Ultragenyx Pharmaceutical Inc. Q2 FY2024 Earnings Call

Good afternoon, and welcome to the Ultragenyx Second Quarter 2024 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 question-and-answer portion of the call. Please go ahead. 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. We've had an incredible first half of the year and look forward to sharing more with you today. On the commercial front, our strong revenue performance puts us on the trajectory to outperform our prior projections, and so we're raising our total revenue guidance range. We're happy with what this means for access to our drugs globally, and Eric and Howard can share more on the revenue details. Within our clinical pipeline, we have meaningfully advanced our late-stage programs through multiple positive data readouts and successful and critically important regulatory interactions. On the data front, in addition to the positive results we shared earlier this year on both UX-111 in Sanfilippo syndrome and GTX-102 in Angelman syndrome, we recently announced positive Phase III results from the DTX401 gene therapy for the treatment of patients with glycogen storage disease Type 1a and additional long-term positive Phase II results from the UX143 antibody for the treatment of patients with Osteogenesis Imperfecta. For GTX-102 for Angelman syndrome, we announced the successful completion of an end of Phase II meeting with the FDA where we aligned on Phase III study design and key endpoints to be evaluated. Our teams have been working with our study sites to initiate our global Phase III study by the end of this year. On UX-111 for Angelman syndrome Type A, we also reached agreement with the FDA on a path forward to seek accelerated approval. The FDA has agreed to use cerebrospinal fluid heparan sulfate as a reasonable surrogate endpoint to support the submission of a BLA supported by our clinical data to date. Our next step is to finalize the details of our submission with the agency in a pre-BLA meeting, and we intend to submit this BLA later this year or early next. Selectively, this puts us in a position to have multiple regulatory marketing submissions and key clinical data readouts over the next six to 18 months, which is extraordinary. I spent my career developing therapies in rare disease and I can tell you I've never seen a rare disease company with the breadth and depth of opportunities we have ahead of us, nor with our ability to move all these things forward. These achievements are a direct result of our excellent execution across the company from our committed employees and our best-in-class approach to rare disease drug development. It's a very exciting time for Ultragenyx. I'll now turn the call over to our Chief Commercial Officer, Erik Harris, to provide an update on the momentum across our commercial portfolio that has led us to raise our total revenue guidance for the year.

Thank you, Emil, and good afternoon, everyone. I'll start with Crysvita's performance in the United States. The demand for Crysvita in the US remained strong in Q2 2024. Approximately 60% of the stock forms came from adult patients and were prescribed by community physicians with over 40 new prescribers in the quarter. This is encouraging, given adult penetration is in the low 20s and implies Crysvita has ample room to continue growing. 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 Latin America team delivered another successful quarter by adding approximately 60 new patients to Crysvita, totaling over 620 patients on reimbursed therapy since launch. Brazil is the largest market in Latin America and continues to drive the majority of revenue in the region. That said, we are beginning to see more meaningful contributions from countries like Argentina and Mexico supported by the underlying patient demand. As I mentioned on previous earnings calls, we expect quarter-to-quarter variability in Latin America revenue due to 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 US, we added approximately 30 start forms and 30 patients on reimbursed therapy, resulting in approximately 520 reimbursed patients since launch. The split between pediatric and adult patients continues to be approximately 65% pediatric and 35% adults. The number of new prescribers continued to grow, adding approximately 10 new prescribers in Q2 2024 with half of them writing more than one prescription. For Dojolvi across Europe and the MENA region, revenue is currently driven by named patient sales requests. There are approximately 215 patients treated under MPS across 12 countries in the region. The majority of demand is from France, but we are receiving an increasing number of requests from other countries within the EMEA region, including the Middle East. As I have said before, 2024 is an important launch year for Evkeeza. In the EMEA region, we added approximately 60 new patients in the second quarter who are being treated through MPS and regular reimbursement processes, where we have approval. In Japan, the launch is starting, but has already gained meaningful contribution following regulatory approval in January and pricing and reimbursement approval in April. The team there has done an excellent job to map and identify a majority of patients in the country and has processed 35 stock forms through the second quarter of 2024. In our territories, we continue to receive positive feedback from the HOFH physician and patient communities, and they are all very excited to have Evkeeza as a treatment option. We expect demand for Evkeeza to continue growing as we bring this important therapy to patients with HOFH. Overall, Q2 2024 was a strong quarter for Ultragenyx. As expected, the second quarter bounced off the first quarter seasonality leading to $147 million in total revenue. The broad strength across the commercial portfolio through the first six months of the year puts us on a trajectory that gives us confidence we will exceed the guidance range that we established at the beginning of the year. With that, I'll turn the call to Howard to share more details on our financial results for the quarter and guidance for the year.

Thanks, Erik and good afternoon everyone. I'll start by briefly summarizing our financials that were reported in our press release earlier today. As Erik noted, we reported $147 million in total revenue for the second quarter of 2024. Crysvita contributed $114 million, including $67 million from North America, $40 million from Latin America and Turkey, and $6 million from Europe. Dojolvi revenue in the second quarter was $19 million, Evkeeza revenue in the second quarter was $8 million, and Mepsevii revenue in the second quarter was $6 million. Our total operating expenses in the second quarter were $263 million, which included R&D expenses of $162 million, SG&A expenses of $81 million, and cost of sales of $21 million. Operating expenses included noncash stock-based compensation of $39 million. In the second quarter, net loss was $132 million or $1.52 per share. As of June 30, 2024, we had $874 million in cash, cash equivalents, and marketable securities, which included net proceeds of $381 million from our offering in June. Net cash used in operations was $77 million for the second quarter and was $268 million in total for the first half of the year. As we discussed on our May call, there is seasonality in the first quarter because it includes items like the payment of annual bonuses. Our guidance for 2024 net cash used in operations remains unchanged and is expected to be less than $400 million for the year. Shifting to revenue guidance, we are increasing our range for total revenue, which is now expected to be between $530 million and $550 million for the year. This reflects strong performance and trajectory across all of our products, including Crysvita globally and the launch of Evkeeza in our territories. Accordingly, we are targeting Crysvita revenue to be towards the upper end of our existing range of $375 million to $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 cash and non-cash royalties from North America and Europe. We continue to expect the Dojolvi revenue to be between $75 million and $80 million. With that, I'll turn the call to our CMO, Eric Crombez.

Thank you, Howard, and good afternoon everyone. The first half of this year has seen a number of important clinical catalysts for UX-111 for the treatment of MPS IIIA. We announced data demonstrating clinically significant reductions in heparan sulfate that correlated with improved long-term cognitive function. This was followed up with our announcement in June that we reached agreement with the FDA that CSF heparan sulfate can be used as a surrogate endpoint for accelerated approval. We expect to finalize details of our filing package in a pre-BLA meeting later this year with the goal of filing the BLA around the end of 2024. For DTX401 for the treatment of GSDIa, we announced positive top-line data from the Phase III study that showed that treatment with DTX401 resulted in a statistically significant reduction in daily cornstarch at week 48 with maintenance of strong glucose control. Results from this study will be discussed with regulatory authorities in a pre-BLA meeting in the second half of 2024. For UX143, for the treatment of Osteogenesis Imperfecta, we announced 14-month data from the Phase II portion of Orbit that showed treatment with setrusumab resulted in a sustained 67% reduction in annual fracture rate and persistent median annualized fracture rate of zero. There were also continued substantial improvements in bone mineral density with a mean increase from baseline of 22% and a mean improvement in Z score of 1.25. For GTX-102 for the treatment of Angelman syndrome in April, we shared additional Phase I/II data from the expansion cohorts that showed rapid and clinically meaningful improvements across multiple domains. These improvements were consistent or exceeding those of the dose escalation cohorts data at day 170. We also shared that additional long-term data in dose escalation cohorts showed increasing and sustained clinical benefit through day 758. There's been a lot of news flow in the space recently and we feel very good about the ability of GTX-102 to improve the lives of patients affected by this disorder. We continue to see the patients in the Phase II portion of the study developing new skills across multiple domains with no new serious adverse events, and we believe we are in a strong position as we advance Phase III start-up activities. Last month we completed a successful end of Phase II meeting with the FDA, where we aligned on the design for a global 48-week blinded randomized sham-controlled Phase III study. We expect to enroll approximately 120 patients between four and 17 years of age who have a full UBE3A deletion. The primary endpoint will be improvement in cognition assessed by the Bayley-4 cognition raw score. The study will also include a key secondary endpoint of a multi-domain responder index evaluating cognition, receptive communication, behavior, gross motor, and sleep. Individual secondary endpoints were also discussed and aligned on with the FDA for the domains of communication, behavior, motor function, and sleep. Phase III study start-up activities have been ongoing for some time, and now with FDA alignment we are focused on initiating the study by year-end. The ongoing Phase II study includes 25 sites across eight countries, which allowed us to respond to the significant global demand to participate in the study and for these types to gain experience with GTX-102. With startup activities already in progress and alignment with FDA and design, we are on track to begin enrollment of our Phase III study by the end of this year. While this initial Phase III study will focus on patients with full deletions who represent the majority of patients with Angelman syndrome, we are also planning to initiate an open-label study to evaluate GTX-102 for the treatment of patients with other genotypes and in other age groups in 2025. We expect to enroll both studies in parallel and plan to include both sets of data in a future BLA application. 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 we performed well globally on the commercialization of four products. I'll close quickly by summarizing our key clinical catalysts for the rest of the year. For GTX-102 for Angelman syndrome, we're working to initiate the Phase III study by the end of the year and over time plan to share updates on how the Phase II patients are doing as they continue receiving maintenance doses. Our long-term data is far superior to any other data presented on ASOs for Angelman to-date and this puts us in an excellent position for the future of that program. For the Phase III portion of the UX143 Orbit study, there are two interim analyses planned with the first anticipated by year-end or early 2025. The first analysis will have a stringent threshold of p-value less than or equal to 0.001. If the threshold is not met, a second interim analysis will occur a few months later followed by a final Angelman study at 18 months. The first interim analysis will not be reported to the company by the Data Monitoring Committee unless the data have met this very stringent threshold, and it's important for study integrity to run these analyses very carefully and rigorously. In the event of an interim analysis that clears the threshold, we would share that outcome, but top line results would not be announced immediately as the study would require patients to complete their final visits over a couple of months and then there's time to collect and prepare the data for formal analysis. For UX701 for Wilson disease, we expect to share Stage 1 data in the second half of the year. In the dose-finding stage of data readout, we'll be prompted once the last patient with Cohort three has received Angelman therapy for six months or more followed by some additional time to collect and analyze all of the data. All of these are very exciting catalysts, and while the teams are executing on these clinical programs, we will also be working on two BLA submissions, one for UX-111 for Sanfilippo syndrome, which is expected around the end of the year, and the other for DTX401 for glycogen storage disease type 1a, which is expected in 2025. Ultragenyx is at an incredible inflection point. Over the next 12 to 18 months, we expect to have filed two BLAs, provide Phase III data for new UX143, and should be well on our way with the GTX-102 Phase III study, all the while we are generating meaningful revenue growth, which is now expected to be between $530 million and $550 million this year. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

Thank you very much, sir. The first question that we have comes from Gena Wang of Barclays. Please go ahead.

Angelman syndrome data update. We also saw quite a few other data updates from both Ionis and Roche. Maybe what are your latest thoughts regarding the competitive landscape and the read-through to your trial design, especially if we're looking at the loading dose frequency and also the endpoints such as expressive communication for Bayley?

Emil, was your line muted? We can't hear you. All right. It looks like we're having maybe a little bit of technical difficulty and we've lost Emil's line. Eric, are you able to help out with that question?

Yes. Thanks, and certainly we've been following along the important data updates that were released around the time of the ASF. So certainly, feel very good about where we stand looking more closely at the data both from Roche and importantly from Ionis. As we've mentioned, we had a very successful end-of-Phase II meeting with the FDA, and we really have locked in our plans for Phase III as we're looking forward to first patient by end of year. We have done some thought on loading dose and reducing from four to three loading doses, which also gives us the ability to increase our dose and drive to higher doses in a shorter period and really get to a data readout for that Phase III under one year of time. Again, looking across all of the important domains we've been talking about collectively in the MDRI and individually as secondary endpoints, we're seeing great movement across all of those domains. We are moving forward with cognition raw scores for our primary endpoint but certainly looking at expressive communication as an important secondary endpoint.

Hello, I'm back.

Eric took care of the call. Gena, are there any follow-up questions that you had for Emil?

Sure. Yes. So maybe regarding the Wilson data in the second half of this year, maybe how many more patients and what kind of data do you on biomarkers that you wish you could have with that?

Well, there is a total of 15 patients, five in each cohort. So it will be 15 patients worth of data at each dose level. It will be primarily biochemical. There's not enough patients in there that have a lot of clinical information, right? So it will be focused on copper levels, distribution levels, and other aspects of the gene therapy. I think it will give us an understanding of if the gene therapy is working well. We had certainly an early indication and that was very encouraging. So we're primarily focused on the biochemical part of the story at this point.

Great. Thank you.

The next question we have comes from Salveen Richter of Goldman Sachs. Please go ahead.

Hi. Can you hear me now?

Loud and clear, Salveen. Go ahead.

So sorry about that. Thank you for taking my question. Could you help us understand how you look on OI with regard to the Phase II data translating to Phase III here? And particularly, as the patients see improvements how that kind of impacts the rate of fractures here for the population and your assumptions around that in the Phase III trial?

Well, I think what we've shown at the 14-month data was in fact that the bone mineral density continues to increase dramatically. And the p-value got much smaller. So remember that's looking at all of the patients not just the median, but it tells you – the p-value declining substantially tells that all of the patients are moving toward a reduction in fractures. So we feel that the effect is very large. In terms of translating to Phase III, we know from the data we had in a few places that they do not see bone mineral density improvement during this period of time. So there will be no placebo effect from that. With regard to fractures, fractures are dependent on both disease severity and also environmental factors like what the patient is doing. Our expectation is that patients, when they feel better, could start doing more work, but what we have seen is patients that have gotten stronger and have been on treatment for a longer period of time will have falls and not have fractures. So we feel pretty confident that the strength of bones will allow them to compensate for any change that might occur because patients are more active. But we do think that the way patients feel their activity will bode well for supportive clinical data and how the patients are doing, which I think will support the value of the product and its clinical meaning for this. Did I hit on the thing you were most interested in Salveen?

That's really helpful. Thank you.

The next question we have comes from Dae Gon Ha from Stifel. Please go ahead.

Hey, good afternoon, guys. Thanks for taking my question. Hope I'm coming off okay. Can you guys hear me?

Loud and clear, Dae Gon.

Awesome. So maybe just revisiting or maybe rewording Gena's earlier question, Emil coming out of that ASF and we certainly have some details around the different domains and its impact by the ASOs. I guess now that the Phase III trial design is set, is there a certain strategy you have in terms of maximizing GTX-102's product differentiation as you feel about the other ASOs coming through fairly quickly? And then, just maybe a little bit tangential here, but I was wondering if you guys ever thought about using a numayo reservoir for GTX-102, just thinking about intrathecal administration and its affiliated side effects? I mean wouldn't a numayo reservoir be like a life cycle management strategy, where you can get more drug a bit more safely, perhaps with greater potency? Thanks so much.

Thanks, Dae Gon. So on the first, I think the thing is part about looking at our data is that we actually are showing long-term data and showing the Bayley four condition into the double-digit range for the majority of patients if you look long enough. So we were showing two years plus of data. I haven't seen any of that from anyone. So from right now, we're the only program that's showing that kind of data. Our drug is more potent than the other drugs. We're operating in the 5- to 14-milligram range far below that. That tells you the science of what we've been talking about is right. The targeted region that we have added is more potent and more effective. So, we believe it will differentiate on superior efficacy. And I'm waiting to see other data from people that will actually match what we have. With regard to your point, I think it's a good point. I think one of our philosophies in nephrology is that we will first make things work and then we will make them easy. Our goal is to get a drug approved for this Angelman syndrome as soon as possible. But then we'll look at how do you make this easier for patients or more potent. But Omya is one thing. It is certainly an invasive approach. It has its upsides and downsides. There are also companies that make lumbar catheter-type devices, which would have catheters inside, which you can access, which is a much simpler procedure than a lumbar puncture, through a port – a similar idea. So certainly those are things we can do as life cycle management. Those are things we will consider, and we as a company never sit still. If we get approved, we're still going to be constantly looking into ways to improve the patient experience, improve the efficacy, and continue to drive forward with the best possible outcome. So we feel like we're in a great position. And after ASF, I haven't seen anything that tells me any different way.

Fair enough. Thank you very much, and congrats on the progress.

Thank you. The next question we have comes from Tazeen Ahmad of Bank of America. Please go ahead.

Hi, good afternoon. And thanks for taking my question. On Wilson, you're talking about doing that interim Stage 1 readout. And maybe I wanted to get a sense on initially, your thought was that you would have a readout in the first half, and then it's moved a couple of times to now second half of the year. Just curious, the reason for the delay. And then once we do see that data, what should we expect those next steps in the development of that program? Thanks.

Yes. So Tazeen, thank you for the question. I think one of the first things is that to finish out the cohort three took longer and we ended up having patients that qualified and something happened, we ended up dragging out the last patient. And so that was part of one of the problems. One thing we saw in the Cohort one data that we did put out is it actually took more time. It took more than six months to see the effects of the drug. It's a transporter for copper. It's not going to behave like some of our enzymes. So, we're learning a little bit about it. So our take was we need to go at least six months of data from the last patient in, and that's what the timing is. I think you have to add on to that, time to clean the data; it is an international Phase II/III study for prepared in Phase, and put it out. So we felt it's important to get this right and make the decisions, and so that's where it is. But we're encouraged by the early data we saw. And I think there is a gene therapy treatment for Wilson on the horizon. And we'll continue to put that data forth and come up with our plan for heading into Phase III.

Thanks. Operator, next question please.

Thank you, sir. The next question we have comes from Kristen Kluska of Cantor Fitzgerald. Please go ahead.

Hi, congrats on a great quarter. On setrusumab, I wanted to ask if you think that there are any benefits this drug could potentially show as it relates to the pain these patients experience. Is there a reason to think that both reducing those fractures and putting down better bone has the potential to have an impact on pain?

Yes. Our impression from the Phase II patients, particularly with their increased activity, they're feeling better. They're having less pain. And while we talk about fractures all the time, OI patients have weak bones. And what that means is lots of microfractures. So, if they do some heavily strong activity, they'll feel terrible the next day because they probably have induced a bunch of microfractures. So, it’s not a single point fracture. What we can see from the patients treated at the one-year point or beyond is that patients are having much more activity—not needing wheelchairs, not being as afraid of physical activity. So, we have confidence that stronger bones will reduce microfractures and will improve pain. And so we are evaluating both pain quality of life and other measures in the study. And it's a large enough study that should help us power those endpoints. So, we think it's one of the ways that we'll make setrusumab a really important therapy for OI.

And then just on that point I know people sometimes ask if you're feeling better and you're doing more activities does that open the door for any potential fractures? But maybe on the other end of that spectrum, if people are exercising and doing more activity could that help even further slowdown any type of bone loss or density loss? Thank you again.

Yes, it's a very good point. I think it certainly could increase fracture risk. We did have a patient who started doing sports again and did have a fracture, but I'm not the one to tell a patient you feel great now, now if you don't do anything with that, right? It's just not rational to think that. What I will say is these patients if you're sedentary you or I sit in our bed and we don't do enough, our bones get weaker. So, the exercise they do will actually stimulate their bones to lay down the bone where their bone is weakest. It will actually enhance their bone strength further. So, I think we'll have a beneficial effect for them to be more active and with sports or anything else. So, we're not worried about the moral risk of getting more fractures. We think it's part of a healthy pattern towards more activity, stronger bone and better lives for these OI patients.

Thanks, Emil.

Thank you. The next question we have comes from Anupam Rama of JPMorgan. Please go ahead.

Hi everyone. This is Priyanka on for Anupam. Just a quick question from us. For UX-111, even though the BLA filing will be based on available data, are there any gating factors for the BLA filing later this year or into early next year?

Well, the one thing we need to make sure is that the CMC put together with our contract manufacturer, they're doing an excellent job. They are derived from the nationwide children's people. They know their stuff, they do good work. And so we feel we're pretty much on track to get where we need to go. That would be one thing that has to be in line. We're having our discussions with the agency about exactly what needs to be in a BLA. The agency has shown the proper flexibility on what needs to be now, what can be in later. And I think right now I don't see any gating factors. It isn't a lot of work putting a BLA together, but we're expected to get there this year.

Thanks so much for taking our question.

Operator, next question please.

Thank you. The next question we have comes from Joon Lee of Truist Securities. Please go ahead.

Hey, congrats on the strong quarter and thanks for taking our question. During Biogen's conference call this morning when asked why they did not opt into Ionis' Angelman program, Biogen indicated that Piaget data may not have crossed the preset go/no-go threshold. Knowing what you know about the competing ASO from what’s been publicly disclosed, in what ways do you think GTX-102 may be a better option for patients than IONIS 582? In other words, as patients consider enrolling for GTX-102 or IONIS study what would be the selling point for your program? Thank you.

Well, I think I am sure Biogen is considering looking at all the data that are publicly available. Since we show substantially higher levels of daily condition achievement over longer periods of time and steady growth in multiple domains, in fact, I think that's a strong data set. What we've seen from our Ionis competitor is a limited amount of data through six months. So I'm sure that Biogen has the capability to understand what the data look like and how to compare, and they made their choice. It seems unlikely to me that they wouldn't have opted in if they had a product that was equal to ours. And at this point, we don't think it is equal. I think our data longer term is substantially stronger. And it didn't meet their criteria and might not have met ours if we were doing their product. But right now, we feel good about our product's potency and the fact that I think it's the number one ASO for Angelman at this point.

Thank you.

Thank you. The next question we have comes from Maury Raycroft of Jefferies. Please go ahead.

Hi. Thanks for taking my question. And I'll ask one about Wilson's disease. For your upcoming update, you're assessing global copper metabolism by biomarkers. What would be considered a win, or what magnitude of change do you need to see to advance to Phase III? Or what scenarios could require further optimization?

Thanks, Maury. I think with Wilson, to have an effective gene therapy, I think it's necessary to see patients to be able to get off standard of care, right, and maintain free copper levels and urinary copper excretion that indicates that they are now top copper through the proper pathway, right? So first off, we have to be able to replace chelators as a way to detox copper. Secondly, we'd like to see some significant improvement in the majority of patients in copper distribution that is a ceruloplasmin copper levels which are generally very low in these patients and are the source of copper to be distributed to the brain and other places. And in many patients, we think that copper deficiency is a contributor to the Wilson phenotype. So those are the two things we're looking for: a substantial improvement in copper distribution over their background baseline, particularly in those patients who are low and the ability to remove standard of care and maintain toxicity control.

Got it. That’s helpful. Thanks for taking my question.

Thank you. The next question we have comes from Joseph Schwartz of Leerink Partners. Please go ahead.

Hi, all. This is Will on for Joe. Thanks for taking our questions. Congrats on the progress this quarter. One for us on GTX-102 outside of the study design and endpoints. Just wondering if the FDA has provided any color on the bar success for approval? And along the same lines, can you remind us of our understanding of what a clinically meaningful benefit would be on the Bayley-4 endpoint? Thank you.

Well, first off, they agreed to a continuous variable analysis for the Bayley-4, right? So there was no set threshold established or required. They thought a variable approach was the right way. So they didn't require responder analysis. We do a responder as part of the MDRI which will support the ceruloplasmin maintenance. So that's what they've required of us. They haven't set any numbers. In our mind, if we can show what we've already seen in Phase II, which is achieving a majority of patients into the double-digit range of Bayley-4, that's essentially twice what is considered a statistically significant improvement in the Bayley-4. I think that's quite important. But I want to be clear about it; while we feature Bayley-4 as a primary, the other endpoints are part of the story and the value of it as we see it through the MRI - the eyes of the clinical community is this combination of factors that is a change of life for patients. So I look at the big picture— the Bayley-4 score itself doesn't tell the whole story. Knowing the patient sleeps well, is not falling down as much, behavior is calmer, and is understanding language spoken language instructions better—these are all things that are a change of life for patients at home. We think some of these states having multiple domains of improvement are going to tell you why this drug would be important for patients. So if we can replicate that in Phase III what we're already showing you in Phase II, I think we're in good shape.

Thank you. The next question we have comes from Yaron Werber of TD Cowen. Please go ahead.

Hi. Thank you for including us. I have a question and a follow-up. Emil, regarding the 48-week endpoint, can you provide some insight into the expected changes in terms of powering that you are anticipating for Phase III? Will there be a longer observation as a secondary endpoint? Also, in relation to GSDIa, we are starting to receive inquiries about the commercial opportunity. You've mentioned a price in the mid-range of about $1 million. How large do you think the market potential is? Thank you.

The 48-week data indicates that we're well above the 90th percentile in terms of power. Even if we assume the placebo group has a three to four times increased natural history, our power remains well over 90%. With a typical natural history control group, it would exceed 95% power. This strong power helps us observe the effect size we're currently witnessing, which is in the double-digit range at 48 weeks. We decided on a longer timeframe because we felt more improvements could be accumulated, enhancing the overall narrative. Regarding GST1a as a commercial opportunity, what's crucial for patients is less about the precise amount of cornstarch and more about their fear of adverse outcomes if they miss doses, reflecting the fragile nature of their condition. The patients are experiencing a shift in their perspective since they now rely less on cornstarch for survival. We believe our Phase III data, due to blinding and the challenges with monitoring their glucose levels, has not shown the full reduction we anticipate, but we expect ongoing improvements as their condition evolves. The change in their quality of life is significant. There is a sense of urgency surrounding this disease; living with the constant fear of death is something they want to avoid. Cornstarch symbolizes the daily risks they face. This condition has a different level of urgency compared to other diseases. We believe there will be a strong demand for our treatment among patients, and their eagerness to receive doses is key to the commercial success of gene therapy. As for pricing, we haven't announced any specifics yet since it's still early. Previously, we mentioned potential pricing in the $1 million to $2 million range, and some programs have exceeded those points. We will carefully assess this and formulate our approach. However, we see GSDIa as a reasonable and significant opportunity that we believe will succeed as an important new therapy, likely similar to other programs with high urgency levels in their patient populations.

Thank you. The next question we have comes from Jeffrey Hung of Morgan Stanley. Please go ahead.

Hi. This is Michael Riad on for Jeff Hung. Going back to setrusumab and thinking about that cycle of fractures leading to bone deformation and then loss of activity. What factors do you think play a role—bigger on the treatment course? Is it age or OI type? I mean if you think about the profile which is now—do you view it as like a broadly better option for the most pediatric patients regardless of type? Whereas for adults you'd expect more OI type-dependent penetration? Thank you.

Well, I think each patient is going to have a reason to be treated. It may be different. If you're a type 3 patient or type 4 with a really severe bone disease and you're treated when you're one or two years old, our hope—and we will see with the Phase 3 data show—is that we could be transformative in terms of stopping fractures, stopping vertical compression and not basically destroying your skeleton before your three or four years of age and ending up in a wheelchair. So that would be what you could do when you're treating kids that are young. However, when they're older, even if you're in a wheelchair because you have to form bones, you're still fracturing, you're still in pain all the time. Being able to stop the pain by stopping the fractures, even if you can't change the information, is still highly valuable in an adult with Type 3 or Type 4. For Type 1, probably the sphere half of that population will have enough fractures where at any age, young or old, it's going to be beneficial. They don't have as much information, but being able to be comfortable participating in sports or activities you might not have been doing before, I think will get Type 1s treated. There may be some Type 1s who are milder, who don't have as many fractures and there might not be as much addressable need in those patients. So we would expect all Type 1s. What I can say from the data we've shown you though, the Type 1s do really well on the treatment as do the Type 3s and 4s. So we expect that we'd have a good penetration of all three types as well as in all ages because we think there’s a reason to treat at any point in life any of these diseases.

Great. Thank you. I appreciate that added color. And then for Angelman, I just want to circle back to something. So obviously, we saw competitor data that showed good responses up to six months, and the Phase 3 is out to 48 weeks, but that makes the Phase 1/2 giving a bit of a more unique insight into those longer-term benefits. So I was just wondering how that data like you think it can be used for evaluating that more durable clinical aspect and the developmental gains that have been achieved?

Are you asking about our data or someone else's data? I didn't quite understand it.

I'm asking about like the Phase 1/2, like how that Phase 1/2 data, especially like larger-term data can.

Long-term… Yeah. Well, I think what's important about the long-term data is to see patients continue to gain ground. They continue to gain ground, which tells you that 48 weeks is only one point on a longer journey where these kids are going. The other point I would make is that while you get a brain to start functioning better, it does take time for kids to learn things, right? Just like growing up, it took time to learn them. So, this is a developmental component, particularly in receptive communication and expressive communication, that we think might take more time, as kids have to essentially learn something that they didn't know and they can't understand. So there's complex control functions that might take more time, but we feel that 48 weeks is a good time point to capture enough improvement to shift—to demonstrate the shift from the control group to get the drug approved. But the long-term continued improvement will be why patients stay on the drug and why the product will penetrate the population if successful in Phase III.

Thanks so much for taking my question.

Thank you. The next question we have comes from Jack Allen of Baird. Please go ahead.

Hi. Thanks so much for taking my question and congratulations on the progress over the quarter. I wanted to ask on setrusumab, I guess a few little parts of this question. The first of which I was wondering what we should expect as we look towards the second half of the year and the presentation of additional data for setrusumab? It looks like the BMD and Z scores are continuing to improve over time. Do you expect to provide additional color as it relates to differences in fracture rates over time with setrusumab and how that correlates with the biomarkers we're looking at there? And then I also just wanted to follow-up and ask about any comments as it relates to the enrollment in the Orbit study and the types of patients you're seeing in that trial versus the Phase 2 portion of that study?

Sure. So with regard to the second half, we haven't set a plan now a particular set of data that we might present or not. I mean honestly right now our goal is to crank Phase 3 and to be prepared as necessary to file a BLA if we're able to hit in the interim. But right now, I'm not sure if we will put out more data, but the patients clearly have continued improvement over time. And 14 months is certainly not the end of the story. They continue—the patients who have been on the 17 to 24 months have continued to do extremely well and it's very encouraging and it's been transformative. So we definitely think that's true. We may put it out at some point in time, but I think most people's eyes are already turned toward interim analyses in 2025. So we haven't committed to other more data yet. With regard to the Orbit type of patients, we did enroll more Type 3s and 4s. We now put up the ratio. But in the first Phase 2 study we had 17 Type 1s and seven Type 3s and 4s. And it's significantly larger Type 3s and 4s in the Orbit study, which is what we wanted. We wanted to get more severe patients that have more fractures that have more medical need. And we're able to enroll a lot number of those. I think actually the Phase II data stimulated them to get involved because before they were apprehensive once they saw the data, then the doctors started putting in their most patients in most need. So there is a little bit of shift there, but I don't think it will be substantially different in what we see compared to our Phase II data.

Got it. Thanks so much for the context. Maybe just one brief follow-up. I know you get a lot of questions on how to think about the powering of the Orbit study. But in that context what were your expectations for enrollment when you set out to enroll the Phase III portion of Orbit, and I guess did you enroll potentially more severe patients than expected? Any thoughts on how that may impact the power?

Well, we originally started with a 195-patient study. And then when we saw our first look of data at six months, it was pretty clear that the fracture reduction of 67% is way past what's needed. We brought that down to 150, which is not a huge difference in power frankly. But we wanted to keep it that large, because you want to get enough Type 1s, Type 3s and 4s to look at the subset, right? And you also had peds and adults, so you have to look at the age subsets. So the number 150, if you could look at the overall powering, but I also look at it as having enough of each group to be able to look at their data and understand the benefit in young or old or Type 3s, 4s or 1s. So that was one of the drivers in maintaining the number of 150. I think with the fracture reduction rate and assuming a higher fracture rate in the study, there was plenty of power. We could have made the study smaller. But I think when you try to cover the types and the severities and the age groups, what we put, I think was a good design that will capture the amount of data across all types of Hawaii.

Got it. Thanks so much for color, and congrats on all the progress.

Thank you.

Thank you. Ladies and gentlemen, we have reached the end of our question-and-answer session. And I would like to turn the call back to Joshua Higa for closing remarks. Please go ahead, sir.

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. Ladies and gentlemen, this then concludes today's conference. Thank you for joining us. You may now disconnect your lines.