric patients in about 2 years versus the 3 to 5 years it usually takes for such approval. This recognizes the value they see for Crysvita in pediatric patients. Our team is now busy getting Crysvita on local hospital formularies to expedite reimbursement for these patients. As I mentioned on previous earnings calls, we expect quarter-to-quarter variability in LatAm revenue driven by uneven ordering patterns but remain confident in the underlying demand growth for our products. Moving on to Dojolvi. Growth of new start forms remained strong. In the U.S., we added over 30 start forms and 15 patients on reimbursed therapy, resulting in over 485 reimbursed patients since launch, with approximately a 65% to 35% split between pediatric and adult patients. The number of new prescribers continued to grow, adding approximately 10 new prescribers in Q1 2024. As you know, Dojolvi has not yet been approved by the European Medicines Agency. So across Europe and the MENA region, Dojolvi is driven by named patient sales request. Approximately 200 patients are treated under MPS across 12 countries as of the first quarter. The majority of demand is from France, but we are receiving increasing requests from other countries within the EMEA region. 2024 is an important launch year for Evkeeza. As of Q1 2024, we are treating nearly 100 patients in EMEA through MPS and regular reimbursement processes where we have approval. We expect to launch Evkeeza in more EMEA countries in 2024. In Canada, we started enrolling patients in our hub after Health Canada's approval last year. Our next step is to secure reimbursement agreements with public payer authorities in late 2024 or early 2025. The team is also working closely with private payers to secure reimbursement in 2024 for enrolled patients who have insurance through these private plans. In Japan, we received the regulatory approval in January and pricing and reimbursement approval in April. The launch is underway; the HoFH physician and patient community in Japan is very excited about Evkeeza. We have started to receive start forms in our hub, and we expect a robust launch in 2024 as we continue to educate physicians and patients on the benefits of the Evkeeza label for appropriate patients. Overall, Q1 2024 was a strong quarter for Ultragenyx, generating $109 million in revenue. Given the strong underlying demand for our 4 commercial products across all regions and the upcoming Evkeeza launches, we remain confident in delivering our 2024 revenue guidance.

Thanks, Erik, and good afternoon, everyone. I'll briefly summarize our financials that were reported in our press release earlier today. As Erik noted, we reported $109 million in total revenue for the first quarter of 2024. Crysvita contributed $83 million, including $40 million from North America, $36 million from Latin America and Turkey, and $6 million from Europe. Crysvita net sales and underlying patient demand continued to grow meaningfully compared to the prior year, including in North America. As a reminder, since the transition of North American commercial responsibilities to KKC in April 2023 and going forward, our revenue in the region shifted from a profit share to a royalty. This is calculated using annual revenue tiers based on net sales with royalties ranging from the mid-20s up to 30%. As a result, our first quarter revenue started at the low end of the royalty range, and we expect the blended rate for the full year to be at the upper end of the range. With the increasing royalty rate and growing underlying demand, we expect North American Crysvita quarterly revenue to significantly increase throughout the year. Dojolvi revenue in the first quarter was $16 million, and Mepsevii revenue in the first quarter was $7 million. Our total operating expenses in the first quarter were $274 million, which included R&D expenses of $178 million, SG&A expenses of $78 million, and cost of sales of $18 million. Operating expenses included non-cash stock-based compensation of $37 million. In the first quarter, net loss was $171 million or $2.03 per share. As of March 31, 2024, we had $569 million in cash, cash equivalents, and marketable securities. In the first quarter, net cash used in operations was $191 million. The first quarter of the year is typically a larger use of cash than the other 3 quarters because it includes items like the payment of annual bonuses. This quarter also ended with a relatively high accounts receivable balance due to timing of receipts from our commercial activity. Importantly, our guidance for 2024 net cash used in operations remains unchanged from what we provided last quarter and is expected to be less than $400 million for the year. We are also reaffirming our 2024 revenue guidance ranges. 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 upcoming clinical data readouts.

Thank you, Howard, and good afternoon, everyone. Emil already went through the exciting GTX-102 data that we shared last month, so I will focus most of my comments on some of our other programs. I would, however, like to reiterate the enthusiasm that we are hearing from patient advocacy organizations and the treating community who all feel that GTX-102 has the potential to be a transformative treatment for patients with Angelman syndrome. We are at an important inflection point for the GTX-102 program. We have clear and clinically meaningful efficacy, and we are transitioning to Phase 3 study startup. The Phase 3 will be a global randomized placebo-controlled study that is expected to enroll approximately 100 to 120 patients. We expect to finalize these plans, including endpoints and study duration, in an end-of-Phase 2 meeting that has been scheduled with the FDA in mid-2024. We plan to initiate the Phase 3 around the end of the year. Shifting to DTX401, our investigational gene therapy for the treatment of Glycogen Storage Disease Type Ia. Phase 3 data from this program, which we expect this quarter, will be the first pivotal dataset from our large and late-stage gene therapy portfolio. All of the patients in the Phase 1/2 study demonstrated a clinically meaningful response to DTX401 that has proven durable with the earliest treated patients in their fifth year of follow-up. The randomized, placebo-controlled Phase 3 study enrolled 49 patients, and we expect to see clinically meaningful and statistically significant reductions in daily cornstarch therapy. Our experience with the Phase 1/2 program helped us to better understand the importance of reducing dependence on overnight cornstarch. And the great fear that all patients with GSDIa and their families have regarding missing a cornstarch dose and the resulting potential for hypoglycemia during sleep, which can be fatal, especially in children. As seen in our Phase 1/2 results, we do expect the Phase 3 to show improved glucose control during the day and also importantly, overnight improvement. We plan to share top line data within the next couple of months. I'll close with Setrusumab, our fully human monoclonal antibody for the treatment of osteogenesis imperfecta. We recently announced completion of enrollment in our Phase 3 Orbit and Cosmic studies. We ended up over-enrolled in record time with 158 patients in Orbit and 66 patients in Cosmic, and this could not have been done without the efforts and strong support from the patient and treating communities. We expect to share additional data from the Phase 2 portion of the Orbit study in the second half of this year. This data will include at least 12 months of follow-up and build on the data we presented last October. I'll now turn the call back to Emil to provide some closing remarks.

Thank you, Eric. In the first part of the year, we made significant progress advancing our clinical pipeline. And I'll close by quickly summarizing our key clinical catalysts for the rest of the year. Later this quarter, we expect to share top line Phase 3 DTX401 data from our gene therapy for GSDIa. We've scheduled the GTX-102 end of Phase 2 meeting with FDA in mid-2024 that would enable initiating our Phase 3 around the end of the year. The UX701 for Wilson disease stage 1 data is expected in the second half of 2024. This will be approximately 6 months after the last patient was dosed in Phase 3 plus some time for all the data to be collected and analyzed. On UX143, we expect to share updated long-term Phase 2 data in the second half of the year. For the UX143 Phase 3 portion of the Orbit study, there are 2 interim analyses planned with the first anticipated by year-end or early 2025. The first analysis will have a stringent threshold of p less than or equal to 0.01. If the threshold is not met, a second interim analysis will occur a few months later, followed by a final analysis at 18 months. Interim analyses will not report to the company by the Data Monitoring Committee unless they are positive. In the event of a positive interim analysis, we would share that outcome, but top line results will not be announced immediately as the study would require patients to complete a final visit and time to collect and prepare the data for a formal analysis. For those of you keeping track, we may have 3 products at or near readiness for BLA filings in Sanfilippo syndrome with UX111, GSDIa with UX401, and Osteogenesis Imperfecta with Setrusumab over the next year or so. We are at a company-defining inflection point that builds on our strong base of growing commercial products and positions us to transform the lives of even more rare disease patients. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

Our first question comes from Yigal Nochomovitz with Citigroup.

I just had one on GSDIa sort of program that you haven't talked about it too much, but you're coming up on the pivotal data. Could you just remind everybody what is required in terms of the primary endpoint to reach a positive study? What are the timelines in terms of the filing strategy for this program? And then thirdly, could you just give a little bit of perspective on the incidence and prevalence of GSDIa and how you think about pricing this product?

So for the GSDIa program, the primary endpoint is a continuous variable now cornstarch utilization. And so we'll be comparing the decrease of cornstarch utilization for the primary between the treated and placebo group. That also requires that the patients have good glucose control for that reduction in starch. That's the primary endpoint agreed with the FDA. In terms of filing strategy, we are transitioning the manufacturing into our plant, and we plan with the data to go to FDA and have a discussion and lay that out. So, we'll provide more detail on the filing timeline when we have it. But the transition of the manufacturing and we'll need to talk to the FDA and set it, but it's on path, assuming our data are positive. Now the last incident prevalence in pricing. We believe there's around 8,000 patients with GSDIa in the commercial territories, and that might be a little under 2,000 that are in the U.S. with the disease. That's an estimate. We haven't set pricing at all at this point. We're thinking about it, but it is a severe disease. It is an urgent disease. Patients are on a treadmill every day, trying to stay alive. And we've seen from the enrollment of the study that there is a desire. So, while prevalence of pricing have an impact, I think the degree of urgency is what defines success in gene therapy launches to date. And I think GSDIa is urgent. I think people want to get treated. They want to get off the treadmill. They want to, as I say, put the gun down at this point at their head every day about managing their glucose. So, we're excited about the potential, but there's still obviously more work to do.

Our next question comes from the line of Anupam Rama with JPMorgan.

Emil, just thinking about the GTX-102 update last month, just in your discussions with the Street, what do you think are the most misunderstood or divergent points of feedback you get relative to, say, the physician or KOL feedback you were getting post AAN?

Well, I think that there's still difficulty appreciating the meaning of the changes in Bayley, for example. And I think what we heard from some of the KOL feedback is that they're excited about the changes. These are meaningful changes, and they know the Bayley doesn't change for cognition. So I think that's one of the major ones. I think there was some misconception about the safety, lower extremity weakness that was reported. It was really 1 patient moderate, 1 mild. They resolved quickly. But it's out of 53 patients now through the full load. So it's a relatively small issue. It's reversible. I think people are still overstating its meaningfulness. But I think if you talked to KOLs, they say it's not a deal. It's not going to change things. And the regulators said, fine, it's all good. They didn't ask us to do anything to move ahead. And they went ahead and accepted an end-of-Phase 2 schedule already. So I think we're on a path. I think these are the two things that need to be straightened. But what I would say, the magnitude of the data we saw, the speed and the combination of domains is something quite exceptional. And I think people aren't seeing that multiple domains of improvement from one treatment in areas that normally don't change. And we need to keep telling our story. And I hope that as people talk to more KOLs and see the data and understand it, that might help inform what the meaningfulness of what we're seeing and how unusual it is for this disease to see any change at all. So we're excited about it, and thank you for the question.

Our next question comes from the line of Tazeen Ahmad with Bank of America Securities.

Just in terms of timing for the Orbit and Cosmic study for OI, do you think that they're going to read out at around this time? And is it your plan to submit for the different age groups as part of a single application, or is it going to be scattered?

Well, fortunately, both studies over-enrolled but got to the same point almost at the same time. And I actually think the younger patients will probably historically respond faster. So, I actually think both studies will probably read out about the same time. Our expectation would be to file for the full age range based on that data. So we're actually in good shape to do that. I think it's the right thing. I think it would be tough to submit one part of the age range and not the youngest. So, with the young patient we're excited to get enrolled, it puts it in play to have both studies in parallel and get them both in the filing, that's our plan.

Our next question comes from the line of Gena Wang with Barclays.

Regarding the GTX-102, the Phase 3 trial design is going to finalize with the FDA. What will be your single domain for primary endpoint? Is that the Bayley-4 cognition? And also, will you use full-loading doses or 3 loading doses since you're also exploring 3 loading doses in cohorts C to E? And very quickly on the Orbit trial enrollment. And did I hear you correctly the timing, the first interim analyses would still be the same before year-end, or could that be earlier than initial assumptions since now you complete enrollment ahead of expectation?

So on the GTX-102 Phase 3, the primary endpoint we're most likely looking at is the Bayley cognition score that we've talked about. It's an integration of multiple things that happen. They improve the most. It improves rapidly. It's a validated tool. It's well known. I think these are features. The FDA is certainly aware of the standpoint and choice we've had discussions on it. We'll include other domains within the secondaries. And the MDRI will be, we think, one of the key secondaries. That's our expectation and the plan. But I think we've got great data on all of these and could potentially use other ones if we wanted to. But I think Bayley's cognition most likely. With regard to 3 or 4 doses, let me clarify the cohorts that we're testing. All have the same number of doses through day 170. It's just in cohort A and B, they're actually getting 4, and then there's a 3-month separation. And in the other cohorts, we have the 4th dose separated by a month. So, it's a slight difference between the two. So, it's not really 3 versus 4. It's really 6 doses over about a 6-month period; it's just exactly how they're spread out. We will make a final decision on that with the agency looking at all of our data, but I don't think there will be a material difference between them. We were just testing them out just to see if there was any difference in how patients would behave or what safety would be like. But right now, we feel comfortable doing either. Now on the UX143 timing, we got done here in April, essentially. The timing for the interim depends a little bit on when we think the fractures would be hit and timing. Our expectation is coming toward the end of the year, possibly early in the next year. So, it's around that same timeframe. It's not really changed. We just want to be clear there's a lot of factors that come into doing the interim. And so it also is happening in December, let's say, December, January. So there's a lot of other things going on. But we're not really changing that. I think it could happen in early January before we would hear. Keep in mind that the actual process may begin for sure. And then, it takes time to get through it because they have to clean the data, prepare it, analyze it, DMC meeting and then we'll release it. But our expectation is DMC opportunity for review would be end of the year, early next year. If it's positive and hits less than p-value less than 0.01, then we would hear about it. If it's not positive, then it will go on to the next one. We set that stringent standard. So it may not mean much to miss because I think it could be a great result, but is not quite 0.01. But that's the timing. Hopefully, that's clear for you.

Next question comes from the line of Dae Gon Ha with Stifel.

Congrats on the progress. I'll just bundle the questions and ask 2 straight away. So, on the GTX-102, when the press release talks about other regulatory meetings in the second half, I mean, you've obviously had conversations with the FDA. But what do you think are some of the divergences or differences that they might bring up in terms of endpoints, for example, or even trial design like enrollment and duration? And then second question, just going earlier to the 401 GSD1a. Can you provide a little bit more color on how you're thinking about presenting the euglycemia throughout the night since that's such an important aspect for KOL?

The other extra meaning it's just normal habit with the products of this importance and size that you're going to talk to the European authorities and you talk to the Japanese authorities about what we're doing. The FDA review is really the dominant view which will drive the decision-making. We've had preliminary discussions, so it's not like we haven't had any. The design of the study is pretty standard. The expectation it's likely to be day 338 or 48-week study. So I think these are pretty standard choices. I don't expect there to be much problem with them. And I don't actually think there's going to be a lot of differences. If there were some differences on endpoints or we can, of course, customize the statistical plan for each region, which we have done in other programs where necessary. But I think the hard-wired piece is randomized trial, 100, 120 patients. And that basic design, I think that's going to be a universe. I don't think there's going to be any problem. So the rest of it is going to be more about statistics and positioning, if anything. We're comfortable, though, that what we're proposing is pretty straightforward, and I don't really think that will be a problem. But of course, there can be feedback. As I said, the FDA's position would dominate our choices for going forward. With regard to the GSDIa program, we've been presenting the data, looking at the fraction of time between the low and the high, right? That's been mostly what we've been doing, Erik, right? And we'll likely look at the nighttime on the CGM monitor where the patients will sleep and the CGM monitor, and we'll look at those tracings. When we did that during Phase 1/2, I was the most impressed with you take kids who were not taking starch at night any longer, and you can watch their glucose; you can see their glucose turn the corner and stabilize. And so, you knew their livers were turning on and releasing glucose. So we're going to look for that pattern that they can safely go through the night and that their livers are going to keep them safe. So, we'll be able to do that just looking at CGM. I wasn't sure you think there's anything else, Eric?

We are maintaining the controlled fasting challenge in the hospital setting. So we will bring them in, fast them overnight and monitor them in a controlled setting. So that's further support from a really large amount of data we'll be getting from the CGM on a daily basis.

So am I understanding it correct? It's going to be an average graph, if you will, across the treated and untreated across the 48 weeks of what the low versus high would be on an every night basis?

So for each patient, there's an interval time where we're doing intensive monitoring of their glucose levels. During those periods, we'll take that create an average for each patient of where they are in their range, right, set their target. We're not averaging and then doing the mean. We're taking each patient for their own control range. And then we'll do the mean of that. And you'll see a graph, which we've had before like a bar chart that shows where the 2 groups, how they're ranging over time between the high and the low. We can talk more about that, but there's a way to present this over time. So you can kind of see the sense of improving control, decreasing hyperglycemia and maintaining no hypoglycemia and tightening up over time, which is what we've been watching in our other patients.

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

We often get asked about setting expectations for the first interim readouts for Setrusumab. Could you please help us frame what are some of the factors that are controllable that we can kind of help to predict in advance? And then some of the items where we're less sure about. And again, how to help frame these 2 expectations?

I believe our Phase 2 data indicates what we can expect moving forward. I anticipate that the reduction will be comparable to what we've observed previously, possibly even better. We found a 67% reduction with a minimum of 6 months and an average of 9 months of exposure. The patients we are enrolling seem quite comfortable with that. It’s possible that the enrolled patients might experience a higher fracture rate. Therefore, we expect to see a similar level of reduction. When enrolling patients with fractures, the situation isn't entirely manageable; we accept them as they are. However, since we have a threshold requirement to participate in the trial, we are essentially excluding patients who would have very low fracture rates and might not show a benefit in that timeframe. Given the type of patients we are enrolling, I think we are well-positioned to achieve similar results to what we previously observed. I don't foresee any uncontrolled factors affecting this. Eric, do you have anything to add?

Yes, definitely. I mean, I think the biggest controllable factor was really enrollment rate and the studies are fully enrolled. Yes, we know the types of patients, and it was good to get a good mix of 1, 3, and 4 in there. I would say, yes, I would agree, the uncontrollable factor may be, especially when you're first initiating treatment in the first couple of months, you may have some patients arriving with fractures before Setrusumab really takes effect there. But there is a degree of unpredictability with fractures.

It's likely that some of the kids are feeling better and becoming more active. While there is concern that this might lead to more fractures, it does not seem to be the case, as they haven't reported any fractures. Therefore, we are not worried about the increased activity. It appears that their bones are becoming stronger, and they are doing well. In fact, increased activity likely helps to strengthen the bones more quickly because the physical strain promotes bone strengthening. Thank you for the question.

Our next question comes from the line of Maurice Raycroft with Jefferies.

Maybe I'll ask one on Wilson's disease. Just wondering how you're assessing changes in global copper metabolism. And what drives the time point of the endpoint or the time frame for when you can measure benefit and get adequate insight into benefit?

Well, the 2 main ways we're looking at copper are how much free copper is coming out in the urine, right? The urine copper, which is a sign of how much is sort of oozing out of the tissues and coming out with a key letter. So, if you get rid of the detoxifying if you detox copper through the bile, then you should have less coming out in your urine. So that's the detox side of the equation. On the other side of the equation is loading copper on the ceruloplasmin oxidase activity. So, we'll be measuring the ceruloplasmin oxidase activity, which is a very sensitive way of looking at copper loaded correctly on ceruloplasmin. So those 2 biomarker assays will give us a sense of the overall copper metabolism. I wasn't sure, Eric, was there anything else to add?

Yes. We're doing a liver biopsy sub-study. So, it will be great. This is really the first time we've been able to do liver biopsies. We made it optional, but the majority of patients did opt in for that. So, it will be interesting to look at copper concentration and histopathology in those samples.

Our next question comes from the line of Jeff Hung with Morgan Stanley.

For the Setrusumab Orbit study, if you go to the second interim, what were the parameters for stopping the study at that point? And in that scenario, would you have greater confidence for stopping the study early with the second interim? And then for the Cosmic study, what would it take for you to stop the study early in that?

The second interim we have planned is set at 0.01, which is significantly less stringent, representing a tenfold larger p-value. The final measure is at 0.04. We believe the second interim is less stringent because by that point, every participant will have completed at least one year of treatment, minimizing regulatory concerns. The 18-month timeframe will correspond to the 0.04, serving as a safety net if we need to extend it that long. For the Cosmic study, it’s important to note that it’s a randomized open-label study. We will be reviewing x-ray results with the Data Monitoring Committee (DMC), which will be assessing outcomes, particularly fracture rates among the children involved. If the DMC identifies a significant difference in fracture rates, they may decide to terminate the study to prevent children from receiving suboptimal treatment. Although we haven't established specific criteria for this, the DMC will review the data periodically throughout the year. We anticipate that younger patients will show quicker responses, and since enrollment is now complete, we expect that by the time we conduct the first interim analysis of one study, the other study will also be advancing well. If one study achieves its endpoints, we believe the other will follow closely. The DMC will continuously evaluate the data to ascertain whether there's a valid reason to halt the study. Extending the study for an additional year is particularly significant for a 2-year-old with a bone condition, underscoring the importance of the DMC being able to take timely actions based on their evaluations.

Next question comes from the line of Joon So Lee with Truist.

For the Angelman program, are you talking to CDER or the neurology department? And if it's not CDER, would it be possible to request GTX wanted to be reviewed by CDER? And the Phase 2 meeting, how strongly would you be advocating for MDRI as an approvable endpoint? Or has that ship already sailed?

We are currently under the jurisdiction of CDER and are functioning within the psychiatry section of the neurology sciences group, where we've been all along. The team is doing exceptionally well, led by Tiffany Farchione, and we've had productive meetings with her, making it a pleasure to collaborate. We are satisfied with our current situation and its progress. As for CDER and the neurology department, there's really no need to change our approach. The drug is well-characterized, and pursuing a fit within the CDER framework would not be beneficial to us at this time. Therefore, we feel good about our position. Regarding MDRI, we appreciate its potential, but it presents a different set of challenges. While it was part of our Mepsevii program and provided support, it remains a new methodology for the FDA. We've engaged in numerous discussions and I've presented extensively at conferences. I believe support for MDRI will increase as we continue to utilize it. Our strategy will likely involve proposing a single primary validated endpoint while incorporating MDRI as an important secondary endpoint. This allows us to meet the FDA's preferences while also including MDRI to bolster our product. I genuinely believe that in the long run, MDRI will represent a fundamentally new and improved approach to analyzing heterogeneous neurological disorders. Once the FDA evaluates its performance in a large randomized trial and gains an understanding of its benefits, I am confident they will begin to appreciate why it offers a superior method for assessing clinical outcomes.

Our next question comes from the line of Joseph Schwartz with Leerink Partners.

This is Will on for Joe today. Congrats on the progress this quarter. So, one for us on the DTX401 program. We recently saw the updated data in the ASGCT abstracts, which suggests that the cornstarch benefit rebounded favorably compared to the data shared last year. So just wondering if you could provide some comments on how you're thinking about the durability of this treatment and how this may change your expectations, if at all, for the cornstarch production that we might see in the pivotal study later this quarter?

I don't think that has changed our opinion significantly. What we've observed over time is that the reduction in starch occurs quickly, but reaching the ultimate level takes longer and involves some secondary factors. It largely depends on how the doctor manages the starch levels in the long run. They need to reduce starch in order to lower glucose levels, as the expression of the gene therapy relies on stimulating the promoter using normal GSDIa, glucose-6-phosphate. There are some interesting aspects to how this works, but we are comfortable with our current position. Our expectations for the study remain unchanged. We believe we observed about a 50% reduction in a short time frame; however, it took considerably longer to achieve complete reduction, which was more influenced by the way doctors adjusted treatment for each patient. We are confident in our observations and do not have concerns about durability at this stage. We think it has been positive over the long term.

Come from the line of Yaron Werber with TD Cowen.

This is Brendan on for Yaron. Just a quick one from us on the gene therapy pipeline. Correct me if I'm wrong, I think you recently said that you might file for GSDIa around the end of this year or early next year. I totally understand that this is somewhat in flux. But I guess in light of the transition for the manufacturing, should we expect kind of similar timing between top line data and filings for OTC? Or would you expect that to potentially go more quickly after the manufacturing in-house? And then kind of along the same lines on pricing. Is it fair to assume that both GSDIa and OTC would be priced similarly? And I guess, if not, what might be driving the differences?

I don't want to predict the exact timing of the BLA filing. We've transitioned our manufacturing internally and are working on those runs. We need to meet with the FDA to clarify whether our manufacturing needs to be included in the initial filing or can be submitted later. These factors will influence the timing of the filing, and we need to gather the necessary data and discuss it in a pre-LET meeting. We expect that if the filing is delayed until late this year, it will likely occur early next year. However, we're hesitant to make predictions until we clarify certain aspects. As for the OTC timing, it's further out, and I'm not sure how quickly that will progress. We have six delay filings anticipated over the next three years, with three of them expected within the next year. Therefore, we'll be quite busy, and the OTC will need to be integrated once Phase 3 is completed. Regarding pricing, I don't think there will be significant differences in how we price GTX-102, as the populations and disease severities are similar. OTC has a very expensive drug like RAVICTI that many patients use, which may justify pricing more easily based on production costs, assuming patients switch from other drugs. However, we haven't established a pricing strategy yet; we're monitoring the situation and will formulate a plan as we get closer.

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

This is Lydia on for Salveen. Just another on the end of Phase 2 meeting with the FDA for Angelman. What would you view as a positive outcome here? And could you just remind us how you plan to message to the Street post this meeting and what details you plan to disclose?

So I think a positive outcome is essentially finalizing the endpoint, palette of endpoints and statistical approach we're taking as well as what the ability to put that forth and get it fillable for approval; that would be the idea. So, while we already have agreement on basic studies, I want to set some comfort on the duration as well as the dosing regimen and the endpoints. But I think the majority issue will be finalizing endpoints with them, and that's what people are most interested in. With regard to messaging, if we complete the meeting and have a very clear solution, we'll put out a notice to the Street on that fact. Sometimes, I mean to be pretty clear, but there's still a couple of pieces to solve, in which case we'd finish that discussion until there is a final agreement which we have to announce, and then we would only announce at that point in time.

Our next question comes from the line of Jack Allen with Baird.

I know a few people have talked around this idea, but what are you thinking about as it relates to expectations for the annual fracture rate in the placebo on Orbit? And I also wanted to ask, are you matching patients based on their seasonal enrollment in the study? I recently did some work with the KOL and they mentioned that seasonality can affect fracture rate as well. Any context you provide there would be very helpful.

We don't have control over the seasons, but if we did, there are many factors that influence the fracture rate. One thing I want to highlight is that simply entering a trial can increase the fracture rate due to activities like transportation and getting in and out of cars. In fact, during the Phase 2 study, 25% of fractures occurred between screening and the start of the trial. Many fractures last year were related to the trial process itself. Fractures are indeed difficult to predict. Currently, we have estimated about 0.67 fractures. The appropriate threshold for study entry is set at one fracture per year, but we are being conservative in our assumptions. We always prefer to set a safe boundary rather than expecting a middle ground. Our expectation is that the rate should be higher than 0.67, though the exact amount will depend on the enrolled participants, their experiences, travel distances, potential risks, and the type of osteogenesis imperfecta they have. With our assumption of a 0.67 boundary and a 50% reduction, we have sufficient power for the study. If the fracture rate and reduction exceed our expectations, we could have considerably more power than necessary. Overall, I believe we are well-positioned, and we have established 0.67 as the criteria for entry, requiring at least one fracture per year.

I guess just as a seasonality component, I understand it's a global study, the patients are going to be distributed and matched across the geographies?

Yes, they will remember they're always going to be in small randomized blocks. So, within any given timeframe, the blocks are small enough that you should still be creating outcomes, even as we stratify based on fracture rate. Patients with high and low fractures will be evenly distributed between the two groups. I would also note that the trial primarily enrolled the majority of patients between November and March, so they were all enrolled within a fairly tight timeframe.

Yes. And the randomization should help with seasonality too, because you're not randomizing exactly one to one, but you are trying to keep that balance through randomization. So, that could help there as well.

Next question comes from the line of Luca Issi with RBC Capital.

Maybe circling back on the prior question on the first interim look for Cosmic. Maybe just ask slightly differently. In a scenario where the Phase 2 data is replicated and the 57% reduction in fracture is actually replicated in the Phase 3. Would that be sufficient to hit the statistic by year-end? Or do you need to see something better in order to win this statistic by year-end? So that's question number one. And question number two, on OI. Can you just remind us the latest thinking in the competitive landscape? It looks like Amgen's actually running a trial Phase 3 versus Bisphosphonates in 5 versus 17 years of age versus you're obviously running a Phase 2 versus placebo in 5 to 25 years of age. How should we reconcile that difference? Why is the FDA asking them to run a trial versus Bisphosphonates 5 and older versus you running a trial versus placebo? Any thoughts there are much appreciated.

I believe our product is superior, although that might be an oversimplification. Our trial will involve participants aged 5 to 25 using a placebo, while we're also conducting a trial involving ages 2 to 7 against Bisphosphonates, allowing us to analyze both perspectives. I'm confident in our position. Amgen's data on bone mineral density at six months was around half of what we achieved, and that was with their highest tested dose. Therefore, our data currently appears stronger than theirs. At this moment, we have no concerns.

Regarding the Cosmic trial, setrusumab is one of the considerations. Another crucial factor is the actual number of fractures occurring. For instance, if there are 1.5 fractures, it could significantly aid the control group's chances of reaching the endpoint, especially if the target is 0.67 or less. However, achieving 6% or 7% is sufficient, provided there are enough fractures. These two elements work together and influence the outcomes. Therefore, we cannot make a definitive prediction. It's challenging to determine if the initial target will be met. The likelihood appears relatively low, but we wanted to remain open to the possibility that if there are a high number of fractures and significant reduction, we might be forced to act since it wouldn't be appropriate to continue administering placebo to children who have already exceeded the necessary requirements. I believe that's a wise decision and in their best interest.

I'm showing no further questions in the queue. I would now like to turn the call back over to Joshua for 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.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.