Ultragenyx Pharmaceutical Inc. Q3 FY2025 Earnings Call

Good afternoon, and welcome to the Ultragenyx Third Quarter 2025 Financial Results Conference Call. It is now my pleasure to turn the call to Joshua Higa, Vice President of Investor Relations.

Thanks, Josh, and good afternoon, everyone. Today, Ultragenyx is on the cusp of significant evolution and growth. We have 4 commercial products that have delivered consistent and substantial double-digit annual revenue growth over many years. We have 2 BLA submissions in progress for programs that are poised to address significant medical need for patients with ultra-rare diseases. We also have multiple late-stage clinical programs with transformative commercial potential that are approaching pivotal data readouts. We're at a defining moment for the company, and I'm pleased to report that our team is ready to maximize the opportunities ahead. We announced earlier today that we took an important step to strengthen our financial position, receiving $400 million of nondilutive capital from OMERS through the cap sale of a portion of our Crysvita royalties. Importantly, we were able to defer the start of payments under this financing until January 2028. These funds and this timing bolster our balance sheet as we approach pivotal data readouts for our most significant commercial opportunities in osteogenesis imperfecta and Angelman syndrome. Importantly, we'll continue to focus on managing our cash burn and prioritizing our investments. Shifting to clinical. We continue to see exciting momentum across our late-stage programs, beginning with GTX-102, our investigational antisense oligonucleotide for Angelman syndrome. In July, we announced the pivotal 48-week Aspire study completed enrollment with 129 patients and is expected to read out data in the second half of 2026. Last week, we announced the first patient had been dosed in the Phase II/III Aurora study, which evaluates GTX-102 in additional ages and genotypes. This study, along with a fully enrolled Phase III Aspire study will generate data across the spectrum of genotypes and ages. Turning to UX143 for the treatment of osteogenesis imperfecta, the conduct of the Phase III Orbit and Cosmic study continues to go well. We hear stories from investigators who have patients in the open-label Phase II about how well their patients are doing, the improvements in their bone mineral density and the profound effect this drug is having on their lives. Data from the Phase III studies are on track to read out around the end of the year, which to us means December or January. As we move into the final analyses, we remain confident in setrusumab's mechanism of action, its ability to make more bone in the places that need more strength, which should reduce fractures. If successful, this will lead to a transformational treatment for pediatric and adult patients with osteogenesis imperfecta. For our existing approved products, our global commercial organization continues to deliver meaningful revenue and cash flow every year. This year, they are on track to deliver total revenue between $640 million and $670 million, which would be 14% to 20% growth from last year. Crysvita is the largest product in the portfolio, and we expect revenue to continue growing in the U.S., Canada, Latin America and Turkey as more and more patients initiate this important medicine. Dojolvi, Evkeeza, Mepsevii also meaningfully contribute to our financial base and provide a steady diversified source of revenue, and is also expected to grow over time. I'll now turn the call over to Erik Harris to share more details on his team's efforts last quarter.

Thank you, Emil, and good afternoon, everyone. As Emil mentioned, the commercial organization is continuing to successfully launch 4 products across the globe. Starting with Crysvita in Latin America. In the third quarter, our team generated another 50 new start forms that led to approximately 50 more patients on reimbursed therapy. We now have approximately 875 patients on commercial product in the region as the team continues to meet the growing demand for this important product. Health care providers continually share positive feedback on how well their patients feel when on Crysvita, and this has led to an increasing number of doctors writing prescriptions for more than one patient. I'll now shift to Crysvita in the United States and Canada, where our partner, Kyowa Kirin, has been leading commercialization since the transition in April 2023. While the third quarter 2025 royalty revenue was impacted by expected seasonality, we also know that there has been continued underlying growth in new start forms and new patients on reimbursed therapy. We expect strong fourth quarter revenue growth consistent with prior quarters. Moving on to Dojolvi in the United States. Growth of new start forms in the third quarter continued to steadily increase, consistent with patterns we have seen in prior quarters. Since launching this product in 2020, our team has generated approximately 700 new start forms leading to approximately 625 patients on reimbursed therapy. The split between pediatric and adult patients continues to be approximately 65% pediatric and 35% adults. The number of new prescribers also continues to grow with a total of approximately 275 unique prescribers at the end of the third quarter. For Dojolvi across the EMEA region, we are approaching 300 patients treated under named patient sales across the region. We continue to be pleased with this demand, especially since we are not actively marketing the therapy and simply responding to named patient requests. The majority of demand has been in France, but we also see increasing interest from patients and families in other EMEA countries, including Kuwait, Saudi Arabia and Greece. In closing, I'll make a few brief comments on Evkeeza, which we began commercializing in our territories outside of the U.S. with formal reimbursement approvals in just the last couple of years. In the EMEA region, we now have patients on reimbursed therapy from nearly all of the major countries, and we have added approximately 120 patients since the beginning of the year. In total, there are approximately 310 patients across 17 countries who are receiving Evkeeza. I want to recognize the tireless efforts from my European team as they continue to successfully navigate the country-by-country pricing negotiations and respond to named patient treatment requests across the whole EMEA region. As I have mentioned in the previous earnings calls, we continue to expect some quarter-to-quarter variability in revenue, but we remain confident in the growing underlying demand of all of our products around the world. With that, I'll turn the call to Howard to share more details on our financial results and guidance.

Thank you, Erik, and good afternoon, everyone. Before I go through our financials and guidance, I want to touch on the financing we announced earlier today. Additional details are in the press release and 8-K, but the essence is that we received $400 million through the sale of an additional 25% of our royalty interest on the future sales of Crysvita in the United States and Canada. Payments to OMERS will start in January 2028 and are capped, just like our prior royalty financing agreement with OMERS. We were fortunate to have many financing tools at our disposal, and monetizing another strip of our Crysvita royalty with OMERS proved to be the best option. We went through a competitive process and OMERS provided an attractive cost of capital and a beneficial payment holiday in a cap transaction. These terms helped us minimize the impact on our P&L and maximize liquidity. Importantly, Crysvita has proven to be a unique and highly valuable asset, one that we expect will continue delivering meaningful value after the cap on this agreement is hit and the royalty stream has returned to Ultragenyx. Adding $400 million to our balance sheet will help us deliver on our expected launches, setting us up for our next stage of growth and on our path to profitability in 2027. We will also continue to maintain our financial discipline, leveraging our existing infrastructure to launch UX111 and DTX401, if they are approved, and remain focused over the next year on delivering Phase III results for UX143 and GTX-102. Now turning to the financials for the quarter. I'll start with total revenue. In the third quarter of 2025, we reported $160 million, representing 15% growth over the quarter of 2024 and 18% growth for the first 9 months of 2025 over the first 9 months of 2024. Crysvita contributed $112 million in the third quarter and $57 million from North America, $47 million from Latin America and Turkey, and $8 million from Europe. Dojolvi contributed $24 million, consistent with its expected steady growth trajectory. Evkeeza contributed $17 million as demand continues to build following the launch in our territories outside of the United States. And Mepsevii contributed $7 million as we continue to treat patients in this ultra-rare indication. Total operating expenses for the quarter were $331 million, which included R&D expenses of $216 million and other investments in prelaunch inventory manufacturing, SG&A expenses of $87 million and cost of sales of $28 million. Operating expenses also included noncash stock-based compensation of $37 million. For the quarter, net loss was $180 million or $1.81 per share. As of September 30, we had $447 million in cash, cash equivalents and marketable securities, which has been further strengthened by the $400 million raised through the Crysvita royalty transaction we announced today. For the 3 months ended September 30, 2025, net cash used in operations was $91 million. In total, for the 9 months ended September 30, 2025, it was $366 million. We do expect 2025 net cash used in operations to increase compared to 2024, and we also reaffirm our path to full-year GAAP profitability in 2027. Shifting to revenue guidance for 2025, we are reaffirming the guidance we previously provided. Total revenue is expected to be between $640 million and $670 million, which represents 14% to 20% growth over 2024. Crysvita revenue is expected to be between $460 million and $480 million, which includes all regions and all forms of Crysvita revenue to Ultragenyx. This range represents 12% to 17% growth over 2024. Dojolvi revenue is expected to be between $90 million and $100 million, which represents 2% to 14% growth over 2024. With that, I'll turn the call over to Eric Crombez, who will provide updates on the clinical programs.

Thank you, Howard, and good afternoon, everyone. I'll touch on UX111 for the treatment of MPS IIIA and DTX401 for the treatment of Glycogen Storage Disease Type Ia. Starting with UX111, we have had constructive formal and informal interactions with the FDA since receiving a complete response letter in July. We have also reviewed the additional longer-term data that the FDA requested, and we continue to see a durable treatment effect based on multiple biomarkers related to MPS IIIA with further separation in multiple clinical endpoints from natural history while maintaining an acceptable safety profile. The FDA interactions and internal progress we have made to address the observation give us confidence in a BLA resubmission in early 2026, followed by an FDA review of up to 6 months. Shifting to DTX401. In September at the International Congress of Inborn Errors of Metabolism in Japan, we presented final 96-week results from the pivotal GlucoGene study. These results show durable, clinically meaningful and statistically significant improvement in cornstarch reduction while maintaining good glucose control. At week 96, study patients originally treated with DTX401 had been on study for nearly 2 years and patients originally randomized to placebo had 48 weeks of treatment with DTX401 after crossover to study drug. At week 96, patients saw a 61% reduction in daily cornstarch intake across both the DTX401 and placebo to DTX401 crossover groups. This also corresponded to a mean decrease in the number of daily doses of cornstarch with the DTX401 group reducing by almost 2 doses at week 96. The placebo to DTX401 crossover group, on average, dropped 1.6 daily doses by week 96. The improved glucose control and reduction in dependence on cornstarch is particularly important overnight with the increased risk of hypoglycemia while patients are sleeping and less able to detect symptoms. Reducing overnight cornstarch doses also helps to alleviate the burden of needing to wait to take cornstarch and the real risk of missed doses. At week 96, 67% of patients were able to eliminate at least one nighttime dose of cornstarch. The DTX401 group saw a 70% reduction of nighttime cornstarch when compared to baseline and the crossover group saw a similar mean reduction of 75% compared to week 48. These clinical results were also supported by improvement in patients' impressions of their disease as measured by a Global Impression of Change scale or PGIC and patient interviews. In the DTX401 group, 10 of 12 or 83% of patients felt that the disease management was improved 96 weeks after receiving DTX401. For the placebo to DTX401 crossover group, 18 of 19 or 95% of patients had improved disease management just 48 weeks after receiving DTX401. What is most important is that patients were able to reduce their dependence on day and nighttime cornstarch, feeling better while doing so, all while maintaining good glycemic control. This is why we believe this could be a transformative and life-changing treatment for these patients. In August, the FDA granted us the ability to begin a rolling submission of our BLA, which is underway and going well. The complete application will include the 96-week clinical data and the CMC updates that are in process based on the UX111 feedback. We expect to complete the DTX401 rolling submission next month. I'll now turn the call back to Emil to provide some closing remarks.

Thank you, Eric. I'll quickly recap the milestones and catalysts as we head toward the end of the year. For UX143 in osteogenesis imperfecta, the last patients in both the Orbit and Cosmic studies have had their final visits, and we are on track to share top-line data from these studies in December or January. For GTX-102 in Angelman syndrome, we continue treating patients in the 48-week Aspire study and continue enrollment in the supportive Aurora study. For DTX401 and GSDIa, the rolling BLA submission continues, and we are on track to complete this filing in December. Lastly, UX111 in Sanfilippo syndrome, we are responding to observation noted during the FDA review and expect to resubmit the BLA early in 2026. We are well positioned to deliver transformative therapies for rare disease patients while generating meaningful long-term shareholder value. We have a growing base of global revenue, a strong balance sheet and focus to execute on our top priorities. We look forward to sharing setrusumab data and reading out the GTX-102 Phase III data in the second half of 2026. With that, let's move on to your questions. Operator, please provide the Q&A instructions.

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.